TMI Blog2022 (12) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... year which has been allowed also. The assignment of debt in favour of another entity partly in exchange of land was integral part of the business activities of the assessee and any gain / loss arising on such an asset should be viewed as business profits only. The situation is no different from a situation wherein the assessee in exchange of loan debts, repossesses the assets of the borrower and sell the same subsequently in discharge of loan assets. Any resultant gains / losses arising therefrom would be part of normal business activities of the assessee. As clear that origin of the parcels of land so acquired is business asset only and therefore, the resultants gains would be business income of the assessee. The said proposition is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case. 2. The Commissioner of Income tax (Appeals) erred in confirming the treatment of profit on transfer of immovable properties as business profit instead of long term capital gains of Rs.102.16 crores 3 The Commissioner of Income tax (Appeals) ought to have appreciated that the lands in question were acquired in settlement of the debts assigned to M/s. Piramal Financial Services Limited and therefore it represented acquisition of capital asset, price of which was settled by the assignment of receivables and hence the land acquired constituted capital assets and profit arising therefrom constituted capital gains. 4. The Commissioner of Income tax (Appeals) ought to have found that mere ownership of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld some of its outstanding receivables valuing at Rs.51.07 Crores to M/s Piramal Financial Services Ltd. for consideration of Rs.40 Crores vide assignment deed dated 30.09.1999. The consideration was settled partly by cheques and partly be transfer of certain properties in favor of the assessee which were under litigation and finally, sold in this year. 2.2 The assessee sold parcels of land so acquired and admitted gains under the head Capital Gains . The Ld. AO held that the gains would be business profits since the assessee claimed loss on repossessed vehicles which was allowed. Similarly, the land was also part of business assets which was re-possessed and therefore, it would be assessable as business income only. Consequently, index ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as and when they are sold. 3.4 The decision of Pune Tribunal in Sri Mahavir Cooperative Bank Ltd. vs. ITO (37 ITD 130) was held to be distinguishable since in that case the assessee intended to purchase the asset permanently for its own use. However, in the present case, the asset was never intended to be used but intended to be sold as and when the litigations were completed and vacant land was sold for profit after due appreciation. Accordingly, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. The undisputed facts that emerges are that the assessee is engaged in equipment leasing, hire purchase financing and bill discounting. As a part of its business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has rightly been distinguished by Ld. CIT(A) and we concur with the same. We also concur with the findings that the land was received in lieu of a business loan foregone. The assets so received by the assessee would assume the character of same business assets irrespective of its treatment by the assessee in the books of accounts. 6. The Ld. AR has averred that the land has been shown as part of fixed asset and therefore, the same should be taken as capital asset. However, it is settled position that entries in the books of accounts would not be determinative of nature of income of the assessee. 7. Considering the facts of the case, the adjudication of Ld. CIT(A) could not be faulted with and we concur with the findings rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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