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TMI Blog2015 (2) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of Land & Deduction allowed u/s 54EC. 3. The assessee is in appeal in respect of the following issues:- (a) Disallowance of Depreciation, interest on car loan and car expenses aggregating to Rs. 85,940/- in respect of the Car owned by the Director. (b) Disallowance made u/s 14A of the Act. 4. The facts relating to the case are stated in brief. The assessee filed its return of income for the year under consideration declaring a total income of Rs. 1,73,02,965/-. It had declared business income from Hoarding charges/compensation and also from trading in silver. The AO noticed that the hoarding charges/compensation were received from various companies for leasing out open spaces. The gross income of Rs. 37,88,010/- received as hoardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired the lease hold rights on it through an agreement dated 11.12.1941. The assessee declared the profit arising on sale of above said plot as long term capital gain and claimed deduction u/s 54EC of the Act. The AO noticed that the assessee had proposed to construct flat on the above said land about 20 years back and had also obtained advances from the parties. The assessee had also prepared plans for construction of residential premises and also obtained sanction from Pune Municipal Corporation. However, the project was abandoned and the advances received from parties excepting a sum of Rs. 73,200/- were returned back. The AO took the view that the assessee had converted the above said plot as "Business asset" and accordingly assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We shall first take up the appeal filed by the revenue. The first issue relates to the disallowance of expenses. The Ld D.R placed strong reliance on the assessment order. On the contrary, the Ld A.R submitted that the assessing officer has made such kind of disallowance only during the year under consideration. Referring to the assessment order passed for AY 2004-05, which is placed at page 42 of the paper book, the Ld A.R submitted that the assessing officer has all along accepted that the assessee is engaged in the business of trading in Bullion. He submitted that the assessee has been declaring the income from hoarding charges and trading in bullion since past several years. He submitted that the assessee company was incorporated in B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness income only. Before us, the Ld D.R could not controvert the findings given by Ld CIT(A). With regard to the expenses, we notice that the Ld CIT(A) has analysed each expense and has given proper reasoning to allow the same. As noticed earlier, the Ld CIT(A) has confirmed disallowance of transfer charges and car expenses. Since we have confirmed the decision of the Ld CIT(A) that the hoarding charges and trading in silver are required to be assessed as Business income, we do not find any infirmity in the decision of Ld CIT(A) in directing the AO to allow the expenses claimed. Accordingly we uphold his order on this issue. 14. The next issue pertains to the assessment of gain arising on sale of Pune land. We have heard the parties on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of conditions prescribed u/s 54EC of the Act. 15. We notice that the Hon'ble Punjab & Haryana High Court had considered an identical issue in the case of CIT Vs. Raj Bricks Industry (2010)(322 ITR 625). The assessee therein was a partnership firm and carried on the business of running brick-kiln. It sold a land, which it had purchased earlier, and declared long term capital gain. The AO assessed the gain arising on sale of land as business income. The Hon'ble High Court held that the gain arising on sale of land cannot be assessed as business income, the assessee is not engaged in the business of dealing in land. Since the assessee was using the land for brick-kiln business, the profit arising on its sale is assessable as Capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the director has used the said car only for the purpose of the business of the assessee company only. Accordingly he submitted that the disallowance relating to the car may be allowed. On the contrary, the Ld D.R supported the order of Ld CIT(A) on this issue. 18. We have heard the rival contentions on this issue. When it was asked as to whether the company has passed any resolution in respect of the Car expenses of the director or was there any agreement between the assessee company and the director with regard to the usage of car, the Ld A.R fairly admitted that the assessee did not possess such kind of documents. In the absence of any agreement or any other document to support the claim of the assessee, we have no other option, but to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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