TMI Blog2015 (2) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Assessment of gain arising on sale of Pune land - claim of deduction u/s 54EC - Held that:- All the sequences in the case would show that the assessee has continued to hold the land as its Capital asset. Under these circumstances, we are of the view that the Ld CIT(A) was justified in holding that the gain arising on sale of land should be assessed as “Long term Capital gain” only. Consequently the Ld CIT(A) was also justified in holding that the assessee can claim deduction u/s 54EC of the Act, subject to the fulfillment of conditions prescribed in that section.- Decided against revenue. Disallowance of Car expenses in respect of the Car owned by a Director - Held that:- When it was asked as to whether the company has passed any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration declaring a total income of ₹ 1,73,02,965/-. It had declared business income from Hoarding charges/compensation and also from trading in silver. The AO noticed that the hoarding charges/compensation were received from various companies for leasing out open spaces. The gross income of ₹ 37,88,010/- received as hoarding charges/compensation consisted of hoarding charges, lease rent, parking charges etc. The AO noticed that the lease period for hoardings were from 3 years to 15 years. Accordingly the AO took the view that the assessee has earned only rental income and accordingly assessed the above said receipts under the head Income from Other sources . 5. The AO noticed that the assessee has carried out only one trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed plans for construction of residential premises and also obtained sanction from Pune Municipal Corporation. However, the project was abandoned and the advances received from parties excepting a sum of ₹ 73,200/- were returned back. The AO took the view that the assessee had converted the above said plot as Business asset and accordingly assessed the gain arising on sale of land as business income. Consequently he rejected the claim for deduction u/s 54EC of the Act. 8. The AO also computed disallowance u/s 14A of the Act at ₹ 1,30,332/- and added the same to the total income of the assessee. 9. The assessee challenged the assessment order by filing appeal before Ld CIT(A). The first appellate authority held that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which is placed at page 42 of the paper book, the Ld A.R submitted that the assessing officer has all along accepted that the assessee is engaged in the business of trading in Bullion. He submitted that the assessee has been declaring the income from hoarding charges and trading in bullion since past several years. He submitted that the assessee company was incorporated in British Era. He submitted that the assessing officer has taken a different view only during the year under consideration. He submitted that the business income declared by the assessee in the subsequent years were not disturbed, though they were assessed u/s 143(1) of the Act. Accordingly he submitted that there was no reason for the assessing officer to take a differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld CIT(A) that the hoarding charges and trading in silver are required to be assessed as Business income, we do not find any infirmity in the decision of Ld CIT(A) in directing the AO to allow the expenses claimed. Accordingly we uphold his order on this issue. 14. The next issue pertains to the assessment of gain arising on sale of Pune land. We have heard the parties on this issue. We have already noticed that the assessee has acquired the leasehold right of the impugned land in the year 1941. The only activity, which was considered by the AO to treat the land as business asset, was about the attempt made to construct the flats on the land. As noticed by the Ld CIT(A), the assessee has abandoned the project after obtaining the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong term capital gain. The AO assessed the gain arising on sale of land as business income. The Hon ble High Court held that the gain arising on sale of land cannot be assessed as business income, the assessee is not engaged in the business of dealing in land. Since the assessee was using the land for brick-kiln business, the profit arising on its sale is assessable as Capital gain only. The High Court further held that the said income cannot also be considered as derived from adventure in the nature of trade. In the instant case also, the assessee has been holding the leasehold right in the land since 1941. It has sold the sold the same after holding it for about 65 years. About 20 years back, the assessee had attempted to develop the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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