2022 (12) TMI 929

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....in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 263 of the Act on 04-03-2015. The grounds taken by the assessee read as under: 1. The order of The Commissioner of Income tax (Appeals) is contrary to law, facts 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 asse....

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....Having heard rival submissions, the appeal is disposedoff as under. Assessment Proceedings 2.1 The assessee being resident corporate assessee is stated to be engaged in equipment leasing, hire purchase financing and bill discounting. It transpired that the assessee assigned / sold 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 L....

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....the fact that the asset was shown as a part of fixed asst. The vacant land came into the possession of the assessee in lieu of loan foregone in the normal course of finance business. Therefore, the vacant lands assume the nature of business assets and would yield business income 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....