TaxTMI 
TaxTMI 
2016 (12) TMI 182
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....nce of 10% of Wages Rs. 38,334/- (iii) Disallowance of Excess Interest paid Rs. 1,05,628/- (iv) Addition hoc disallowance of Expenses Rs. 20,000/- 2.2 Aggrieved by the order of assessment dated 13.10.2010 for A.Y. 2010-11, the assessee went in appeal before the CIT(A)-34, Mumbai. The learned CIT(A) dismissed the assessee's appeal vide the impugned order dated 30.09.2014. 3. Aggrieved by the order of the CIT(A)-34, Mumbai dated 30.09.2014 for A.Y. 2010-11, the assessee has preferred this appeal before the Tribunal raising the following grounds: - "1. The learned CIT (Appeals) has erred in law and on facts in confirming the order of - the Assessing Officer in respect of the profit on sale on Industrial Gala as Capital Gain instead of Business Income as declared by the appellant. 2. The learned CIT (Appeals) has erred in law and on facts in confirming the order of the Assessing Officer for applying section 50C of the Income Tax Act,1961 for determining the sales consideration of Industrial Gala which was considered as business transactions by the appellant in the Return of Income filed. 3. The learned CIT (Appeals) has erred in law and on facts in confirming the ....
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....kaging material at its factory premises at Bhayander. Vide agreement dated 01.11.2007 titled 'Agreement for Development' the assessee took over the entire land of a dilapidated building alongwith development rights for Rs. 11 lakhs. After incurring expenditure of Rs. 57,99,284/- as cost of improvement, etc. the resultant industrial gala was sold vide agreement dated 30.12.2009 to Shri Bharat R. Thakkar and Shri Tanna Thakkar for a consideration of Rs. 80 lakhs. It is contended that the assessee had not purchased the said property but only the development rights and therefore had no intention to purchase capital assets and therefore in these circumstances it is clear that the intention of the assessee was of construction of gala and sale thereof. Therefore, the assessee's claim that the profit on sale of the gala is to be treated as Business Income may be allowed. 4.2 Per contra, the learned D.R. for Revenue placed reliance on the orders of the authorities below. According to the learned D.R., it is evident from perusal of the agreement dated 01.11.2007, that the assessee has acquired the said property alongwith the rights of development of the dilapidated building which was improv....
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.... owner of the property as he has the absolute rights of possession, developing, selling, receiving sale proceeds, etc. to the total exclusion of the erstwhile owner. This view of ours is further confirmed as perusal of the sale agreement of the said property, i.e. gala dated 30.12.2009 (copy placed at pg. 2 to 20 of the paper book) would show that on the last page, page 11 (pg. 14 of the paper book), the assessee has signed, sealed and delivered the property in his actual capacity as "OWNER" of the property. If the ownership still vested in the erstwhile owners, as claimed by the assessee, then they should have been at least consenting parties to the sale deed dated 30.12.2009. These documentary evidences, in our view, puts paid to the assessee's claim on facts that the income/profit arising on sale of the gala was his business income. In our view, the income from sale of gala has been correctly held by the authorities below to be exigible to tax as STCG and not business income. With due respect, the judicial pronouncements cited by the assessee do not come to his rescue as they are factually different and distinguishable from the factual situation in the case on hand. In this fact....
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....nd therefore the claim ought to be allowed. From an appreciation of the facts of the matter on record, it is seen that the learned CIT(A) has in fact taken due note of the assessee's submissions in this regard at pages 11 to 13 of the impugned order and taken note thereof while dismissing the assessee's claim of expenditure incurred on cost of improvement in respect of the aforesaid four parties (supra) amounting to Rs. 30,64,396/-. Except for raising these general arguments before us, the assessee had not placed on record any material evidence which controverts any of the findings of the authorities below on this issue. In this factual matrix of the case, we uphold the action of the authorities below in disallowing the assessee's claim for having incurred expenditure of Rs. 30,64,396/- as cost of improvement in respect of the aforesaid four parties. Consequently grounds 3 and 4 of the assessee's appeal are dismissed. 7. Ground No. 5 - Disallowance out of Wages @10% 7.1 We have heard the rival contentions and perused and carefully considered the material on record. According to the assessee this disallowance of Rs. 38,334/- was not called for since the employees have been paid t....