- (1.) This Appeal under Section 260A of the Income Tax Act, 1961 (the Act), challenges the order dated 19th June, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal)for the Assessment Year 2008-09.
(2.) The Revenue urges the following questions of law for our consideration: "(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal was correct in holding that mesne profits are capital receipts in the hands of the assessee and not revenue receipts chargeable to tax (b) Whether on the facts and in the circumstance of the case and in law, the Tribunal was correct in holding that mesne profits, can not be part of book profit under section 15JB, as it was held as capital assets
(3.) The impugned order of the Tribunal has held that the mesne profits received by the Respondent-Assessee for the unauthorized occupation of its premises from Central Bank of India is a receipt of capital nature and thus not taxable. To reach the above conclusion, the impugned order placed reliance upon the decision of Special Bench of the Tribunal in Narang Overseas Pvt. Ltd., v. ACIT 100 ITD (Mum)S.B. The issue before the Special Bench in Narang Overseas Pvt. Ltd. (supra) was whether the mesne profits received by an assessee is revenue or capital in nature. The Special Bench, in its order placed reliance upon the definition of mesne profits in Section 2(12) of the Code of Civil Procedure, 1908 which reads as under: "Mesne profits of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession. " On the basis of above, it held that any amount received from a person in wrongful possession of its property, would be mesne profits and it is capital in nature. ;