TMI Blog2013 (7) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For the Appellant : Mr. T.Banusekar, C.A., For the Respondent : Mr. Shaji P.Jacob, Addl. CIT O R D E R Per Challa Nagendra Prasad, JM: ITA Nos. 2256/Mds/2012 and 76/Mds/2013 are cross appeals filed by the assessee and the Revenue respectively for the assessment year 2009-10. ITA No.79/Mds/2013 is filed by the Revenue in respect of a sister concern of the assessee i.e. M/s. Essorpe Holdings Pvt.Ltd., which has filed Cross Objection No.108/Mds/2013 for the assessment year 2009-10. Since common issue is involved in all these appeals cross objection, they are heard together and disposed off by this common order. 2. ITA No.76/Mds/2013 of the Revenue and C.O.No.108/Mds/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A IPOA, the company and the impugned land was under various charges upon various liabilities and provisions of law. 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the appellant was a guarantor in the loan transaction and therefore, the property was subjected to a charge. Thus while assessing income, amount to the extent of borrowings would have to be reduced from the total consideration. 7. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the impugned property got vested in Essorpe Holdings P Ltd by the order of demerger by Madras High court as on the appointed date of 01.01.09 8. For that without prejudice to the above, the Commissioner of Income Tax (Appeals) failed to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of section 2(47) of the Act and held that sale consideration of such property has to be assessed in the assessment year 2009-10. However, the Commissioner of Income Tax (Appeals) held that since the assessee has converted its capital asset into stock-in-trade, the sale consideration to the extent ofRs.17,62,50,000/- shall be assessed as business income out ofRs. 35,25,00,000/-. The assessee filed appeal against this order of the Commissioner of Income Tax (Appeals) contending that there was no transfer under section 2(47) of the Act and there is no income chargeable to tax in the hands of the assessee for the assessment year 2009-10. 5. The assessee in the alternative submits that in case the sale consideration has to be assessed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, since the assessee has converted the capital asset into stock-in-trade, he has directed the Assessing Officer to calculate the business income on the sale of 5.075 acres of land by the assessee company for the assessment year 2009-10. However, he directed the Assessing Officer to take 50% ofRs. 35,25,00,000/- as sale consideration in respect of total property of 10.15 acres of land for the assessment year 2009-10 as business income on account of transfer of property. The counsel for the assessee could not substantiate his claim that there is no transfer and no income had arisen during the assessment year 2009-10 and at the same time, has no serious objection in assessing gain as business income, as per the provisions of section 45( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holder in the financial year 2008-09 has fetched a sum of ₹ 20,25,00,000/-. Therefore it is most humbly prayed that the fair market value as on the date of conversion of land and building into stock-in-trade i.e. in the financial year 2007-08 may be taken at a value 5% less than the fair market value (i.e. the sale consideration) in the financial year 2008-09 i.e. [Rs.20,25,00,000 - 5% of ₹ 20,25,00,000 = ₹ 19,23,75,000]. 11.For the purpose of computing the long term capital gains on conversion of land into stock in trade, the full value of consideration will have to be arrived at by reducing the value of building from the fair market value as on the date of conversion of land i.e. ₹ 19,23,75,000 (-) ₹ 71,51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground no.8 are dismissed. ITA No.76/Mds/2013 (Revenue appeal):- 11. In this appeal, the Revenue has raised the following grounds:- 1. The order of the CIT (Appeals)-I, Coimbatore is against the law and facts of the case. 2. The CIT (Appeals)-I, Coimbatore has erred in directing the Assessing Officer to restrict the levy of business income to the extent ofRs. 17,62,50,000/- when the property was sold and registered to the tune ofRs. 20,25,00,000/-. 3. For these and other grounds that may be adduced at the time of hearing, the order of the CIT (Appeals)-I may be cancelled and that of the Assessing Officer be restored. 12. In respect of these grounds, the counsel for the assessee fairly concedes that the assessee has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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