IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1756 OF 2014 Commissioner of Income Tax 8, Mumbai ... Appellant Vs. Glowshine Builders & Developers Pvt. Ltd. ... Respondent ...... Mr. Arvind Pinto for Appellant. Mr. Madhur Agarwal a/w Mr. Atul K. Jasani for Respondent. ...... CORAM : S. C. DHARMADHIKARI & PRAKASH D. NAIK, JJ. DATE : SEPTEMBER 04, 2017. P.C. : 1. Revenue's Appeal challenges order of Tribunal dated 11th April, 2014, for assessment year 2009 2010. 2. Mr. Pinto would submit that all questions and proposed from pages 4 to 6 (paragraphs 6.1 to 6.8) are substantial questions of law. 3. He would submit that Tribunal has seriously erred in reversing concurrent findings of fact. If assessee is claiming to be engaged in business of building, development and investments in real estate, then Assessing Officer observed that company had entered into agreement with M/s. Kirit City Homes. It's development rights in property at Vasai were sold for total consideration of Rs.15,94,06,500/ . ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: vikrant 2/6 17 ITXA 1756 2014.odt 4. agreement in that regard dated 6th May, 2008 was duly registered with Sub Registrar of Assurances, Vasai. However, rectification deed was executed and registered on 30 th May, 2008, revising consideration to Rs.5,24,27,354/ . 5. Assessing Officer, according to Mr. Pinto, correctly noted that sum of Rs.15,94,06,500/ , though received, was not recorded in books of account maintained by assessee. Therefore, that was treated as short term capital gain and it was added to income for year under consideration. 6. Commissioner of Income Tax (Appeals), Mumbai, passed order dated 30th November, 2012 dismissing Appeal. He upheld view of Assessing Officer to treat transaction as income for capital gains for assessment year 2009 2010. 7. Being aggrieved, Tribunal was approached by assessee, but in submission of Mr. Pinto, Tribunal in garb of considering facts in totality, have completely misinterpreted same. It has taken upon itself task of re appreciating and re appraisal of factual findings though no perversity was established. Hence, direction of Tribunal to assess income resulting from impugned transaction under head profit and gains of business or profession by taking into consideration sale consideration at Rs.5.24 crores as shown by ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: vikrant 3/6 17 ITXA 1756 2014.odt assessee in its profit and loss account as relating to business of assessee and further holding that provisions of Section 50C are not applicable, is perverse and contrary to law. 8. With assistance of Mr. Pinto and Mr. Agarwal, we have perused order of Tribunal carefully. 9. We have also perused Section 50C of Income Tax Act, 1961. That Section enacted special provision for full value of consideration in certain cases. Sub section (1) of Section 50C in terms states that where consideration received or accruing as result of transfer by assessee of capital asset, being land or building or both, is less than value adopted or assessed or assessable by any authority of State Government (stamp valuation authority) for purpose of payment of stamp duty in respect of such transfer, then, value so adopted or assessed or assessable shall, for purposes of Section 48, be deemed to be full value of consideration received or accruing as result of such transfer. 10. It is common ground that assessee is in business of building and development of properties. There was no change in activities of company of assessee during year under consideration. factual findings emerging from paragraphs 16 and 17 of order of Tribunal are that assessee, for year ending 31st March, 2006, disclosed inventories at Rs.8.66 ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: vikrant 4/6 17 ITXA 1756 2014.odt crores. For year ending 31 st March, 2007 there was no change and same figure was disclosed. For year ending 31 st March, 2008, assessee showed sale of land development rights at Rs.5,24,27,354/ and cost of land was shown at Rs.5,21,37,454/ . reason for sale consideration of Rs.5.24 crores during financial year 2007 2008 was disclosed as MOU with M/s. Kirit City Homes Private Limited dated 27 December, 2007 for transfer of development rights for total consideration of Rs.5,24,27,354/ . necessary entries were passed on 2nd January, 2008, debiting account of M/s. Kirit City Homes but crediting that of one M/s. SICCL. assessee owed to M/s. SICCL sum of Rs.8.10 crores. Therefore, it directed M/s. Kirit City Homes to pay consideration directly to M/s. SICCL. corresponding entries were made in account of M/s. SICCL. Even possession of land was handed over on 2nd January, 2008. This falls within financial year 2007 2008 relating to assessment year 2008 2009. In that assessment year, assessee offered this sum as income under head business income . development agreement dated 6 th May, 2008 did not reflect correct sale consideration and in above sum. Instead, it mentioned amount of Rs.15,94,06,500/ . On relying this mistake, deed of rectification was executed on 30th May, 2008 and registered with office of Sub Registrar, Vasai. 11. Once all these facts were taken into consideration in totality ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: vikrant 5/6 17 ITXA 1756 2014.odt and they being undisputed, we do not see how Tribunal can be faulted. Tribunal has recorded that assessee was holding 50.16 acres of land, out of which 27.44 acres of land is subject matter of MOU dated 27the December, 2007. remaining land aggregating to 22.72 acres has been converted by assessee as capital asset, that is subsequent to impugned transaction. It is in these circumstances and when total cost of land has been determined proportionately that all questions, and particularly whether impugned transaction relates to transfer of stock in trade or capital asset, have been answered in favour of assessee and against Revenue. To our mind, when written documents were perused and with corroborating materials, Tribunal rightly concluded that impugned transaction relates to business of assessee and is to be assessed as such under head profit and gains of business and profession . When Tribunal noticed such perversity in concurrent findings, it has but performed its duty as last fact finding authority. Tribunal being empowered by law to undertake that exercise, has performed it's duty. We do not see how in such background can Tribunal's view be termed as perverse or it's order termed as vitiated by any error of law apparent on face of record. reasons assigned from paragraphs 16 to 18 of impugned order are based on materials produced before Tribunal and forming part of record. Tribunal has not gone beyond same. In circumstances, none of questions proposed by Revenue in ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: vikrant 6/6 17 ITXA 1756 2014.odt this Appeal are substantial questions of law. Appeal is devoid of merit and is dismissed. However, there shall be no order as to costs. (PRAKASH D. NAIK, J.) (S. C. DHARMADHIKARI, J.) ::: Uploaded on - 12/09/2017 ::: Downloaded on - 13/09/2017 09:53:11 ::: CommissionerofIncome-tax8,Mumbai v. GlowshineBuilders&DevelopersPvt.Ltd