ITO, Panvel V. Shri Manohar Shridhar Patil, Raigad

ITA 1166/PUN/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6778 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 05-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS S PRAVEENA
• Assessee Lawyers: V L JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Cost of acquisition
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1166/PN/2012 (ASSESSMENT YEAR : 2004-05) INCOME TAX OFFICER, WARD- 4, PANVEL, DIST. RAIGAD. . APPELLANT VS. SHRI MANOHAR SHRIDHAR PATIL, FLAT NO.14, GANESHKRUPA CO-OP. HOUSING SOCIETY, NEAR S.T. STAND, BEHIND LIC OFFICE, PANVEL, DIST. RAIGAD. PAN : ABWPP5950B . RESPONDENT DEPARTMENT BY : MRS. S. PRAVEENA ASSESSEE BY : MR. V. L. JAIN DATE OF HEARING : 21-07-2014 DATE OF PRONOUNCEMENT : 25-07-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, THANE D ATED 28.02.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 24.12.2010 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 OF THE INCOME-TAX ACT , 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2004-05. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE INCOME ARISEN FROM SALE O F LAND IN QUESTION IS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE WITHOUT APP RECIATING THE FACT THAT THE LAND IN QUESTION IN RESPECT OF WHICH INCOME HAS ARISEN WAS REGISTERED IN THE NAME OF THE ASSESSEE AND NOT IN THE NAME OF M/S . VIRAJ ESTATE PVT. LTD. 2. THE CIT(A) HAS ERRED IN HOLDING THAT THE LAND I N QUESTION WAS 'STOCK-IN-TRADE' AND HENCE PROVISIONS OF SECTION 50 C OF THE INCOME TAX ACT ARE NOT APPLICABLE OVERLOOKING THE FACT THAT THE AS SESSEE WAS NOT IN THE BUSINESS OF LAND DEALING AND HENCE THE LAND CANNOT BE CONSIDERED AS 'STOCK- IN-TRADE. ITA NO.1166/PN/2012 A.Y. : 2004-05 3. WHILE HOLDING THE ABOVE, THE CIT(A) ERRED IN RE LYING UPON THE DECISION OF CIT(A), NASHIK IN THE CASE OF BHARAT V. SHAH (ONE OF THE CO- OWNERS) OVERLOOKING THE FACT THAT THE SAID DECISION HAS ALREADY BEEN SET- ASIDE BY THE ITAT, PUNE TO THE FILE OF THE CIT(A), NASHIK FOR RE-ADJUDICATION. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPON DENT-ASSESSEE IS AN INDIVIDUAL AND THE DISPUTE REVOLVES AROUND LONG TER M CAPITAL GAIN OF RS.26,02,681/- ASSESSED IN THE HANDS OF THE ASSESSE E WITH RESPECT TO A PROPERTY SITUATED AT SURVEY NO.21/1B & 23/1B DEOLAL I, DISTRICT- NASHIK. AS PER THE ASSESSING OFFICER A DEVELOPMENT AGREEMENT DATED 30.12.2013 WAS EXECUTED BY ASSESSEE AND TWO OTHER PERSONS WITH SHR I RAJESH PATHARKAR WITH RESPECT TO THE AFORESAID PROPERTY FOR A CONSIDERATI ON OF RS.38,00,000/-. THE SAID AGREEMENT HAS FORMED THE BASIS FOR THE ASSESSI NG OFFICER TO INFER THAT ASSESSEE EARNED LONG TERM CAPITAL GAIN ON SALE OF S UCH PROPERTY WHICH HAS BEEN COMPUTED AT RS.26,02,681/-. IN COMPUTING SUCH CAPITAL GAIN, THE ASSESSING OFFICER CONSIDERED THE CONSIDERATION IN T ERMS OF SECTION 50C OF THE ACT AT RS.99,66,000/- AND AFTER REDUCING THE INDEXE D COST OF ACQUISITION, TOTAL CAPITAL GAIN WAS WORKED OUT AT RS.79,13,291/- AND A SSESSEES SHARE CAME TO RS.26,02,681/-. 4. THE ASSESSEE HAS RESISTED THE ASSESSABILITY OF S UCH GAIN IN HIS HANDS ON THE PLEA THAT THE TRANSACTION DID NOT BELONG TO HIM, BUT TO ONE M/S VIRAJ ESTATE PVT. LTD. (I.E. VEPL), A CONCERN WHO HAS DUL Y REFLECTED THE ENTIRE TRANSACTIONS IN ITS BOOKS OF ACCOUNT AND RETURNS OF INCOME. IN ORDER TO SUPPORT HIS PLEA THAT THE INCOME ARISING FROM THE SAID TRAN SACTION IS NOT ASSESSABLE IN HIS HANDS, ASSESSEE REFERRED TO A CHRONOLOGY OF EVE NTS STARTING FROM THE ACQUISITION OF LAND IN QUESTION. 5. IN ORDER TO ADJUDICATE THE CONTROVERSY, THE FOLL OWING CHRONOLOGY OF EVENTS IS WORTHY OF NOTICE. ON 05.01.1993, BY WAY OF TWO SEPARATE AGREEMENTS OF SALE, VEPL ACQUIRED THE PROPERTY AT S URVEY NO.21/1B & 23/1B DEOLALI, DISTRICT- NASHIK FROM DHIRAJLAL CHIMANLAL SHAH & OTHERS AND SHISHIR ITA NO.1166/PN/2012 A.Y. : 2004-05 GOVARDHANDAS SHAH & OTHERS FOR A TOTAL CONSIDERATIO N OF RS.18,00,000/-. ON 21.08.2000, VEPL ENTERED INTO A MOU WITH ASSESSEE A ND TWO OTHERS, NAMELY S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V . SHAH WHEREBY ASSESSEE AND THE OTHER TWO PERSONS WERE TO DEVELOP THE PROPERTY FOR CONSIDERATION PAYABLE TO VEPL AND IN TERMS OF THE S AID MOU, THE FINAL CONVEYANCE DEED OF THE SAID PROPERTY WAS TO BE DIRE CTLY MADE IN THE NAMES OF ASSESSEE AND THE OTHER TWO PERSONS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V. SHAH. ON 16.09.2000 BY WAY OF A SALE-DEED ONE GROUP OF THE ORIGINAL OWNERS, I.E. SHISHIR GOVARDHA NDAS SHAH & OTHERS EXECUTED THE SALE DEED OF A PART OF THE PROPERTY IN THE NAMES OF ASSESSEE AND S/SHRI SAMPURNANAD KESHAV GAVANDE. ON 16.12.2000, THE SECOND SET OF ORIGINAL OWNERS, I.E. DHIRAJLAL CHIMANLAL SHAH & OT HERS EXECUTED THE SALE DEED OF THE REMAINING PORTION OF THE PROPERTY IN THE NAM E OF ASSESSEE AND TWO OTHERS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE A ND SHRI BHARAT V. SHAH. ON 02.02.2002, THE MOU DATED 21.08.2000 ENTE RED BY ASSESSEE AND TWO OTHERS WITH VEPL FOR DEVELOPMENT OF THE PROPERT Y WAS CANCELLED ON ACCOUNT OF CERTAIN DISPUTES AND NON-PASSING OF VACA NT POSSESSION BY VEPL, AS REQUIRED BY THE MOU. SUBSEQUENTLY, A DEVELOPMEN T AGREEMENT DATED 30.12.2003 WAS EXECUTED BY ASSESSEE AND TWO OTHERS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V. SHAH WITH SHRI RAJESH PATHARKAR FOR A CONSIDERATION OF RS.38,00,000/-. T HE ASSESSING OFFICER HAS HELD THAT CAPITAL GAIN ON EXECUTION OF THE SAID DEV ELOPMENT AGREEMENT DATED 30.12.2003, HAS ARISEN IN THE HANDS OF THE ASSESSEE AND TWO OTHER PERSONS. 6. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF THE ASSESSEE THAT HE WAS ONLY A NOMINEE OF VEPL. THE PAYMENTS REFLECTED IN THE DEVELOPMENT AGREEMENT WERE RECEIVED BY VEPL AND THAT EVEN THE P URCHASE CONSIDERATION FOR THE PROPERTY WAS PAID BY VEPL. AS PER THE ASSE SSING OFFICER, PAYMENTS MADE BY VEPL CAN, AT BEST, BE UNDERSTOOD TO HAVE BE EN MADE ON BEHALF OF THE ASSESSEE AND TWO OTHERS BUT THE OWNERSHIP OF TH E PROPERTY VESTED WITH ITA NO.1166/PN/2012 A.Y. : 2004-05 ASSESSEE AND TWO OTHER CO-OWNERS. IT WAS, THUS, TH E CASE OF THE ASSESSING OFFICER THAT BY WAY OF SALE-DEEDS DATED 06.09.2000 AND 16.12.000, ASSESSEE AND TWO OTHER CO-OWNERS HAD ACQUIRED THE PROPERTY A ND THE SUBSEQUENT DEVELOPMENT AGREEMENT DATED 30.12.2003 EXECUTED BY ASSESSEE AND TWO OTHERS WITH SHRI RAJESH PATHARKAR FOR A CONSIDERATI ON OF RS.38,00,000/- GAVE RISE TO CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AND TWO OTHER PERSONS. 7. THE CIT(A) HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE TRANSACTION IN QUESTION DOES NOT BELONG TO THE ASSESSEE INASMUC H AS THE LAND IN QUESTION HAS BEEN PURCHASED AND SOLD FOR AND ON BEHALF OF VE PL, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 8. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE HAS PRIMARILY RELIED UPON THE ORDER OF THE ASSESSING OFFICER IN SUPPORT OF THE CASE OF THE REVENUE WHOSE REASONING, WE HAVE ALREADY ADVERTED TO IN EAR LIER PARAS 5 & 6 ABOVE, AND THE SAME ARE NOT BEING REPEATED FOR THE SAKE OF BREVITY. 9. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FO R THE RESPONDENT- ASSESSEE POINTED OUT THAT THE CIT(A) CAME TO A FACT UAL FINDING, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, AND THE DOCUMENTARY EVIDENCE ON RECORD THAT THERE WAS NO ERROR IN HOLDING THAT THE TRANSACTION IN QUESTION DID NOT BELONG TO THE ASSESSEE. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE CRUX OF THE DISPUTE IS AS TO WHETHER THE INCOME ARISING AS A RE SULT OF THE DEVELOPMENT AGREEMENT DATED 30.12.2003 EXECUTED BY ASSESSEE AND TWO OTHERS WITH SHRI RAJESH PATHARKAR IS LIABLE TO BE ASSESSED IN THE HA NDS OF THE ASSESSEE OR NOT. THE CASE SETUP BY THE ASSESSEE IS THAT THE SAID TRA NSACTION DOES NOT BELONG TO HIM. IN THIS CONTEXT, WE FIND THAT THE CIT(A) IN T HE COURSE OF APPELLATE ITA NO.1166/PN/2012 A.Y. : 2004-05 PROCEEDINGS BEFORE HIM CALLED FOR A REMAND REPORT F ROM THE ASSESSING OFFICER. IN TERMS OF HIS COMMUNICATION, THE CIT(A) REQUIRED THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS/DOCUMENTS AS TO WHETHER (I) PAYMENTS FOR PURCHASE OF LAND ARE MADE BY VEPL; (II) SALE PROCEEDS ARE RECEI VED BY VEPL; (III) INCOME IS DISCLOSED BY VEPL; AND, (IV) ALL THE TRANSACTION S ARE RECORDED IN THE BOOKS OF ACCOUNT OF VEPL. THE CIT(A) CATEGORICALLY RECOR DS THAT VIDE A REPORT DATED 18.01.2012, THE ASSESSING OFFICER REPORTED THAT THE LAND IN QUESTION WAS PURCHASED BY M/S VEPL AND THE PAYMENT WAS ALSO MADE BY THEM . THEREAFTER, THE CIT(A) PERUSED OTHER DOCUMENTARY EV IDENCES FURNISHED BY THE ASSESSEE, SUCH AS, BANK STATEMENT, LEDGER ACCOUNT, AUDITED BALANCE-SHEET AND PROFIT & LOSS ACCOUNT OF VEPL. ON THE BASIS OF HIS EXAMINATION, HE HAS CONCLUDED AS UNDER :- 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AND THE SUBMISSION OF THE APPELLANT AND I FIND THAT THE LAND IN QUESTION WAS ACQUIRED BY M/S. VIRAJ ESTATE PVT. LTD. (FORMERLY M AHAVIR LAND DEVELOPERS) VIDE TWO AGREEMENTS TO SALE DT. 05.01.1993 AND THEN AN MOV DT. 21.08.2000 WAS ENTERED INTO BETWEEN M/S. VIRAJ ESTA TE PVT. LTD. AND SHRI. S.K. GAVANDE, SHRI. BHARAT W. SHAH AND SHRI. MANOHA R SHRIDHAR PATIL (THE APPELLANT) FOR DEVELOPMENT OF THE LAND. ACCORDINGLY , THE SALE DEEDS DATED 16.09.2000 AND 16.12.2000 WERE ENTERED INTO BETWEEN THE ORIGINAL LAND OWNERS AND THESE THREE CO-OWNERS. ON PERUSAL OF THE SALE DEEDS, IT IS NOTICED THAT THE PAYMENT OF RS.18,00,000/- HAS BEEN MADE BY CHEQUES FROM BANK ACCOUNT WITH GODAVARI CO-OPERATIVE BANK L TD., NASHIK BETWEEN MAY 1999 TO JULY 2000 AND THE SAME HAS BEEN RECORDE D IN THE BOOKS OF M/S. VIRAJ ESTATE PVT. LTD. THE A.O. HAS ALSO ACCEP TED THESE FACTS IN HIS REMAND REPORT THAT THE PURCHASE CONSIDERATION HAD B EEN PAID BY M/S. VIRAJ ESTATE PVT. LTD. 4.1 ON FURTHER PERUSAL OF THE SALE DEEDS, IT IS NOT ICED THAT THE M/S. VIRAJ ESTATE PVT. LTD. WAS A CONFIRMING PARTY AND TWO CLAUSES OF THE AGREEMENT AS MENTIONED AT PARA 4 THEREOF CLEARLY ES TABLISHED THAT THE APPELLANT AND TWO OTHER CO-OWNERS WERE THE NOMINEES OF M/S. VIRAJ ESTATE PVT. LTD. BOTH THE CLAUSES OF SALE AGREEMENT ARE REPRODUCED AS UNDER:- 'THE VENDORS HAVE ENTERED INTO AGREEMENT OF SALE IN FAVOUR OF THE CONFIRMING PARTY WITH RIGHTS GIVEN FOR DEVELOPMENT AND SALE OF THE PROPERTY WITH A RIGHT TO NOMINATE A PERSON FOR THE COMPLETION OF THE CONVEYANCE OR SALE DEED. THE CONFIRMING PARTY HAS N OMINATED THE PURCHASER AND FOR THE SAKE OF THIS THE CONFIRMING P ARTY HAS JOINED IN THIS DEED. AND WHEREAS IN PURSUANCE OF THE AGREEMENT IN FAVOUR OF THE CONFIRMING PARTY, AND THE REQUEST OF THE CONFIRMING PARTY AND AS NOMINATED BY THE CONFIRMING PARTY AND VENDORS ALSO AGREED TO EXECUTE THE SALE DEED IN FAVOUR OF THE PURCHASER AS REQUESTED AND NOMINATED BY THE CONFIRMING PARTY. ITA NO.1166/PN/2012 A.Y. : 2004-05 FURTHER IN THE BALANCE SHEET OF M/S. VIRAJ ESTATE P VT. LTD., THE LANDS IN QUESTION ARE SHOWN IN SCHEDULE 'G-2' AS ADVANCE AGA INST PURCHASE OF LAND 21/23 RS.18,00,000/-, EXPENSES 21/23 AT RS.14,03,42 5/-. THIS ADVANCE FOR LAND IN QUESTION IS THE PART OF TOTAL ADVANCES AT R S.38.71 CRORES RECORDED IN THE BOOKS OF ACCOUNT AND BALANCE SHEET AS ON 31.03. 2006 OF M/S. VIRAJ ESTATE PVT. LTD. THEREFORE, IT IS CLEARLY ESTABLIS HED BY THE APPELLANT WITH THE HELP OF DOCUMENTARY EVIDENCES THAT THE PURCHASE OF LAND BY THE APPELLANT AND TWO OTHER CO-OWNERS WAS MADE FOR AND ON BEHALF OF M/S. VIRAJ ESTATE PVT. LTD. 4.2 NOW, COMING TO THE SALE OF THE SAID LAND VIDE A DEVELOPMENT AGREEMENT DT. 31.12.2003, IT IS NOTICED THAT THE AP PELLANT AND TWO OTHER CO- OWNERS HAVE AGREED TO TRANSFER THE DEVELOPMENT RIGH TS IN THE SAID LAND TO SHRI. RAJESH ARUN PATHARKAR FOR CONSIDERATION OF RS .38,00,000/-. THE EARNEST MONEY OF RS.3,51,000/- BY CHEQUES HAS BEEN RECEIVED AND BALANCE AMOUNT WAS TO BE RECEIVED LATER ON. THE REC EIPT OF EARNEST MONEY AT RS.3,51,000/- IS ALSO DULY REFLECTED IN THE BOOK S OF ACCOUNT OF M/S. VIRAJ ESTATE PVT. LTD. FINAL SALE DEED HAS BEEN EXECUTED BY RAJESH ARUN PATHARKAR AND ORS. TO SHRINE OF INFANT JESUS TRUST ON 19/01/2007 AND M/S. VIRAJ ESTATE PVT. LTD. GOT ITS BALANCE CONSIDERATIO N OF RS.30,00,000/- ON 14.02.2007 FROM SHRI. RAJESH A. PATHARKAR. THIS AMO UNT IS FOUND CREDITED IN THE BANK ACCOUNT OF M/S. VIRAJ ESTATE PVT. LTD. WITH HDFC BANK ON 15/02/2007. ON FURTHER VERIFICATION IT IS NOTICED T HAT, THE SCHEDULE 'J' FORMING PART OF PROFIT & LOSS A/C, ALSO SHOWS PROFI T ON SALE OF LAND AT SURVEY NO.21/23 WHICH IS UNDER CONSIDERATION AND TH E SAME HAS BEEN INCLUDED IN THE BUSINESS PROFIT OF 2.36 CRORES OF M /S. VIRAJ ESTATE PVT. LTD. 4.3 IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES AND D OCUMENTARY EVIDENCES, I AM OF THE CONSIDERED VIEW THAT LAND IN QUESTION HAS BEEN PURCHASED AND SOLD FOR AND ON BEHALF OF M/S. VIRAJ ESTATE PVT. LTD. FURTHER, SINCE THE LAND IN QUESTION WAS A STOCK-IN-TRADE, TH E PROFIT THEREON IS LIABLE TO BE ASSESSED AS BUSINESS INCOME AND NOT AS LONG T ERM CAPITAL GAIN. THEREFORE, I HOLD THAT THE PROVISIONS OF SECTION 50 C ARE NOT APPLICABLE AND NO ADDITION ON ACCOUNT OF CAPITAL GAIN IS CALLED FO R IN THE CASE OF APPELLANT. THIS VIEW ALSO GETS SUPPORT FROM THE ORDER OF ID. C IT(A)-II, NASHIK IN THE CASE OF SHRI. BHARAT W. SHAH (SUPRA). THUS, THE A.O IS DIRECTED TO DELETE THE ADDITION. 11. AS PER THE AFORESAID DISCUSSION, IT IS EVIDENT THAT THE CIT(A) NOTICED THAT THE LAND IN QUESTION WAS INDEED ACQUIRED BY VEPL VI DE TWO AGREEMENTS TO SALE DATED 05.01.1993; AND, ON 21.08.2000 VEPL ENTE RED INTO A DEVELOPMENT AGREEMENT WITH S/SHRI SAMPURNANAD KESHAV GAVANDE AN D SHRI BHARAT V. SHAH AND ASSESSEE BEFORE US I.E. SHRI MANOHAR SHRID HAR PATIL FOR DEVELOPMENT OF LAND. ACCORDINGLY, THE SALE-DEEDS D ATED 16.09.2000 AND 16.12.2000 WERE ENTERED INTO BETWEEN ORIGINAL LAND OWNERS AND THE AFORESAID THREE CO-OWNERS. AS PER THE CIT(A), THE SAID SALE- DEEDS SHOWED THAT PAYMENTS FOR ACQUISITION OF LAND WERE MADE BY VEPL THROUGH THEIR BANK ACCOUNTS. IT IS ALSO NOTICED BY THE CIT(A) THAT PA YMENTS HAVE BEEN RECORDED ITA NO.1166/PN/2012 A.Y. : 2004-05 IN THE BOOKS OF ACCOUNT OF M/S VEPL. THE ASSESSING OFFICER IS STATED TO HAVE ACCEPTED THE POSITION IN HIS REMAND REPORT THAT THE PURCHASE CONSIDERATION HAS BEEN PAID BY VEPL. BEFORE US, THERE IS NO MATERIAL LEAD BY THE REVENUE TO NEGATE THE AFORESAID FINDINGS OF THE CIT(A). IN TH E COURSE OF HEARING BEFORE US, THE LEARNED COUNSEL HAS FURNISHED A PAPER BOOK WHICH, INTER-ALIA, CONTAINS THE MATERIAL RELIED UPON BY THE CIT(A) IN COMING TO HIS CONCLUSION. IT IS QUITE CLEAR THAT THE FINDING OF THE CIT(A) IS BORNE OUT O F THE MATERIAL ON RECORD. 12. IN SUPPORT OF HIS CONCLUSION THAT THE TRANSACTI ON WAS BELONGING TO THE VEPL, THE CIT(A) HAS ALSO REFERRED TO A CLAUSE OF S ALE-DEED TO POINT OUT THAT ASSESSEE AND TWO OTHER CO-OWNERS WERE NOMINEES OF V EPL AND VEPL HAD SIGNED THE DEEDS AS A CONFIRMING PARTY. APART THER EFROM, IT IS ALSO ASSERTED BY THE CIT(A) THAT IN THE BALANCE-SHEET OF VEPL, THE T RANSACTION IN QUESTION HAS BEEN REFLECTED AS ADVANCES AGAINST PURCHASE OF LAND . ON THE BASIS OF THE SAID DOCUMENTARY EVIDENCE, THE CIT(A) HAS CONCLUDED THAT PURCHASE OF LAND BY THE ASSESSEE AND TWO OTHER CO-OWNERS IS FOR AND ON BEHA LF OF THE VEPL. WE HEREBY AFFIRM THE FINDINGS OF THE CIT(A) AS NOTHING TO THE CONTRARY HAS BEEN LEAD BEFORE US BY THE REVENUE. 13. IN THE SAME MANNER, THE CIT(A) ALSO EXAMINED TH E IMPUGNED DEVELOPMENT AGREEMENT DATED 30.12.2003 AND NOTICED THAT CONSIDERATION THEREON HAS BEEN CREDITED IN THE BOOKS OF ACCOUNT O F VEPL. THE CIT(A) ALSO RECORDS THAT THE PROFITS ON SALE OF SUCH LAND HAVE ALSO BEEN CREDITED IN THE PROFIT & LOSS ACCOUNT OF VEPL, AS A PART OF BUSINES S PROFIT. 14. IN THE FACE OF THE AFORESAID FACTUAL APPRECIATI ON OF THE MATTER, THE CIT(A) REACHED AN INESCAPABLE CONCLUSION THAT THE L AND IN QUESTION WAS INDEED PURCHASED AND SOLD BY THE ASSESSEE AND TWO O THER CO-OWNERS FOR AND ON BEHALF OF VEPL. THEREFORE, THE INCOME THEREOF W AS NOT LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. HAVING REGA RD TO THE MATERIAL AND ITA NO.1166/PN/2012 A.Y. : 2004-05 EVIDENCE ON RECORD, WE HEREBY AFFIRM THE ORDER OF T HE CIT(A) BECAUSE THERE IS NO COGENT REASON OR MATERIAL LEAD BY THE REVENUE, W HICH WOULD REQUIRE US TO INFER TO THE CONTRARY. THUS, THE ULTIMATE CONCLUSI ON OF THE CIT(A) IS HEREBY AFFIRMED. 15. ONE ARGUMENT RAISED BY THE REVENUE IS THAT THE CIT(A) HAS REFERRED TO AN ORDER OF HIS PREDECESSOR IN THE CASE OF CO-OWNER SHRI BHARAT V. SHAH FOR ASSESSMENT YEAR 2004-05, WHICH HAS SINCE BEEN SET-A SIDE AND REMANDED BACK FOR ADJUDICATION AFRESH BY THE TRIBUNAL. IN T HIS CONTEXT, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE FURNISHED A COPY OF ORDER OF THE TRIBUNAL DATED 30.01.2012 VIDE ITA NO.1022/PN/2009 WHEREBY T HE ORDER OF THE CIT(A)- II, NASHIK DATED 08.06.2009 RELATING TO SHRI BHARAT V. SHAH FOR ASSESSMENT YEAR 2004-05 HAS BEEN SET-ASIDE TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFRESH. 16. WE HAVE PERUSED THE SAID DECISION AND FIND THAT THE SAME DOES NOT TURN MUCH WITH REGARD TO THE PRESENT CONTROVERSY BE FORE US. IN ITA NO.1022/PN/209 (SUPRA), THE TRIBUNAL DEALT WITH AN APPEAL OF THE REVENUE WHEREBY SIMILAR ADDITION ON ACCOUNT OF LONG TERM CA PITAL GAIN BASED ON THE DEVELOPMENT AGREEMENT DATED 30.12.2003 WAS DELETED BY THE CIT(A) IN THE HANDS OF ANOTHER CO-OWNER. THE TRIBUNAL NOTED THAT THE CIT(A) HAD ALLOWED RELIEF ON THE GROUND THAT THE PROPERTY IN QUESTION DID NOT QUALIFY TO BE A CAPITAL ASSET AND THUS THE TRANSACTION THEREOF DID NOT GIV E RISE TO CAPITAL GAINS AND THEREFORE, THE QUESTION OF INVOKING SECTION 50C OF THE ACT DID NOT ARISE. HOWEVER, THE TRIBUNAL NOTED THAT WHILE ALLOWING REL IEF IN THE HANDS OF THE CO- OWNER, THE CIT(A) DID NOT DETERMINE THE PRELIMINARY ISSUE RAISED BEFORE HIM WHICH WAS TO THE EFFECT THAT THE GAIN ARISING IN TE RMS OF THE DEVELOPMENT AGREEMENT DATED 30.12.2003 WAS NOT AT ALL ASSESSABL E IN THE HANDS OF THE ASSESSEE AS THE TRANSACTION DID NOT BELONG TO HIM, RATHER IT BELONGED TO VEPL. THE SAID PERTINENT ISSUE WAS NOT ADJUDICATED BY THE CIT(A) AND THE TRIBUNAL ITA NO.1166/PN/2012 A.Y. : 2004-05 CONCLUDED THAT THE CIT(A) OUGHT TO HAVE ADJUDICATED THE PRELIMINARY GROUND AND ONLY THEREAFTER CONSIDERED THE ALTERNATIVE PLEA OF NON-APPLICABILITY OF SECTION 50C OF THE ACT. FOR THE AFORESAID REASONIN G, THE ORDER OF THE CIT(A) WAS SET-ASIDE AND THE MATTER WAS REMANDED BACK TO H IS FILE TO BE ADJUDICATED AFRESH. 17. AS CAN BEEN SEEN FROM THE AFORESAID DISCUSSION, IN THE IMPUGNED ORDER, THE CIT(A) HAS INDEED DETERMINED THE PERTINE NT POINT RAISED BY THE ASSESSEE TO THE EFFECT THAT THE TRANSACTION DID NOT BELONG TO HIM. THE TRIBUNAL VIDE ORDER DATED 30.01.2012 (SUPRA) PRECISELY REQUI RED THE CIT(A) TO ADDRESS SUCH CONTROVERSY. SINCE THE SAID CONTROVERSY HAS A LREADY BEEN ADDRESSED BY THE CIT(A) IN THE IMPUGNED ORDER, THE SAME HAS BEEN DEALT WITH BY US ON ITS MERITS AFTER CONSIDERING THE RIVAL STANDS. THEREFO RE, THE RELIANCE PLACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF CO-OWNER, SHRI BHARAT V. SHAH DATED 30.01.2 012 (SUPRA) IS OF NO AVAIL FOR ADJUDICATING THE PRESENT CONTROVERSY. THUS, ON THIS GROUND REVENUE FAILS. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 25 TH JULY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, THANE; 4) THE CIT-I, THANE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE