Sh. Deepak Godha, UDAIPUR V. ITO, UDAIPUR

CO 15/JODH/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9715 (ITAT-JODHPUR)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Sale consideration of property below Jantri Value; Business income; Salary income; Principle of natural justice; Additional evidence; Fair market value; Valuation report
• Section: 40A(3); 50C; 154

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 110/JODH/2013 (A.Y. 2009-10) ITO, WARD-2(1), VS. SHRI DEEPA K GODHA, UDAIPUR. 222, ASHOK NAGAR, UDAIPUR. PAN NO. AAQPG 8365 G (APPELLANT) (RESPONDENT) C.O. NO. 15/JODH/2013 (A.Y. 2009-10) SHRI DEEPAK GODHA, VS. ITO, WARD-2 (1), 222, ASHOK NAGAR, UDAIPUR. UDAIPUR. PAN NO. AAQPG 8365 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 07/05/2014. DATE OF PRONOUNCEMENT : 11/06/2014. O R D E R PER N.K. SAINI, A.M 2 THE APPEAL BY THE DEPARTMENT AND THE CROSS OBJECTI ON BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 21/12 /2012 OF LD. CIT(A)-I, JAIPUR. 2 FIRST WE WILL DEAL WITH THE CROSS OBJECTION OF THE ASSESSEE IN C.O. NO. 15/JODH/2013. THE ONLY GROUND RAISED IN THIS C ROSS OBJECTION READS AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN TREATING THE INCOME FROM SHORT TERM CA PITAL GAIN ARISING FROM SALE OF LAND AS BUSINESS INCOME. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29/07/2009 DECLARING TOTAL INCOME OF RS. 27,25,570/-. LATER ON, CASE WAS SELECTED FOR SCRUTINY. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN OF RS. 6,14,212/- ON SALE OF PLOT AT ANAND NAGAR, UDAIPUR. THE ASSESSING OFFICER FROM THE COPIES OF REGISTERED DOCUMENTS FOUND THAT THE ASSESSEE HAD SOLD LAND AT ANAND NAGA R FOR RS. 17,50,000/- ON 26/05/2008 WHEREAS THE SUB-REGISTRAR HAD VALUED THIS LAND AT RS. 25,02,500/-. THE ASSESSING OFFICER DID NOT FIN D MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE M ATTER WAS CLEARLY 3 COVERED UNDER THE DEEMING PROVISIONS OF SECTION 50C OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT), TH EREFORE, AN ADDITION OF RS. 7,52,500/- WAS MADE TO THE INCOME OF THE ASSESS EE. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- THE ASSESSEE HAD SOLD ONE PLOT OF LAND SITUATED AT 54, ANAND NAGAR, AYAD, UDAIPUR FOR RS.17,50,000/- TO DR. SUDHA SHARM A VIDE SALE DEED DATED 26/05/2008. THE REGISTRAR HAS CHARGED STAMP C HARGES ON DLC VALUE OF RS.25,02,500/-. THE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN ON THE SALE CONSIDERATION ACTUALLY RECEIVED OF RS.1 7,50,000/-. THE AO HAS CALCULATED THE LTCG ADOPTING THE VALUE U/S 50C OF R S.25,02,500/- AND HENCE MADE THE ADDITION OF RS.7,52,500/- WE HAVE MADE THE FOLLOWING SUBMISSION TO THE AO AT THE TIME OF ASSESSMENT VIDE OUR LETTER DATED 17/10/2011: WHY DLC RATE SHOWN IN REGISTRY IS NOT TAKEN AS SALE CONSIDERATION FOR CALCULATING LTCG U/S 50C? IN THIS RESPECT WE WOU LD LIKE TO SUBMIT THAT THE ASSESSEE HAD SOLD THE RESIDENTIAL PLOT SITUATED AT 54, ANAND NAGAR, AY AD, UDAIPUR. THE ASSESSEE HAS SOLD THE PLOT FOR CONSIDE RATION OF RS.17,50,000/- WHERE AS THE REGISTRAR HAS CHARGED S TAMP DUTY ON DLC RATE OF RS.25,02,500/-. NOW AS PER SECTION 50C YOUR HONOUR WANT TO TAKE SALE CONSIDERATION AS PER DLC VALUE OF RS.25,02,500 /- FOR CALCULATING LONG TERM CAPITAL GAIN. IN THIS RESPECT WE WOULD LIKE TO SUBMIT THAT PLOT S ITUATED AT ANAND NAGAR, AYAD, UDAIPUR IS MERE 200 FT. AWAY FROM AYAD RIVER. THE LEVEL OF PLOT IS ALSO VERY BELOW THE GROUND LEVEL SO USUALLY IN HEAVY RAI NS WHEN THERE IS HEAVY WATER FLOW IN AYAD RIVER THE WATER USED TO FLOW IN THE PLOT. SO DUE TO THESE REASONS THE MARKET VALUE OF THE PLOT IS VERY LOW CO MPARED TO THE MARKET VALUE OF THE AREA AND THE PLOT WAS NOT EASILY SALEA BLE. THOUGH THE REGISTRAR HAS CHARGED THE STAMP VALUE ON THE PREVAI LING DLC RATE OF THE AREA BUT ACTUALLY THE ASSESSEE HAS RECEIVED THE CON SIDERATION LOWER THAN THE PREVAILING MARKET VALUE. AS THE PLOT WAS NOT EA SILY SALEABLE WE OFFERED 4 THE BUYER TO BEAR THE STAMP CHARGES ALSO AND PAID H EAVY BROKERAGE OF RS.87,500/-. IF YOUR HONOUR WANT THEN YOU MAY REFER TO DVO FOR VALUATION OF FAIR MARKET VALUE. THEREFORE, IN LIGHT OF THE ABOVE FACTS WE HAVE TAKE N THE ACTUAL CONSIDERATION RECEIVED FOR THE PURPOSE OF CALCULATI NG LTCG. IF WE TAKE THE VALUE AS PER SECTION 50C THERE WILL BE UNDUE HARDSH IP ON THE ASSESSEE AS TO TAX NOTIONAL CONSIDERATION WHICH ACTUALLY ASSESSEE DID NOT RECEIVE. THEREFORE, WE REQUEST YOUR HONOUR TO TAKE THE ACTUA L CONSIDERATION RECEIVED THAT IS RS.17,50,000/- ONLY FOR CALCULATIN G THE LONG TERM CAPITAL GAIN. NOW WE FURTHER SUBMIT THAT VIDE THIS ABOVE LETTER A LONG WITH THE GENUINE REASONS WE HAVE REQUESTED THE AO TO REFER THE CASE TO VALUATION OFFICER AS PER THE PROVISION OF THE SECTION 50C OF THE ACT AND ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY BUT THE AO TOTALL Y IGNORED THE ASSESSEE'S SUBMISSION AND MADE THE ADDITION OF RS. 7,52,500/- WITHOUT GETTING THE VALUATION DONE FROM VALUATION OFFICER W HICH IS TOTALLY BAD IN LAW AND AGAINST THE NATURAL JUSTICE AND REQUIRED TO BE DELETED. ' 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS DID NOT RAISE THE ISSUE OF REFERRING TH E CASE TO THE VALUATION OFFICER NOR FILED VALUATION REPORT BY A REGISTERED VALUER DURING THE TIME OF ASSESSMENT PROCEEDINGS OR THE APPELLATE PROCEEDI NGS. HE FURTHER OBSERVED THAT VALUATION OF THE PROPERTY WAS DONE BY THE SUB-REGISTRAR AT RS. 25,02,500/- AND THE DLC RATES WERE FIXED BY THE REVENUE DEPARTMENT AFTER TAKING INTO CONSIDERATION OF ALL THE SET BACK S ETC. IN THAT PARTICULAR AREA, THEREFORE, THE VALUATION BY THE SUB-REGISTRAR OF THE REVENUE DEPARTMENT WAS A RELIABLE VALUATION OF THE PROPERTY AS PER THE DEEMING 5 PROVISIONS OF SECTION 50C OF THE ACT. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER WAS CONFIRMED. NOW THE ASSESS EE HAS FILED THE CROSS OBJECTION. 6 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WAS R EQUESTED VIDE LETTER DATED 17/10/2011 TO REFER THE CASE TO THE VALUATION OFFICER AS PER THE PROVISIONS OF SECTION 50C OF THE ACT TO ASCERTAIN T HE FAIR MARKET VALUE OF THE PROPERTY, BUT THE ASSESSING OFFICER TOTALLY IGN ORED THE ASSESSEES SUBMISSIONS AND MADE THE IMPUGNED ADDITION WITHOUT GETTING VALUATION DONE FROM THE VALUATION OFFICER. 7 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. STRONGLY S UPPORTED THE ORDER OF THE LD. CIT(A) AND FURTHER SUBMITTED THAT THE ADDIT ION WAS MADE BY THE ASSESSING OFFICER KEEPING IN VIEW THE DEEMING PROVI SIONS OF SECTION 50C OF THE ACT AND THE ASSESSEE NEVER RAISED ANY OBJECTION BEFORE THE LD. CIT(A) NOR FILED VALUATION REPORT BY A REGISTERED VALUER. THEREFORE, THE LD. CIT(A) RIGHTLY SUSTAINED THE ADDITION MADE BY THE A SSESSING OFFICER. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE DID NOT FILE ANY VALUATION REPORT BY A 6 REGISTERED VALUER OR CITED ANY COMPARABLE CASE TO C LAIM THAT THE DLC RATE FIXED BY THE REVENUE DEPARTMENT WAS NOT CORREC T. THEREFORE, THE VALUE ADOPTED BY THE ASSESSING OFFICER ON THE BASIS OF DLC RATE FIXED BY THE REVENUE DEPARTMENT WAS JUSTIFIED AND LD. CIT(A) RIGHTLY SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. WE, TH EREFORE, DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER ON THIS ISSUE. 9 . NOW WE WILL DEAL WITH THE APPEAL OF THE DEPARTMEN T IN I.T.A.NO. 110/JODH/2013. THE FOLLOWING GROUNDS HAVE BEEN RAI SED IN THIS APPEAL:- 'ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) HAS ERRED IN 1. DELETING THE DISALLOWANCE MADE BY THE AO AMOUNTI NG TO RS. 20,44,375/- BEING CASH PAYMENT U/S 40A(3) OF THE I. T. ACT. BY ADMITTING ADDITIONAL EVIDENCES FURNISHED BY THE ASS ESSEE BEFORE HIM WITHOUT PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER. 2. HOLDING THAT THE PAYMENTS OF RS. 20,44,375/- C OULD NOT BE DISALLOWED U/S 4Q(A)(IA) AS PER THE FINDING OF THE HON'BLE SPE CIAL BENCH ITAT, VISAKHAPATNAM IN THE CASE OF MERIYN SHIPPING & TRAN SPORTERS VS. ACIT (2012) 20 TAXMAN.COM 244 (VISAKHAPATNAM) WITHO UT APPRECIATING THE FACT THAT THE PROVISIONS OF SECTIO N 40(A)(IA) OF THE I.T. ACT ARE APPLICABLE NOT ONLY TO THE AMOUNT WHIC H IS SHOWN AS PAYABLE ON THE DATE OF BALANCE SHEET, BUT IT IS ALSO APPLIC ABLE TO SUCH EXPENDITURE, WHICH BECOME PAYABLE AT ANY TIME DURIN G THE RELEVANT PREVIOUS YEAR AND WAS ACTUALLY PAID WITHIN THE PREV IOUS YEAR. MOREOVER, THE DECISION IN THE CASE CITED ABOVE HAS BEEN KEPT ON 'INTERIM SUSPENSION' BY THE HON'BLE ANDHRA PRADESH HIGH COURT VIDE ORDER DATED 08. 10. 20 12. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DEL ETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 7 10 . FROM THE ABOVE GROUNDS, IT IS NOTICED THAT ONLY G RIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DELETION O F ADDITION OF RS. 20,44,375/-. 11 . FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSI NG OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THAT THE ASSESSEE HAD DECLARED SHORT TERM CAPITAL GAIN OF RS. 18,16,976/- ON SALE OF PROPERTY AT BEDWAS. ON EXAMINATION OF THE DOCUMENTS OF SALE AND PURCHAS E OF THE SAID PROPERTY, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE TRANSACTION WAS IN THE NATURE OF ADVENTURE IN TRADE. THE ASSES SING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE FOR T HE REASON THAT THE ASSESSEE HAD PURCHASED A PIECE OF LAND AND CUT PLOT S. OUT OF THIS LAND, INCURRED DEVELOPMENT EXPENSES AND THEN SOLD THE PIE CES OF LAND THROUGH BROKERS TO WHOM HE PAID HUGE COMMISSION. THE ASSES SING OFFICER HELD THAT THE INCOME OF RS. 18,16,976/- FROM THE SALE OF PLOTS WAS BUSINESS INCOME UNDER SECTION 2(13) OF THE ACT AND NOT FROM SHORT TERM CAPITAL GAIN. HE ALSO OBSERVED THAT THERE WAS VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT AS THE ASSESSEE HAD MADE CASH PAY MENTS EXCEEDING RS. 20,000/- ON ACCOUNT OF COMMISSION PAID TO VARI OUS PERSONS. THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 20,44,37 5/- ON ACCOUNT OF 8 CASH PAYMENTS MADE BY INVOKING THE PROVISIONS OF SE CTION 40A(3) OF THE ACT. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAW S:- 1) P.M. MOHAMMED MEERAKHAN VS. CIT (1969) 73 ITR 73 5. 2) ECLAT CONSTRUCTION (P) LTD. VS. CIT (1988) 172 I TR 84 (PAT.) 3) CIT VS. SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. ( 1975) 100 ITR 706 (SC) 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER:- THE ASSESSEE HAS PURCHASED AN AGRICULTURE LAND AT B EDWAS, UDAIPUR IN SEPTEMBER 2007 AS A INVESTMENT PURPOSE FOR RS. 30,8 8,500/-. AS THE LAND PURCHASED WAS VERY UNLEVELED AND IRREGULAR, THE ASS ESSEE WITH THE USE OF JCB MACHINE GOT THE LAND LEVELED. AFTER THAT WHEN ASSESSEE WAS IN URGENT NEED OF SOME MONEY PLANNED TO SALE THE LAND. BUT HE WAS NOT GETTING THE HANDSOME RETURN WHEN HE TRIED TO SELL THE LAND SO IT IS AND WAS NOT EASILY SALEABLE. SO WHEN HE ENQUIRED IN THE MARKET HE WAS SUGGESTED THAT IF HE GET THE L AND CONVERTED AND MAKE THE PLOTTING DONE HE CAN GET THE RETURN AND AL SO THE SMALL BUYERS WILL TAKE INTEREST IN PURCHASING THE PLOTS. SO THE ASSESSEE GOT THE PLOT CONVERTED, MADE THE SM ALL PLOTTING AND SOLD THE LAND. AS HE REQUIRES THE FUND URGENTLY THEREFOR E HE SOLD THE PLOTS WITH HELP OF PROPERTY BROKERS AND REALIZED THE AMOUNT. W E HEREBY SUBMIT THAT THE ASSESSEE'S INTENTION AT THE TIME OF THE PURCHAS E OF THE PLOT WAS FOR INVESTMENT AND NOT FOR TRADING. THE ASSESSEE'S REGU LAR BUSINESS IS TRADING IN MARBLE AND NOT THE REAL ESTATE. THIS IS THE ONLY TR ANSACTION HE MADE IN THIS NATURE FOR THE FIRST TIME: AT NO POINT OF TIME THE ASSESSEE'S INTENTION WAS TO EARN PROFIT BY DOING THE TRADING ACTIVITY IN REAL E STATE. WE THEREFORE SUBMIT THAT AS THE ASSESSEE'S INTENTION WAS INVESTMENT ONL Y THEREFORE PROFIT SHOWN UNDER STCG IS CORRECT AND IT IS NOT ADVENTURE IN NA TURE OF TRADE. AS FAR THE APPLICABILITY OF SECTION 40A(3) IS CONCERNED IT IS NOT APPLICABLE IN 9 ASSESSEE'S CASE AS THE ASSESSEE HAS NOT MADE THE CA SH PAYMENT OF RS.20,000/- OR MORE IN CASH IN A SINGLE DAY. THE MA XIMUM PAYMENT OF BROKERAGE IS THROUGH CHEQUE. THE PAYMENT FOR LEVELI NG AND JCB CHARGES IS MADE IN PART ON DAILY BASIS. WE HAVE TAKEN THE SING LE BILL BUT THE PAYMENT IS MADE IN PARTS ON DAILY BASIS. SO SECTION 40A (3) IS NOT APPLICABLE. AS PER SECTION 40A(3) IS CONCERNED THE ASSESSEE IS NOT IN THE BUSINESS OF TRADING THEREFORE THIS SECTION IS ALSO NOT APPLICAB LE. THE ASSESSEE HAS MADE THE PAYMENT OF BROKERAGE AND JOB CHARGES BEFORE 31 ST MARCH ONLY AND NO PAYMENT OF THIS NATURE IS OUTSTANDING THEREFORE SEC TION 40(A)(IA) IS NOT APPLICABLE. WE HEREBY SUBMIT THAT THE STCG SHOWN IS NOT A ADVEN TURE IN NATURE OF TRADE BUT PURELY AN INVESTMENT PROFIT AND NOT A BUS INESS INCOME AND THEREFORE SECTION 40A(3) AND 40(A)(IA) IS ALSO NOT APPLICABLE. SIR WE HEREBY AGAIN SUBMIT THAT ASSESSEE'S BUSINESS IS NOT OF REAL ESTATE AND TRADING OF LAND BUT HIS BUSINESS IS TRADING OF MARBLE & GRANITE. THE ASSESSEE PURCHASED THE LAND, FOR INVESTMENT PURPOSE ONLY BUT DUE TO CHANGE IN CIRCUMSTANCES HE HAD TO SELL THE LAND IN SHORT TIME AND FOR THE PURPOSE HE GOT THE LAND CONVERTED IN PLOTS AND SOLD THE PLOTS. MERE CONVERSION OF LAND INTO SMALL PLOTS AND SELLIN G THEM DOES NOT SHOW THAT ASSESSEE IS IN THE REGULAR BUSINESS OF TRADING OF LAND AND THEREFORE THE TREATING THE STCG AS BUSINESS INCOME IS NOT JUSTIFI ED AND CORRECT. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: SAROJ KUMAR MAZUMDAR V/S CIT (1959) 37 ITR 242 (SC) . KALI NATH V/S CIT (1973) 88 ITR 347 (ALL). CIT V/S A. MOHAMMED MOHIDEEN (1989) 42 TAXMAN 1/176 ITR 393 (MAD.). KAUR SINGH V/S CIT (1983) 144 ITR 756 (PUNJAB). KRISHNA PRASAD & CO. V/S CIT (1955) 27 ITR 49 (SC). CIT V/S NATIONAL FINANCE LTD. (1962) 44 ITR 788 (SC). RAM NARYAN SONS (P) LTD. V/S CIT (1961) 41 ITR 534 (SC). 10 IN SUPPORT OF GROUND NO.2 THAT THE SALE OF PROPERTY AT BEDWAS IS NOT AN ADVENTURE OF TRADE AND THEREFORE DOES NOT FALL UNDE R INCOME U/S BUSINESS & PROFESSION WE ARE ENCLOSING HEREWITH THE COPY OF RE TURN OF INCOME FOR A.Y.2006-07 TO A.Y. 2012-13 ALONG WITH PROFIT & LOS S ACCOUNT OF THE ASSESSEE. AS EVIDENT FROM THE RETURN OF INCOME THE ASSESSEE HAS SOURCE OF INCOME FROM SALARY, INTEREST, SALE OF SHARES AND LO NG TERM CAPITAL GAIN IN FEW YEARS. THE ASSESSEE IS NEVER IN THE BUSINESS OF PURCHASE & SALE OF LAND OR PROPERTY AT ANY TIME. THIS IS THE SINGLE TRANSAC TION WHICH THE ASSESSEE HAD MADE AND THAT ALSO WITH A INTENTION OF INVESTME NT AND NOT AS BUSINESS. THE ASSESSEE IS NOT MAINTAINING REGULAR BOOKS OF AC COUNT AS IT IS NOT HAVING ANY BUSINESS INCOME BUT WE ARE ENCLOSING HEREWITH S TATEMENT OF AFFAIRS OF ASSESSEE FOR ALL SEVEN ASSESSMENT YEARS. ' IT WAS FURTHER SUBMITTED AS UNDER:- 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AS W ELL AS IN THE LAW, THE LD. AO GROSSLY ERRED IN MAKING DISALLOWANCES OF RS.20,4 4,375/- U/S 40A(3) OF THE ACT. RESPECTED SIR THE ASSESSEE HAS MADE THE ABOVE PAYME NT RELATED TO DEVELOPMENT OF LAND AND COMMISSION DURING THE YEAR. THE ASSESSEE HAS MADE THE MAXIMUM PAYMENTS OF COMMISSION THROUGH ACCOUNT PAYEE CHEQUE ONLY. THE AO'S CONTENTION THAT ASSESSEE HAS NOT GIVEN THE SUPPORTING FOR THE PAYMENT IS NOT TRUE AS THE ASSES SEE HAS SUBMITTED THE BANK STATEMENT OF THE YEAR RELEVANT TO THE A.Y. DURING THE ASSESSMENT PROCEEDINGS. WE HAVE SUBMITTED THE FACTS AS PRODUCE D ABOVE IN GROUND NO. 2 VIDE LETTER DATED 30/11/2011. SIR AFTER THE ASSESSMENT ORDER RECEIVED WE HAVE APP LIED FOR RECTIFICATION U/S 154 ON THE ABOVE ADDITION SHOWING THAT PAYMENT OF R S. 11,64,375/- IS THROUGH ACCOUNT PAYEE CHEQUE ONLY. THE COPY OF THE LETTER IS ENCLOSED HEREWITH. IN REPLY TO THE RECTIFICATION APPLICATION THE AO HAS PASSED THE ORDER IN WHICH HE ACCEPTED THE FACTS OF THE ASSESSE E AND MADE AN ORDER AS FOLLOWS: 'THOUGH THE PAYMENTS OF RS. 11,64,375/- ARE NOT DIS ALLOWABLE U/S 40A(3) BUT THE SAME ARE DISALLOWABLE U/S 40A(IA), THEREFOR E, THERE IS NO REVENUE 11 IMPLICATION AND THERE IS NO CHANGE IN ASSESSED INCO ME U/S 143(3), THEREFORE APPLICATION FILED U/S 154, IS HEREBY REJECTED. ' THE BALANCE AMOUNT OF RS.8,80,000/- (RS.20,44,375 - RS.11,64,375) IS PAYMENT MADE TO KAILASH CHANDRA DANGI RS.4,95,000/- & CHETAN P. DANGI RS.3,85,000/- FOR JCB & OTHER CHARGES FOR LEVELING OF LAND AND OTHER DEVELOPMENT CHARGES. IN THIS REGARD WE HEREBY SUBMI T THAT WE HAVE NOT MADE THE PAYMENT ON SINGLE DAY TO THE PARTIES. SIR WE HAVE MADE THE PAYMENT TO BOTH THE PARTIES IN PART PAYMENTS AND NO SINGLE PAYMENT EXCEEDING RS.20,000/- ON SINGLE DAY IS BEING MADE. THIS IS SUPPORTED BY THE ACCOUNT STATEMENT OF THE PARTY. THIS WAS NOT GI VEN TO AO AS THE SAME WAS NOT AVAILABLE WITH US AS WE COULD NOT CONTACT B OTH THE PARTIES AT THE TIME OF ASSESSMENT PROCEEDINGS AND IS ADDITIONAL EV IDENCE PRODUCED BEFORE YOU AND WE REQUEST YOUR HONOUR TO KINDLY ACCEPT THE SAME. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT V/S ALOO SUPPLY CO. (1980) 121ITR 680 (ORI.). GIRDHARILAL GOENKA V/S CIT (SUPRA). SO ON THE BASIS OF THE ABOVE GROUNDS WE HEREBY SUBM IT THAT THE DISALLOWANCE OF EXPENSES OF RS.20,44,375/- MADE IS NOT CORRECT AND DESERVES TO BE DELETED. ' 13. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE, DELETED THE ADDITION BY OBSERVING IN PARA 5.3 & 5.4 OF THE IMPUGNED ORDER, WHICH READ AS UNDER:- I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND TH E SUBMISSIONS OF THE AR ALONG WITH THE PAPER BOOK FILED WITH THE SUBMISSION S. THE QUESTION WHETHER THE PROFIT FROM SALE OF LAND IS TO BE TAXED AS BUSINESS INCOME OR CAPITAL GAINS IS TO BE DECIDED ON THE FACTS AND THE LAW APPLICABLE TO THESE FACTS, THE FACTS ARE SUMMARIZED BELOW FOR CLARITY: 1. THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS DER IVING INCOME FROM SALARY FROM CHANDRA MARBLE, UDAIPUR, INTEREST INCOME FROM BANK AND COMMISSION FROM ASTRA DIAMOND TOOLS AND CA PITAL 12 GAINS ON SALE OF LAND FROM A.Y. 2008-09. 2. ON PERUSAL OF THE STATEMENT OF AFFAIRS BEING MAINTA INED BY THE APPELLANT, IT IS SEEN THAT HE HAD CONSISTENTLY BEEN INVESTING IN PROPERTY SINCE 1992 WHICH WAS REGULARLY REFLECTED I N THE STATEMENT OF AFFAIRS AND WAS SELLING LAND FOR PROFI T SINCE A.Y. 2008-09 EVERY YEAR. 3. THE IMPUGNED PROPERTY AT BEDWAS WAS PURCHASED IN A. Y. 2008-09 AND WAS SOLD IN A.Y. 2009-10 AFTER LEVELING THE GRO UND AND CUTTING PLOTS. DURING THE YEAR UNDER CONSIDERATION THE APPE LLANT ALSO SOLD A PLOT OF LAND AT ANAND NAGAR, WHEREIN EXEMPTI ON ON LTCG WAS TAKEN BY PURCHASE OF BONDS U/S 54EC. HOWEVER, O N THE SALE OF LAND AT BEDWAS THE APPELLANT DECLARED STCG OF RS. 1 8,16,976/-. THE LAND AT BEDWAS WAS PURCHASED IN A.Y. 2008-09 F OR RS.30,88,500/-. THE APPELLANT TOOK INTEREST FREE LO ANS FROM HIS FAMILY MEMBERS AND WITHDREW AMOUNTS FROM HIS BUSINE SS CONCERNS NAMELY M/S CHANDRA MARBLES. 5.4 WHETHER THE TRANSACTIONS IN LAND UNDER TAKEN BY THE APPELLANT DURING THE YEAR WERE BUSINESS TRANSACTIONS OR ADVENTURE IN THE NATURE OF TRADE OR CAPITAL ACCRETION, IS A VEXED QUESTION THAT IS REQU IRED TO BE DECIDED ON THE FACTS, AND LAW APPLICABLE TO THESE FACTS. IT IS NOT POSSIBLE TO EVOLVE ANY LEGAL TEST OR FORMULA WHICH CAN BE APPLIED IN DETER MINING WHETHER A TRANSACTION IS AN ADVENTURE IN NATURE OF TRADE OR B USINESS OR NOT. THE ANSWER TO THE QUESTION MUST NECESSARILY DEPEND IN E ACH CASE ON THE TOTAL IMPRESSION AND EFFECT OF ALL THE RELEVANT FACTORS A ND CIRCUMSTANCES, WHICH DETERMINE THE CHARACTER OF THE TRANSACTION AND THE LEGAL PRINCIPLES THAT HAVE EVOLVED OVER A PERIOD OF TIME THROUGH THE JUDICIAL PRONOUNCEMENTS MADE BY THE VARIOUS HIGH COURTS AND THE HONORABLE SUPREME C OURT ON THIS ISSUE. 'BUSINESS' AS DEFINED IN SECTION 2(13), 'INCLUDES A NY TRADE COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATU RE OF TRADE, COMMERCE OR MANUFACTURE.' THESE WORDS ARE OF VITAL IMPORT, THE UNDERLYING IDEA BEING A CONTINUOUS EXERCISE OF AN A CTIVITY. THE DEFINITION OF 'TRADE' DOES NOT FIND ITS PLACE IN THE ACT. THE DIC TIONARY MEANING OF 'TRADE' AS PER DICTIONARY OF WEBSTER'S NEW TWENTIETH CENTUR Y DICTIONARY, (SECTION EDITION), MEANS AMONGST OTHER, 'A MEANS OF EARNING ONE'S LIVING, 13 OCCUPATION OR WORK'. IN BLACK'S LAW DICTIONARY ALSO 'TRADE' MEANS A BUSINESS WHICH A PERSON HAS LEARNT OR HE CARRIES ON FOR PROCURING SUBSISTENCE OR PROFIT; OCCUPATION OR EMPLOYMENT, ET C. [CIT V. ASSAM HARD BOARD LTD., (1997) 224 ITR 318, 320 (GAUH)]. 'TRADE ' IN ITS PRIMARY MEANING IS THE EXCHANGING OF GOODS FOR GOODS OR GOO DS FOR MONEY; IN ITS SECONDARY MEANING IT IS REPEATED ACTIVITY IN THE NA TURE OF BUSINESS CARRIED ON WITH A PROFIT MOTIVE, THE ACTIVITY BEING MANUAL OR MERCANTILE AS DISTINGUISHED FROM THE LIBERAL ARTS OR LEARNED PROF ESSIONS OR AGRICULTURE [STATE OF PUNJAB V. BAJAJ ELECTRICALS LTD., (1968) 70 ITR 730, 732 (SC)]. IF A PERSON BUYS GOODS WITH A VIEW TO SELLING THEM AT PR OFIT, IT IS AN ORDINARY CASE OF 'TRADE'. IF THE TRANSACTIONS ARE ON A LARGE SCAL E, IT IS CALLED 'COMMERCE' [GANNON DUNKERLEY & CO. V. STATE OF MADRAS, (1954) 5 STC 216, 244 (MAD)], AND IT IS THE CONTINUOUS REPETITION OF SUCH TRANSAC TIONS WHICH WILL CONSTITUTE A 'BUSINESS'. THE QUESTION WHETHER TRADE IS CARRIED ON BY A PERSON AT A GIVEN PLACE MUST BE DETERMINED ON A CON SIDERATION OF ALL THE CIRCUMSTANCES. NO TEST OR SET OF TESTS WHICH IS OR ARE DECISIVE FOR ALL CASES CAN BE EVOLVED FOR DETERMINING WHETHER A PERSON CAR RIES ON TRADE AT A PARTICULAR PLACE. THE HONORABLE SUPREME COURT PASSE D THE SEMINAL ORDER IN THE CASE OF JANKI RAM & BAHADUR RAM V/S CIT (1965) 57 ITR, 21, WHICH LAID DOWN THE OVERALL BROAD PRINCIPLES IN CASES OF LAND TRANSACTIONS SPECIFICALLY, AND HAVE BEEN HEAVILY RELIED ON SINCE, BY THE VARIO US HIGH COURTS WHILE DEALING WITH THIS ISSUE. THE HONORABLE SUPREME COURT IN THE AFOREMENTIONED C ASE HELD THAT IT IS FOR THE REVENUE TO ESTABLISH THAT THE PROFIT EARNED IN A TRANSACTION IS WITHIN THE TAXING PROVISIONS AND THE TRANSACTION MUST BE D ETERMINED ON A CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES. I T FURTHER OBSERVED THAT THE QUESTION WHETHER A TRANSACTION IS AN ADVENTURE IN THE NATURE OF TRADE MUST DEPEND UPON THE COLLECTIVE EFFECT OF ALL THE R ELEVANT MATERIAL BROUGHT ON RECORD. BUT GENERAL CRITERIA INDICATING THAT CER TAIN FACTS HAVE DOMINANT SIGNIFICANCE IN THE CONTEXT OF OTHER FACTS WERE LAI D DOWN AS FOLLOWS : 1. IF FOR INSTANCE A TRANSACTION IS RELATED TO THE BUS INESS WHICH IS NORMALLY CARRIED ON BY THE ASSESSEE, THOUGH NOT DIRECTLY PART OF IT, AN INTENTION TO LAUNCH UPON AN ADVENTUR E IN NATURE OF TRADE MAY READILY BE INFERRED. 2. A SIMILAR INFERENCE WOULD ARISE WHERE A COMMODITY I S PURCHASED AND SUB DIVIDED, ALTERED, TREATED OR REPA IRED AND SOLD, OR IS CONVERTED INTO DIFFERENT COMMODITY AND THEN SOLD. 14 3. MAGNITUDE OF THE TRANSACTION OF PURCHASE, THE NATURE OF COMMODITY, SUBSEQUENT DEALINGS AND THE MANNER OF DISPOSAL MAY BE SUCH THAT THE TRANSACTION MAY BE ST AMPED WITH THE CHARACTER OF TRADING VENTURE. 4. IT WAS FURTHER ENUNCIATED THAT TRANSACTIONS OF PURC HASER OF LAND CANNOT BE ASSUMED WITHOUT MORE TO BE A VENTURE IN THE NATURE OF TRADE SINCE BY ITS VERY NATURE LAND IS NO T A COMMERCIAL COMMODITY. THE HONORABLE SUPREME COURT REFERRED TO THE FINDINGS TO THE JUDICIAL PRONOUNCEMENTS IN THE FOLL OWING CASES: * COMMISSIONERS OF INLAND REVENUE V/S REINHOLD [195 3] 34 TC 389 (C SESS) * SAROJ KUMAR MAZUMDAR V/S CIT [1959] 37 ITR 242 (SC). * LEEMING V/S JONES [1930] 15 TAX CAS. 333 (HL). IT WAS OBSERVED THAT THESE ARE CASES IN WHICH THE C OMMODITY PURCHASED AND SOLD WAS LAND WHICH WAS NOT ORDINARILY COMMERCI AL AND THE MANNER OF DEALING WITH THE COMMODITY DID NOT STAMP THE TRANSA CTION AS A TRADING VENTURE. 5. PROFIT MOTIVE IN ENTERING INTO A TRANSACTION IS NOT DECISIVE, FOR, AN ACCRETION TO CAPITAL DOES NOT BECOME TAXABLE INCOME MERELY BECAUSE AN ASSET WAS ACQUIRED IN THE EXPECTATION TH AT IT MAY BE SOLD AT PROFIT. ON ANALYZING THE FACTS OF THE CASE OF THE ASSESSEE WITHIN THE AMBIT OF THESE GUIDELINES IT IS SEEN THAT THE APPELLANT HAD STARTED TO BUILD UP HIS LAND BANK SINCE A.Y. 2006-07. FROM A.Y. 2008-09 HE STARTED TO SELL LAND FOR FINANCIAL GAIN. IN A.Y. 2009-10 HE SOLD A PLOT AT A NAND NAGAR FOR RS. 17,50,000/- AND CLAIMED EXEMPTION U/S 54EC. THE PLOT OF LAND WAS PURCHASED IN A.Y. 2008-09 IN BEDWAS FOR RS.30,88,50 0/-. THE USE OF LAND WAS GOTTEN CONVERTED, CONVERSION CHARGES WERE PAID TO UIT. THE LAND WAS DIVIDED INTO SMALL PLOTS OF LAND AND THESE WERE SOLD ON PROFIT THROUGH COMMISSION AGENTS TO WHOM HEFTY COMMISSION WAS PAID . SIMILAR PROCESS WAS REPEATED IN THE NEXT A.Y. THAT IS 2010-11 WHERE IN THE LAND AT TITARDI WAS PURCHASED IN A.Y. 2009-10 FOR RS.22,15,450/- IT S USE WAS GOTTEN CONVERTED FROM UIT AFTER PAYING THE DUE CHARGES; TH E LAND WAS ONCE AGAIN DEMARCATED INTO SMALLER PLOTS WHICH ARE A MARKETABL E COMMODITY AND 15 THESE WERE SOLD FOR PROFIT THROUGH COMMISSION AGENT S. PART OF THE PROFIT WAS USED TO PURCHASE LAND IN ASHOK NAGAR FOR RS.6,41,09 0/-. THIS PROPERTY WAS SUBSEQUENTLY SOLD IN A.Y. 2012-13. THUS IT IS SEEN THAT THE TRANSACTION OF SALE OF LAND AT BEDWAS DURING THIS A.Y. WAS NOT A S INGLE TRANSACTION BY THE ASSESSEE, INSTEAD HE HAD BEEN CONSISTENTLY INCREASI NG HIS LAND BANK FROM 2006-07 AND SELLING FOR PROFIT EVERY YEAR SOME PIEC E OF LAND OR THE OTHER FROM HIS LAND BANK. I) THUS THE ASSESSEE STARTED TO GET THE USE OF LAN D CONVERTED, PAID THE CHARGES TO UIT AND PARCELED THE LAND INTO SMALL ER PLOTS WHICH WERE A MORE CONVENIENT TRADEABLE COMMODITY. THE LAN D WAS LEVELED AND SOLD THROUGH COMMISSION AGENTS. THIS PR OCESS WAS REPEATED AGAIN IN THE NEXT A.Y. ON THE PLOT OF LAND AT TITARDI. THUS THE NATURE OF THE COMMODITY THAT IS LAND WAS ALTERE D, FROM AGRICULTURAL TO RESIDENTIAL, IT WAS LEVELED AND CON VERTED INTO A DIFFERENT COMMODITY I.E. PLOTS; AND THEN SOLD II) I T IS ALSO SEEN THAT THE APPELLANT WAS NOT USING HIS SURPLUS FUNDS FOR T HE PURCHASE OF LAND BUT TAKING LOANS FROM HIS FAMILY MEMBERS AN D ALSO WITHDREW MONEY FROM HIS BUSINESS CONCERN FOR PURCHA SE OF LAND WHICH HAD COMMERCIAL POTENTIAL. THUS IT IS SEEN THA T AS PER THE GUIDELINES OF THE HON'BLE SUPREME COURT, THOUGH THE TRANSACTION IN LAND WAS NOT RELATED TO THE BUSINESS OF THE APPELLA NT THAT IS OF MARBLE, HE WAS USING THE FUNDS OF BUSINESS FOR PURC HASING LAND WHICH HAD COMMERCIAL POTENTIAL AND THEN SELLING IT TO REALIZE PROFITS. SECONDLY, THE USE OF THE LAND WAS ALTERED, THEREBY A VALUE ADDITION WAS DONE, IT WAS SUB DIVIDED INTO PLOTS AN D TO GET MAXIMUM PROFIT IT WAS SOLD THOUGH COMMISSION AGENTS . THERE WAS THUS AN ORGANIZED EFFORT THROUGH DIFFERENT COMMISSI ON AGENTS TO MAXIMIZE PROFITS. III) THIS ACTIVITY WAS BEING CONDUCTED REGULARLY E VERY YEAR FROM A.Y. 2008-09. THUS THERE WAS REGULARITY IN PURCHASE AND SALE OF LAND BY THE APPELLANT WHICH ESTABLISHES THAT THE NATURE OF TRANSACTION WAS NOT THAT OF INVESTMENT BUT BUSINESS. IV) IT IS SEEN THAT THE APPELLANT HAS NOT MAINTAIN ED ANY P&L A/C AND HAS NOT SHOWN THIS PROPERTY AS STOCK-IN-TRADE. THUS TO THIS EXTENT THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE HELD TO BE 16 UNRELIABLE AS PER SECTION 145(3) FOR THE PURPOSE OF ASCERTAINING THE TRUE PROFIT/INCOME AND SO ARE REJECTED. IN VIEW OF THE ABOVE FACTS AND THE LAW APPLICABLE T O THESE FACTS IT IS HELD THAT THE INCOME FROM THE SALE OF LAND WAS BUSINESS INCOME AS DEFINED IN SECTION 2(13) AND IS CHARGEABLE TO TAX U/S 28. REGARDING THE NEXT GROUND OF APPEAL THAT IS DISALLO WANCE OF PAYMENTS OF RS.20,44,375/- U/S 40A(3). I HAVE PERUS ED THE DETAILS IN THE PAPER BOOK WITH REGARD TO THE PAYMENTS MADE IN CASH TO SHRI CHETAN DANGI AND KAILASH CHANDRA DANGI. IT IS SEEN THAT NONE OF THESE PAYMENTS WERE MADE IN CASH ABOVE RS.20,000/- ON A PARTICULAR DATE . AS FOR THE OTHER PAYMENTS, THE AR OF THE APPELLANT HAS FILED DETAILS OF THE PAYMENTS HAVING BEEN MADE BY CHEQUE. THE DETAILS OF THE CHEQUE NOS. , DATE, AMOUNT AND THE NATURE OF EXPENSES WERE ALSO FURNISH ED. IN VIEW OF THE EVIDENCE ON RECORD THE PAYMENTS ARE CLEARLY NOT COV ERED UNDER THE PROVISIONS OF SECTION 40A(3). THUS THE DISALLOWANCE OF RS.20,44,375/- DESERVES TO BE DELETED ON VERIFICATION OF THE FACTS . NOW THE DEPARTMENT IS IN APPEAL. 14. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE AS SESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSM ENT ORDER DATED 02/12/2011. 15. IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). 16. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE PURCHASED A P IECE OF LAND AND 17 CONVERTED IT INTO PLOTS WHICH WERE SOLD IN VARIOUS YEARS THROUGH COMMISSION AGENTS AND THIS ACTIVITY WAS BEING CONDU CTED REGULARLY FROM A.Y. 2008-09. THEREFORE, THE TRANSACTION WAS NOT T HAT OF INVESTMENT BUT OF BUSINESS. IN THE PRESENT CASE, THE ASSESSING OF FICER MADE THE DISALLOWANCE OF RS. 20,44,375/- BY INVOKING THE PRO VISIONS OF SECTION 40A(3) OF THE ACT, HOWEVER, THE LD. CIT(A) ON VERIF ICATION FROM THE RECORD FOUND THAT NONE OF THE PAYMENT WAS MADE IN CASH ABO VE RS. 20,000/- ON A PARTICULAR DATE AND OTHER PAYMENTS WERE MADE BY C HEQUES GIVING DETAILS OF CHEQUE NUMBERS, DATE, AMOUNT AND NATURE OF EXPENSES. THE LD. CIT(A) CATEGORICALLY STATED THAT ON THE BASIS O F EVIDENCE ON RECORD, THE PAYMENTS WERE CLEARLY NOT COVERED UNDER THE PRO VISIONS OF THE SECTION 40A(3) OF THE ACT. WE, THEREFORE, IN THE A BSENCE OF ANY CONTRARY MATERIAL ON RECORD, ARE OF THE VIEW THAT THE OBSERV ATIONS GIVEN BY THE LD. CIT(A) DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF T HE DEPARTMENT. 17 BEFORE PARTING, IT IS RELEVANT TO POINT OUT THAT TH E DEPARTMENT HAD RAISED GROUND NO.2 AGAINST THE OBSERVATIONS OF THE LD. CIT(A) THAT THE DISALLOWANCE COULD NOT HAVE BEEN MADE UNDER SECTION 40(A)(IA) OF THE ACT. REGARDING THIS ISSUE, IT IS NOTICED THAT THE ASSESSING OFFICER MADE DISALLOWANCE ONLY UNDER SECTION 40A(3) OF THE ACT. THEREFORE, THE 18 OBSERVATIONS, IF ANY, MADE REGARDING THIS SECTION E ITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(A) ARE OF ACADEMIC INTERE ST ONLY BECAUSE NO DISALLOWANCE WAS EITHER MADE BY THE ASSESSING OFFIC ER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT OR DELET ED BY THE LD. CIT(A) OUT OF THE DISALLOWANCE MADE UNDER THE SAID SECTION. 18. IN THE RESULT, APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 11 TH JUNE, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH JUNE, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.