TMI Blog2020 (2) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in accordance with law. Accrued interest on the loan raised for the company against F.D. Booked by the Director - Payments of interest on FD and on the interest paid on loan - HELD THAT:- Admittedly, assessee deposited ₹ 1 crore in bank in his name as F.D, on which assessee received interest of ₹ 3,93,198/-. On security of this FD, company in which assessee is a Director, raised loan of ₹ 50 lakhs and repaid the loan. However, interest on loan amounting to ₹ 3,68,252/- was claimed as expenditure by the assessee. In our opinion this interest is actually the liability of the company and there is no basis for claiming this expenditure, in the hands of the appellant. Therefore there is no basis for setting off of this liability of company against interest earned by assessee on funds belonging to him deposited in the bank. Hence, the actual interest which actually works out to 3,68,253/- - We therefore do not find any infirmity in order of Ld,CIT(A). - ITA No.134 & 135/Bang/2012 - - - Dated:- 30-1-2020 - Shri A. K. Gorodia, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Sri. Narendra Sharma Advocate For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case. 6. The authorities below failed to appreciate the fact that the lands which were sold is an agricultural land and cannot be considered as a capital asset as per section 2[4] of the Act under the facts and circumstances of the case. 7. The authorities below were not justified in law in treating the sale transaction as an adventure in the nature of trade as per the provisions of section 2[13] of the Act. 8. The learned authorities below failed to appreciate the fact that the appellant did not had any intention to carry on the business of trading by converting the said agricultural land which is a perquisite condition for invoking the provisions of section 2[13] of the Act under the facts and circumstances of the case. 9. The authorities below failed to appreciate the fact that since there was a dispute between the appellant and the original owners of the agricultural land purchased by the appellant the same could not have been registered in the year 1994 under the facts and circumstances of the case. 10. Without prejudice the learned authorities below ought to have treated the consideration received from sale of agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome over and above the returned income of ₹ 1,66,728 under the facts and circumstances of the case. 5. The learned assessing officer is not justified in law in not allowing the appellant to carry forward of capital loss of ₹ 2,61,621 under the facts and circumstances of the case. 6. The Appellant denies himself liable to be charged to interest under section 234A, 234B 234C of the Income-Tax Act, the facts and circumstances of the case. 7. The Appellant craves leave to add alter, delete or substitute any of the grounds urged above. 8. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the justice and equity. 2. Ld.AR submitted that, in both years under consideration, assessee has challenged initiation of search under section 132 (2), as bad in law, and consequent assessment under section 153A to be null and void ab initio . It has been submitted that assessee wished to withdraw grounds pertaining to while entity of search raised before this Tribunal for years under consideration. Ld.AR identified Ground No.1-3 is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction before Ld.CIT(A) and submitted that said property was purchased for consideration of ₹ 4,70,000/- on 29/09/03, and was held as agricultural property, which was sold as it is, on 31/01/04 for a sum of ₹ 70,00,000/-. Assessee submitted that, out of total consideration received by assessee, sum of ₹ 15,50,000/- was realised on 05/02/04 and sum of ₹ 54,00,000/- was realised on 30/06/04. Assessee furnished certificate dated 28/01/11 from PWD stating that, property is beyond 12.6 km from BBMP limits. He thus argued that land sold is not a capital asset as per section 2 (14) of the Act, and hence capital gains are not attracted, as it is situated more than 8 km from local limits of Bangalore and municipal Corporation. 3.1. The details furnished by assessee was remanded to Ld.AO by Ld.CIT (A) since, they were not filed at the time of assessment. In remand report, Ld.AO ascertained that BDA classified the subject village that included the subject land as residential zone, and therefore cannot be treated as agricultural land as submitted by assessee. In response, assessee alternatively submitted that this may be treated as a single business venture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural land and was situated outside 8 km from and simple limits and therefore cannot be treated as a capital asset as defined under section 2 (14) of the Act. He submitted that even as on 2011 a certificate has been issued by PWD, certifying the land to be situated beyond 8 km of BBMP limits. 4.2. As regards treatment of sale of land as adventure in the nature of trade or business, Ld.AR placed reliance on following decisions: Indian Hume Pipe Company Ltd vs CIT reported in 195 ITR 386; CIT vs RV Gupta reported in 258 ITR 261 Ld.AR submitted that, in facts narrated hereinabove, sale transaction entered into by assessee cannot be treated as adventure in nature of trade, as per section 2 (13) of the Act, and therefore, sale consideration received from sale of said property, cannot be considered as business income. 4.3. On the contrary, Ld.CIT.DR placed reliance upon orders passed by Ld.CIT(A) and Ld.AO. 5. We have perused submissions advanced by both sides in light of records placed before us. Submissions of Ld.AR has been considered in light of sale agreement, entered into by assessee with Sh.Abdul Khudus on 02.06.1994 (pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced by both sides in light of records placed before us. In preceding paragraphs, we have already negated observation of Ld.AO that, said land was purchased and sold in a short span during financial year relevant to assessment year under consideration. We therefore reject this argument by Ld.DR that income earned from sale of said land is to be treated as business income. Coming to the nature of said land, Ld.AO before Ld.CIT(A), submitted that the Village that includes said land has been ascertained by BDA as residential zone. Whereas assessee submitted that he did not convert the said land for non agricultural purposes. However, we also note that assessee has not established by way of documents /evidences that it was agricultural land. We therefore cannot appreciate the argument advanced by Ld.AR. As we have held hereinabove that said land is a long term capital asset, capital gains must be computed by granting indexation benefit to assessee. Ld.AO is directed to recomputed LTCG in respect of sale of said land by asessee in accordance with law. Accordingly Grounds 5-10 stands allowed partly. Ground No.11 is consequential in nature and therefore do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
