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TMI Blog2011 (8) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... sarathi for the Respondent. JUDGMENT N. Kumar, J These three appeals are preferred by the revenue challenging the common order passed by the Tribunal, wherein the claim of the assessee that the income from the sale of the property should be assessed under the head of 'capital gains' and not under the head of 'income from business', has been upheld. 2. These appeals pertain to the assessment years 1996-97, 1997-98 and 1999-2000. The assessee is a partnership firm carrying on the business of dealing in grocery items at Mangalore in a rented premises. At the first instance, the partnership firm was consisting of Sri Annappa Pai and Smt. Shoba S Pai. They started the business under the name and style of "Pai Provision Stores" fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. After such sale of constructed portion of the property, subsequent sales are effected by the assessee after a lapse of three years. Leaving the said period, which is not accepted as capital gains, the Tribunal was of the view that the subsequent sales have been effected on account of financial problems of the partners, who incurred liability in the construction of residential house. Therefore, the said sale transactions cannot be treated as trading activity. The long gap between the first sale and subsequent sale will itself go to show that investment has been made to meet the capital so as to house business of the assessee in the constructed building. Therefore, the Tribunal accepted the claim of the assessee and accordingly, set a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is how both the properties, which were acquired by the assessee, have been developed. One portion of the property was sold in the year 1992-93. Three years thereafter, as aforesaid, they have sold three portions falling under three different assessment years. The consideration received from the sale is utilized to clear the debt, which they had incurred for the development of the property. The assessee has let out the remaining portion of the property to different tenants and also carrying on business. So, the overall evidence on record discloses that though the assessee purchased the land, constructed building and sold some portions of the same, the said sale is not with the object of making any profit. It is to wipe out the liability the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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