TMI Blog2013 (7) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... -assessee is not able to fulfill its obligation, then it was required to refund the amount to the developer. Thus, there was no transfer of land during that assessment year - Assessing Officer has interfered without any evidence that possession of factory land was given to respondent-assessee in the subject assessment year on the basis that construction activity had started. This is erroneous as the commencement certificate was only received from BMC in the next assessment year - Decided against Revenue. Conversion of the land into stock in trade - Whether Tribunal justified in holding that there was conversion of the land into the stock-in-trade during the Financial Year 1991-92 and therefore the expenditure incurred during Financial Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Mr. Arvind Pinto For the Respondent : Mr. M. N. Shah JUDGMENT This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (in short the Act ), challenges the order dated 26 February 2009 of the Income Tax Appellate Tribunal (in short the ITAT ) relating to the assessment year 2000-01. 2. The following questions have been raised by the revenue for our consideration: (a) Whether on the facts and circumstance of the case and in law, the ITAT justified in holding that no capital gain will arise in the concerned assessment year i.e. 2000-01 as the assessee was restrained by Industrial Court as well as this Court from disposing the factory land in question? (b) Whether on the facts and circumstance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferred to M/s. Sheth Developers Ltd, during the assessment year and subjected the consideration received to capital gain tax. This was on the ground that under the above agreement, transfer of the land could be said to have taken place under Section 2(47)(v) of the Act. (iii) In appeal, the CIT(A) held that there was no occasion for Section 2(47) of the Act to apply as no possession of the factory land could be given by the respondent-assessee under the agreement dated 19 November 1999 to M/s. Sheth Developers Ltd. Further no construction activity had commenced during the year under consideration. Thus, the respondent-assessee is not liable to capital gain tax for the assessment year 2000-01. (iv) On appeal by the revenue, the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent-assessee is not able to fulfill its obligation, then it was required to refund the amount to the developer. Thus, there was no transfer of land during the assessment year 2000-01. The revenue has not challenged the second part of the order of the Tribunal. Moreover, the Assessing Officer has interfered without any evidence that possession of factory land was given to respondent-assessee in the subject assessment year on the basis that construction activity had started. This is erroneous as the commencement certificate was only received from BMC on 7 November 2000 i.e. in the next assessment year. We find that two authorities viz: CIT(A) and Tribunal have rendered a finding of fact that no transfer of land took place in the concerned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer by the assessment order did not accept the case of respondent-assessee that the factory land had been converted into stock-in-trade in 1992. This was on the basis that there was no activity on the factory land since 1992 to 1999. Accordingly he concluded that the factory land had not been converted into stock-in-trade. (iii) In appeal, the CIT(A) takes into account the facts stated in (i) herein above, concluded that the respondent-assessee had converted its factory land into stock-in-trade in 1992. (iv) On an appeal by the revenue, the Tribunal upheld the finding of fact arrived at by CIT(A) that the factory land was converted into stock-in-trade in 1992. (v) The grievance of the revenue is that the resolution passed in 1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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