TaxTMI 
TaxTMI 
2001 (5) TMI 176
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....the Urban Land Ceiling Act, the firm had to file a statement declaring the area of land held together with exemption application, if any. The whole land belonging to the firm was declared by the competent authority as surplus land required for public purpose. In view of the above, the competent authority directed that no development could be done on the said land and was deemed as acquired by the Government of Maharashtra. Since then land was retained as a passive asset in hands of the firm. 3. In 1976 several disputes arose between the partners of the firm. Several suits were filed with the City Civil Court by one of the partners namely, Narain M. Gidwani against the other group of partners in the matter of a sister concern M/s Shantinagar Builder. In view of the land ceiling, acquisition and dispute with the other partners, the firm decided not to continue with any business activity. The bank account of the firm was also closed by the bank as there was no operation in the said account and this account was inoperative from 1977. 4. In the year 1996, the partners of the firm got offers for sale of land. Since there were suspicion and disputes between the said partners, it was....
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....t collected from the firm through its partner Mr. Gidwani amounting to approximately over Rs. 6 crores be refunded to Mr. Gidwani as he had invested the moneys on behalf of the firm into the specified assets. Accordingly, the AO refunded the moneys to Mr. Gidwani. 6. Later on, the successor CIT issued a show-cause notice under s. 263 on 10th Jan., 2001, as according to him, the order passed by the AO under s. 143(b) was erroneous and prejudicial to the interest of Revenue. The assessee filed detailed submissions in respect to the show-cause notice but rejecting the same, the CIT set aside the order of the learned AO. He gave a finding that the AO should enquire into the matter on allowability of legitimate expenses but that he should assess the sale as profits and gains of business. The learned CIT concluded his order in para 102 as under: "The AO has overlooked the above facts and as well as the law of the land and passed the assessment order which is prejudicial and erroneous in the interest of Revenue inasmuch as the AO failed to consider the facts, circumstances and the legal position and as such the assessment order passed by the AO under s. 143(3) dt. 3rd April, 1999 is....
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....inite decision taken not to do commercial activities which has been brushed away by the CIT at p. 28 of his order; (iii) the CIT has wrongly stated at p. 15 of this order that the asset was shown as stock-in-trade when the balance sheet clearly shows plot account; (iv) the CIT was manifestly wrong in stating at p. 27, para 61 that the asset was held as stock-in-trade when he admitted in the same para that a fine line requires to be drawn to decide whether the profits from the sale are of trading nature or mere investment. (v) the CIT was in error in stating that only a small portion of land was declared as surplus while the competent authority had declared the whole land as surplus and deemed to be acquired." 9. On the legal aspects of the matter, the learned counsel for the petitioner submitted that the Tribunal has wide and inherent powers to grant stay to collection as also to stay the proceedings. In support of this contention, she relied upon the Supreme Court judgment in the case of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC), CIT vs. Bansidhar & Sons (1986) 50 CTR (SC) 250 : (1986) 157 ITR 665 (SC), the judgment of the Andhra Pradesh High Court in the case....
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....000 (8) Flat No. 8, Mahavir, situated at Kemps Corner, Warden Road, Mumbai-26. 1,50,00,000 (9). We further submit that bonds of value of Rs. 2.25 crores is retained by the IT Department as security 2,25,00,000 11,00,00,000 For the liability of about Rs. 6 crores which will arise on account of interest, the partners have given a separate undertaking which reads as under: "Undertaking for recovery of taxes: We undertake that we partners of Shanti Builders/Attorneys will not dispose of assets as per the following details till order is passed by Tribunal, against appeal under s. 263 in case of our firm Shanti Builders for asst. yr. 1997-98. Sr. No. Particulars of the property Market value 1. Advani Chambers, 4, 5 & 6th floors, admeasuring about 6,000 sq. ft. at Kemps Corner, Mumbai. 6,00,00,000 At the and, the learned counsel concluded that it is a fit case for stay of proceedings both on merits and legal position and in view of adequate security offered by the partners of the firm. 11. Shri O.P. Jain, the learned Departmental Representative strongly opposed the stay petition. He submitted that after considering ....