Shri Kikimal K Chhabria, 268,A-Z Industrial estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400013 Vs. Asstt. Commissioner of Income Tax 18(2), Piramal hambers, Mumbai-400012
July, 02nd 2015
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI
BEFORE S/SHRI I.P. BANSAL, (JM) AND B.R.BASKARAN (AM)
.. , .. ,
( / Assessment Year :2008-09)
Shri Kikimal K Chhabria, / Asstt. Commissioner of Income
268,A-Z Industrial estate, Vs. Tax 18(2),
Ganpatrao Kadam Marg, Piramal Chambers,
Lower Parel, Mumbai-400012
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. :AAAPC6123E
/ Appellant by Shri K K Ramani
/Rspondent by Shri Asghar Zain
/ Date of Hearing : 01.7.2015
/Date of Pronouncement : 01.7.2015
/ O R D E R
PER B.R. BASKARAN (AM)
The assessee has filed this appeal challenging the order dated
30.6.2011 passed by Ld CIT(A)-29, Mumbai and it relates to assessment
2. At the time of hearing, the ld. Counsel appearing for the assessee
pressed only ground no.2. and did not press the remaining grounds.
Accordingly, the remaining grounds urged by the assessee are dismissed
as not pressed.
2 I T A N o . 6 6 6 9 / Mu m / 2 0 1 1
3. In the ground no.2, the assessee has challenged the decision of the
ld. CIT(A) in holding that the entire profit on sale of property is
assessable as Short Term Capital Gain and they cannot be bifurcated into
Long Term and Short Term Capital Gain.
4. We heard the parties and perused the record. The assessee is
undertaking the interior decoration works under the name and style of M/s
Creations. During the year under consideration, the assessee has sold a
property located in A to Z Industrial Estates for a consideration of Rs.1.03
crores. The said property was used by the assessee as office-cum-
workshop. The assessee divided the sale consideration into two categories
namely sale consideration related to land and sale consideration related to
building structure. The assessee computed the LTCG on sale of land and
STCG on sale of building structure. The AO examined the agreement for
sale and noticed that the agreement nowhere mentioned that the unit sold
by the assessee included land also. Further, the Balance sheet filed by the
assessee disclosed the assets as "workshop premises" and depreciation
was allowed on it. It appears that the property sold by the assessee was
in the second floor. Accordingly, the AO took the view that it is not clear
as to how the land would become a part of unit, when the unit sold is on
the second floor of the building. Accordingly, the AO held that the entire
sale consideration pertains to the unit on which depreciation was allowed.
Accordingly he computed STCG as per the provisions of section 50 of the
Income Tax Act, 1961. The ld. CIT(A) also confirmed the same and hence
the assessee has filed this appeal before us.
5. The ld. Counsel appearing for the assessee submitted that the tax
authorities are not correct on facts in holding that the property sold by the
assessee did not include land. The ld. Counsel furnished a copy of the sale
3 I T A N o . 6 6 6 9 / Mu m / 2 0 1 1
agreement and submitted that the sale consideration received by the
assessee included the sale consideration received for land also. He further
submitted that the depreciation is not admissible on the cost of land and
hence the provisions of section 50 of the Act are not applicable to the sale
of land. Accordingly, he contended that capital gain arising from the sale
of land should be assessee as LTCG.
6. On the contrary, the ld. DR submitted that the assessee could not
prove before the tax authorities that the sale consideration received by
the assessee included the sale consideration relating to land.
7. Having heard the rival contentions, we are in agreement with the
contention of the ld. AR with regard to the principle that Capital Gains
arising on sale of land is assessable as LTCG, since the sale of land would
not fall under the purview of provisions of section 50 of the Act as
depreciation is not admissible on land. Now the limited controversy is
whether the sale of consideration received by the assessee included
consideration received towards the land or not. It is submitted by the
assessee that he can prove that the sale consideration received included
the consideration received towards sale of land and satisfy the tax
authorities, if an opportunity is provided to him. Hence, we are of the
view that the assessee, in the interest of justice, should be provided one
more opportunity of being heard. Accordingly, we set aside the order of
ld. CIT(A) on this issue and restore the same to the file of the AO with the
direction to examine the same afresh by duly considering the evidences
and explanation that may be furnished by the assessee. The assessee is
also directed to furnish all the relevant documents and explanation to
prove his contention.
4 I T A N o . 6 6 6 9 / Mu m / 2 0 1 1
8. In the result, the appeal filed by the assessee is treated as allowed
for statistical purposes.
Pronounced accordingly on 01st July, 2015.
01st July, 2015
(.. /I.P. BANSAL) (.. / B.R. BASKARAN)
/ Judicial Member /Accountant Member
Mumbai: 01st Jul,2015.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
, /ITAT, Mumbai