The Commissioner Of Income Tax – 13, Mumbai v. Shri Milan D. Shah

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.6934 OF 2010 The Commissioner of Income Tax – 13, Mumbai..Appellant. Versus Shri Milan D. Shah ..Respondent. Mr.Suresh Kumar for the appellant.Mr.Prakash Shah with Mr.Jas Sanghavi i/by PDS Legal for the respondent. CORAM : J.P. Devadhar & A.A. Sayed, JJ. P.C. : DATE : 4[th] August, 2011. 1.Four questions of law have been raised by the Revenue in this appeal, which reads thus : (a)Whether, on the facts and circumstances of the case and in law the Tribunal is justified in holding that the purchase and sale transactions in share and unit are to be treated by the AO without appreciating the nature and the magnitude of the transaction in shares, when the income of the assessee from profit on sale at Rs.49,31,973/- in short interval, the profit on sale of shares in business Income and not income from investment under head of Capital Gain as claimed by the assessee ? (b)Whether, on the facts and circumstances of the case and in law the Tribunal is justified in holding that the income of the assessee from sale of share in high volume in short period is a capital gain and assessee is entitled for concessional rate under Section 111A and 112 ? (c)Whether, on the facts and circumstances of the case and in law the Tribunal is justified in holding that right to get the flat cannot be said that the transfer of the tenancy rights right took place, whereas it is well settled position that receipt on account of surrendering the tenancy rights are capital in nature and taxable as capital gains ? (d)Whether, on the facts and circumstances of the case and in law the Tribunal is justified in holding that arbitrage loss was towards derivative transactions and same can be allowed to be set against business income ? 2.As regard questions (a) and (b) are concerned, counsel for the parties state that similar questions raised in the case of CIT V/s. Dinesh B. Shah being Income Tax Appeal No.16 of 2011 has been dismissed by this Court on 22[nd] July 2011. For the reasons stated therein, questions (a) and (b) cannot be entertained. 3.As regards question (c) is concerned, the dispute is, while computing the capital gains, whether, the amount paid by the assessee to the developer towards the construction cost of the premises to the 13 tenants were liable to be excluded from the total consideration received by the assessee. The Income Tax Appellate Tribunal relying upon the judgment of this Court in the case of CIT V/s. Shakuntala Kantilal reported in 190 ITR 96 has held that unless the tenants were provided alternate permanent accommodation, the development agreement could not have been implemented. In these circumstances, the decision of the Income Tax Appellate Tribunal in excluding the amount paid by the assessee to the developer for and on behalf of the tenants in computing the capital gains cannot be faulted. Accordingly, question (c) cannot be entertained. 4.As regards question (d) is concerned, counsel for the Revenue fairly states that the said question is answered by the Income Tax Appellate Tribunal in favour of the Revenue and, therefore, he is not pressing question (d). 5.The appeal is accordingly disposed off with no order as to costs. (A.A. Sayed, J.) (J.P. Devadhar, J.)