Commissioner of Income Tax - 6 vs Mahindra Lifespace Developers Ltd.

In this appeal by the revenue for assessment year 2004-05 following questions have been raised for our consideration.

(a) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in directing the Assessing officer to re-compute the disallowance u/s. 14A on a reasonable basis relying on the judgment of Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. Vs. Dy. Commissioner of Income Tax, Range 10(2) and Others, despite the fact that the issue pertains to A.Y. 2004-05 when rule 8D was not in statute book?

(b) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in setting aside the case and relying on the judgment of the Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. Vs. Dy. Commissioner of Income Tax, Range 10(2) and Others, despite the fact that the A.O. has clearly stated that is a case where interest bearing funds were utilized for earning tax free income?

(c) Whether on the facts and in the circumstances of the case and in law the Tribunal is right in holding that the income from sale of land is in the nature a long term capital gains without appreciating the factual and legal matrix which he clearly show that being developed in a planned and systematic manner, the transaction of sale of land partake character of business income?

(d) Whether on the facts and in the circumstances of the case and in law the Tribunal was correct in holding that the income from sale of land to be in nature of income under the head long term capital gains, even though the transaction of sale is at least adventure in the nature of trade as is clearly brought out by the factual and legal matrix as contained in the Assessment order?

So far as questions (a) and (b) are concerned the Tribunal by impugned order has remanded the matter to the file of the Assessing Officer to decide the issues raised herein in the light of the decision of this Court in Godrej and Boyce Mfg. Co. Ltd. Vs. Dy. Commissioner of Income Tax, Range 10(2) and Others, . In these circumstances, we see no reason to entertain the proposed questions (a) and (b).

So far as questions (c) and (d) are concerned, the Assessing Officer has recorded a finding of fact that on a similar issue for earlier assessment year 2003-04 the income earned from the sale of land has been assessed to capital gain. The revenue has accepted the order of the Assessing Officer for assessment year 2003-04. The Tribunal by impugned order while applying rule of consistency held that it is not permissible for the revenue to agitate the same issue when in the earlier assessment year 2003-04 the same being taxable as capital gains has been accepted by the revenue. In that view of the matter, we see no reason to entertain the questions (c) and (d). Accordingly, the appeal is dismissed. No order as to costs.