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TMI Blog2015 (8) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... h is engaged in the business of manufacturing and selling pharmaceutical items in a small scale. It appears that the said concern M/s.Win Pharma was originally a partnership firm comprising of the respondent herein as well as two others as its partners. Therefore, when the concern was carrying on business in partnership, it purchased land of an extent of about 1 acre on 14.12.1978. The land was depicted as the business asset of the partnership firm. 4. It appears that two out of three partners retired on 24.6.1979, making the partnership firm a sole proprietary concern, of which, the respondent became the sole proprietor. He continued to run the business as a proprietorship concern thereafter. 5. On 24.1.1981, the respondent purchased an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders were passed on 31.8.2007 in respect of the assessment years 2004-2005 and 2005-2006. Aggrieved by these orders, the assessee filed appeals in I.T.A. Nos.122 to 125/2006-2007 and 87 and 88/2007-2008 before the Commissioner of Income Tax (Appeals). The Commissioner allowed the appeals for the assessment years 2000-2001 to 2002-2003 and 2005-2006 fully and allowed the appeals in respect of the assessment years 2003-2004 and 2004-2005 partly. 10. As against those orders, the Department filed these appeals in I.T.A.Nos.679 to 684 of 2011 for the assessment years 2000-2001 to 2005- 2006 before the Income Tax Appellate Tribunal. The assessee filed two independent appeals in I.T.A.Nos.596 and 597 of 2011 in respect of the assessment years 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case, the Tribunal was right in considering the fact that one of the housing unit was above 1,500 sq.ft., violating the limit prescribed under Section 80IB(10)? " 12. The answer to questions (iii)(a) to (iii)(c) in relation to assessment years 2003-2004 and 2004-2005 would depend directly upon our answer to question (i) in relation to the assessment years 2000-2001 to 2005-2006. Therefore, we shall take up for consideration the first question that relates to the issue as to whether the sale of undivided share in land by the assessee could be treated as a business income or not. 13. The facts, which we have narrated in the first part of this order would show that the respondent was originally a partnership firm, which purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and sale of pharmaceutical products. Hence, the Commissioner of Income Tax (Appeals) and the Tribunal were right in holding that the assessee was entitled to treat it as a business income. Hence, we decide on question (i) that the Tribunal was right in holding that the income from the sale of undivided share of land and the construction of flats cannot be subjected to computation of capital gains and that the same would be treated as business income. As a consequence of this opinion, questions (iii)(a) to (iii)(c) raised in relation to the assessment years 2003-2004 and 2004-2005 should automatically go in favour of the assessee. 16. Coming to the question of law relating to the valuation report submitted by the DVO and the reliance pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent valuation of the superstructure. 24. Apart from the above basic fallacy relied on by the Assessing Authority, it is to be seen that the consideration was paid by the buyers as a whole for the purchase of apartments along with the undivided share of right in the land and as such the value of land and value of apartment cannot be worked out independently. The value adopted for the purpose of executing sale deeds to convey the undivided share of right in the land was only for the purpose of registration, which is evident from the fact that the guideline value was adopted by the assessee to register such documents. It is to be seen therefore that the consideration paid by the buyers of the apartments is wholesome consideration for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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