Aforesaid appeal by assessee for Assessment Year (AY) 2010-11 arises out of the order of learned Commissioner of Income-Tax (Appeals)-58, Mumbai [CIT(A)], order dated 30/07/2019 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 143(3) on 05/02/2013.
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI
BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode)
Assessment Year: 2010-11
M/s Mukesh Gopaldas Dattani
3-C Avsar, 77/81 Kazi Sayed Street Mumbai-400 003,
PAN/GIR No. AAAFM-3204-E
ITO – 17(2)(4) Room no. 123B, 1st floor,
Aaykar Bhavan, M. K. Road, Mumbai-400 020
Assessee by: Shri Paresh Shaparia, Ld. AR
Revenue by:Shri Bharat Andhale, Ld. Sr. DR
Date of Hearing: 03/06/2021
Date of Pronouncement: 30/08/2021
O R D E R
1. During assessment proceedings, it transpired that the assessee, vide agreement dated 17/09/2009, transferred its right in respect of a leasehold property i.e., Shop Cum Godown No.10 in Block ‘Y’ APMC Complex, Navi Mumbai for sale consideration of Rs.19.52 Lacs which was offered to tax under the head ‘Çapital Gains’. The net sale consideration received by the assessee was Rs.9 Lacs whereas the balance amount of Rs.10.52 Lacs was directly paid by the purchaser to APMC (marketing committee) on behalf of assessee.
2. At the outset, it could be noted that what the assessee has sold is leasehold rights in certain property and therefore, the provisions of Sec.50C would not be applicable to such a transaction. The provisions of Sec.50C apply in case of transfer of capital asset being land or building or both and are not applicable in case of transfer of leasehold rights in land & buildings.
3. The assessee paid interest of Rs.0.61 Lacs to the partners. The same was disallowed since the original partnership deed did not provide for payment of any such interest. The Ld. CIT(A) confirmed the stand of Ld. AO since the only income in the Profit & Loss Account was interest income. Whether interest was assessable as Business income was not established and therefore, the interest disallowance was confirmed. Aggrieved, the assessee is in further appeal before us.
4. The appeal stand partly allowed in terms of our above order. Order pronounced on 30th August, 2021.
Please find attached the enclosed file for the full judgement