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TMI Blog2013 (7) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the assessee are field with delay of 11 days & 129 days respectively. The Department as well as the assessee filed petition/affidavit for condonation of delay explaining the reasons for the delay. We have gone through the petition/affidavit and find that there is a reasonable cause in filing of the appeal as well as cross objection belatedly. Therefore, in the interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appreciate that the income from transfer of the property has to be calculated as per the provisions of section 45(2) of Income Tax Act. 9. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer erred in not applying the provisions of section 50 while arriving at the gain on sale of building." 4. In this appeal the assessee contends that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under the head "income from business" as the assessee has converted the capital asset into stock-in-trade, the gain up to the date of conversion has to be assessed under the head "long term capital gains" and the asset which was converted into stockin- trade has to be assessed as business income granting benefits of the provisions of section 45(2) of the Act. 6. The counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(2) of the Act. The assessee has not seriously objected for considering the sale consideration for the assessment year 2009-10 atRs. 20,25,00,000/- as against the direction given by the Commissioner of Income Tax (Appeals) to adopt atRs.17,62,50,000/-. The counsel for the assessee had in fact, filed written submissions in respect of the application of the provisions of section 45(2) as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,00,000 = Rs. 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. Rs. 19,23,75,000 (-) Rs. 71,51,725 = Rs. 18,52,23,275/- and the short term capital gains on conversion of building into stock in trade would be as determined by the Assessing Officer which is Rs. 69,26,825/- i.e. Rs. 71,51,725 (-) Rs. 2,24,900/- (WDV of building) 12.This prayer is made since the cost inflation index has increased only by 5.6% from the financial year 2007-08 to financial year 2008-09." 9. Therefore, we uphold the order of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 no serious objection in allowing the appeal of the Revenue as the sale consideration received by the assessee during the assessment year 2009-10 wasRs.20,25,00,000/-. In the circumstances, we allow the appeal of the Revenue. ITA No.79/Mds/2013 & C.O.No.108/Mds/2013:- 13. In this appeal, the Assessing Officer made addition in respect of transfer of property under the head business income protectively. As we have sustained the addition in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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