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TMI Blog2016 (2) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 2.2 From the record, it is seen that up to Asst. year 2008-09, the income of the assessee from trading in derivatives and other securities was assessed as business income and business expenses were accordingly allowed. However, in the year under consideration, the Assessing Officer ('AO') observing that there is a nominal business activity held that the expenses claimed were excessive and consequently disallowed the business expenses claimed by the assessee. In respect of the assessee's activity of sale of ownership lands ('Kabjadar land'), the AO held them to be business activity and allowed business expenses, making the assessment thereunder on a protective basis. Apart from this, the assessee is also right holder (Eksali lands) in various plots of land in Mira, Bhayandar and Ghodbunder in Thane District, Maharashtra. The assessee has offered capital gains or loss on transfer of such lands. The assessee adopted the cost as on 01/04/1981 at market value as per Regd. Valuer's report and the consideration received as full consideration for 'Kabjadar lands'. For Eksali lands, the cost as on 01/04/1981 was taken at 1/3rd value of ownerships land on that date as determined by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. 3. (a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the sale consideration received on sale of ownership land as business income. The Ld. CIT(A) did not appreciate the fact that the land was owned by the assessee for a long period of time and it had shown in the Balance sheet as investments. (b) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in appreciating the fact that the provision of section 50C of the IT act is code by itself and applicable on the sale of a capital asset in computing the long term capital gain. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in coming to a conclusion that the AO has allowed all the expenses claimed by the assessee as the computation has started from net profit, thereby overlooking the fact that there is a disallowance made by the AO of an identical amount in the computation forming part of the order. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that income from transfer of ownership lands is to be assessed as business income, thereby overl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been in the business of derivate transactions, other securities and money landing for over two decades and that the income from such transactions have all along been declared and assessed as business income. As observed by the authorities below, the income/revenue and volume of such transactions has reduced considerably in the year under consideration, whereas the expenditure claimed against meagre income was substantial and not justified. It is seen that the AO inspite of acknowledging that the assessee's business activity in trading of securities, derivates and money lending still continues in this year also, though on a smaller scale, proceeded to summararily disallow the entire expenditure claimed in this regard on the ground that the same were not incurred for business purposes. This action of the AO, in our view, was not warranted, in the facts and circumstances of the case, as it was based solely on summaries and conjectures . 5.3.2 We find in the impugned order, that the Ld. CIT(A) had noted that the business activity of the assessee continues and therefore the relevant corresponding expenditure is allowable. While observing that the expenditure claimed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ownership lands' as business income on a protective basis, while at the same time accepting the same as capital gains as declared by the assessee in the return of income. We find that on appeal, the Ld. CIT(A) observing that since the actively of sale of 'ownership lands' plots was quite frequent, that the land was treated as stock-in-trade and the assessee had to execute conveyance deeds and maintain its rights and in this context requires legal consultation and other expenses to be incurred; concurred with the view of the AO that the income from sale of 'ownership lands' is business income . Except for raising the ground that income from sale of 'ownership lands' should be assessed as capital gains, since the assessee had declared the same as income from capital gains, no cogent reasons or evidence has been put forth by the Ld. DR to controvert the factual findings of the Ld. CIT(A) and also those of the AO that the income from sale of 'ownership lands' is to be assessed as business income. In the facts and circumstances of the case as discussed above, we concur with the findings and reasoning of the Ld. CIT(A) that, in view of the frequency of sale of 'ownership lands'; the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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