The Commissioner Of Income Tax – 3, Mumbai v. M/S.floreat Investments Limited

agk IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5660 OF 2010 The Commissioner of Income Tax – 3, Mumbai..Appellant. Versus M/s.Floreat Investments Limited ..Respondent. Mr.Vimal Gupta, Senior Advocate with Ms.Padma Divakar for the appellant.Mr.Poras Kaka, Senior Advocate with Mr.Jignesh Chavla i/by Mr.Atul K Jasani for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. M.S. Sanklecha, JJ. DATE : 5[th] November 2012 P.C. : 1.Following substantial questions of law are raised by the Revenue in this appeal. a)Whether on the facts and in the circumstances of the case and in law the Tribunal was right in deleting the addition of Rs.5,22,13,305/- made by the Assessing Officer by holding that income from the project undertaken by the assessee company is assessable on completion of the entire project of redevelopment of land and not from the completion of construction of one building in the entire project even though the profits arising from the construction of that building are to be assessed in the year in which the construction of such building was completed ?the Tribunal was right in deleting the addition of Rs.5,22,13,305/- made by the Assessing Officer by holding that income from the project undertaken by the assessee company is assessable on completion of the entire project of redevelopment of land and not from the completion of construction of one building in the entire project even though the profits arising from the construction of that building are to be assessed in the year in which the construction of such building was completed ? b) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that interest from government securities received by the assessee company amounting to Rs.1,66,327/- was 'business income' as claimed by the assessee company and not 'income from other sourses' as held by the assessing officer even though such income did not arise from the business activity of the assessee company ? c) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that rental income received by the assessee company amounting to Rs.1,48,575/- was business income as claimed by the assessee company and not income from other sources as held by the assessing officer even though such income did not arise from the business activity of the assessee company ?the Tribunal was right in holding that rental income received by the assessee company amounting to Rs.1,48,575/- was business income as claimed by the assessee company and not income from other sources as held by the assessing officer even though such income did not arise from the business activity of the assessee company ? d) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that appreciation in government securities amounting to Rs.20,825/- was business income as claimed by the assessee company and not income from other sources as held by the assessing officer even though such income did not arise from the business activity of the assessee company.the Tribunal was right in holding that appreciation in government securities amounting to Rs.20,825/- was business income as claimed by the assessee company and not income from other sources as held by the assessing officer even though such income did not arise from the business activity of the assessee company. 2.As regards question (a) is concerned, the assessee by following project completion method had not offered any income to tax from the project in the assessment year in question. It is not in dispute that the method adopted by the assessee in computing the income by following the project completion method has been accepted by the Revenue in the subsequent assessment years. In these circumstances, the first question raised by the Revenue cannot be entertained. 2.As regards question (a) is concerned, the assessee by following project completion method had not offered any income to tax from the project in the assessment year in question. It is not in dispute that the method adopted by the assessee in computing the income by following the project completion method has been accepted by the Revenue in the subsequent assessment years. In these circumstances, the first question raised by the Revenue cannot be entertained. 3.As regards questions (b), (c) and (d) are concerned, counsel for the parties state that similar questions raised by the Revenue in the assessee's own case, being Income Tax Appeal No.4184 of 2009 decided on 30[th ] November 2010, have not been entertained by this Court. Hence, questions (b), (c) and (d) cannot be entertained. 4. The appeal is accordingly disposed of with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)