Smt. Sunita Gupta, Agra V. DCIT,Circle- 6, Jhansi

ITA 120/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0389 (ITAT-AGRA)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-02-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 22-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: NAVIN GARGH
• Keywords: Reopening of assessment; Revised return; Revenue expenditure; Reassessment proceedings
• Section: 40A(3); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 120/AGRA/2012 ASSTT. YEAR : 2002-03 SMT. SUNITA GUPTA, VS. D.C.I.T., CIRCLE-6, OPP. MEDICAL COLLEGE, JHANSI. GATE NO.1, KANPUR ROAD, JHANSI(PAN : AGJPG 3322J). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 15.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 22.02.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 25.11.2011 FOR THE ASSESSMENT YEAR 2002- 03. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO. 1, THE ASSESSEE CHALLENGED THE INI TIATION OF PROCEEDINGS U/S. 147 OF THE IT ACT. THE ASSESSEE IS A COLONIZER AND SURVEY U/S. 133A WAS CONDUCTED ITA NO. 120/AGRA/2012 2 ON 15.10.2008 ON THE PREMISES OF THE ASSESSEE. ON P ERUSAL OF THE IMPOUNDED PAPERS, IT WAS OBSERVED THAT THE ASSESSEE MADE PURC HASE OF LAND IN CASH IN VIOLATION OF SECTION 40A(3) OF THE IT ACT. THEREFORE, TO THAT EXTENT, INCOME ESCAPED ASSESSMENT. THEREFORE, THE ASSESSMENT WAS REOPENED U/S. 148 OF THE IT ACT AFTER SEEKING APPROVAL OF LD. CIT-II, AGRA. NOTICE WAS DU LY SERVED UPON THE ASSESSEE AND THE ASSESSEE STATED THAT THE RETURN FILED ORIGINALL Y MAY BE TREATED AS RETURN FILED U/S. 148 OF THE IT ACT. THE ASSESSEE WAS ALSO PROVIDED C OPY OF THE REASONS U/S. 148. THE AO AFTER CONSIDERING THE OBJECTIONS OF THE ASSE SSEE REJECTED THE OBJECTIONS OF THE ASSESSEE REGARDING REOPENING OF THE ASSESSMENT. THE LD. CIT(A) ALSO CONFIRMED THE INITIATION OF REASSESSMENT PROCEEDINGS BECAUSE IN THE ASSESSEES CASE, THE REOPENING WAS MADE ON THE BASIS OF THE MATERIAL FOU ND DURING THE SURVEY ON WHICH THE AO FORMED A GENUINE BELIEF THAT INCOME CHARGEAB LE TO TAX HAD ESCAPED ASSESSMENT, AS THE ASSESSEE HAS VIOLATED THE PROVIS IONS OF SECTION 40A(3) OF THE IT ACT AND ACCORDINGLY, THE REOPENING OF ASSESSMENT WA S HELD TO BE JUSTIFIED. 4. THE LD. COUNSEL FOR THE ASSESSEE MERELY STATED T HAT WHATEVER SUBMISSIONS WERE MADE BEFORE THE AUTHORITIES BELOW MAY BE CONSI DERED AND HE DID NOT ELABORATELY ARGUED THIS ISSUE. ON THE OTHER HAND, T HE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 120/AGRA/2012 3 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW IN CONFIRMING THE REOPENING OF ASSESSMENT U/S. 147/148 OF THE IT ACT. DURING THE C OURSE OF SURVEY, SPECIFIC MATERIAL WAS FOUND AGAINST THE ASSESSEE TO PROVE TH AT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 40A(3) OF THE IT ACT AND, THE REFORE, INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THUS, REOPENING IS BASED ON SPECIFIC MATERIAL FOUND AGAINST THE ASSESSEE, WHICH HAVE NOT BEEN DENIED BE FORE THE AUTHORITIES BELOW. THEREFORE, WE ARE OF THE VIEW THAT REOPENING OF ASS ESSMENT IS JUSTIFIED IN THE MATTER. IN THE ABSENCE OF ANY SPECIFIC OBJECTIONS T O THE REOPENING OF ASSESSMENT, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES. GROUND NO. 1 OF APPEAL OF THE ASSESSEE IS, ACCORDIN GLY, DISMISSED. 6. ON GROUND NO. 2, THE ASSESSEE CHALLENGED THE ADD ITION OF RS.2,41,440/- U/S. 40A(3) BY DISALLOWING 20% OF PURCHASE AMOUNT OF LAN D OF RS.12,07,200/-. ACCORDING TO THE AO, THE ASSESSEE HAD PURCHASED LAN D IN CASH OF RS.12,07,200/-. THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40 A(3), THE AO DISALLOWED 20% OUT OF THE SAME AND MADE THE ADDITION OF RS.2,41,44 0/-. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A) AND IT WAS SUBMITT ED THAT THE LAND PURCHASED WAS AGRICULTURAL LAND AND DUE TO DEVELOPMENT OF VICINIT Y IN THE AREA, THE SAME WAS CONVERTED INTO STOCK-IN-TRADE IN THE ASSESSMENT YEA R 2005-06 BY TRANSFERRING THE ITA NO. 120/AGRA/2012 4 LAND TO THE AOP M/S. KAILASH RESIDENCY AND FURTHER, THE ABOVE PROVISIONS APPLY TO THE REVENUE EXPENDITURE ONLY, BUT THE ASSESSEE DID NOT MAKE ANY CLAIM OF DEDUCTION OF EXPENDITURE. THE LAND IN QUESTION WAS NOT SOLD D URING THE YEAR AND EVEN IF, IT WAS TREATED AS STOCK IN TRADE, THE SAME WAS UN-SOLD AT THE END OF THE YEAR. FURTHER, THE CASH PAID WAS RS.9,44,000/- AND NOT RS.12,07,20 0/- AND FURTHER RULE 6DD WOULD APPLY IN THE CASE OF THE ASSESSEE. THEREFORE, THE ADDITION MAY BE DELETED. 7. THE LD. CIT(A) CONSIDERING THE FACTS AND CIRCUMS TANCES OF THE CASE FOUND THAT THE CONDUCT OF THE ASSESSEE SHOWS THAT THE LAN DS WERE PURCHASED BY THE ASSESSEE NOT FOR THE PURPOSE OF INVESTMENT, BUT TO FURTHER DEVELOP THEM. THEREFORE, THE PURCHASE OF LAND BY THE ASSESSEE AND FURTHER DE VELOPMENT WOULD PARTAKE THE CHARACTER OF BUSINESS. THEREFORE, THE PROVISIONS OF SECTION 40A(3) CLEARLY APPLY IN THE CASE OF THE ASSESSEE. THE LD. CIT(A), HOWEVER, EXCLUDED THE STAMP DUTY / REGISTRATION CHARGES U/R. 6DD(B) OF THE IT ACT AND CONFIRMED THE REST OF THE ADDITION AND ALLOWED THIS GROUND OF APPEAL OF THE A SSESSEE PARTLY. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT TWO LANDS PURC HASED FROM KASHI RAM LALA RAM AND LALA RAM IN A SUM OF RS.10,57,000/- PERTAIN ED TO THE YEAR UNDER CONSIDERATION. HOWEVER, THE LAND PURCHASED FROM RAM CHARAN VIDE REGISTERED SALE ITA NO. 120/AGRA/2012 5 DEED DATED 26.11.2002 IN A SUM OF RS.1,50,000/- WOU LD RELATE TO THE NEXT ASSESSMENT YEAR 2003-04. THEREFORE, THIS CANNOT BE ADDED IN THE YEAR UNDER CONSIDERATION. COPY OF THE SALE DEED IS PRODUCED ON RECORD. HE HAS FURTHER SUBMITTED THAT SINCE THE PAYMENTS WERE MADE TO THE SELLER RESIDING AT VILLAGE DADIAPURA WHERE THERE IS NO BANK, THE CASE OF THE A SSESSEE WOULD BE COVERED BY RULE 6DD. THEREFORE, THE DISALLOWANCE MAY BE DELETE D. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. ITAT, JODHPUR BENCH IN THE CASE OF VAISHALI BUILDERS AND COLONIZERS VS. ADDL. CIT, 138 ITD 227 VIDE ORDER DATED 25.07.2012 IN PARA 11 TO 1 1.3 HELD AS UNDER : 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE A BOUT THE FACTS NOTED ABOVE IN THIS ORDER. THE ASSESSEE IS DEALING IN REA L ESTATE AND LAND PURCHASED IS STOCK IN TRADE. THEREFORE, THE PAYMENT MADE FOR PURCHASE OF LAND IS EXPENDITURE IN THE BUSINESS OF THE ASSESSEE AND ATTRACT THE PROVISIONS OF SECTION 40A(3) OF THE IT ACT. IT IS ALSO ADMITTED FACT THAT THE ASSESSEE HAS PURCHASED CHUNK OF LAND FROM PARTIES MENTIONED ABOVE AND IT IS ONLY THE PAYMENT, WHICH HAS BEEN STAGGERED OVER A PERIOD OF TIME. THUS, THE LAND IS STOCK IN TRADE OF THE BUSINESS OF THE ASSESSEE AND WAS NOT MERELY AN ASSE T. THE ASSESSEE PLEADED BEFORE THE AUTHORITIES BELOW THAT THE PARTI ES INSISTED FOR CASH PAYMENT, THEREFORE, THE CASH PAYMENT IS MADE ON DIF FERENT DATES, BUT THE PLEA TAKEN BEFORE THE AUTHORITIES BELOW HAVE NO T BEEN ESTABLISHED BY ANY EVIDENCE OR MATERIAL ON RECORD OR CONFIRMATI ON FROM THE PARTIES. THE ASSESSEE HAS CREDITED THE WHOLE AMOUNT IN THE ACCOUNT OF THE ABOVE PARTIES AND HAVE STAGGERED THE PAYMENT AL MOST EVERY DAY AT LESS THAN RS.20,000/- IN A DAY AND FURTHER CREDIT B ALANCE WAS CARRIED FORWARD IN THE NEXT YEAR. THEREFORE, IT IS NOT A CA SE OF THE ASSESSEE ITA NO. 120/AGRA/2012 6 THAT EACH BILL WAS LESS THAN RS.20,000/-. THE WHOLE PAYMENT OF PURCHASE OF LAND IS NOT LESS THAN RS.20,000/-. IT I S ONLY THE PAYMENT, WHICH HAS BEEN STAGGERED OVER A PERIOD OF TIME. PB- 53 TO 86 ARE THE DETAILS OF CASH PAYMENT IN WHICH ALMOST EVERYDAY PA YMENTS HAVE BEEN MADE IN A SUM OF RS.15,000/-, RS.18,000/-, RS.19,00 0/- AND RS.20,000/-. THE ASSESSEE FAILED TO PROVE THAT THE BANK FACILITY IS NOT AVAILABLE ON EACH DAY WHEN CASH PAYMENT IS MADE. NO BUSINESS EXPEDIENCY IS ALSO PROVED AS TO WHY EVERY DAY CASH PAYMENT IS MADE IN INSTALLMENTS. IT IS DIFFICULT TO BELIEVE THAT VI LLAGERS FROM CHOKA VILLAGE WOULD COME EVERYDAY ALMOST IN WHOLE OF THE YEAR TO COLLECT THE PETTY PAYMENTS AT JODHPUR FOR SALE OF LAND. THE DISTANCE BETWEEN VILLAGE CHOKA AND JODHPUR IS MORE THAN 10 K.M. AND RATHER IT IS RISKY FOR THE VILLAGER TO GO EVERYDAY TO JODHPUR TO COLLE CT PAYMENT IN INSTALLMENT AND TO RETURN TO HIS VILLAGE WITH CASH. THUS, THE ASSESSEE DELIBERATELY STAGGERED THE PART PAYMENT TO CIRCUMVE NT THE PROVISIONS OF LAW. THE EXPLANATION OF THE ASSESSEE IS NOT SUPP ORTED BY ANY EVIDENCE OR CONFIRMATION THAT THE CONCERNED PARTIES INSISTED FOR CASH PAYMENT EVERYDAY IN WHOLE OF THE YEAR. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE, THUS, MANIPULATED IN SUCH A WAY WHICH SUITS TO THE CONVENIENCE OF THE ASSESSEE. HONBLE M.P. HIGH COUR T IN THE CASE OF SHRI RASHIKA PRAKASHAN (RAIPUR) PVT. LTD. 257 ITR 6 75, DISMISSED THE APPEAL OF THE ASSESSEE. IN THIS CASE, BEFORE THE AS SESSING OFFICER, IT WAS SUBMITTED THAT THE PAYMENTS WERE MADE NUMBER OF TIMES IN A DAY AND EACH TRANSACTION WAS BELOW RS.10,000/- AND THE PROVISIONS OF SECTION 40A(3) ARE NOT ATTRACTED. THE AO, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. THE TRIBUNAL RECORDED A FINDING OF FACT THAT THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENC E IN SUPPORT OF THE EXPLANATION THAT THE PARTY INSISTED ON PAYMENT IN C ASH AND IT HAD CONSCIOUSLY SPLIT UP THE PAYMENT SO THAT EACH PAYME NT DID NOT EXCEED RS.10,000/-, ONLY TO CIRCUMVENT THE PROVISIONS OF L AW. ACCORDINGLY, THE ADDITION WAS CONFIRMED. HONBLE HIGH COURT DISMISSE D THE APPEAL OF THE ASSESSEE. 11.1 HONBLE PUNJAB AND HARYANA HIGH COURT IN THE C ASE OF AGGARWAL STEEL TRADERS VS. CIT, 250 ITR 738, CONSID ERING THE BOARDS CIRCULAR ON RULE 6DD HELD- HELD, (I) THAT THE EXPLANATION RENDERED BY THE AS SESSEE IN RESPECT OF THE PAYMENTS OF RS.24,000 AND RS.40,000 WOULD BE COVERED BY THE EXCEPTIONAL CIRCUMSTANCES AS PROVIDED IN THE BOARDS CIRCULAR, ITA NO. 120/AGRA/2012 7 YET THAT BY ITSELF WOULD NOT ENTITLE THE ASSESSEE T O CLAIM THE RELIEF. THERE IS A FURTHER REQUIREMENT PROVIDED IN THE BOAR DS CIRCULAR ITSELF OF FURNISHING A CONFIRMATORY LETTER FROM THE CONCER NED PARTIES. ADMITTEDLY, NO SUCH LETTER IN THE ABOVE TERMS HAD B EEN FURNISHED BY THE ASSESSEE. HENCE, THE TRIBUNAL WAS JUSTIFIED IN SUSTAINING THE ADDITION OFRS.64,000 IN VIEW OF THE PROVISIONS OF S ECTION 40A(3) READ WITH RULE 6DD OF THE INCOME-TAX RULES, 1962. 11.2 THE ASSESSEE DID NOT PRODUCE SALE DEED OR THE AGREEMENT DURING THE COURSE OF ARGUMENTS TO PROVE THAT PART C ASH PAYMENTS WERE MADE IN INSTALLMENTS FOR PURCHASE OF LAND. IF IT WA S ADVANCE MONEY GIVEN TO THE VILLAGERS FOR PURCHASE OF LAND IN INST ALLMENT, THERE WAS NO NECESSITY TO MAKE PAYMENT IN CASH IN INSTALLMENT. I T COULD BE PAID BY CHEQUES/DRAFTS. FURTHER IF THE AMOUNT WAS PAID AT T HE TIME OF EXECUTION OF SALE DEED, THE VILLAGER/SELLER WOULD N OT ACCEPT CASH PAYMENTS IN INSTALLMENTS EVERYDAY DURING THE WHOLE YEAR AFTER THE EXECUTION OF SALE DEED. THEREFORE, IT IS CLEAR THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN MANIPULATED TO CIRCUMVENT THE PROVISIONS OF LAW. THE ASSESSEE HAS, THUS, FAILED TO PROVE GENUIN E PAYMENTS IN INSTALLMENTS TO THE VILLAGERS IN CASH. HONBLE SUPR EME COURT IN THE CASE OF CIT VS SHRI DURGA PRASAD MORE 82 ITR 540 AN D IN THE CASE OF SMT. SUMATI DAYAL VS CIT 214 ITR 801 HELD THAT THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCES BEFORE THEM B Y APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONSIDERING THE SURROU NDING CIRCUMSTANCES. 11.3 REGARDING THE BUSINESS EXPEDIENCY, THE ASSESSE E HAS NOT FILED ANY EVIDENCE BEFORE THE AUTHORITIES BELOW AND NOTHI NG IS CLARIFIED AS TO WHAT WERE THE OTHER RELEVANT FACTORS, FOR WHICH THE CASH PAYMENT HAS BEEN MADE AND NO SPECIFIC RULE HAS BEEN EXPLAIN ED U/R 6DD, WHICH IS APPLICABLE TO THE CASE OF THE ASSESSEE. TH E LD. COUNSEL FOR THE ASSESSEE ARGUED THAT FOR PURCHASE OF AGRICULTURAL L AND AND PAYMENT MADE TO THE VILLAGERS, THE PROVISIONS OF SECTION 40 A(3) MAY NOT BE APPLIED AS PROVIDED IN EXCEPTION TO RULE 6DD. WE HA VE GONE THROUGH THE RULE 6DD APPLICABLE NOW AND PRIOR TO AMENDMENT ALSO, IN WHICH NONE OF THE EXCEPTION HAS BEEN PROVIDED FOR MAKING PAYMENT IN CASH FOR PURCHASE OF LAND. IT IS, HOWEVER, PROVIDED THAT ABOVE RULE CAN BE AVOIDED IF PAYMENT IS MADE FOR PURCHASE OF AGRICULT URAL PRODUCE WHICH IS NOT THE CASE OF THE ASSESSEE AT ALL. THE A SSESSEE IS DEALING IN REAL ESTATE AND IN LAND AND AS SUCH, IT WAS FOR THE ASSESSEE TO ESTABLISH ITA NO. 120/AGRA/2012 8 THAT THE CASH PAYMENTS HAVE BEEN MADE FOR BUSINESS EXIGENCIES, WHICH THE ASSESSEE HAS FAILED TO PROVE IN THIS CASE. FURT HER RULE 6DD(J) WOULD NOT APPLY IN THIS CASE BECAUSE THE ASSESSEE F AILED TO PROVE THAT ON THE DATE OF PAYMENT WHETHER BANKS WERE CLOSED EI THER ON ACCOUNT OF HOLIDAY OR STRIKE. THE LD. CIT(A), THEREFORE, RI GHTLY NOTED IN HIS FINDING THAT THE ASSESSEE HAS NOT SATISFIED AS TO U NDER WHICH RULE, THE ASSESSEES CASE WOULD FALL. IN THE CASE OF TRIVEDI CORPORATION PVT. LTD. (SUPRA), ITAT AHMEDABAD BENCH CONSIDERED THE I SSUE OF DISALLOWANCE U/S. 40A(3) IN RESPECT OF CASH PAYMENT MADE TO GUJRAT STATE ELECTRICITY BOARD, WHICH WAS CONSIDERED AS ON E OF THE UNDERTAKING OF THE STATE GOVERNMENT. THEREFORE, IT WAS CONSIDERED TO BE A PAYMENT MADE TO GOVERNMENT BODY AND WAS FALLIN G IN EXCEPTION. THE CASE LAW CITED BY THE LD. COUNSEL FOR ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE BECAUSE THEY ARE BASED ON THEIR OWN FACTS AND THAT THE THEORY OF REAL INCOME WOULD NOT APPLY FOR DEALING WITH THE ISSUE OF SECTION 40A(3) OF THE IT ACT. CONSIDERING THE FACTS AND CIRCUMSTANCES AND ABOVE DISCUSSION, IT IS VERY CLEA R THAT THE ASSESSEE CONSCIOUSLY SPLIT UP THE PAYMENTS IN WHOLE OF THE Y EAR, WHICH IS IMPRACTICABLE, ILLOGICAL AS NOTED ABOVE AND IT WAS DONE JUST TO CIRCUMVENT THE PROVISIONS OF LAW. THERE WAS NO JUST IFICATION FOR THE ASSESSEE TO SPLIT UP THE TRANSACTIONS OF CRORES OF RUPEES IN SMALL PAYMENTS OF RS.15,000/- TO RS.20,000/- EVERYDAY. WH ATEVER PLEA WAS TAKEN BEFORE THE AUTHORITIES BELOW WAS NOT SUPPORTE D BY ANY EVIDENCE. THEREFORE, THE ASSESSEE FAILED TO PROVE ANY BUSINES S EXPEDIENCY OR OTHER FACTS FOR MAKING STAGGERED PAYMENTS IN CASH. THE CASE OF THE ASSESSEE WOULD NOT FALL IN ANY EXCEPTION TO RULE. T HE ASSESSEE DELIBERATELY AND CONSCIOUSLY SPLIT UP THE PAYMENTS IN PART SO AS TO CIRCUMVENT THE PROVISIONS OF LAW. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. THERE IS NO MERIT IN THESE GROUNDS OF APPEAL BY THE ASSESSEE. SAME ARE ACCORDINGLY DISMISSED. 10. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A COL ONIZER AND BUILDER AND DEALING IN REAL ESTATE. DURING THE COURSE OF HEARING, THE ASSE SSEE WAS DIRECTED TO FILE COMPLETE AUDIT REPORT BUT THE SAME HAS NOT BEEN FILED. THE A SSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE LAND IN QUESTION WAS NOT SOLD DURIN G THE YEAR AND EVEN IF TREATED AS ITA NO. 120/AGRA/2012 9 STOCK IN TRADE, THE SAME REMAINED UNSOLD AT THE END OF THE YEAR. IT WOULD, THEREFORE, SHOW THAT THE LAND PURCHASED WAS ALSO STOCK IN TRAD E. THEREFORE, IN THE CASE OF THE COLONIZER / BUILDER DEALING IN REAL ESTATE, PAYMENT MADE FOR THE PURCHASE OF LAND IS EXPENDITURE IN THE NATURE OF BUSINESS OF ASSESSEE A ND WOULD CLEARLY ATTRACT THE PROVISIONS OF SECTION 40A(3) OF THE IT ACT. IT WAS ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT THE SAME LANDS WERE CONVERTED INTO STOC K IN TRADE IN ASSESSMENT YEAR 2005-06 BY TRANSFERRING THE LAND TO AOP, M/S. KAILA SH RESIDENCY AND ULTIMATELY IT WAS DEVELOPED. THE LD. CIT(A), THEREFORE, CORRECTLY FOUND THAT THE CONDUCT OF THE ASSESSEE SHOWS THAT THE LANDS WERE PURCHASED BY THE ASSESSEE NOT FOR THE PURPOSE OF INVESTMENT, BUT TO DEVELOP THE SAME. THEREFORE, IT WAS RIGHTLY HELD TO BE THE PURCHASE OF LAND MADE BY THE ASSESSEE AND FURTHER D EVELOPMENT WOULD PARTAKE THE CHARACTER OF BUSINESS. THEREFORE, THE PROVISIONS OF SECTION 40A(3) HAS BEEN RIGHTLY INVOKED IN THE CASE OF THE ASSESSEE. THE ASSESSEE S UBMITTED BEFORE THE AO THAT THERE WAS NO BANK AS THE PAYMENT WAS TO BE MADE TO THE SELLER RESIDING AT VILLAGE DADIAPURA. THE AO SPECIFICALLY NOTED THAT ALL THE P ROPERTIES ARE ENCLOSED VICINITY TO BANKS AND BANKS ARE SITUATED WITHIN 1 TO 1 KIL OMETERS AND ALL THE PAYMENTS ARE MADE IN WORKING DAYS. THEREFORE, RULE 6DD WOULD ALSO NOT APPLY IN THE CASE OF ASSESSEE AND FURTHER NO CONFIRMATIONS ETC. HAVE BEEN FILED FROM THE CONCERNED PARTIES. THEREFORE, REQUIREMENT OF RULE 6DD HAS NOT BEEN SATISFIED IN THIS CASE. THE SAME VIEW IS TAKEN BY HONBLE PUNJAB AND HARYAN A HIGH COURT IN THE CASE OF ITA NO. 120/AGRA/2012 10 AGARWAL STEEL TRADERS VS. CIT, 250 ITR 738. THUS, T HE ASSESSEE HAS FAILED TO MAKE OUT ANY CASE OF ANY EXCEPTIONAL CIRCUMSTANCE IN THI S CASE. CONSIDERING THE FACTS OF THE CASE IT IS ALSO CLEAR THAT THE ASSESSEE DELIBER ATELY DID NOT MAKE CLAIM OF EXPENDITURE IN THE ASSESSMENT YEAR UNDER APPEAL JUS T TO CIRCUMVENT THE PROVISIONS OF LAW, OTHERWISE IN THE CASE OF BUILDERS AND COLON IZERS WHEN THE PURCHASE OF LAND IS EXPENDITURE, THERE WAS NO REASON FOR THE ASSESSE E NOT TO MAKE SUCH CLAIM IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE ALSO FAILED T O PRODUCE COMPLETE PROFIT AND LOSS ACCOUNT AND AUDIT REPORT ON RECORD. IT WOULD A LSO SHOW THAT THE ASSESSEE HAS MANIPULATED BOOK ENTRIES IN THE PROFIT AND LOSS ACC OUNT AND BOOKS OF ACCOUNT JUST FOR THEIR OWN BENEFITS AND TO DEFEAT THE PROVISIONS OF LAW. CONSIDERING THE ABOVE DISCUSSION, WE DO NOT FIND ANY JUSTIFICATION TO INT ERFERE WITH THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE APPLICABILITY OF PROVISION S OF SECTION 40A(3) OF THE IT ACT. HOWEVER, CONSIDERING THE SALE DEED DATED 26.11 .2002 OF PURCHASE OF LAND FOR RS.1,50,000/-, COPY OF WHICH IS PLACED ON RECORD IN THE CASE OF SHRI RAM CHARAN, IT IS CLEAR THAT THE SAID PURCHASE OF LAND FALLS IN TH E NEXT ASSESSMENT YEAR 2003-04. THEREFORE, TO THAT EXTENT, THE AO SHALL EXCLUDE THE PURCHASE OF LAND FROM THE TOTAL PURCHASE AND SHALL GIVE RESULTANT RELIEF TO THE ASS ESSEE. GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. ITA NO. 120/AGRA/2012 11 11. ON GROUND NO. 3, THE ASSESSEE CHALLENGED THE OR DER OF THE LD. CIT(A) IN NOT ALLOWING THE DEDUCTION OF RS.3,53,080/- TO BE ASSES SED AS AGRICULTURAL INCOME. THE ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE AO. TH E ASSESSEE FILED ORIGINAL RETURN OF INCOME AT RS.6,53,299/- ON 05.09.2002. FURTHER, NOT ICE U/S. 148 HAS BEEN RECEIVED BY THE ASSESSEE. THE ASSESSEE FILED A LETTER BEFORE THE AO SUBMITTING THEREIN THAT THE RETURN ORIGINALLY FILED MAY BE TREATED AS RETUR N FILED IN RESPONSE TO NOTICE U/S. 148 OF THE IT ACT. THE AO WHILE COMPUTING THE INCOM E OF ASSESSEE U/S. 148 TOOK THE INCOME AS PER RETURN AT RS.6,53,299/- AND AFTER MAKING ADDITION OF RS.2,41,440/- U/S. 40A(3), COMPUTED THE INCOME AT R S.8,94,739/-. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE AGRICULTUR AL INCOME OF RS.3,53,080/- WAS INADVERTENTLY INCLUDED IN THE ORIGINAL RETURN OF IN COME. THEREFORE, THIS MISTAKE MAY BE CORRECTED AND AMOUNT OF RS.3,53,080/- MAY BE ASSESSED AS AGRICULTURAL INCOME. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE CLAIM OF THE ASSESSEE BECAUSE THIS AMOUNT WAS RETURNED AS INCOME BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME. THE ORIGINAL RETURN OF INCOME WAS ALSO NOT REVISED RECTIFYING THE MISTAKE AND THE ASSESSEE IN RESPONSE TO THE NOTICE U/S. 148 ALSO SUBMITTED THAT THE RETURN FILED ORIGINALLY MAY BE TREATED AS HAVING BEEN FILE D IN RESPONSE TO THE NOTICE U/S. 148 OF THE IT ACT. THE LD. CIT(A), THEREFORE, FOUND THAT SINCE NO CLAIM WAS MADE BEFORE THE AO AND NO REVISED RETURN HAS BEEN FILED, THEREFORE, THE CLAIM OF THE ITA NO. 120/AGRA/2012 12 ASSESSEE IS NOT MAINTAINABLE IN VIEW OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD., 284 ITR 323. THIS GROUND WAS ACCORDINGLY DISMISSED. 12. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND REFERRED TO PB-12, WHICH IS COMPUTAT ION OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL, IN WHICH RS.3,53,080/ - WAS ADDED TO THE INCOME FROM FARMING AT AGRICULTURAL FARM HOUSED AT KARKIGA RH. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A). 13. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN REJEC TING THE CLAIM OF ASSESSEE. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME AT RS.6,53 ,299/- ON 05.09.2002. THE ASSESSEE HAS INCLUDED INCOME OF RS.3,53,080/- IN TH E ORIGINAL RETURN OF INCOME AS NOTED ABOVE. THE ORIGINAL RETURN MUST HAVE BEEN PRO CESSED U/S. 143(1) WITHIN THE LIMITED PERIOD. THUS, THE ORIGINAL RETURN OF THE AS SESSEE HAS BEEN ACCEPTED AS IT IS BY THE AO AT THE INCOME DECLARED BY THE ASSESSEE. T HE ORIGINAL RETURN WAS NOT SUBJECTED TO ANY REFERENCE IN ANY APPEAL. THEREFORE , THE ORIGINAL RETURN WAS NEVER SUBJECTED TO ANY LITIGATION AND THUS, THE RETURNED INCOME HAS BECOME FINAL. THE ASSESSEE NEVER DISPUTED THE CORRECTNESS OF THE RETU RNED INCOME SHOWN IN THE ORIGINAL RETURN OF INCOME AT ANY POINT OF TIME AND EVEN IN THE PROCEEDINGS U/S. 148, ITA NO. 120/AGRA/2012 13 THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE ORIGI NAL RETURN OF INCOME FILED MAY BE TREATED AS HAVING BEEN FILED IN RESPONSE TO NOTI CE U/S. 148. THUS, THE ASSESSEE NEVER REVISED THE FIGURE OF INCOME SHOWN IN THE ORI GINAL RETURN AS WELL AS IN SUBSEQUENT PROCEEDINGS U/S. 148 OF THE IT ACT. IF T HE ASSESSEE WAS OF THE VIEW THAT THE AMOUNT IN QUESTION PERTAINED TO AGRICULTURAL IN COME, THE ASSESSEE COULD HAVE REVISED THE FIGURES IN THE RETURN U/S. 148 OF THE I T ACT. THUS, THE ASSESSEE CLEARLY ADMITTED THE ORIGINAL INCOME DECLARED IN THE ORIGIN AL RETURN OF INCOME AS WELL AS IN THE PROCEEDINGS U/S. 148 OF THE IT ACT ON THE SAME INCOME. FURTHER, NO EVIDENCE WAS PRODUCED BEFORE THE AUTHORITIES BELOW TO SUPPOR T THE CONTENTION, WHETHER SUCH INCOME WAS INCOME EARNED FROM AGRICULTURAL FARMING. MERELY STATING THAT IT WAS AN AGRICULTURAL INCOME IS NOT ENOUGH TO EXCLUDE THE SA ME FROM THE INCOME ALREADY DECLARED VOLUNTARILY BY THE ASSESSEE. EVEN NO EVIDE NCE IS FILED BEFORE US IN SUPPORT OF THE SAME CONTENTION THAT SAME INCOME WAS IN FACT AGRICULTURAL INCOME. THEREFORE, THE ISSUE CANNOT BE CONSIDERED FAVOURABL Y IN FAVOUR OF THE ASSESSEE. FURTHER, THE MISTAKE, IF ANY, HAS BEEN DONE IN THE ORIGINAL RETURN OF INCOME WHICH IS NOT SUBJECT MATER OF APPEAL BEFORE US IN THE PRESEN T APPEAL. THEREFORE, WHATEVER INCOME HAS BEEN DECLARED IN THE ORIGINAL RETURN WHI CH IS NOT UNDER CHALLENGE IN APPEAL BEFORE US CANNOT BE SUBJECTED TO FURTHER LIT IGATION OR INVESTIGATION IN THIS MANNER. THUS, THE ISSUE IS SUBJECTED TO FURTHER INV ESTIGATION OF FACTS WHICH IS NOT WARRANTED IN THE SECOND APPEAL BEFORE US AND THAT T OO WHEN ORIGINAL RETURN OF ITA NO. 120/AGRA/2012 14 INCOME WHERE INCOME OF RS.3,53,080/- HAS BEEN OFFER ED FOR TAXATION IS NOT IN CHALLENGE BEFORE THE TRIBUNAL. WE, THEREFORE, DO NO T FIND ANY JUSTIFICATION TO ISSUE ANY DIRECTION ON THE MATTER IN ISSUE. THE APPEAL OF THE ASSESSEE IS, THUS, NOT MAINTAINABLE IN THE PRESENT FORM ON GROUND NO. 3. I N THE RESULT, GROUND NO. 3 OF APPEAL OF THE ASSESSEE IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY