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TMI Blog2023 (12) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Officer Ward-21(2), New Delhi under the head of short term capital gains. To be more specific, on the facts and in the circumstances of the case the learned CIT (A) has erred in law: (a) in confirming the application of the provisions of section 50C of the Income Tax Act, 1961 (hereinafter referred to as the Act) and thereby considering the value adopted by the stamp valuation authorities while computing the short term capital gain (deemed) from the transfer of leasehold rights in the plot of land allotted to the appellant assessee not considering and ignoring the various case laws cited by the assessee and by relying upon a case which had no relevance to the issue at hand and also in not considering the plea of the appellant assessee that (i) the value assessed for Stamp Duty purpose does not represent the true fair value of the property, (ii) the appellant assessee had a lot of financial burden/liability to discharge and was forced to make a distress sale and was not in a position to wait for a buyer who could offer better price and(iii) the concept of fair value cannot be invoked in case of a distress sale; (b) in not considering and deciding upon the plea that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of leasehold basis was sold by the assessee during the year under consideration for Rs. 75 lakhs. This fact is not in dispute. Seems the lease period for 99 years, the ld AO proceeded to treat the transaction of allotment of land on leasehold basis to the assessee as an acquisition made and consequential when the state industrial lease has been sold by the assessee, the same constitutes transfer on account of sale and accordingly the provision of section 50C of the Act also would come into operation if the sale consideration is less than the consideration fixed for the purpose of levy of stamp duty of the stamp duty authority. The ld AO proceeded to determine short term capital gain of sale above industrial plot by sale consideration figure of Rs. 1,14,06,000/- (in terms of section 50C of the Act). The assessee also gave the details of amount paid by it on account of lease as under:- Financial year Amount 2004-05 Rs. 6,60,000/- 5005-06 Rs. 23,18,168/- 2006-07 Rs. 2,18,790/- 2007-08 Rs. 27,535/- 4. The assessee also submitted that it had made construction of the super structure on the said leasehold of land allotted to it. The details of cost of construction are incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um/2010) decided on 13 May 2011 which held that Section 50C is not applicable while computing capital gains on transfer of leasehold rights in land and buildings. 4. Mr. Kotangale, learned Counsel for the Revenue, states that the Revenue has not preferred any appeal against the decision of the Tribunal in the case of Atul Puranik (supra). Thus, it could be inferred that it has been accepted. Our Court in DIT vs. Credit Agricole Indosuez 377 ITR 102 (dealing with Tribunal order) and the Apex Court in UOI vs. Satish P. Shah 249 ITR 221 (dealing with High Court order) has laid down the salutary principle that where the Revenue has accepted the decision of the Court/Tribunal on an issue of law and not challenged it in appeal, then a subsequent decision following the earlier decision cannot be challenged. Further, it is not the Revenue's case before us that there are any distinguishing features either in facts or in law in the present appeal from that arising in the case of Atul Puranik (supra). 5. In the above view, the question as framed by the Revenue does not give rise to any substantial question of law. Thus, not entertained. 6. Appeals dismissed. No order as to costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t whether sale or gross receipts shows at Rs. Nil. In reply the assessee submitted though as no business carried out during the year still the assessee is incurring certain expenses to repay its business obligation and making certain realization from its sundry debtors for recovery of old dues. The ld AO further disagreed with the plea of the assessee and proceeded to disallow of expenditure of Rs. 16,08,268/- in the assessment. I believe that expense does not have any nexus with earning of income from business. This action was upheld by the ld CIT(A). 13. At the outset, we find that the expenses were not disallowed by the lower authorities of doubting its genuineness. The only grievance of the lower authorities is that since no business activity was carried out by the assessee during the year, the aforesaid expenditure cannot be said to be incurred for the purpose of business of the assessee. The ld AR rightly placed reliance before us on the decision of the Allahabad High Court I the case of CIT Vs. Rampur Timber and Tannery Co Ltd reported in 129 ITR 58. The question raised before the Hon'ble High Court is as under:- "Whether, on the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e effective and profitable disposal of the assets of the erstwhile business. For the year 1970-71, the ITO had treated the written-off loan from Raza Textiles Distributing Company and old liabilities for teak wood supply as income from other sources. It is evident that the company had to exist as a company before it could be held liable for earning income because of the writing-off of the loan and because of the old persisting liabilities of the business which had been closed down. Ex hypothesi the expenditure incurred for retaining the status of the company, namely, miscellaneous expenses, salary, legal expenses, travelling expenses, etc., would be expended wholly and exclusively for the purpose of making or earning such income. A sum of Rs. 6,080 was claimed as revenue expense. This amount was paid as interest on a loan taken from the State Govt. The loan was an asset of the company and was retained as such. Payment of interest thereon would be clearly an expense falling within the purview of Clause (iii) of Section 57 of the I.T. Act. 9. Learned counsel for the department relied upon several decisions which interpret Clause (iii) of Section 57 and analogous provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dr. Gupta's second line of argument as well. We find that the whole cause of action of disallowance of expenses is in the background of AO's observation that the assessee did not carry out any business transactions which at best was AO's finding about an activity of business not being functional in the relevant previous year. In our opinion, not carrying on business activity in a particular period cannot be equate with closure of business as it takes an unsustainably narrow view of the scope of cessation of a business. In the case of L.VE. Vairavan Chettiar v. CIT, their Lordships of Hon'ble Madras High Court were in seisin of a situation where the assessee had obtained an import licence for doing arecanut business but due to adverse conditions in market, he temporarily suspended the arecanut business for the assessment year in question. Nevertheless, he was maintaining the establishment and was waiting for improved market conditions in arecanut. It was thus an admitted position that no activities were carried out so far as this part of the business was concerned. On these facts, their Lordships took note of the position that "There is nothing on record to show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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