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TMI Blog2008 (11) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer did not allow this claim. CIT(A) confirmed the stand of AO but tribunal upheld the claim of assessee – HC upheld the order of Tribunal on various grounds and reasonings - 585 of 2008 - - - Dated:- 26-11-2008 - BADAR DURREZ AHMED and RAJIV SHAKDHER JJ. Ms. Prem Lata Bansal and Sanjeev Rajpal for the appellant. Sriram Krishna for the respondent. JUDGMENT The judgment of the court was delivered by BADAR DURREZ AHMED J. - The Revenue is aggrieved by the order dated May 25, 2007, passed by the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), in ITA No. 1359/Del/2006 pertaining to the assessment year 2002-03 inasmuch as the Tribunal has directed the Assessing Officer to assess the profit/los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital asset in different years. Upon indexation, the same came to Rs. 56,10,337. On behalf of the assessee, it was contended that the cost of improvement incurred by the assessee had been wrongly shown as stock-in-trade in its books of account and it is on the basis of such wrong treatment that the tenancy right was held to be stock-in-trade by the Assessing Officer. It was contended that since the accounting treatment given by the assessee was patently wrong, the Assessing Officer as well as the Commissioner of Income-tax (Appeals) were not justified in deciding the nature of the tenancy right as being stock-in-trade of the assessee's business relying on such wrong treatment. The assessee contended that its business was purchase and sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was one where property was taken by the assessee on rent and after making substantial improvement therein, the same was occupied by it for a considerable length of time before finally surrendering the tenancy right in the said property to the owners thereof for consideration. According to the Tribunal, this was not a part of the business of the assessee. The Tribunal held that it was a solitary transaction of surrender of the tenancy right by the assessee in respect of the premises occupied by it and that too in favour of the owner. Consequently, the Tribunal returned the finding that the tenancy rights were not acquired by the assessee for the purposes of sale in the normal course of business. The Tribunal also returned a finding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, while determining their true nature, the treatment accorded to them by the assessee in the books of account may be one of the factors relevant in coming to a conclusion one way or the other. This is not such a transaction. 7. No fault can be found with the reasoning of the Tribunal. No perversity in its findings has been pointed out. Consequently, the appeal is dismissed as no substantial question of law arises for our consideration. It is made clear that in case the cost of improvement has been treated as business expenditure in the earlier years then the Assessing Officer would be within his rights to withdraw the same. Learned counsel for the respondent does not have any objection to this direction. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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