9911796707
TMI Blog2022 (7) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1989-90. 2. The issue in this appeal relates to the acquisition and subsequent disposal by the Appellant-Assessee of two of his premises, i.e., offices bearing Nos.91 and 92 at Free Press Building, Mumbai. The Appellant - Assessee, had booked the two office premises in the Free Press Building on 31 March 1982. The total cost of purchase of two premises was Rs.933450. Out of which, the Appellant-Assessee paid Rs.840105. By an agreement dated 3 August 1988, the Appellant-Assessee sold the two properties to Bank of India Ltd. for Rs.7524000 and Rs.7144500, i.e., a total of Rs.14668500. In the Return of Income filed by the Appellant - Assessee on 18 December 1989, the Appellant - Assessee declared the loss of Rs.113490. As regards the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against the order passed by the Commissioner of Income Tax (Appeals), the Respondent - Revenue filed an appeal bearing No. I.T.A. No. 7985/BOM/1992 in the Income Tax Appellate Tribunal, Mumbai. The Tribunal, by the impugned order dated 7 August 2002, allowed the appeal filed by the Respondent - Revenue and set aside the order passed by the Commissioner of Income Tax (Appeals) accepting the conclusion of the Assessing Officer. Therefore, the Appellant-Assessee has filed the present appeal. 5. This Appeal was admitted on 22 September 2004 on the following questions of law framed as substantial questions of law: "1. Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in holding that the surplus arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Appellant-Assessee has real estate business, the same was not pursued on investment activity. It was contended that the amount paid towards the purchase of the premises was shown as a fixed asset in the balance sheet since beginning the same was accepted by the Respondent - Revenue. Mr. Agrawal submitted that the Board of Directors' reports and Minutes of Board Meetings, which were part of the record, clearly show that the premises were not purchased with an object to deal with the same. It was contended that there were certain circumstances where they were faced difficulties by the Developers of the building where the premises were booked with the Municipal Corporation, and therefore, the Board of Directors of the Appellant - Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The intention of the assessee will have to be seen. There are tests such as the quantity of purchase of commodity and time within which it is sold, singleness or isolation of transaction. The general activities of the Assessee and the nature of the transaction can also be looked at. Though the objects clause in the Memorandum and the assessee company is not conclusive by itself, the manner in which the Assessee has conducted itself is relevant. Further factors such as whether the person has invested in the property intended to hold it and enjoy its income or for the purpose of sale are also relevant. These are some of the considerations which, coupled with other relevant factors cumulatively, are germane to decide the question at hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue that the Appellant-Assessee required such large office premises; its income was not consistent. The Appellant-Assessee, invested the entire share capital in purchasing the properties, and all resources of the Appellant- Assessee were locked up in the purchase of premises. One of the reasons for buying the premises under construction by the Appellant-Assessee was that it had expected further expansion of the business, and therefore, the office premises were purchased, and it was, therefore, convenient to go for premises under construction. However, at the same time, the Appellant - Assessee locked into entire share capital in purchasing the premises. The Tribunal noted that the property admittedly never yielded income to the Assessee, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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