Mukeshbhai Kanaiyalal Dalia, Vadodara V. The Income Tax Officer, Ward-3(1)(1), Baroda

CO 94/AHD/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4036 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 05-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CROSSOBJECTOR
• Assessee Lawyers: MAHESH KUMAR SHAH
• Keywords: Business income; Audit objection; Tax effect
• Section: 143(3); 54B

Judgement Text

ITA NO. 1044/AHD/2016 & CO NO.94/AHD/2016 ITO VS. MUKESHBHAI KANAIYALAL DALIA ASSESSMENT YEAR: 2011-12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR, AM AND MS. MADHUMITA ROY, JM] ITA NO.1044/AHD/2016 & CO NO. 94/AHD/2016 ASSESSMENT YEAR: 2011-12 THE INCOME-TAX OFFICER ..................AP PELLANT WARD 3(1)(1), VADODARA VS. MUKESHBHAI KANAIYALAL DALIA ........................RESPONDENT & PROP. OF VARSHA BUILDERS, CROSS-OBJECTOR NEAR WADI TOWER, WADI, VADODARA 390 005 [PAN : ACMPD 3702 G] APPEARANCES BY: MAHESH KUMAR SHAH, FOR THE APPELLANT KINJAL SHAH, FOR THE RESPONDENT & CROSS-OBJECTOR DATE OF CONCLUDING THE HEARING : 25.07.2018 DATE OF PRONOUNCING THE ORDER : 01.08.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL BY THE REVENUE AND THE CROSS-OBJECTI ON THEREOF BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 9 TH DECEMBER, 2015 PASSED BY THE LEARNED CIT(A)-4, VADODARA IN THE MATTER OF ASSESSMENT UNDE R SECTION 143(3) OF THE INCOME- TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. 2. THE GRIEVANCES RAISED BY THE ASSESSING OFFICER A RE AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.47,7 5,636/- ON ACCOUNT OF SALE OF LAND AS BUSINESS INCOME OF THE ASSESSEE BEING AD VENTURE IN THE NATURE OF TRADE BEING SOLELY FOR PROFIT MOTIVE. 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FA CT THAT THE ASSESSEE DID NOT USE HIS AGRICULTURAL LAND FOR THE PURPOSE OF AGRICU LTURAL ACTIVITIES RENDERING THE ASSESSEE INELIGIBLE FOR CLAIM OF DEDUCTION U/S 54B OF THE ACT. 3. THE LD. CIT(A) FAILED IN NOT APPRECIATING THE F ACT THAT THE ASSESSING OFFICER HAS CATEGORICALLY DENIED DEDUCTION U/S 54B OF THE A CT IN THE ASSESSMENT ORDER ITA NO. 1044/AHD/2016 & CO NO.94/AHD/2016 ITO VS. MUKESHBHAI KANAIYALAL DALIA ASSESSMENT YEAR: 2011-12 PAGE 2 OF 3 OWING TO THE FACT THAT SINE QUA NON FOR CLAIMING SU CH DEDUCTION WAS NOT FULFILLED BY THE ASSESSEE. 4. THE LD. CIT(A) ERRED IN SUMMARIZING THE ISSUE IN THREE ABSTRACTS NAMELY, A)HOLDING OF LAND, B) DECLARING IMPUGNED LAND AS IN VESTMENT AND C) OFFERING INCOME AS BUSINESS INCOME IN RESPECT OF OTHER LAND TRANSACTION, WITHOUT APPRECIATING THE FACT THAT THE A.O. HAS CATEGORICAL LY MENTIONED THAT IN THE A.YS. 2008-09, 2009-10 AND 2010-11 THE ASSESSEE HAS DECLARED IMPUGNED LAND UNDER THE SAME HEAD IN HIS RETURNS OF INCOME D ESPITE A FACT THAT INCOME TAX RETURN HAS MEANT SPECIFIC COLUMN FOR INVESTMENT S, WHERE IMPUGNED LAND DID NOT FIND IT'S PLACE. 5. THE LD. CIT(A) OVERRULED THE FACT THAT THE AS SESSEE COULD NOT SUBMIT BALANCE SHEET FOR A.Y. 2004-05 TO DISCHARGE HIS ONU S THAT THERE WERE SUFFICIENT FUNDS IN HIS PERSONAL CAPACITY TO INVEST IN SUCH LAND AND THE ASSESSEE FAILED TO EARMARK THE LAND HOLDINGS AS TRA DE INVESTMENTS OR ASSETS IN HIS RETURNS OF INCOME, RENDERING THE ORDER OF LD . CIT(A) PERVERSE TO THE FINDING OF THE A.O. IN THE ASSESSMENT ORDER. 6. THE LD. CIT(A) IGNORED THE FACT THAT THE ASSES SEE HAD NOT FURNISHED HIS WEALTH TAX RETURN SO AS TO PROVE THAT THE IMPUGNED LAND WAS HIS INVESTMENT, AND, WITHOUT SUCH VITAL INGREDIENT THE LAND HAS TO BE CONSIDERED AS HIS BUSINESS ASSET OWING TO THE FACT THAT INCOME TAX RE TURN SPECIFICALLY MEANT SEPARATE COLUMNS FOR INVESTMENTS AS WELL AS ASSETS. 3. SO FAR AS THE APPEAL OF THE REVENUE IS CONCERNED , AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE POINTS OUT THAT THE APPEAL OF THE REVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE RECENT CBDT CIRCULAR NO.3 OF 2018 DATED 11.07.2018. LEARNED COUNSEL FOR THE ASS ESSEE ALSO SUBMITS THAT IN THE PRESENT CASE THE TAX EFFECT IS RS.14,77,017/-, AS PER THE WORKING GIVEN BY THE DEPARTMENT ALONGWITH GROUNDS OF APPEAL, WHICH IS BE LOW THE PRESCRIBED LIMIT OF RS.20 LACS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMI TTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFO RESAID CBDT CIRCULAR. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL ON RECORD, WE FIND THAT PRIMA-FACIE THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW OF THE RECENT CBDT CIRCULAR NO. 3/2018 IN F.NO.279/MISC. 1 42/2007-ITJ (PT) DATED 11 TH JULY, 2018, VIDE WHICH IT HAS BEEN DECIDED BY THE B OARD THAT NO DEPARTMENTAL APPEALS SHOULD BE FILED BEFORE THE TRIBUNAL IF THE TAX EFFECT BY VIRTUE OF THE COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER IS BEL OW RS. 20 LACS. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (10) OF THE INSTRUCTI ONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTIONS WILL NOT BE APPLICABLE, WHE RE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT/RULE IS UNDER CHALLENGE OR WHE RE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT OR WHE RE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS ETC. WE F IND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX EF FECT IS LESS THAN RS.20 LACS. THEREFORE, THE PRESENT APPEAL IS NOT MAINTAINABLE A ND HENCE DISMISSED. 5. THE APPEAL OF THE REVENUE IS THUS DISMISSED IN LIMINE. ITA NO. 1044/AHD/2016 & CO NO.94/AHD/2016 ITO VS. MUKESHBHAI KANAIYALAL DALIA ASSESSMENT YEAR: 2011-12 PAGE 3 OF 3 6. AS THE APPEAL FILED BY THE REVENUE ITSELF IS FOU ND TO BE NON-MAINTAINABLE AND AS THE CROSS-OBJECTION OF THE ASSESSEE ARISES ONLY AS A RESULT OF THIS APPEAL, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED AS INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL AND CROSS-OBJECTION, B OTH ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 1 ST AUGUST, 2018 SD/- SD/- MS. MADHUMITA ROY PRA MOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 1 ST DAY OF AUGUST, 2018 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ................COVERED MATT ER..01.08.2018.... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .. 01.08.2018..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: 01.08.2018... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 01.08.2018... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : . 01.08.2018. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER : . 8. DATE OF DESPATCH OF THE ORDER: ......