TMI Blog2018 (3) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... venture in the nature of trade. For compensation paid to VLS capital Ltd as cost of improvement to be deducted from sale consideration for the purposes of Capital Gains - Held that:- As the amount was borrowed from VLS Capital Ltd for setting up LPG Bottling plant where formal approvals were not accorded by the various authorities. Therefore, the project was discarded and the land was sold to West Bengal Government. The West Bengal Government, if has acquired the said land for the purpose of residential colony or whatever, is not a concern of the assessee and therefore, cannot be held to be an adventure in the nature of trade. Thus as relying on CIT Vs. Mithlesh Kumari[1973 (2) TMI 11 - DELHI High Court] the interest part as deduction of ₹ 1.40 crore is directed to be allowed and deduction of ₹ 2 crores is rejected. Thus, on the second aspect of the issue, the same is partly allowed. - ITA No. 2738/DEL/2014 - - - Dated:- 13-3-2018 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER For The Assessee : Shri G.C. Srivastava For The Revenue : Shri Amit Jain, Sr. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, This appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1,84,29,294/- and thereafter site development v/ith cost of ₹ 1,71,31,949/- is stated to be made during the F.Y. 1995 - 1996 to F.Y. 1998 - 1999. Thus meeting the total cost of land to the assessee of ₹ 3,55,61,243/-. The assessee from the sale consideration has reduced an amount of ₹ 3,40,00,000/- stated to be paid to one M/s. VLS Capital Ltd.. Accordingly capital gain after indexation has been worked out in loss.income. The circumstances of the company to purchase the land, then develop it and then gv., adventure in the nature of trade. The assessee had purchased this land from around 50 different villagers in West Bengal then developed it and sold the developed land to Housing Board at a considerable profit. Even the sale consideration receipt has been further invested by the assessee in lands as advances to various persons in some other towns. The details of the persons without address to whom these advances have been given are available on records but despite asking the AR of the assessee has not produced any documents executed with such persons to whom these advances have been given. He has deliberately with held this information. Even the regular book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and circumstances of the case, this expenditure claimed of ₹ 3,40,00,000/- is not genuine hence not allowed. It is also been mentioned here that M/s. VLS Capital Ltd. had not shown this 4 With the above remarks and after taking into consideration all the facts of the case the total income of the assessee is worked out as under: Income from business Sale consideration of land ₹ 8,51,00,000/- Less Expenditure as claimed [Including payment to M/s VLS Capital Ltd] ₹ 7,14,51,805/- Add The amount paid to M/s VLS Capital Ltd disallowed for the reasons discussed above. 3,40,00,000/- Rs. ₹ 4,76,48,195/- ₹ 4,76,48,195/- 4. The ld. CIT(A) confirmed the action of the Assessing Officer. 5. We have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings from time to time, as investments is not under dispute. 6. Regarding the expenditure made necessary evidences were placed on record and no dispute in that regard has ever been made. These submissions were submitted before the DCIT, Central circle 17, New Delhi placed at pages 41 and 42 of the paper book. The assessee also submitted a letter to the DCIT, Central Circle 17, New Delhi dated 7.12.2011, available at pages 43 44 of the paper book in this regard. The Assessing Officer has not pointed out any defect in the same. For the years since 1995 there is no dispute in this regard as to the cost of land i.e. purchase of land and the improvement of the same. It is also not in dispute that the assessee company was formed for the purpose of main business of operating as LPG Bottling plant in West Bengal. No adverse finding has been given ever in the earlier assessments and in the impugned assessment year. It is surprising that whether contention of the assessee has throughout been accepted by the department, all of a sudden the department cannot take a U turn to hold that the intention of the assessee is to earn a profit and the land was acquired from different villagers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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