Shri Teli Munna Ibrahim, Jalgaon V. CIT-II, Nashik

ITA 1091/PUN/2013

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3010 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-03-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Audit objection; Difference of opinion; Assessment record; Change of opinion
• Section: 40A(3); 50C; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKAR A RAO, AM . / ITA NO.1091/PUN/2013 / ASSESSMENT YEAR : 2008-09 SHRI TELI MUNNA IBRAHIM, PROP. OF ASHA KIRANA MERCHANT, KHADKA ROAD, BHUSAWAL, JALGAON PAN : AAHPT1095P . /APPELLANT VS. CIT-II, NASHIK . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 15.03.2018 / DATE OF PRONOUNCEMENT: 24.05.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE REVISION O RDER OF CIT-II, NASHIK U/S.263 OF THE ACT, DATED 21-03-2013 FOR THE ASSESSMENT YEAR 2008-09. 2. ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : PROCEEDINGS U/S.263 AND ORDER U/S.263 ARE WITHOUT JURISDICTION AND BAD IN LAW. SAME MAY PLEASE BE CANCELLED. HONOURABLE COMMISSIONER HAS ERRED IN PASSING ORDER U /S.263 AND SETTING ASIDE ORDER U/S.143(3) DENOVO. APPELLANT PRAYS TO CANCEL THE ORDER U/S.263. COMMISSIONER HAS ERRED IN SUSPECTING THE TRANSACTION OF PURCHASES AND SALE OF PLOT, THOUGH ARE REGISTERED DOCUMENTS CITS DIRECTION TO NOT ALLOWING LOSS ON SALE ACTIVITY MAY PLEASE BE CANCEL LED ACCEPTING RETURNED LOSS. CIT HAS ERRED IN OBSERVING & DIRECTING ASSESSING OF FICER TO DISALLOW PAYMENT OF CASH FOR PURCHASE OF LAND. COMMISSIONER HAS ERRED IN OBSERVING AND DIRECTING AS SESSING OFFICER TO ASSESSEE THE TRANSACTION OF SALE/SURRENDER OF RELIA NCE PETROL PUMP AS SLUM SALE AS AGAINST PROFIT ON SALE OFFERED AS SHOR T TERM GAIN. 2 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESS EE RUNS VARIOUS BUSINESS ACTIVITIES IN THE NAME OF VARIOUS CONCERNS VIZ. (1) SAGAR CONSTRUCTIONS DEALS IN TRADING OF THE PROPERTIES, (2) RELIANCE PETROL PUMP DEALING IN PETROLEUM PRODUCTS AND (3) ASHA KIRA NA MERCHANT DEALING IN SALE OF SCRAP AND SAND ETC. ASSESSE E FILED THE RETURN OF INCOME U/S.139(1) OF THE ACT ON 04-11-2008 DECLA RING TOTAL INCOME OF RS.2,19,780/-. NOTICES U/S.143(1) AND 143(2) WERE ALS O ISSUED. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS U/S.1 43(3) OF THE ACT, AO ISSUED QUESTIONNAIRES DATED 11-10-2010 AND 07- 12-2010 CALLING FOR DETAILS ON VARIOUS ISSUES. THESE QUESTIONNAIRES A ND THE ASSESSEES REPLIES ARE PLACED IN PAGES 12 TO 22 OF THE P APER BOOK. EVENTUALLY, ON EXAMINATION OF THE CLAIMS OF LOSS IN TRANSACTIO N OF SALE OF SCRAP, PURCHASE/SALE TRANSACTIONS OF LAND, SALE OF PETROL PUMP TO THE RELIANCE INDUSTRIES LIMITED, ETC., THE AO COMPLETED THE ASSE SSMENT U/S.143(3) OF THE ACT DISALLOWING A SUM OF RS.30,53,378/-, THE LO SS CLAIMED BY THE ASSESSEE FROM SALE OF SCRAP. AO LEFT AN OFFICE NOTE IN THIS REGARD TOO. THUS, THE ASSESSED INCOME IS DETERMINED AT RS.32,73,158/- VIDE ORDER DATED 24-12-2010. 4. SUBSEQUENTLY, ON 04-03-2013, THE CIT IN RESPONSE TO THE AUDIT OBJECTION AND ALSO CONSIDERING THE PROPOSAL OF THE AO, A SHOW CAUSE NOTICE WAS ISSUED U/S.263 OF THE ACT RAISING CERTAIN ISSUES. 5. FIRSTLY, IN CONNECTION WITH CLAIMS WITH PROPRIETARY CONCE RN NAMED SAGAR CONSTRUCTION, THE CIT EXAMINED THE PURCHASE AND SALE DETAILS OF THE LANDS AT SY.NO.77 (77 PLOTS OF LAND) AND SY.NO.81 (45 PLOT S OF LAND) AND MENTIONED THAT ASSESSEE GOT LOSS OF RS. 18,71,000/- OUT OF LANDS AT SY.NO.77 AND LOSS OF RS.12,53,000/- OUT OF LANDS AT SY.NO.81. TOTAL LOSS WORKS OUT TO RS.31,24,000/-. CIT EXAMINED THIS ISSUE IN PARA NO.3 TO 5 OF HIS ORDER. CIT RECORDED THE FACT THAT THE AO C ONSIDERED THE WRITTEN SUBMISSIONS OF THE ASSESSEE ON THIS ISSUE AND MEN TIONED THE 3 SAME, IN THE OFFICE NOTE, THE REASONS FOR THE BUSINESS LOSS IN THE SALE OF IMMOVABLE PROPERTIES. THE FACT OF HIS EXAMINING THE PURCHAS E AND SALE DETAILS AND THE RELEVANT AGREEMENT DEEDS WERE ALSO MENT IONED. HOWEVER, THE CIT HELD THAT THE AO RELIED TOO MUCH ON TH E DOCUMENTS OF THE SUB-REGISTRAR, BHUSAWAL WITHOUT CARRYING OUT ANY INDE PENDENT VERIFICATION OF FACTS. EVENTUALLY, CIT SUSPECTED THE LOSS OF RS.31,24,000/- OUT OF THE TRANSACTIONS OF SALE OF LANDS AS R EPORTED BY THE ASSESSEE IN THE RETURN AS DELIBERATE WAY OF INCURRING LOSSES. EVENTUALLY, THE CIT IS OF THE OPINION THAT THE AO FAILED TO UNDERTAKE ANY ENQUIRY ON THIS ISSUE. HE ALSO MENTIONED THAT THE PURCHA SE AND SALE OF THE PROPERTIES IS DONE BETWEEN THE TWO BROTHERS AND T HESE CAN CONSTITUTE A COLLUSIVE ARRANGEMENT FOR GENERATING THE LOSS . AT THE END, ON THE ISSUE, THE CIT HELD AS UNDER : 5. . . . . . . . . . THIS ISSUE IS THEREFORE SET-ASIDE FOR EX-EXAMINATIO N BY THE ASSESSING OFFICER WHO WILL PASS A SPEAKING ORDER AFTER EXAMIN ING THE FACTS OF THE CASE. 6. THE SECOND ISSUE PICKED UP BY THE CIT FOR DESIGNATING THE ASSESSMENT ORDER AS ERRONEOUS, RELATES TO THE PURCHA SE VALUE OF THE PROPERTIES AT SY.NO.77 AND 81. THE TOTAL PURCHASE VALUE OF THESE PROPERTIES WORKS OUT TO RS.41,24,000/-. CONSIDERING THE FA CT THAT THE PROVISIONS OF SECTION 40A(3) APPLY TO THE CASH PAYMENTS FO R BUYING THE STOCK IN TRADE, THE CIT IS OF THE OPINION THAT THERE IS E RRONEOUS ASSUMPTION OF LAW OR FACT IN THIS REGARD. CONSEQUENTLY, TH E ASSESSMENT ORDER BECOMES ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE ON ACCOUNT OF THE ISSUE OF PURCHASE VALUE OF THE STOCK IN TR ADE. CIT ALSO MENTIONED THAT THE AO FAILED TO VERIFY THE TRANSACTIONS R ELATING TO PURCHASE/SALE OF THE LANDS. 7. THE THIRD ISSUE EXAMINED BY THE CIT FOR SETTING ASIDE THE REGULAR ASSESSMENT ORDER OF THE AO IS CLAIM RELATING TO SHORT TER M CAPITAL GAINS 4 OF RS.9,17,715/-. CIT DISCUSSED THE FACT THAT THE ASSESSE E OWNS RELIANCE PETROL PUMP AS PER THE DEALERSHIP AGREEMENT DAT ED 04-03-2006. IT APPEARS THAT THE SAID DEALERSHIP WAS CA NCELLED AND THE PETROL BUNK WAS SOLD TO RELIANCE INDUSTRIES LIMITED. IN FAC T, THE AO WROTE A LETTER TO THE ASSESSEE DATED 11-10-2010 CALLING FOR DETAILS ON THIS ISSUE. ASSESSEE REPLIED VIDE LETTER DATED 12-12-2007 STATING THE FACTS ABOUT THE CANCELLATION OF THE SAID DEALERSHIP. CONSIDE RING THE FACT THAT THE ASSESSEE DID NOT FILE CERTAIN CORRESPONDENCE BE TWEEN THE ASSESSEE AND THE RELIANCE PETROL PUMP, THE CIT SUSPECTE D THE LIKELY SALE OF RELATED ASSETS INCLUDING THE LANDS TO M/S. RELIANCE I NDUSTRIES LIMITED. CIT IS OF THE OPINION THAT THE AO FAILED TO EXAMINE THE DETAILS OF SALE OF PETROL PUMP TO RELIANCE INDUSTRIES LIMITED. EVEN TUALLY, ON FINDING FAULT WITH THE AO QUA THE VERIFICATION OF VARIOUS ASPEC TS, THE CIT HELD THE REGULAR ASSESSMENT ORDER OF THE AO ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. CONTENTS OF PARA NO.8 OF THE OR DER OF CIT READS AS UNDER : 8. IN THE RESULT, I AM OF THE VIEW THAT THE ASSESS MENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND THE SAME IS ACCORDINGLY SET-ASIDE FOR BEING COMPLETED DENOVO. 8. AGGRIEVED WITH THE SAME, ASSESSEE RAISED THE AFORESAID GROUNDS STATING THAT THE REVISION ORDER OF THE CIT IS BAD IN LAW. ON THE FACT OF CALLING THE REGULAR ASSESSMENT ORDER OF THE AO AS ERRONE OUS IS UNSUSTAINABLE, THE ASSESSEE ALSO RAISED CERTAIN ISSUES ON MERITS STATING THAT IT IS A CASE OF SUSPECTING THE LOSS OF REVENUE AND NOT ACTUAL LOSS OF REVENUE. 9. BEFORE US, TO START WITH, LD. AR FOR THE ASSESSEE BROU GHT OUR ATTENTION TO THE QUESTIONNAIRES AND THE REPLIES PLACED AT PAGES 9 TO 20 OF THE PAPER BOOK AND DEMONSTRATED THE ISSUES RELATING TO SAID LOSS ON SALE OF PROPERTIES AND THE INVESTMENTS AND THE RELATED D ETAILS, WERE CALLED FOR AND MADE DISALLOWANCE OF RS.30,53,378/- BEFORE REGU LAR 5 ASSESSMENT IS COMPLETED U/S.143(3) OF THE ACT. FURTHER, R ELYING ON THE CONTENTS ON PAGE 39 (NOTE NOT TO THE ASSESSEE) OF THE PAPER BOOK, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE AO DUTIFULLY RECORDED THE DISCU SSION TOOK PLACE IN THE SCRUTINY PROCEEDINGS ON THE SAID ISSUES RELATING TO DISALLOWANCE OF RS.30,53,378/- AND ALSO THE PURCHASE/SALE TR ANSACTION OF LAND ETC. THE FACT RELATING TO TIME BARRING NATURE OF T HE ASSESSMENT AND THE PRESSURES OF FINALIZING THE ORDER IN 10 DAYS PERIO D WERE ALSO DISCUSSED. REFERRING TO PARA 3 OF THE SAID PAGE 39, (THE O FFICE NOTE NOT TO THE ASSESSEE), LD. AR SUBMITTED THAT THE ISSUES RELAT ING TO TRANSACTIONS UNDERTAKEN BY THE SAGAR CONSTRUCTION RELA TING TO SY.NOS. 77 AND 81 AND THE CONSEQUENT INVESTMENTS IN THE LANDS AMOUNTING TO RS.41,24,000/- IN CASH AND RS.31,24,000/-, THE NET LOSS, WER E ALSO SCRUTINISED BY THE AO. AFTER CONSIDERING ALL THESE ASPECT S, AO DID NOT MAKE ANY ADDITION ON THIS ACCOUNT. THE FACT OF OBTAINING T HE RELEVANT DETAILS ON THESE TRANSACTIONS AND INAPPLICABILITY OF PROVISION S OF SECTION 50C OF THE ACT WERE ALSO RECORDED IN THE SAID PARAGRAPH . THUS, IT IS THE CASE OF LD. AR FOR THE ASSESSEE THAT OUT OF THE 3 ISSUES , THE FIRST ISSUE RELATING TO PURCHASE AND SALE OF LAND TRANSACTIONS UNDERT AKEN BY SAGAR CONSTRUCTION AND THE THIRD ISSUE OF CANCELLATION OF DEALERSH IP OF RELIANCE PETROL PUMP/RELEVANT SHORT TERM CAPITAL GAINS OUT OF THE SAME, WERE THE SUBJECT MATTER OF THE SCRUTINY DURING THE REG ULAR ASSESSMENT PROCEEDINGS. THUS, THE AO HAS ALREADY TAKEN A POSSIBLE V IEW ON THESE ISSUES AND THEREFORE, THE CONCLUSIONS DRAWN BY THE CIT AG AINST SUCH VIEWS OF THE AO ARE OUTSIDE THE SCOPE OF PROVISIONS OF SEC TION 263 OF THE ACT. THUS, THE REVISION ORDER OF CIT IS UNSUSTAINABLE IN LAW ON THESE ISSUES. HOWEVER, LD. AR FOR THE ASSESSEE DOES NOT HAV E ANYTHING TO SAY ON THE ISSUE OF APPLICABILITY OF THE PROVISIONS OF SECTION 4 0A(3) OF THE ACT TO THE CASH PAYMENTS MADE BY THE ASSESSEE IN CONNECT ION WITH THE PURCHASE OF LAND, I.E. THE STOCK IN TRADE. 6 10. PER CONTRA, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE REVISION ORDER OF THE CIT AND SUBMITTED THAT IT IS A CASE OF INCOM PLETE VERIFICATION OF THE ISSUES AND PREMATURE COMPLETION OF THE A SSESSMENT PROCEEDINGS WITHOUT CONDUCTING NECESSARY VERIFICATIONS BY THE AO IN THE REGULAR ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT. AS PER THE LD. DR, AO SHOULD HAVE EXAMINED/VERIFIED THIS ISSUE AND IT IS NOT THE CASE OF THE CHANGE OF OPINION. REGARDING THE PRESSURES OF THE TRANSFER OF FILE AND THE TIME BARRING PRESSURES ON THE ASSESSMENT, LD . DR FOR THE REVENUE HAS NOTHING TO SAY ON RECORD. 11. LD. DR FOR THE REVENUE FILED WRITTEN SUBMISSIONS DATED 20-05-2015 COMMUNICATING THE FACT OF PASSING OF FRESH ASS ESSMENT ORDER IN THIS CASE. MOST OF THESE SUBMISSIONS REVOLVE ARO UND THE ISSUE OF WORKING OF SHORT TERM CAPITAL GAINS ON SALE OF RELIANCE PE TROL PUMP TO RELIANCE INDUSTRIES LIMITED. IN EFFECT, THE SUBMISSIONS OF THE LD. DR RELATES TO THE MERITS OF ADDITION ON ACCOUNT OF SHORT TER M CAPITAL GAINS RAISED BY THE CIT IN HIS REVISION ORDER. IT IS THE CASE OF LD. DR THAT THERE IS NO OPINION FORMED BY THE AO IN THE REGULAR ASSE SSMENT ON THE ISSUES RELATING TO PURCHASE AND SALE OF TRANSACTIONS OF LAN DS UNDERTAKEN BY SAGAR CONSTRUCTION AND SALE OF RELIANCE PE TROL PUMP TO RELIANCE INDUSTRIES LIMITED BY THE ASSESSEES PROPRIETARY CONCE RN. 12. WE HEARD BOTH THE PARTIES AND PERUSED THE PAPERS FILED BEFORE US ALONG WITH CATENA OF DECISIONS SUBMITTED IN SUPPORT OF THE LEGAL ISSUE RELATING TO VALIDITY OF THE REVISION ORDER PASSED BY THE CI T U/S.263 OF THE ACT. WE SHALL NOW PROCEED TO EXAMINE EACH OF THE 3 ISSUES CONSIDERED BY THE CIT FOR CONCLUDING THE ORDER PASSED B Y THE AO DATED 24-12-2010 AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 7 13.A. LOSS ON SALE OF PLOTS/SHOPS UNDERTAKEN BY SAGAR CONSTRUCTION : REGARDING THE FIRST ISSUE RELATING TO THE FAILURE OF THE AO IN VERIFYING THE PURCHASE AND SALE TRANSACTIONS OF LAND UNDERTAKEN BY SAGAR CONSTRUCTION, PROPRIETARY CONCERN OF THE ASSES SEE, WE FIND PARA 3 OF PAGE 39 OF THE PAPER BOOK EVIDENCES THE FACT OF CONDUCTING REQUISITE VERIFICATION INTO THE PURCHASE VALUE AS WELL AS SAL E VALUE OF LANDS AT SY.NOS. 77 AND 81. IN OTHER WORDS, THE ISSUE RE LATING TO CORRECTNESS OF THE PURCHASE VALUE OF RS.41,24,000/- AND THE SALE VALUES LEADING TO EARNING OF NET LOSS OF RS.31,24,000/- WERE EXAM INED AND THE DOCUMENTS ARE AVAILABLE ON THE ASSESSMENT RECORD. IT IS THE CONCLUSION OF THE AO ON THIS ISSUE THAT THE PROVISIONS OF SECTION 50 C OF THE ACT DO NOT APPLY. THUS, THE AO HAS TAKEN A VIEW ON THIS ISSUE DURING THE REGULAR ASSESSMENT. FOR THE SAKE OF COMPLETENESS, WE P ROCEED TO EXTRACT THE CONTENTS OF PARA NO.3 APPEARING ON PAGE 39 OF THE PAPER BOOK AND THE SAME READS AS UNDER : 3. IN RESPECT OF LOSS ON ACCOUNT OF SALE OF IMMOVABLE PROPERTY WHICH IS STOCK IN TRADE OF THE ASSESSEE UNDER THE PROPRIETARY CONCERN OF SAGAR CONSTRUCTION, THE PURCHASE OF THE PROPERTY IN QUESTION AND SALE OF IMMOVABLE PROPERTY ARE SUPPORTED BY PURCHAS E/SALE DEED AS ACCEPTED BY THE JT. SUB-REGISTRAR, BHUSAWAL IN WHICH, THE VALUE OF PURCHASE/SALE OF IMMOVABLE PROPERTY ARE VERIFIED. ALL NECESSARY DOCUMENTS ARE ALSO OBTAINED AND PLACED ON RECORD. AS THE SALE OF IMMOVABLE PROPERTY IS STOCK IN TRADE OF THE ASSESSEE , PROVISION OF SECTION 50C OF THE ACT IS ALSO NOT APPLICABLE IN RESPECT OF SALE VALUE OF IMMOVABLE PROPERTY. CONSIDERING THE ABOVE, WE FIND THAT IT IS THE CASE OF CHAN GE OF OPINION AND HENCE, THE ORDER OF CIT IS NOT SUSTAINABLE ON THE GROUND OF AOS FAILURE TO EXAMINE THE PURCHASE AND SALE RELATED TRA NSACTION OF LAND. THEREFORE, THIS PART OF THE ORDER OF CIT IS INVALID. W E ORDER ACCORDINGLY. B. APPLICABILITY OF PROVISIONS OF SECTION 40A(3) OF THE ACT : CIT RAISED THE ISSUE OF AOS FAILURE TO APPLY THE PROVISIONS OF SECTION 40A(3) OF THE ACT TO THE AFORESAID PURCHASE OF PLOTS OF LAND. THE FACT THAT THE 8 PLOTS OF LAND WERE PURCHASED AS STOCK IN TRADE WAS ALSO EVIDENT. DESPITE THE SAME, AO FAILED TO APPLY THE SAID PROVISIONS AN D ALSO TO UNDERTAKE THE REQUISITE VERIFICATION. IN FACT, THE AO IS AB SOLUTELY SILENT ON THE APPLICABILITY OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THEREFORE, IN OUR VIEW, THE AO FAILED TO INVOKE THE PROVISIONS OF SECTION 40A(3) OF THE ACT, WHICH HE SHOULD HAVE DONE. THERE IS NO DISCUSSIO N ON THIS ISSUE EITHER IN THE ORDER OF THE AO OR IN THE QUESTIONNAIR ES (SUPRA). AO SHOULD HAVE DISCUSSED IF THEY FALL IN THE EXCEPTIONS PROVIDE D IN THE STATUTE IF ANY. THEREFORE, ON THE ISSUE OF AOS FAILURE TO EXAMINE THE APPLIC ABILITY OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT, WE FIND THERE IS ERROR IN THE ORDER OF THE AO. THEREFORE, AO FAILED TO VERIFY BOTH THE ASPECT OF APPLICABILITY OF PROVISIONS OF SECTION 40A(3) OF THE ACT AND ALS O TAKE AN OPINION ON THIS ISSUE. HENCE, IN OUR VIEW, THE SAME SHOULD CONSTITUTE A CASE OF ERRONEOUS ASSUMPTION OF LAW TO THE FACTS RELATING TO THE PURCHASE OF STOCK IN TRADE. HENCE, ON THIS ASPECT, THE ORDER OF THE AO CONSTITUTES AN ERRONEOUS ONE IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THIS PART OF THE REVISION ORDER IS R EQUIRED TO BE CONFIRMED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESS EE. ACCORDINGLY, WE ORDER. C. SHORT TERM CAPITAL GAIN DUE TO CANCELLATION OF DEA LERSHIP AGREEMENT : THIS IS THE LAST GROUND FOR THE CIT TO TREAT THE AO S ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . WE HAVE NARRATED THE REQUISITE FACTS IN THE PRECEDING PARAGRAPHS OF THIS ORDER. WE EXPLAINED THE DETAILS OF VERIFICATION DONE BY THE AO THRO UGH THE QUESTIONNAIRES ON THIS ASPECT OF SALE/CANCELLATION OF PETROL BUNK. BROADLY, WE HOLD THAT THIS ISSUE WAS EXAMINED BY THE AO - RELATING TO SALE TRANSACTION OF RELIANCE PETROL PUMP AND THE SAME IS EVIDENT FROM ITEMS AT SL.NO.1 OF PAGE 9 OF THE PAPER BOOK (QUESTIONNAIRE & REPLY LETT ER 9 OF THE ASSESSEE DATED NIL). FURTHER, THE ITEM NO.3 OF PAGE 12 OF THE PAPER BOOK (QUESTIONNAIRE DATED 11-10-2010) ALSO EVIDENC ES THE FACT OF ENQUIRY/VERIFICATION WITH REGARD TO SALE TRANSACTION OF PET ROL PUMP. THEREFORE, ON THE BASIS OF THESE EVIDENCES, WE ARE OF THE OPINION, THE AO VERIFIED THE CLAIM AND ACCEPTED THE SAME. THUS, THE SAME CONSTITUTES AN OPINION OF THE AO. AS SUCH, CIT DOES NOT HAVE ANY EV IDENCE TO SUGGEST ANYTHING CONTRARY. THEREFORE, THIS PART OF THE A LLEGATION OF THE CIT STAND DISMISSED AND IN FAVOUR OF THE ASSESSEE. ACCOR DINGLY, WE ORDER. THUS, TO SUM UP, WE UPHOLD THE FINDING OF THE CIT ON THE ISSUE OF APPLICABILITY OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT TO THE CASH PURCHASES OF PLOTS OF LAND MADE BY THE AO. OTHER ARGUM ENTS OF THE CIT STAND DISMISSED. THEREFORE, THE LEGAL ISSUE RAISED BY THE AS SESSEE IS PARTLY ALLOWED. 14. GROUNDS ON MERITS : CONSEQUENTLY, THE ADJUDICATION OF GROUNDS RAISED BY THE ASSESSEE ON MERITS OF ADDITION ON ACCOUNT OF PURCHASE AND SALE TRANSACTION OF LAND UNDERTAKEN BY SAGAR CONSTRUCTIO N AND THE SHORT TERM CAPITAL GAINS QUA THE PETROL PUMP BECOMES A CADEMIC. THEREFORE, THE SAID GROUNDS ARE DISMISSED AS ACADEMIC. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF MAY, 2018. SD/- SD/- (SUSHMA CHOWLA) (D.KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 24 TH MAY, 2018 10 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE. 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT-II, NASHIK 4. , , A BENCH PUNE; 5. / GUARD FILE.