TMI Blog2019 (1) TMI 1987X X X X Extracts X X X X X X X X Extracts X X X X ..... ards disallowance of expenditure in the activity of breeding horses for assessment year 2008-09, the Ld. DR pleaded on the lines of grounds of appeal extracted. CIT(A) followed the order of this tribunal, supra, we do not find any reason to interfere with his order and hence, the corresponding grounds of the Revenue for assessment year 2008- 09 is dismissed. - I.T.A. Nos. 424 & 425/Chny/2014, 1494/Chny/2012 & 1442/Chny/2015 - - - Dated:- 11-1-2019 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER Appellant by : Shri. AR V Sreenivasan, JCIT Respondent by : Shri. S. Sridhar, Advocate O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: The Revenue filed these appeals against the orders of the Commissioner of Income Tax (Appeals) (C)-II, Chennai in ITA Nos. 411 412/13-14 dated 12.11.2013 for assessment years 2009-10 2010- 11, respectively, Commissioner of Income Tax (Appeals)-III, Chennai in ITA No. 815/2010-11/A-III dated 05.01.2012 for assessment year 2008-09 and Commissioner of Income Tax (Appeals)-1, Chennai in ITA No. 644/13-14/A-1 dated 25.02.2015 for assessment year 2011-12. 2. The facts in brief as canvassed are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the form of land and partially completed flats from assessee s brother s wife viz. Kumararani Dr. Meena Muthiah her son Sri M.A.M.M. Annamalai, started in December, 2006, out of 128 flats, during the financial year 2007-08, he sold 19 flats. After hearing the assessee, the sale of undivided share of land from this project was treated by the AO as business profits along with the profits on the sale of constructed flats in the assessment made for assessment year 2008-09. The assessee objected to such differential treatment of flats of Rani Meyyanimai Towers, Phase-Il (RMT-ll) before the CIT(A) by an appeal submitting that similar treatment given to RMT-1 should also be given for the sale of undivided share of land of RMT-11 and the profit should be assessed as long-term capital gain. 2.3 The Ld. CIT(A) in his order related to the assessment year 2008- 09 held , inter alia, that the AO in the remand report has stated that the appellant was right in bifurcating the profits between LTCG and business profit in respect of project RMT-l, because land in RMT-l was inherited by the appellant. However, land in RMT-Il was inherited by the family of appellant s brother and subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case. 2.1 The CIT(A) erred in holding that the land comprised in the project RMT Phase II is a capital asset and the gain out of the sale of the same should be treated as capital gains. 2.2 The CIT(A) failed to appreciate that the project RMT II was not conceived by the assessee but the land along with the building was acquired by the assessee from his sister-in-law Mrs. Meena Muthiah and her son Shri Annamalai for a consideration of Rs.81.34 lakhs and along with the cost of interest expenditure on the unfinished project of Rs.95,05,766 , the opening work-in-progress as on 1.4.2007 amounted to Rs.82,29,11,383 which formed the basis for computing the profits during the year based on sales and current year expenses of the current year. 2.3 The CIT(A) ought to have rejected the assessee s claim before the CIT(A) that the land component of the sale value is a capital asset and not stock-in-trade taking a plea that the property devolved on him from the erstwhile owners through a partition deed dt.15.ii.2006 and in order to acquire a larger share of land a sum of Rs.50 crores was paid to them, and therefore the profits on sale of land should be subject to tax as Long term c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of breeding horses. 3.2 It is submitted that the decisions of the ITAT in the assessee s own case for the AY 2003-04 in ITA No.13/2007 dated 11/01/2008 and in ITA Nos. 800,801, 802 2346 of 1991 dated 28/03/2002 have no connection to the issue raised by the assessee before CIT(A). 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. 5. In the assessments made for assessment years 2009-10, 2010- 11 2011-12, the AO continued to assess income derived from the land of project RMT-II as business income, as he has done in for assessment year 2008-09. Aggrieved against those orders, the assessee filed appeals before the CIT(A). The CIT(A) following his decision made in assessment year 2008-09, allowed the assessee s appeals. Aggrieved against those orders, the Revenue filed appeals for all these assessment years on the common grounds and hence the common grounds filed for ITA 425/2014 is extracted as under: 1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2.1 The CIT(A) erred in hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f RMT-II, but assessed as business profits, the Ld. DR placed his arguments on the lines of grounds of appeal extracted, supra, and relied on the orders of the AO. Per contra, the Ld. AR placed his reliance on the orders of the Ld. CIT(A). When we called for the relevant documents, both the parties could not place anything but pleaded on the orders of the lower authorities. However, both of them have agreed that this issue can be remitted back to the AO for a fresh examination. In the facts and circumstances, we deem it fit to remit this issue back to the AO for a fresh examination. The assessee shall place all the materials in its support before the AO and comply to the AO s requirements as per law. The A O is free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assesssee on the material etc to be used against it and decide the matter in accordance with law for assessment years 2008-09 to 2011-12. 7. In respect of the proposal of the AO for enhancement of income to the CIT(A), towards disallowance of expenditure in the activity of breeding horses for assessment year 2008-09, the Ld. DR pleaded on the lines of grounds of appeal extr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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