MANJU BANSAL, Jaipur V. ITO, Jaipur

ITA 1088/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2012 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ARPIT VIJAY CA DH L
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Additional evidence; Cost of acquisition; Fair market value; Valuation report
• Section: 44AD; 45(2); 43CA; 50C; 133(6); 148; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 1088/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2011-12 SMT. MANJU BANSAL PLOT NO.5, MANGAL VIHAR, GOPAL PURA BYPASS, JAIPUR CUKE VS. THE ITO WARD- 6(4) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AOFPB 6994 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI ANIL SHARMA, CA & SHRI ARPIT VIJAY, CA JKTLO DH VKSJ LS@ REVENUE BY:SHRI VARINDER MEHTA, CIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 31/08/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 11 /10/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 23-09-2016 FOR THE ASSESSM ENT YEAR 2011-12 RAISING FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN REJECTING THE ADDITIONAL GROUND CHALLENGING THE INITIATION OF PROCEEDINGS U/S 147/1 48 OF I.T. ACT, 1961. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 2 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADMITTING THE ADDITI ONAL EVIDENCES SUBMITTED U/R 46A OF I.T. RULES, 1962. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 78,34,D422/- TOWARDS SHORT TERM CAPITAL GAIN AS DET ERMINED BY THE AO COMPRISING FOLLOWINGS. (1) SALE OF PROPERTY 74,SMS COLONY, DURGAPURA, JAIPUR RS. 71,28,702/- (2) SALE OF PROPERTY 91,R.K. PURAM SANGANER, JAIPUR RS. 7,05,720/- 2.1 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 1. HENCE, THE SAME IS DISMIS SED BEING NOT PRESSED. 3.1 APROPOS GROUND NO. 2 & 3 OF THE ASSESSEE, THE F ACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE FAC TS OF THE CASE ARE DISCUSSED IN GROUND NO. 1. IN THE RETURN OF INCOME FILED BY THE ASSESSEE SUBSEQUENT TO THE NOTICE ISSUED BY ITO, (I NTELLIGENCE), THE ASSESSEE FILED A RETURN DECLARING SALE CONSIDERATIO N OF RS. 20,21,000/- AND DECLARED STOCK IN TRADE OF RS. 12,2 1,000/-. THE ASSESSING OFFICER DID NOT ACCEPT THE DECLARATION OF SALE CONSIDERATION AND THE SALE OF PLOTS AS A BUSINESS T RANSACTION AND THE CLAIM OF THE ASSESSEE THAT THEY WERE HELD AS STOCK IN TRADE. THE REASONS DISCUSSED IN THE RETURN OF INCOME FOR ASSES SMENT YEAR 2011-12 PAGE 19 ARE REPRODUCED BELOW:- (A) THE ASSESSEE ADMITTED THAT NO RETURN OF INCOM E FOR THE A.Y. 2011-012 AND EARLIER YEARS HAD BEEN FILED. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 3 (B) IT HAS ALSO BEEN ADMITTED THAT NO BUSINESS ACTI VITY WAS THERE BEFORE A.Y. 2011-12. ( C) THE ASSESSEE HAS ALSO ADMITTED THAT THE RETURN OF INCOME WAS FILED AFTER ISSUANCE OF NOTICE BY THE DEPARTMENT. (D) THE ASSESSEE CATEGORICALLY ADMITTED THAT NO BOO KS OF ACCOUNT HAVE BEEN MAINTAINED AS REQUIRED U/S 44AA AND THE INCOME HAS BEEN DECLARED U/S 44AD OF THE I.T. ACT, 1961. (E) THE ASSESSEE STATED THAT DURING THE F.Y. 2009- 10 ONE PROPERTY SITUATED AT 74,SMS COLONY, DURGAPURA, JAIPUR WAS PURCHASED WHIC H WAS HER FIRST BUSINESS ACTIVITY, HOWEVER, NO DOCUMENTARY EVIDENCE HAS BEEN PRODUCE D. (F) THE LADY ASSESSEE STATED THAT SHE IS CARRYING O UT BUSINESS ACTIVITY SINCE 26- 03-2010 AND STARTED EARNING GOOD SINCE 21-07-2010,S O IT IS CORRECT THAT SHE WAS PARTIALLY DEPENDENT ON HER HUSBAND BEFORE 26-03-2010. AS REGA RDS THE PARTIALLY OR FULLY DEPENDENCY ON HER HUSBAND, THE HUSBAND OF THE LADY NEVER INTIMATE D TO HIS GOVT. DEPARTMENT. (G) AS REGARDS THE REJECTION OF CLAIM, THE ASSESSEE STATED THAT THE PROPERTY WAS PURCHASED ON 26-03-2010 AND AT THAT TIME IT WAS A P LAIN PLOT. THE ASSESSEE IS NOT CORRECT TO SAY THAT ONE ROOM SET AND BOUNDARY WALL CONSTRUCTED THEREON. THE ASSESSEE IN HER STATEMENT HAD CATEGORICALLY STATED THAT NO CONSTRUCTION WAS C ARRIED OUT THEREON. FURTHER, ON GOING THROUGH THE SALE DEED OF THE PROPERTY, IT HAS CLEAR LY MENTIONED THAT ONLY TIN SHED WAS THEREON. (H) AS REGARDS THE DLC VALUE OF RS. 76,21,852/-, TH E ASSESSEE STATED THAT THEY DID NOT HAVE KNOWLEDGE OTHERWISE THE ISSUE WOULD HA VE BEEN CHALLENGED IN THE REVENUE COURT. ALTHOUGH, ON THE ENHANCED VALUE OF THE PROPERTY THE STAMP DUTY HAS TO BE PAID BY THE PURCHASER, HOWEVER, AS PER PROVISIONS OF SEC 50C, I T WAS OBLIGATORY ON THE PART OF THE ASSESSEE TO PAY CAPITAL GAIN TAX THEREON. (I) IN THE CONCLUSION THE ASSESSEE STATED THAT THE TRANSACTION BEGINS WITH ONE PURCHASE AND ENDS WITH ONE SIDE IS NOT DECISIVE. IT WOULD BE PERTINENT TO MENTION THAT AN ISOLATED TRANSACTION OR ACTIVITY CANNOT BE PART OF BUSINESS. TO CONSIDER THE QUESTION OF BUSINESS, THERE MUST BE REGULAR ACTIVITY OF PURCHAS ING AND SELLING.. FURTHER, STATEMENT OF SMT. MANJU BANSAL AND HER HUS BAND MAHESH BANSAL WERE RECORDED AND THE EXTRACT IS REPR ODUCED IN THE ASSESSING OFFICERS ORDER. AFTER DISCUSSING THE DET AILS FILED BY THE ASSESSEE THE ASSESSING OFFICER DID NOT ACCEPT THE C ONTENTIONS OF THE ASSESSEE AND SUBJECTED THE TRANSACTIONS TO THE PROV ISIONS OF SECTION 50C AND CALCULATED THE CAPITAL GAINS THEREON. IN THE PRESENT PROCEEDINGS, THE AUTHORIZED REPRESEN TATIVE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER IN THE ASSESSMENT PROCEEDINGS AND ALSO MADE AN APPLICATION FOR ACCEPTANCE OF ADDITIONAL EVIDENCE WHICH CONSISTED O F A VALUATION REPORT OF A REGISTERED VALUER FOR VALUATION OF LAND SOLD BY THE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 4 ASSESSEE. NO REAONS AS PRESCRIBED IN RULE 46A EXIST FOR ADMITTANCE OF SUCH AN EVIDENCE AS ENOUGH OPPORTUNITY BEFORE TH E ASSESSING OFFICER WAS AVAILABLE TO THE ASSESSEE AND THE SAME HAS NOT BEEN DENIED. FURTHER, THE ONLY GROUND RELATES TO THE ASS ESSMENT OF THE TRANSACTION AS CAPITAL GAINS OR BUSINESS VENTURE, N O PURPOSE IS SERVED BY THE VALUERS REPORT FOR THE ABOVE PROPOSIT ION. NO FURTHER OR ADDITIONAL OR ALTERNATE GROUNDS HAVE BEEN TAKEN BY THE AUTHORIZED REPRESENTATIVE. HENCE, THE ADDITIONAL EV IDENCE IS NOT ADMITTED FOR REASONS AS DISCUSSED ABOVE. NOW COMING TO THE QUESTION OF SALE TRANSACTION AS C APITAL GAIN OR BUSINESS, IT IS SEEN THAT NO RETURN HAS BEE N FILED IN THE PRESCRIBED TIME AS PER THE PROVISIONS OF THE ACT AN D ONLY AFTER A SPECIFIC NOTICE UNDER SECTION 133(6) WITH THE DETAI LS OF THE TRANSACTIONS WAS ISSUED TO THE ASSESSEE BY THE ITO, INTELLIGENCE (I&CI) THE RETURN WAS FILED. AT THAT STAGE AFTER TH E DEPARTMENT HAS ALREADY RECEIVED THE INFORMATION REGARDING THE TRAN SACTION AND ON BEING QUESTIONED ABOUT IT THE ASSESSEE HAS CLAIMED THAT THE TRANSACTION REFLECT A BUSINESS TRANSACTION AND THE PLOT WAS BEING HELD AS STOCK IN TRADE. NO PREVIOUS RETURNS HAVE BE EN FILED BY THE ASSESSEE FROM WHERE IT COULD BE SEEN THAT THE ASSES SEE WAS IN THE BUSINESS OF SELLING AND PURCHASING LAND AND PLOTS. IN THE BALANCE SHEET FILED FOUR PLOTS HAVE BEEN SHOWN AS CAPITAL A SSETS AND IT IS STATED BY THE AUTHORIZED REPRESENTATIVE THAT THE PL OT SOLD ARE PART OF THE CLOSING STOCK OF THE PREVIOUS YEAR. ALL THE BALANCE SHEETS AND ACCOUNTS HAVE BEEN SUBSEQUENT YEARS THE SAME ARE FI LED UNDER SECTION 44AD. IN VIEW OF THE ABOVE CONSPECTUS OF FA CTS ONE THING IS CLEAR THAT THE ASSESSEE HAD NOT FILED THE RELEVANT RETURNS AND HENCE CANNOT TAKE THE BENEFIT THAT ITS PREVIOUS CONDUCT W OULD POINT TO THE FACT OF CARRYING ON BUSINESS OR NOT. FURTHER, WHEN QUESTIONED REGARDING THE TRANSACTIONS , BOTH THE ASSESSEE AND HER HUSBAND IN THEIR STATEMENTS RECORD ED ON 25.11.2014 COULD NOT GIVE SATISFACTORY ANSWERS. THE RELEVANT QUESTIONS WHICH BRING OUT THIS ASPECT ARE REPRODUCE D BELOW: MANJU BANSAL STATEMENT RECORDED ON 25.11.2014 ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 5 IZ'U 5% O'KZ 2009 ESA TC VKIUS VIUK O;OLK; 'KQ: FD; K FKK ML O'KZ ESA VKIDS IKL D;K&D;K LEIFR FKH FTLDS VK/KKJ IJ VKIUS O ;OLK; 'KQ: FD;KA MRJ 5%EQ>S BL CKJS ESA ;KN UGH GSA O'KZ 2009 DS O ;OLK; 'KQ: DJRS LE; DKSU LH LEIFR LS O;OLK; 'KQ: FD;K FKK ,OA ML O' KZ ESA D;K CSPK FKK ;G HKH /;KU UGH GSA IZ'U 6% BLDS CKN DS O'KZ 2010&11 VFKKZR FU-O'KZZ 2 011&12 ESA VKIUS D;K [KJHN CSPKU FD;K FKKA MRJ 6% O'KZ 2010&11 ES ESUS ,L-,E-,L- DKWYKSUH OKY K IYKV [KJHNK FKK ,OA CSPK ,OA ,D IYKV DKJ DS IQJE DKWYKSUH ESA [KJHN K FKK ,OA MLS CUKDJ DC CSPK FKK BLDK EQ>S /;KU UGH GSA ,L-,E-,L DKWYKSUH OKYK T SLK FKK OSLH GH FLFKFR ESA CSPK FKKA IZ'U 9% VKIUS TKS EDKU CUKDJ CSPS GS ,OA MUESA TKS CUKUS ESA [KPKZ YXK;K GS D;K VKIDS IKL ML [KPSZ DS FCY OKMPJ BR;KFN EKSTW N GSA MRJ 9% EDKU CUKUS ESA TKS [KPKZ FD;K X;K GS MLS FC Y OKMPJ IZLRQR DJUS ESA VLEFKZ GWWAA IZ'U11% U RKS VKIUS O'KZ 2009&10 VFKKZR FU-O'KZZ 2 010&11 DH VK;DJ FOOJ.KH HKJH GS ,OA UGH DKSBZ MLDK LCWR BL CKCR FD VKIDK 31-03-2010 DKS D;K DYKSFTAX LVKWD FKK ,OA 1-4-2010 DKS D;K IZKJFEHKD L VKAD FKK LCWR IS'K DJUS ESA VLEFKZ JGS GS ,OA O'KZ 2010&11 VFKKZR FU- O'KZ 20 11&12 DH VK;DJ FOOJ.KH HKH FOHKKX }KJK BAAFXR FD;SA TKUS DS CKN FD VKIDS }KJK TKS LEIFR CSPH XBZ IJ NS; DJ CURK GS FU-O'KZ 2011&12 DH FOOJ.KH NKF[KY DH XB Z GS TKS FD VKIUS O;OLK; ESA DKSBZ YXKRKJ O;OLKF;D XFRFOF/K UGH JGH GS U GH BL CKJS ESA VKI DKSBZ LK{; IZLRQR DJ IK;S GS FD VKIUS O;OLK; 'KQ: FD;K FKKA VR % D;KSA UGH 72]61]852@& IJ Y/KQ DKFYD IWAFTXR YKHK DH X.KUK FU- O'KZ 2011&1 2 DS NKSJKU DH TK;SA MRJ% BL CKJS ESA FOLR`R :I ESA ESSJS IFR JH EGS'K CALY MRJ NSUS ESA L{KE GKSXK D;KSAFD OS GH O;OLK; DK LKJK DK;Z NS[KRS GSA MAHESH BANSAL STATEMENT RECORDED ON 25-11-2014 IZ'U 8% VKIDH IRUH JHERH EATW CALY US VIUS C;KUKSA ESA IZ'U LA-11 ESA CRK;K GS FD ESJS IFR ESJS O;OLK; DH NS[KJS[K DJ JGS GS ,OA FOFHKUU O;OGKJ TKS TEHU [KJHN ,OA FCH DS GQ;S GS MUDS CKJS ESA O T;KN K VPNH RJG TKURS GS ,OA BL CKJS ESA VIUK LIVHDJ.K NSA ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 6 MRJ 8%ESJH IRUH }KJK FD;S TK JGS O;OLK; DH TKUDKJH IFR GKSUS DS UKRS BRUH GH GS FD OS TEHU [KJHN QJKSDR ,OA HKOU FUEKZ.K DK O ;OLK; DJ JGH GSA IFR GKSUS DS UKRS OS EQ>S VIUS O;OLK; DS CKJS ESA CRKRH JGRH GS O'KZ 2009&10 ESA ; FD;SA X;S IYKV ESA TKS /KU O;; FD;K X;K FKK OG ESJS FIRK }KJK E`R;Q LS IWOZ O'KZ 2009 ESA FN;K FKK VU; DKSBZ TKUDKJH EQ>S UGH GSA IN THE STATEMENT, SMT. MANJU BANSAL STATED THAT HER HUSBAND WOULD KNOW THE DETAILS, THE HUSBAND STATED THAT HE ONLY K NEW ABOUT THE BUSINESS THAT SHE IS INDULGING IN SALE AND PURCHASE OF PLOTS. FURTHER, WHILE THE LADY STATED THAT ON THE PLOT AT SMS COLON Y NO CONSTRUCTION HAD BEEN DONE WHILE IN THE PROCEEDINGS IT HAS BEEN CLAIMED THAT CONSTRUCTION HAD BEEN UNDERTAKEN ON TH E PLOT. THUS, THERE ARE DISCREPANCIES IN THE STATEMENT ALSO. THE ABOVE CLEARLY SHOWS THAT THE ASSESSEE HAS SOLD THE PLOTS AND NOT FILED THE RETURN OF INCOME, INFORMATION FOR WHICH W AS RECEIVED BY THE DEPARTMENT. ON BEING QUESTIONED FOR THE SAME, T HE ASSESSEE HAS COME UP WITH THE PLEA OF HAVING SOLD THE SAME AS ST OCK IN TRADE. NO EVIDENCE OF THE FACT THAT THE ASSESSEE WAS IN THE B USINESS OF SALE AND PURCHASE OF LAND AND THE PLOTS WERE HELD AS STO CK IN TRADE COULD BE PRODUCED BY THE ASSESSEE. ALL BOOKS OF ACCOUNTS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT ARE PREPARED SUBSEQUENTLY, NO RETURNS OF INCOME HAD BEEN FILED PRIOR TO THE YEAR OR FOR THE YEAR IN QUESTION. FOUR OTHER PLOTS ARE APPEARING AS CAPITAL ASSETS IN THE BALANCE SHEET AND THE TWO PLOTS SOLD ARE BEING CLAIMED TO BE STOC K IN TRADE BASED ON THE BALANCE SHEET OF PREVIOUS YEAR WHICH IS AGAI N ARRIVED AT AND SUBMITTED SUBSEQUENT TO THE ENQUIRY BY THE DEPARTME NT. THE RETURNS FOR SUBSEQUENT YEARS ARE FILED UNDER SECTION 44AD. THE ASSESSEE IS CLAIMING THAT CONSTRUCTION HAD BEEN CARRIED OUT ON THE PLOT BEFORE ITS SALE TO SUPPLEMENT ITS STAND THAT IT WAS THE PA RT OF BUSINESS, WHEREAS THE REGISTERED SALE DEED RECORDS ONLY A 100 SQ. FT. TIN SHADE ROOM ON THE PLOT AT THE TIME OF SALE. THE ONUS FOR PROVING TREATING A PARTICULAR ASSET AS STOCK IN TRADE OR ASSET RESTS W ITH THE ASSESSEE ESPECIALLY IN A CASE WHERE NO RETURNS WERE FILED AN D THE RETURN IS FILED AFTER DETECTION OF THE TRANSACTION BY THE DEP ARTMENT AND NOTICE THEREON BASED ON INFORMATION RECEIVED. RELIANCE IS PLACED ON THE CASE OF V.S. CHANDRA SHEKHAR VS. ACIT, BANGALORE WH EREIN IT HAS ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 7 BEEN HELD THAT SINCE THE ASSESSEE FAILED TO BRING A NY EVIDENCE ON RECORD TO SHOW THAT THE AMOUNT WAS PAID TO THE VEND OR FOR ACQUIRING LAND AS STOCK IN TRADE FOR THE PURPOSE OF BUSINESS, ADDITION MADE THEREON BY THE AUTHORITIES BELOW WAS TO BE CONFIRMED. (54 TAXMANN. COM 185, BANGALORE TRIBUNAL ). IN VIEW OF THE DISCUSSION AND FACTS OF THE CASE, THE ADDITI ON MADE BY THE ASSESSING OFFICER UNDER THE HEAD CAPITAL GAIN IS CO NFIRMED. THE GROUND OF APPEAL IS DISMISSED. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAD ERRED IN NOT ADMITTING THE ADMIT TING THE ADDITIONAL EVIDENCES SUBMITTED UNDER RULE 46A OF IT RULES, 196 2 AND ALSO ERRED IN CONFIRMING THE ADDITION OF RS. 78,34,422/- TOWARDS SHORT TERM CAPITAL GAIN AS DETERMINED BY THE AO ON SALE OF PROPERTY 74, SMS COLONY, DURGAPURA, JAIPUR FOR RS. 71,28,702/- AND ON SALE O F PROPERTY 91, R.K. PURAM, SANGANER, JAIPUR FOR RS. 7,05,720/- FOR WHIC H THE LD.AR ASSESSEE FILED THE FOLLOWING WRITTEN SUBMISSION. GROUND NO.2 &3 : 1.THE ASSESSEE PURCHASED A LAND 74, SMS COLONY, DU RGAPURA JAIPUR, VIDE REGISTERED DEED DATED 26.03.2010 FOR RS.400000/- (PB NO.52) AND WITHIN FOUR MONTHS THEREOF AFTER CONSTRUCTION OF ONE ROOM AND BOUNDARY WALL TH EREON SOLD THE SAME VIDE REGISTERED SALE DEED DATED 21.07.2010 FOR RS.1000 000/-.DLC VALUE WAS ADOPTED AS PER REGISTERED SALE DEED RS.2044872 /-(PB NO.60 ). 2. THE ASSESSEE PURCHASED ANOTHER LAND 91, R.K.PURAM, SANGANER, JAIPUR VIDE REGISTERED DEED DATED 24.06.2010 FOR RS.300000/- (PB NO.66) AND AFTER CONSTRUCTION OF A RESIDENTIAL HOUSE THEREON SOLD THE SAME VIDE REGISTERED SALE DEED DATED 31.01.2011 FOR RS.1021000/-.DLC VALUE WAS ADOPTED AS PER REGISTERED SALE DEED RS.986873 /-(PB NO.71 ). ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 8 3.THE ASSESSEE PURCHASED ANOTHER LAND B-6A, DEVI CH IRANJEEVI COLONY, JAIPUR VIDE REGISTERED DEED DATED 25.11.2010 FOR RS.4960000/- (PB NO.81) AND STARTED CONSTRUCTION THEREON, DURING THE RELEVANT PREVIOUS YEAR WHICH REMAINED IN HAND AT THE END OF THE YEAR. 4. THE ASSESSEE IN RESPONSE TO CERTAIN INQUIRIES CO NDUCTED BY INTELLIGENCE WING OF THE DEPARTMENT SUBMITTED HER RETURN OF INCOME FILED AFT ER INITIATION OF SUCH INQUIRIES, WHEREIN THE RELEVANT TRANSACTIONS OF PURCHASE AND S ALE OF LAND AND CONSTRUCTION THEREON, WERE CLAIMED AS BUSINESS TRANSACTIONS AND CORRESPONDING INCOME OF RS.175491/- WAS SHOWN AS INCOME FROM BUSINESS & PRO FESSION. 5. THE AO INITIATED THE ASSESSMENT PROCEEDINGS U/S 148 OF IT ACT 1961, AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE VIDE LETTER DATED 16.12.2013 (PB NO.95 ) SUBMITTED THE COPY OF RETURN OF INCOME ALONG WITH TRADING AND PROFIT & LOSS ACCOUNT AND BALANCE SHEET SHOWING OPENING STOCK, PU RCHASES, CONSTRUCTION EXP. SALES AND CLOSING STOCK, AND INDIRECT EXP. ETC. AND DECLARING NET PROFIT OF RS.175491/- AGAINST TOTAL SALES OF RS.2021000 /-.(PB NO.28-31) 6. THE ASSESSEE VIDE LETTER DATED 11.07.2014 (PB NO.100) SUBMITTED THE COPY OF BALANCE SHEET FOR THE PRECEDING A.Y.2010-11, WHEREI N THE LAND (74, SMS COLONY) PURCHASED IN PRECEDING YEAR ON 26.03.2010, WAS SHOW N AS CLOSING STOCK OF RS.493150 /-.(PB NO.27) 7. THE ASSESSEE ALSO CLAIMED THAT THE BUSINESS OF R EAL ESTATE WAS CONTINUED IN SUCCEEDING YEARS AND SUBMITTED THE RETURN OF INCOME ALONG WITH TRADING AND PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR THE SUCCEEDING A .Y.2012-13 (PB NO.32-34) 2013-14 (PB NO.35-39) AND 2014-15 ( PB NO.40-42) R.W. PB NO.108. 8. THE ASESSEE VIDE LETTER DATED 11.08.2014 (PB NO.102) FURTHER CLAIMED THAT THE RETURN FOR THE RELEVANT PREVIOUS YEAR HAS BEEN FILE D U/S 44AD OF IT ACT 1961, DECLARING NET PROFIT HIGHER THAN PRESUMPTIVE NP RAT E, THEREFORE SHE HAS NEITHER REQUIRED NOR MAINTAINED ANY BOOKS OF ACCOUNTS, HOWE VER THE TRADING AND P& L ACCOUNT AND BALANCE SHEET HAVE BEEN PREPARED ON THE BASIS OF BANK STATEMENT AND MEMORANDUM INFORMATION. 9 . AS DIRECTED BY THE AO THE ASSESSEE AND HER HUSBAN D PERSONALLY APPEARED BEFORE THE AO WHOSE STATEMENTS WERE RECORDED ON OATH .(PB NO.43-47/48-51) 10. THE AO REJECTED THE CLAIM OF THE ASSESSEE AND H ELD THAT THE ASSESSEE HAD NO SUCH BUSINESS ACTIVITY DURING THE PRECEDING A.Y.2010-11 OR IN EARLIER YEARS AND RETURN OF INCOME FOR THE RELEVANT PREVIOUS YEAR HAS BEEN FILE D AFTER ISSUANCE OF NOTICE OF THE INTELLIGENCE WING OF THE DEPARTMENT, THEREFORE LAN D/HOUSE UNDER CONSIDERATION IS A CAPITAL ASSETS AND NOT THE STOCK IN TRADE AS CLAIME D BY THE ASSESSEE. 11. THE AO ON THE BASIS OF INFORMATION AVAILABLE IN HIS POSSESSION OBSERVED THAT THE DLC VALUE OF ONE OF THE PROPERTY (74, SMS COLONY) O F RS.2044872/-ADOPTED AT THE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 9 TIME OF EXECUTION OF REGISTERED SALE DEED DATED 21. 04.2010 HAS BEEN ENHANCED TO RS.7621852/- BY THE DIG, STAMPS. 12. THE ASSESSEE VIDE LETTER DATED 19.12.2014 (PBNO.107) RAISED HER OBJECTION BEFORE THE AO TOWARDS SUCH ENHANCED VALUATION OF RS.762185 2/-JUST WITHIN FOUR MONTHS FROM THE DATE OF PURCHASE. 13.THE AO IN RESPECT OF SAID PROPERTY (74, SMS COLO NY), IGNORING THE OBJECTION OF THE ASSESSEE DETERMINED SHORT TERM CAPITAL GAIN IN RESPECT OF SAID PROPERTY OF RS.7128702/-BY APPLYING THE ENHANCED DLC VALUE OF RS.7621852/- AND COST OF ACQUISITION OF RS.493150/- WITHOUT ALLOWING ANY COS T OF IMPROVEMENT TOWARDS CONSTRUCTION OF ONE ROOM AND BOUNDARY WALL THEREON. 14.THE AO IN RESPECT OF ANOTHER PROPERTY (91, R. K. PURAM) DETERMINED SHORT TERM CAPITAL GAIN OF RS.705720/-BY APPLYING THE SALES CONSIDERATION OF RS.1021000/- AND COST OF ACQUISITION OF RS.315280/- WITHOUT ALLOWING ANY COST OF IMPROVEMENT TOWARDS CONSTRUCTION OF COMPLETE RESIDENTIAL HOUSE THEREON . 15. THE AO THUS MADE ADDITION OF SHORT TERM CAPITAL GAIN DETERMINED IN RESPECT OF BOTH THE PROPERTIES, TO RETURNED INCOME. 16. THE YEAR WISE ACTIVITIES OF THE ASSESSEE RELATI NG TO PURCHASE, CONSTRUCTION AND SALE OF LAND/HOUSE, BEGINNING FROM PRECEDING A.Y.2010-1 1 MAY KINDLY BE CONSIDERED AS FOLLOWS: A.Y.2010-11 OP. STOCK PURCHASE CONSTRUCTION SALE CL. STOCK NIL 400 SQ. YARD LAND, 74, SMS COLONY, DURGAPURA, JAIPUR FOR RS.400000/- VIDE REG. DEED DATED 26.03.2010 (PB NO.52- 58) SHOWN AS STOCK IN TRADE IN THE BALANCE SHEET SUBMITTED BEFORE THE AO VIDE LETTER DATED 11.07.2014 (PB NO.27/100) REGISTRY EXP. RS.93150/- NIL NIL RS.493150/- NIL 493150/- NIL NIL 493150/- A.Y.2011-12 OP. STOCK PURCHASE CONSTRUCTION SALE CL. STOCK ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 10 74, SMS COLONY, JAIPUR RS.493150/- ONE ROOM AND BOUNDARY WALL AS MENTIONED IN REGISTERED SALE DEED DATED 21.07.2010 AND SITE PLAN (PB NO.60/62/65 ) AND AFFIRMED IN THE STATEMENTS OF THE ASSESSEE, ANSWER TO QUESTION NO.10 (PB NO.43/45-46) ) VIDE REGISTERED DEED DATED 21.07.2010 FOR RS.100000 /-(PB NO.60-65) NIL 126 SQ. YARD LAND, 91, R.K.PURAM, SANGANER, JAIPUR FOR RS.300000/-, VIDE REG. DEED DATED 24.06.2010 (PB NO.66-70 ) REG. EXPENSES RS.15280/- CONSTRUCTION OF RESIDENTIAL HOUSE, 1102 SQ FT., AS PER SITE PLAN ANNEXED TO REG. SALE DEED DATED 31.01.2011 (PB NO.71/80) VIDE REGISTERED DEED DATED 31.01.2011 FOR RS.1021000/- (PB NO.71-80) NIL 91.66 SQ.YARD LAND, B-6A, DEVI CHIRANJEEVI COLONY, JAIPUR VIDE REGISTERED DEED DATED 25.11.2010 FOR RS.496000/- (PB NO.81-88) REG. EXPENSES RS.25100/- CONSTRUCTION OF RESIDENTIAL HOUSE, COSTING RS.700000/- AS CLAIMED BEFORE AO VIDE LETTER DATED 17.11.2014 (PB NO.104 ) NIL B-6A, DEVI CHIRANJEEVI COLONY, JAIPUR RS.1221100/- 493150/- 836380/- 1630000/- 2021000/- 1221100/- TRADING AND PROFIT & LOSS ACCOUNT (PB NO.31) A.Y.2012-13 OP. STOCK PURCHASE CONSTRUCTION SALE CL. STOCK B-6A, DEVI CHIRANJEEVI COLONY, JAIPUR RS.1221100/- NIL NIL NIL 1221100/- ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 11 DURING THE SUCCEDING A.Y.2012-13 ASSESSEE UNDERTAKE N CONTRACT WORK AND OPENING STOCK REMAINED IN HAND AS CLOSING STOCK, AS PER RET URN OF INCOME & BALANCE SHEET SUBMITTED BEFORE AO .(PB NO.32-34). A.Y.2013-14 OP. STOCK PURCHASE CONSTRUCTION SALE CL. STOCK B-6A, DEVI CHIRANJEEVI COLONY, JAIPUR RS.1221100/- NIL NIL 1221100/- 121, R.K.PURAM, SANGANER, JAIPUR, PURCHASED ON 02.04.2012 FOR RS.316280/- AS CLAIMED BEFORE AO VIDE LETTER DATED 17.11.2014 (PB NO.104) CONSTRUCTION OF RESIDENTIAL HOUSE FOR RS.1175680/- SOLD ON 09.05.2012 FOR RS.1051000/- NIL HOUSE NO.46, PREM NAGAR, VISTAR, GOPALPURA, JAIPUR PURCHASED ON 19.11.2012 FOR RS.474400/- NIL SOLD ON 28.02.2013 FOR RS.533334/- NIL CONTRACT WORK OF RS.680000/- NIL 1221100/- 790680/- 1175680/- 2264334/- 1221100/- TRADING AND PROFIT & LOSS ACCOUNT (PB NO.39) A.Y.2014-15 OP. STOCK PURCHASE CONSTRUCTION SALE CL. STOCK B-6A, DEVI CHIRANJEEVI COLONY, JAIPUR RS.1221100/- NIL NIL 1221100/- ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 12 352A, SURYA NAGAR, GOPALPURA, JAIPUR, PURCHASED ON 04.09.2013 FOR RS.386567/- AS CLAIMED BEFORE AO VIDE LETTER DATED 17.11.2014 (PB NO.104/105) NIL NIL 386567/- 1221100/- 386567/- NIL NIL 1607667/- TRADING AND PROFIT & LOSS ACCOUNT (PB NO.42) 17. THUS THE ASSESSEE IS REGULARLY ENGAGED IN THE T RANSACTIONS OF PURCHASE, CONSTRUCTION AND SALE OF /HOUSES TO THE EXTENT CONS IDERED FAVORABLE, APPROPRIATE AND PROFITABLE, WHICH CONSTITUTE REGULAR BUSINESS ACTIV ITIES CARRIED ON BY THE ASSESSEE, BEGINNING FROM PURCHASE OF STOCK IN TRADE IN THE PR ECEDING A.Y.2010-11. 18. THE TRANSACTION OF PURCHASE/CONSTRUCTION AND SA LE OF LAND/HOUSE HAVE BEEN CARRIED ON BETWEEN A SHORT TIME INTERVAL OF 1 TO 7 MONTHS AFTER THE DATE OF PURCHASE. 19. THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR PURCHASED FIRST PROPERTY, (74 SMS COLONY) ON 26.03.2010 AND SOLD THE SAME ON 27.07.20 10, I.E. WITH IN FOUR MONTH OF PURCHASE, JUST BEFORE ONE MONTH FROM THE SALE OF TH E FIRST PROPERTY PURCHASED SECOND PROPERTY, (91, R.K.PURAM) ON 24.06.2010,WHICH AFTER CONSTRUCTION SOLD ON 31.01.2011 I.E. WITHIN 7 MONTH OF PURCHASE, JUST BEFORE TWO MO NTH FROM THE SALE OF THE SECOND PROPERTY PURCHASED THIRD PROPERTY,(B-6A, DEVI CHIRA NJEEVI COLONY), WHICH WAS LYING AS STOCK IN TRADE ALONG WITH CONSTRUCTION THEREON. 20.SUCH REGULAR ACTIVITIES OF PURCHASE, CONSTRUCTIO N AND SALE HAVE ALSO BEEN CARRIED ON IN SUCCEEDING YEARS HAVING SHORT TIME INTERVAL O F 1-3 MONTHS BETWEEN SALE AND PURCHASE. 21. THUS CYCLICAL, REGULAR, AND FREQUENT ACTIVITIES OF PURCHASE, CONSTRUCTION AND SALES HAVING SHORT TIME INTERVAL OF FEW MONTHS BETWEEN SA LE AND PURCHASE ARE EVIDENT FROM THE DOCUMENTS AVAILABLE ON RECORD 22. IN VIEW OF THE NATURE OF THE BUSINESS, REQUIREM ENT OF CAPITAL AND OTHER FACTORS REGULATING THE RELEVANT TRADE THERE MAY BE A CASE W HEN THE ASSESSEE MAY HAVE NO PURCHASE, CONSTRUCTION/SALES DURING A PARTICULAR PE RIOD/YEAR OR THERE MAY BE VERY LIMITED/FEW TRANSACTIONS. 23. EVERY PERSON HAS FIRST YEAR OF ITS BUSINESS WI THOUT HAVING ANY BUSINESS IN PRECEDING YEAR OR IN EARLIER YEARS. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 13 24. THEREFORE, THE FACT THAT THE ASSESSEE WAS NOT H AVING ANY BUSINESS ACTIVITIES DURING THE PRECEDING YEAR OR IN EARLIER YEAR IS NOT CONCLU SIVE/ DECISIVE TO HOLD THAT THE ACTIVITIES OF THE ASSESSEE CARRIED ON DURING THE RE LEVANT PREVIOUS YEAR DO NOT FALL WITHIN THE SCOPE AND NATURE OF BUSINESS ACTIVITIES. 25.THE TOTAL INCOME OF THE ASSESSEE WAS NEVER EXCEE DING THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX, THEREFORE ASSESSEE DID NOT FILE ANY RETURN OF INCOME PRIOR TO ISSUANCE OF NOTICE BY THE INTELLIGENCE WING OF THE DEPARTMEN T, HOWEVER RETURN FILED BY THE ASSESSEE WITH IN THE EXTENDED PERIOD PRESCRIBED U/S 139(4) IS A VALID RETURN. 26. THEREFORE NO ADVERSE INFERENCE CAN BE DRAWN FRO M THE FACT THAT THE ASSESSEE HAS NOT FILED HERE RETURN OF INCOME BEFORE ISSUANCE OF NOTICE BY THE INTELLIGENCE WING OF THE DEPARTMENT SHOWING BUSINESS INCOME. 27.WHEN IT IS VERY MUCH CLEAR FROM THE NATURE, CYCL E, FREQUENCY, TIME INTERVAL BETWEEN THE TRANSACTIONS OF PURCHASE AND SALE, AND VOLUME OF PROFIT/LOSS ARISING FROM THE TRANSACTIONS CARRIED ON BY THE ASSESSEE THAT T HE RELEVANT TRANSACTIONS CONSTITUTE BUSINESS ACTIVITIES, NATURE OF SUCH TRANSACTIONS DO NOT CHANGE SIMPLY FOR THE REASON THAT SUCH TRANSACTIONS WERE NOT CARRIED ON IN PREC EDING YEAR OR RETURN OF INCOME IN RESPECT THEREOF HAS NOT BEEN FILED. 28.THE AO IS NOT JUSTIFIED IN HOLDING THAT THE ASSE SSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE FIRST PROPERT Y (74 SMS COLONY) WAS PURCHASED AS STOCK IN TRADE, THERE CANNOT BE A DOCUMENTARY E VIDENCE TO SHOW THE INTENTION OF THE ASSESSEE, SUCH NATURE OF THE TRANSACTION IS LIABLE TO BE DECIDED FROM THE FUTURE CONDUCT OF THE ASSESSEE AND IN THE LIGHT OF TOTALITY OF FAC TS AND CIRCUMSTANCES OF THE CASE. 29.THE ASSESSEE HAS PURCHASED THE PROPERTY (74, SMS COLONY) IN PRECEDING YEAR WHICH WAS KEPT AS CLOSING STOCK AS CLAIMED IN THE R ELEVANT BALANCE SHEET AS ON 31.03.2010 (PB NO.27),AND THE SAME HAS BEEN CARRIE D FORWARD AS OPENING STOCK IN RELEVANT PREVIOUS YEAR (PB NO.31). 30.THUS THE ASSESSEE NEVER CLAIMED CONVERSION OF S AME PROPERTY FROM CAPITAL ASSETS TO STOCK IN TRADE, THEREFORE THE AO HAS NO JUSTIFIC ATION IN REFERRING TO RELEVANT PROVISIONS OF SECTION 45(2) OF IT ACT 1961 AND IN H OLDING/ ALLEGING THAT CAPITAL ASSETS CONVERTED IN TO STOCK IN TRADE IS A COLOURABLE DEV ICE AND SHAM TRANSACTION. 31.THE BUSINESS OF PURCHASE, CONSTRUCTION AND SALE OF LAND AND HOUSE/FLATS IS AN ELIGIBLE BUSINESS AND THE ASSESSEE IS AN ELIGIBLE A SSESSEE AS PRESCRIBED U/S 44AD OF IT ACT, THEREFORE THERE IS NOTHING WRONG IN FILING RET URN U/S 44AD AND IN DECLARING PROFITS THERE UNDER WITHOUT MAINTAINING ANY BOOKS OF ACCOUN TS. 32. IT IS EVIDENT FROM REGISTERED SALE DEED DATED 21.07.2010 AND ANNEXED SITE PLAN (PB NO.60/62/65 ), THAT THE ASSESSEE BEFORE SALE OF THE PROPERTY 74, SMC COLONY, IMPROVED THE SAME FOR REALIZATION OF BETTER SALE PR ICE, BY CONSTRUCTING ONE ROOM AND BOUNDARY WALL THEREON, AS AFFIRMED BY THE ASSESSEE BEFORE THE AO IN RESPONSE TO QUESTION NO.10 OF HER STATEMENTS. (PB NO.43/45-46) ) ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 14 33. THUS THE ASSESSEE WAS ENGAGED IN BUSINESS OF PU RCHASE, CONSTRUCTION AND SALE OF LAND, HOUSES AND FLATS, WHERE DLC VALUE AS PROVIDED U/S 50C OF IT ACT IS NOT APPLICABLE. SECTION 43CA PROVIDING ADOPTION OF DLC VALUE IN CASE BUSINESS TRANSACTIONS HAS BEEN ENACTED W.E.F. 01.04.2014, TH EREFORE THE SAME HAS NO APPLICATION IN CASE OF THE ASSESSEE. 34. THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR HAS UNDERTAKEN REGULAR AND CYCLICAL ACTIVITIES OF PURCHASE, CONSTRUCTION OF SALE OF LAN D, HOUSE/FLATS, AND THERE IS NO ISOLATED ACTIVITY, THEREFORE THE AO HAS NO JUSTIFICATION IN HOLDING THAT AN ISOLATED TRANSACTION OR ACTIVITY CANNOT BE PART OF BUSINESS. 35.THEREFORE UNDER THE FACTS AND CIRCUMSTANCES THE AO IS NOT JUSTIFIED IN HOLDING THE SALE OF RELEVANT LAND/HOUSE AS TRANSFER OF CAPITAL ASSETS AND IN DETERMINING THE SHORT TERM CAPITAL GAIN ARISING THERE FROM ON THE BASIS O F DLC VALUE AS PROVIDED U/S 50C OF IT ACT 1961. 36.THEREFORE YOUR HONOUR IS REQUESTED TO ACCEPT THE BUSINESS INCOME OF RS.175491/- AS DECLARED BY THE ASSESSEE FROM SALE OF LAND/HOUS ES AND DELETE THE RELEVANT ADDITION OF RS.7128702/- AND 705720/- MADE TO RETURNED INCOM E TOWARDS SHORT TERM CAPITAL GAIN. ALTERNATIVE PLEA 36.WITHOUT PREJUDICE TO THE SUBMISSION CITED ABOVE IT IS HUMBLY SUBMITTED THAT EVEN IF IT IS ASSUMED THAT THE ASSESSEE HAS TRANSFERRED THE CAPITAL ASSETS AND PROFIT ARISING THERE FROM IS CHARGEABLE AS SHORT TERM TERM CAPITAL GAIN THE ENHANCED DLC VALUE OF RS.7621852/- OF THE PROPERTY 74, SMS COLONY, IS HIG HLY EXCESSIVE AND NOT REASONABLE. 37.AT THE TIME OF PURCHASE ON 26.03.2010, DLC VALUE OF THE SAID PROPERTY WAS ADOPTED RS.1858975/-, (PB NO.52/56) AT THE TIME OF SALE ON 21.07.2010, IT WAS ADOPTED RS.2044872/- (PB NO.60) AND JUST WITHIN 4 MONTHS FROM THE DATE OF PURCHASE THE SAME HAS BEEN ENHANCED TO RS.7621852/-BY THE DI G STAMPS. 38.THE ASSESSEE VIDE LETTER DATED 19.12.2014 (PB NO.107/111) OBJECTED BEFORE THE AO TOWARDS SUCH ENHANCED VALUATION ADOPTED BY DIG STAM PS. 39.THE RELEVANT OBJECTION OF THE ASSESSEE SHOULD HA VE BEEN CONSIDERED BY THE AO AS PROVIDED U/S 50C(2) OF IT ACT 1961, HOWEVER THE SA ME WAS NOT BEEN CONSIDERED BY THE AO AT ALL. 40.THE AO WITHOUT GIVING ANY FINDING OR EVEN MAKING ANY SPECIFIC COMMENT WITH RESPECT TO OBJECTIONS RAISED BY THE ASSESSEE OR WIT HOUT ASKING THE ASSESSEE TO FILE ANY CLARIFICATION OR EVIDENCE IN RESPECT OF THE SAME AP PLIED SUCH HUGE VALUATION OF RS.7621852/- AS ADOPTED BY DIG STAMPS, AND DETERMIN ED SHORT TERM CAPITAL GAIN OF RS.7128702/- FROM THE SALE OF THE RELEVANT PROPERTY JUST WITHIN 4 MONTHS FROM THE DATE OF ITS PURCHASE. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 15 41.THEREFORE THE ASSESSEE AS ADVISED, GOT VALUED TH E SAID PROPERTY BY AN INDEPENDENT AND REGISTERED VALUER AS ON DATE OF SALE I.E. ON 21 .07.2010 FOR RS.2341080/- AND SUBMITTED THE SAME BEFORE LD. CIT(A) AS ADDITIONAL EVIDENCE ALONG WITH APPLICATION U/R 46A OF IT RULES 1962 .(PB NO.13-26). 42.THE LD. CIT(A) TOO HAS NOT DEALT WITH THE OBJECT ION RAISED BY THE ASSESSEE TOWARDS EXCESSIVE VALUATION ADOPTED BY DIG STAMPS AND WITHO UT PROPERLY APPRECIATING THE CONTENTION OF THE ASSESSEE DENIED TO ADMIT THE ABOV E SAID ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE .(PAGE NO.13 OF CIT(A) ORDER.) 43. WHERE THE ASSESSEE RAISED OBJECTION REGARDING T HE VALUATION ADOPTED BY STAMP VALUATION AUTHORITY THE AO IS DUTY BOUND TO CONSIDE R THE SAME. KINDLY REFER TO ITO V.GITA ROY 17 ITR (TRIB.)431,(KOL), ITO V. MANJU RA NI JAIN,24 SOT 24(DEL), TRISHLA JAIN V. ITO 11 ITR 579 (DEL) MEGHRAJ BAID VS. ITO 1 14 TTJ 841 (JD) AND RAJENDAR KUMAR MANKAR V. SCIT (2015) 174 TTJ 409(JD). 44. THE VALUATION REPORT OF THE RELEVANT PROPERTY S UBMITTED BY THE ASSESSEE BEFORE LD. CIT (A), GOES TO THE ROOT OF THE ISSUE AND IS QUITE ESSENTIAL TO ARRIVE AT THE FAIR MARKET VALUE OF THE PROPERTY. 45.THE AO NEITHER DECIDED NOR REQUIRED THE ASSESSEE TO SUBMIT ANY EVIDENCE OR CLARIFICATION IN RESPECT OF HER OBJECTION RAISED VI DE LETTER DATED 19.12.2014 TOWARDS VALUATION ADOPTED BY STAMP VALUATION AUTHORITY, THE REFORE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE ABOVE SAID V ALUATION REPORT BEFORE THE AO. 46.THE THE ACSE OF THE ASSESSEE FALLS WITHIN THE SC OPE OF CIRCUMSTANCES PRESCRIBED U/R 46A(C ) OF IT RULES 1962, THEREFORE LD. CIT(A) IS N OT JUSTIFIED IN HOLDING THAT NO REASON AS PRESCRIBED U/R 46A EXIST FOR ADMITTANCE O F SUCH AN EVIDENCE. 47.IF THE CLAIM OF THE ASSESSEE THAT THE RELEVANT T RANSACTION OF SALE OF THE PROPERTY IS BUSINESS TRANSACTION IS REJECTED AND THE SAME IS A SSESSED AS CAPITAL GAIN, THE OBJECTIONS RAISED BY THE ASSESSEE TOWARDS HIGHER AN D EXCESSIVE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY IS LIABLE TO BE DECID ED IN THE LIGHT OF FAIR MARKET VALUE AS PER VALUATION REPORT SUBMITTED BY THE ASSESSEE, THEREFORE LD.CIT(A) IS NOT JUSTIFIED IN HOLDING THAT NO PURPOSE IS SERVED BY THE VALUATI ON REPORT. 48. THUS THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADM ITTING THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE AND IN NOT DEALING WITH T HE OBJECTION RAISED BY THE ASSESSEE TOWARDS EXCESSIVE AND HIGHER VALUATION OF THE PROPE RTY ADOPTED BY STAMP VALUATION AUTHORITY. KINDLY REFER TO APPLICATION FILED BEFORE LD. CIT(A) U/R 46A OF IT RULES 1962. (PB NO.13-14). 49.THE VALUATION REPORT SUBMITTED BY THE ASSESSEE C LEARLY SUPPORT THE CONTENTION OF THE ASSESSEE THAT THE ENHANCED VALUATION OF RS.7621852/ - ADOPTED BY STAMP VALUATION AUTHORITY IS ABNORMALLY EXCESSIVE AND HIGHER AS CO MPARED TO FAIR MARKET VALUE OF THE RELEVANT PROPERTY AND SUCH VALUATION HAS BEEN MADE AT IMAGINARY FIGURES. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 16 50. AS PER VALUATION REPORT FAIR MARKET VALUE OF TH E PROPERTY IS RS. 2341080/- AGAINST THE SALES CONSIDERATION OF RS.1000000/- DECLARED BY THE ASSESSEE, SUCH VARIATION BEING WITHIN REASONABLE LIMITS MAY KINDLY BE IGNORED. 51.UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE ME NTIONED ABOVE, THE AO IS NOT JUSTIFIED IN DETERMINING THE SHORT TERM CAPITAL GAI N ON THE BASIS OF ENHANCED DLC VALUE OF RS.7621852/- ADOPTED BY STAMP VALUATION AU THORITY. 52.THEREFORE YOUR HONOUR IS REQUESTED TO ACCEPT THE DECLARED SALES CONSIDERATION OF RS.1000000/- IN RESPECT OF THE RELEVANT PROPERTY, 7 4 SMS COLONY, AND THE AO MAY KINDLY BE DIRECTED TO DETERMINE THE SHORT TERM CAPI TAL GAIN IN RESPECT OF THE SAME ON THE BASIS OF SUCH DECLARED SALES CONSIDERATION OR G RANT ANY OTHER RELIEF AS DEEMED FIT AND APPROPRIATE IN THE INTEREST OF JUSTICE. 3.3 ON THE OTHER HAND, THE SUPPORTED THE ORDER OF T HE LD. CIT(A) 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE DURING THE RELEVANT PREVIOUS HAS SOLD TWO PROPERTIES 74, SMS COLONY, DURGA JAIPUR AND 91, R.K. PURAM, SANGANER, JAIPUR. THE FIRST PROPERTY 74, SMS COLONY , HAS BEEN SOLD VIDE REGD. SALE DEED DATED 21.07.2010 FOR SALE CONSIDERA TION OF RS.10,00,000/-, THE STAMP VALUATION AUTHORITY FOR T HE PURPOSE OF REGISTRATION ADOPTED DLC VALUE OF RS.20,44,872/- W HICH WAS LATER ON ENHANCED TO RS. 76,21,852/-BY THE DIG STAMPS. THE S ECOND PROPERTY 91, R.K. PURAM, SANGANER, JAIPUR HAS BEEN SOLD VIDE RE GD. SALE DEED DATED 31.01.2011 FOR SALE CONSIDERATION OF RS.10,21,000/- WHICH WAS MORE THAN THE DLC VALUE OF RS.9,86,873/- ADOPTED BY THE STAM P VALUATION AUTHORITY(PBP-71 BACKSIDE). THE REGISTERED SALE DEE DS OF BOTH THE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 17 PROPERTIES ARE PLACED AT PAGE NO.60 AND 71 OF THE PAPER BOOK. THE FIRST PROPERTY 74, SMS COLONY, WAS PURCHASED BY THE ASSES SEE VIDE REGD. PURCHASE DEED DATED 26.03.2010 FOR RS.400000/- (PBP -52-59) AND SECOND PROPERTY 91, R.K. PURAM WAS PURCHASED VIDE REGD. PU RCHASE DEED DATED 24.06.2010 FOR RS.3,00,000/-(PBP 66-70), WHICH AFTE R CERTAIN CONSTRUCTION THEREON HAVE BEEN SOLD DURING THE RELE VANT PREVIOUS YEAR. THE REGISTERED PURCHASE DEEDS OF BOTH THE PROPERTIE S ARE PLACED AT PAGE NO.52 AND 66 OF THE PAPER BOOK. THE ASSESSEE ALSO VIDE REGD. DE ED DATED 25.11.2010 PURCHASED ANOTHER LAND B-6, DEVI C HIRANJEEVI COLONY, JAIPUR FOR RS.4,96,000/- (PBP 81-88) WHICH IS LYING IN HAND AT THE END OF RELEVANT PREVIOUS YEAR. THE ASSESSEE IN RESPONSE TO CERTAIN INQUIRIES CONDUCTED BY THE REVENUE, FILED BELATED RETURN U/S 139(4) OF THE IT ACT 1961, DECLARING NET PROFIT OF RS.1,75,491/- FROM TH E ABOVE SAID TRANSACTIONS OF PURCHASE, CONSTRUCTION AND SALE OF PROPERTIES. THE RELEVANT RETURN OF INCOME AND TRADING AND PROFIT & LOSS ACCO UNT AND BALANCE SHEET ARE PLACED AT PAGE NO.28-31 OF PAPER BOOK. THERE IS NO DISPUTE ON THESE FACTS OF THE CASE, THE ONLY DISPUTE INVOLVED IN THE CASE IS THAT WHETHER THE RELEVANT TRANSACTIONS OF PURCHASE, CONS TRUCTION AND SALE OF PROPERTIES FALLS WITHIN THE NATURE OF CARRYING ON BUSINESS ASSESSABLE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 18 UNDER THE HEADING PROFIT AND GAINS OF BUSINESS OR PROFESSION U/S 28 OF IT ACT OR FALLS WITHIN THE NATURE OF TRANSFER OF CA PITAL ASSETS ASSESSABLE AS CAPITAL GAIN U/S 45 OF IT ACT. THE ASSESSEE HAS CL AIMED THE RELEVANT TRANSACTIONS AS BUSINESS TRANSACTIONS ASSESSABLE UN DER THE HEADING PROFIT AND GAINS OF BUSINESS OR PROFESSION U/S 28 OF IT A CT, AND THUS WITHOUT TAKING INTO ACCOUNT THE DLC VALUE ADOPTED BY STAMP VALUATION AUTHORITY, DECLARED NET PROFIT ON THE BASIS OF FACE VALUE OF S ALE CONSIDERATION, WHEREAS THE AO HAS HELD THE SAME AS TRANSFER OF CAP ITAL ASSETS ASSESSABLE AS CAPITAL GAIN U/S 45 OF IT ACT, AND THUS APPLYING THE ENHANCED DLC VALUE OF RS.76,21,852/-AS PROVIDED U/S 50C OF IT AC T DETERMINED SHORT TERM CAPITAL GAIN OF RS.71,28,702/-IN RESPECT OF FI RST PROPERTY 74, SMS COLONY AND OF RS.705720/- IN RESPECT OF SECOND PROP ERTY 91, R.K. PURAM, JAIPUR. THE LD. A.R. DREW OUR ATTENTION TO THE BALA NCE SHEET FOR THE PRECEDING A.Y.2010-11, PLACED AT PAGE NO.27 OF THE PAPER BOOK WHERE IN THE CLOSING STOCK OF RS.4,93,150/- HAS BEEN SHOW N. THE LD. A.R. EXPLAINED THE SAME PERTAINING TO THE PROPERTY 74, S MS COLONY, JAIPUR PURCHASED ON 26.03.2010, COMPRISING FACE VALUE OF R S.4,00,000/-AND REGISTRY EXP. OF RS.93,150/-.THE LD. A.R. FURTHER I N SUPPORT OF HIS CONTENTION SUBMITTED THAT THE ASSESSEE IS REGULARLY ENGAGED IN THE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 19 BUSINESS OF PURCHASE, CONSTRUCTION AND SALE OF FLAT S /HOUSES AND RELIED ON RETURN OF INCOME, TRADING AND PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE SUCCEEDING YEARS PLACED AT PAGE NO.32-42 OF PAPER BOOK, WHEREIN SIMILAR ACTIVITIES HAVE BEEN SHOWN TO BE REGULARLY CARRIED ON AND CLAIMED AS BUSINESS ACTIVITIES. THE LD.A/R ALSO REFERRED TO STATEMENTS OF THE ASSESSEE AND HER HUSBAND RECORDED BY THE AO PLACED AT PAGE NO.43-51 OF PAPER BOOK , WHERE IN BOTH THE ASSESSEE AND HER HUSBAND AFFIRMED THE CARRYING OF BUSINESS OF PURCHASE, CONSTRUCTION AND SALE OF PROPERTIES. THE LD A.R. SUBMITTED THAT IN CASE OF BUSINESS TRANSACT IONS PROVISIONS OF SECTION 50C ARE NOT APPLICABLE. IT IS EVIDENT THAT THE PROPERTY 74, SMS COLONY WAS PURCHASED ON 26.03.2010 IN THE FORM OF L AND AND THE SAME WAS SOLD ON 21.07.2010 AFTER CONSTRUCTION OF BOUNDA RY WALL ETC. AS MENTIONED IN REGD. SALE DEED .THE SECOND PROPERTY 9 1, R.K.PURAM WAS PURCHASED ON 24.06.2010 WHICH AFTER CONSTRUCTION OF COMPLETE RESIDENTIAL HOUSE HAS BEEN SOLD ON 31.01.2011. BOTH THE PROPERT IES HAVE BEEN SOLD WITHIN SHORT TIME INTERVAL OF 4-7 MONTHS FROM THE D ATE OF PURCHASE. THE SIMILAR PURCHASE, CONSTRUCTION AND SALE ACTIVITIES OF FLATS/HOUSE ARE EVIDENT IN SUCCEEDING YEARS ALSO. THE ASSESSEE IN H ER STATEMENTS IN RESPONSE TO Q. NO.10 (PB NO.45), HAS CATEGORICALLY STATED THAT BOTH THE ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 20 PROPERTIES SOLD DURING THE RELEVANT PREVIOUS YEAR A RE INCLUDED IN HER BUSINESS ACTIVITIES. THE HUSBAND OF THE ASSESSEE IN RESPONSE TO Q.NO.3 (PB NO.48) HAS ALSO CONFIRMED SUCH BUSINESS ACTIVIT IES CARRIED ON BY THE ASSESSEE. THUS CYCLICAL, REGULAR, AND FREQUENT ACTI VITIES OF PURCHASE, CONSTRUCTION AND SALES HAVING SHORT TIME INTERVAL O F FEW MONTHS BETWEEN SALE AND PURCHASE ARE EVIDENT FROM THE DOCUMENTS AV AILABLE ON RECORD WHICH CONSTITUTE BUSINESS ACTIVITIES. THEREFORE WE HOLD THAT THE RELEVANT TRANSACTIONS OF PURCHASE, CONSTRUCTION AND SALE OF PROPERTIES CARRIED ON DURING THE RELEVANT PREVIOUS YEAR ARE FALLING WITH IN THE NATURE OF CARRYING ON BUSINESS ASSESSABLE UNDER THE HEADING PROFIT A ND GAINS OF BUSINESS OR PROFESSION U/S 28 OF IT ACT 1961.THE ASSESSEE HAS ALREADY DECLARED THE NET PROFIT OF RS.1,75,491/-U/S 44AD OF THE ACT, AND FILED RELEVANT DETAILS BEFORE THE AO WHICH HAVE BEEN NOT DOUBTED BY THE A O, THEREFORE THE ADDITIONS OF RS.71,28,702/- AND 7,05,720/- MADE BY THE AO TOWARDS SHORT TERM CAPITAL GAIN ARE DELETED. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. IT IS ALSO PERTINENT TO MENTION THAT WE HA VE DELETED THE ADDITIONS, ON THE BASIS OF EVIDENCES AND MATERIAL AVAILABLE O N THE RECORD, THEREFORE GROUND NO.2 RELATING TO ADMISSION OF ADDITIONAL EVI DENCES AND ALTERNATIVE PLEA OF THE ASSESSEE DO NOT REQUIRE ADJUDICATION. ITA NO. 1088/JP/2016 SMT. MANJU BANSAL VS ITO, WARD- 6(4), JAIPUR 21 4.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-10-2017 . SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/10/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. MANJU BANSAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 6(4), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 1088/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR