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TMI Blog2020 (6) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... opment the impugned land for its business activities has not been challenged. In the similar facts and circumstances the Hon ble Tribunal Jodhpur has decided the issue in favour of the assessee in the case of Marudhar Hotels Pvt. Ltd v/s ACIT [ 2013 (2) TMI 840 - ITAT JODHPUR ] wherein held that share of sale consideration received by the appellant from developer on sale of plots under the development agreement was in the course of realization of a capital asset held by the appellant for over 30 long years, giving rise to income taxable under the head 'Capital gains'. Such an activity could not, on the undisputed facts of the case, be regarded as carrying on an adventure in the nature of trade. Thus we hold that the income generated by the assessee from the sale of the property in dispute is taxable under the head capital gain. - Decided in favour of assessee. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ] - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to indexation. The appellant submits that in view of provisions of section 48 each and every capital expenditure of ₹ 8317516/- was entitled to indexation. The appellant submits that the conclusion in para 12 of the assessment order is unilateral in nature, and not in consonance with the provisions of law. The said conclusion be quashed and the assessing officer be directed to allow indexation. 3.0 The appellant without prejudice to above further submits that the Commissioner of Income tax (Appeals) erred in concluding that the gain was taxable as short term capital gain. The appellant submits that the capital asset was a long term capital asset and therefore gain was long term capital gain. The appellant submits that it be so held now. 3.1 The appellant submits that conclusion has been arrived at by the CIT(A) without affording any opportunity of being heard. The appellant submits that conclusion being unilateral and in violation of principles of natural justice be quashed. 4.0 The CIT(A) erred in upholding erroneous demand in the case of the appellant. It is submitted that the assessing officer be directed to make correct computation of the demand. It is further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee there was the isolated transaction for the sale of the building which was held for more than 10 years. Thus in this way the resultant loss had been arisen after providing indexed cost of acquisition and indexed cost of improvement. 10. However, the AO observed that the assessee had been incurring the expenditure continuously, knowing fully well that such building was not economically viable to run the corporate house. Thus the intention of the assessee was very clear to sell the property ultimately at a good point of time after development. Thus the AO was of the view that the activities carried out by a developers/builders to run his business are similar to the activities carried out by the assessee. The AO therefore considered the transaction as adventure in the nature of the trade and accordingly the transaction would be covered under the head business and profession. The AO accordingly denied the indexation on cost and improvement incurred by the assessee. 11. The AO further while computing the business income, improvement cost incurred by the assessee before 21-03-2000, did not allow for the reason that the permission was granted by Ahmedabad Municipal Corporation to us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. The construction continued till the year of sale which shows that appellant constructed the same for commercial benefit. The whole thing cannot be treated as improvement of capital asset. 2- Appellant has not disclosed the construction of commercial building as capital work in progress to indicate that it wasconstructing its own office building. If it would have been the case, appellant would have transferred the same to office building account and the same would have been business asset. The sale of depreciable business asset would have resulted in short term capital gain in section 50 of IT act. Even as per this also appellant would have paid taxes at the same rate as business head. Therefore even if appellant would have treated this as its own office building construction, the tax effect would be the same as done by the AO. 3- Appellant's claim that single venture cannot be treated as adventure in the nature of trade is not correct since various courts have held that even single venture can be adventure in the nature of trade if the same is done by way of organised activity. Appellant has done construction on plot of land after demolishing old bungalow. Construction r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alow was not the mere investment. Subsequentactivities including demolition of the same and construction thereon show that it was not simply an investment but adventure in the nature of trade for the purpose of earning profit. In view of the above and judicial decisions relied upon by the assessing officer, I am of the clear view that appellant carried out regular organized activity in constructing a commercial premise which was later on sold to outside parties and this constituted adventure in the nature of the trade. Result of this activity is definitely business profit taxable in business head and not capital gain. The addition made by the assessing officer is therefore confirmed. Even otherwise, as mentioned earlier, the appellant is liable to short term capital gain under section 50 if this premise would have been taken as its own office building. In either case the addition made by the AO is justified. 15. Being aggrieved by the order of the ld. CIT-A, the assessee is in appeal before us. 16. The ld. AR before us reiterated the submission as made before the authorities below. 17. On the other hand the ld. DR vehemently placed his reliance on the finding contained in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has been carrying on business of property development on the basis that the assessee has been incurring the expenditure on continuous basis for the development of the land. The contention as raised by the assessee before the authorities below that it wanted to development the impugned land for its business activities has not been challenged. 22. We also find that in the similar facts and circumstances the Hon ble Tribunal Jodhpur has decided the issue in favour of the assessee in the case of Marudhar Hotels Pvt. Ltd v/s ACIT reported in 40 taxmann.com 161 wherein it was held as under: Thus, in the given facts and the circumstances of the case, and in view of the above stated legal (position) inescapable conclusion that follows is that the share of sale consideration received by the appellant from developer on sale of plots under the development agreement was in the course of realization of a capital asset held by the appellant for over 30 long years, giving rise to income taxable under the head 'Capital gains'. Such an activity could not, on the undisputed facts of the case, be regarded as carrying on an adventure in the nature of trade. Consequently, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suo motu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters for clarifications because of considerable time lag between the point of time when the hearing is concluded and the point of time when the order thereon is being finalized, but then, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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