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2005 (6) TMI 221 - ITAT CHANDIGARH-BChargeable as capital gain - Income from sale of shops computed under the head 'profits and gains of business and profession' Or 'capital gain' - Property for the purpose of trade or for investment - rental income - whether in computation of income from house property annual value should be reduced by the amount of brokerage paid - HELD THAT:- From the facts of the case, it becomes clear that assessee's intention was to hold the property as investment and not as a stock-in-trade. No prudent trader would sit on stock for so long. Also facts in the cited cases which have been relied upon by the Assessing Officer are clearly distinguishable from the facts of the present case. As already discussed, the assessee is engaged in running of hotel and cinema hall, he acquired the SCOs and kept it as investment for a long period of nine years before selling of in the relevant years. The CIT(A) also found that the SCOs were acquired by paying advance and the balance was paid in instalments and possession taken over. we have mentioned regarding submissions of the assessee that in the assessment year 1994-95, the Assessing Officer has also treated the income from sale of SCOs as capital gain, whereas in the years under appeal he has changed his opinion regarding character of the transactions and also brought it under the head 'business income'. Even on this plea, the assessee finds support that principle of res judicata does not apply to income-tax proceedings but to deviate from it, there should be change in the facts and circumstances, as observed in the case of CIT v. Dalmia Dadri Cement Ltd. [1969 (11) TMI 16 - PUNJAB AND HARYANA HIGH COURT]. Therefore, we are of the considered view that the CIT(A) was justified in directing the Assessing Officer to compute the income arising from sale of SCOs under the head 'capital gain' after necessary indexation. We uphold her order and do not find any merit in the common ground raised by the revenue in all the three appeals. The ground stands rejected. Conversely, it can be inferred that ALV is not to be disturbed which is coming out as a result of computation, as per formula u/s 23. Also the plea of the ld. AR regarding overriding title cannot be accepted as no obligation has been cast on the assessee to pay brokerage. Brokerage is one time expenditure for procuring the tenant. It is up to the assessee whether he needs the services of a broker or not. There is a difference between an amount which a person is obliged to pay out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Hence, on this account also, the plea of the assessee fails. Also the assessee's alternative plea that the brokerage should be allowed to be deducted from the business income is not tenable in law, as the said brokerage as not paid for the purpose of its existing business. Law provides only the expenditure incurred wholly and exclusively for the purposes of business. Hence on this account also, the plea of the assessee fails. Accordingly, we set aside the order of the CIT(A) in this regard and restore that of the Assessing Officer, by accepting the ground of the revenue. The appeal stands partly allowed. In the result, I.T.A. Nos. 533 and 535 are partly allowed and I.T.A. No. 534 is dismissed.
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