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TMI Blog2019 (7) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... :- In view of the decision of the Hon ble Gujarat High Court in case of CIT vs. Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] we do not find any merit in the grievance of the assessee on this score. Ground No.2 of the assessee s appeal is dismissed. Method of computation of business income as a consequence of sale of flat - conversion of land into stock-in-trade - AR thus submitted that the cost price of FMV on the date of conversion of land into stock-in-trade is liable to be taxed as long term capital gain and excess consideration accrued / received over and above FMV is liable to be taxed as business income - HELD THAT:- We find merit in the plea of the assessee for setting right the error committed by the assessee. We, therefore, are disposed to entertain deviation in the claim originally made which may result in lower tax liability. The issue however has not been examined by the Revenue authorities on facts. Therefore, we consider it appropriate to set aside the issue to the file of the AO for fresh adjudication in the light of submissions to be made by the assessee with factual evidences before AO. It will thus be open to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial is on record. 5. When the matter was called for hearing, the learned AR referred to the assessment order and submitted that the disallowance made by the AO under s.14A of the Act towards expenditure attributable the exempt income comprises of ₹ 1,39,076/- under Rule 8D(2)(ii) towards proportionate interest expenditure and ₹ 1,18,621/- towards administrative expenditure Rule 8D(2)(iii) of the IT Rules. Aggregate disallowance was thus made at ₹ 2,57,697/-. In the context of interest disallowance of ₹ 1,39,076/-, the learned AR referred to the financial statement placed by way of paper book and submitted that the investment having potential to yield dividend income is ₹ 2.80 Crore whereas the assessee holds its own funds in the vicinity of ₹ 22.82 Crores. It was thus submitted that the own funds at the disposal of the assessee surpasses the corresponding investment in a very significant way. This being so, a presumption would arise in favour of the assessee that own funds have been utilized for investments giving rise to exempt income in the light of long line of judicial precedents including; (i) CIT vs. UTI Bank Ltd. [2013] 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Arun Vila Scheme) from FY 2008-09 onwards, The construction started in FY 2008-09. Some portions of the flats were ready during FY 2011-12 i.e. AY 2012-13. The assessee company sold three flats in FY 2012-13 concerning AY 2013-14 in question. The assessee submitted all the relevant details in the course of assessment proceedings for the preceding AY 2012-13. The assessee prepared the computation of income correctly for AY 2012-13. However, the assessee committed mistake during AY 2013-14 in question as well as in AY 2014-15 2015-16. The leaned AR for the assessee referred to the statement of income and assessment order for receiving AY 2012- 13 to demonstrate the bonafides in the act of the assessee. 11.1 The learned AR thus submitted that the cost price of FMV on the date of conversion of land into stock-in-trade is liable to be taxed as long term capital gain and excess consideration accrued / received over and above FMV is liable to be taxed as business income. In the AY 2012-13, the assessee committed a mistake of deducting only original cost price instead of bifurcating the profits into long term capital gain and business income having regard the FMV of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn would not ipso facto bar an assessee from claiming an expense or disputing an addition if it is otherwise permissible under law. It is thus well settled that if a particular income is not taxable under the Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine. The Revenue authorities cannot enforce untenable actions of the assessee against it which led to declaration of income of higher amount incorrectly. It is thus open to assessee to show that it was over assessed in correctly owing to its own mistake. 13. In the light of the observations so made, we find merit in the plea of the assessee for setting right the error committed by the assessee. We, therefore, are disposed to entertain deviation in the claim originally made which may result in lower tax liability. The issue however has not been examined by the Revenue authorities on facts. Therefore, we consider it appropriate to set aside the issue to the file of the AO for fresh adjudication in the light of submissions to be made by the assessee with factual evidences before AO. It will thus be open to the assessee to show before the AO that it was over assessed incorrectly or sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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