MANJI BHANJI PATEL, RAIGAD V. ITO WD 2, THANE

ITA 1242/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4964 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Capital asset; Business income; Capital Gains
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI GEORGE MATHAN , J UDICIAL M EMBER AND SHRI ANIL CHATURVEDI, A CCOUNTANT M EMBER . / I TA NO. 1242/MUM /20 17 / ASSESSMENT YEAR : 2010 - 11 MANJI BHANJI PATEL, 01, YOGESHWAR KRUPA, DONGRI P UL, AT POST - MAHAD RAIGAD - 402 301 . PAN: AATPP5796R ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD - 2, PANVEL. / RESPONDENT . / ITA NO. 66 2/PUN/2019 / ASSESSMENT YEAR : 2011 - 12 S MT. LAXMIBEN MANJI PATEL 01, YOGESHWAR KRUPA, DONGRI PUL, AT POST - MAHAD RAIGAD - 402 301. PAN: AEJPP2824A ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD - 2, PANVEL / RESPONDEN T A SSESSEE BY : SHRI BIMLENDU BHUSHAN REVENUE BY : SHRI PANKAJ GARG 2 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 / DATE OF HEARING : 1 8 .02.2020 / DATE OF PRONOUNCEMENT : 21 .0 2 .2020 / ORDER P ER ANIL CHATURVEDI , A M : THE APPEAL IN ITA NO.1242/MUM/2017 FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 2 , THANE DATED 29.12.2016 FOR ASSESSMENT YEAR 2010 - 11. THE APPEAL IN ITA NO.662/PUN/2019 FILED BY THE ASSESSEE IS EMANATING FROM THE ORDER OF THE LD. CIT(APPEALS) - 2, PUNE DATED 04.12.2018 FOR THE ASSESSMENT YEAR 2011 - 12. 2. BEFORE US AT THE OUTSET, THE LD. AR SUBMITTED THAT THOUGH THE APPEALS ARE BY TWO DIFFERENT ASSESSEES BUT THE FACTS & ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL AND THEREFORE, THE SUBMISSIONS MADE BY HIM WHILE ARGUING ONE APPEAL WOULD BE APPLICABLE TO THE OTHER APPEAL ALSO. HE THEREFORE SUBMITTED THAT BOTH THE APPEALS CAN BE HEARD TOGETHER. THE LD. DR DID NOT CONTROVERT THE AFORESAID SUBMISSIONS OF LD. AR. WE THEREFORE, FOR THE SAKE OF CONVENIENCE PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER BUT HOWEVER, WE PROCEED WITH THE FACTS IN ITA NO. 1242/MUM/2017 IN THE CASE OF MANJI BHANJI PATEL. 3 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 3 . THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER: - THE ASSESSEE IS AN INDIVIDUAL AND FILED ELECTRONICALLY HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11 ON 21.04.2011 S HOWING TOTAL INCOME AT RS.1,65,780/ - . THE RETURN WAS INITIALLY PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 12, IT WAS NOTICED THAT THE ASSESSEE ALONG W ITH THE CO - OWNERS HAD SOLD 3 PIECES OF LAND. THE 1 ST PIECE OF LAND WAS SOLD TO M/S. RAIGAD INFRA PROJECTS LTD. FOR CONSIDERATION OF RS.1,80,75,000 / - IN WHICH THE ASSESSEE WAS H AVING SHARE @ 25.17% WHICH WORKED OUT TO RS.45,50,000/ - . THE 2 ND PIECE OF LAND WAS SOLD BY T HE ASSESSEE ALONG WITH OTHER CO - OWNERS TO M/S. RAIGAD MEGA PROJECT LTD. FOR CO NSIDERATION OF RS.1,81,50,000/ - IN WHICH THE ASSESSEE WAS HAVING SHARE @1.65% WHICH WORKED OUT TO RS.3,00,000/ - . THE 3 RD PIECE OF LAND WAS SOLD BY ASSESSEE ALONG WITH CO - OWNERS TO RAIGAD VALLEY DEVELOPERS LTD. FOR A CONSIDERATION OF RS.1.58 CRORE AND IN WHICH THE ASSESSEES SHARE WORKED OUT TO RS.18,17,499/ - . THE ASSESSING OFFICER NOTED THAT TRANSACTIONS OF SALE OF LAND R ESULTED INTO EARNING OF T OTAL PROFIT OF RS.57,68,650/ - BY THE ASSESSEE. HE NOTED THAT THE ASSESSEE HAS NOT SHOWN ANY INCOME FROM THE TRANSACTION IN THE RETURN OF INCOME FILED FOR ASSESS MENT YEAR 2010 - 11. T HE CASE WAS THEREFORE RE - OPENED BY ISSUING NOTICE U/S.148 OF THE ACT ON 13.06.2014 AFTER RECORDING THE REASONS FOR REOPENING. THEREAFTER, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S.143(3) R.W.S.147 OF THE ACT AND TOTAL INCOME WAS ASSESSED AT RS.59,34,430/ - . 4 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 4. AGGRIEVED BY THE ASSESS MENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(APPEALS) WHO VIDE ORDER DATED 29.12.2016 IN APPEAL NOS.80,78,79 & 81/16 - 17 DISMISSED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS: 1. THERE IS NOT A SALE OF LAND. THE LEARNED ASSESSING OFFICER, WARD - 2, PANVEL ('LD. AO') HAS ERRED IN ASSESSING THE TOTAL INCOME OF SHRI MANJI BHANJI PATEL ('THE APPELLANT') AT RS. 75,06,380/ - FOR A.Y. 2010 - 11 AS BUSINESS INCOME. 2. ALL TRANSACTION CARRIED BY ASSESSEE IS TRANSFER OF ASSET AND NOT SALE OF ASSET. AS IT IS A TRANSFER OF LAND THERE WILL NOT BE BUSINESS INCOME. THERE COULD BE A CAPITAL GAIN AND THAT TO APPLY ONLY ON TRANSFER OF NON AGRICULTURE INCOME IN MOST AWFUL SITUATION. 3. NOT ALL LANDS ARE NON AGRICULTURAL LAND. CAPITAL GAIN IF ANY, SHALL APPLY ONLY ON NON AGRICULTURE LAND ONLY. FOR AGRICULTURAL LAND CAPITAL GAINS TAX WILL NOT APPLY. 4. DUE TO REVENUE LAWS PERTAINING TOWARDS ACQUISITION OF AGRICULTURAL LAND IN INDIA, COMPANY WAS NOT ALLOWED PURCHASING AGRICULTURE LAND IN ITS NAME. HENCE, ASSESSEE HAS PURCHASED LAND IN HIS OWN NAME ALONG WITH JOINT HOLDER ON BEHALF OF COMPANY IN EARLIER YEARS. THE LD. AO HAS ERRED IN SLATING THE APPELLANT AND HIS FAMILY MEMBERS ARE ENGAGED IN ORGANIZED ACTIVITIES OF BUYING AND SELLING OF LAND. IN LAST FEW YEARS ASSESSEE HAS NEITHER PURCHASED ANY LAND NOR SOLD ANY LAND. ASSESSEE IS NOT IN TO BUSINESS OF SELLING AND PURCHASING OF LAND. ASSESSEE BAD NEITHER PAID ANY AMOUNT FOR ACQUISITION OF LAND NOR PAID ANY AMOUNT FOR ACQUISITION OF LAND NOR PAID ANY AMOUNT TOWARDS CONVERSION OF AGRICULTURE LAND T O NON - AGRICULTURE LAND. THE FUND FOR THIS WAS NEITHER BORNE BY HIM NOR ANY JOINT HOLDER APPEARING IN THE AGREEMENT. IT IS ALSO STATED THAT AT THE TIME OF TRANSFER OF NON - AGRICULTURAL LAND IN THE NAME OF COMPANY, THE ASSESSEE HAS NOT RECEIVED ANY CONSIDERA TION AMOUNT IN CASH OR IN KIND DURING THE YEAR UNDER CONSIDERATION. SO THERE WILL NOT BE ANY BUSINESS INCOME. 5. THE LD. AO HAS FAILED TO TAKE INTO ACCOUNT THE UPDATED 7 /1 2 EXTRACT OF EACH LAND SUBMITTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PR OCEEDI.NGS WHICH CLEARLY SHOW THE AGRICULTURAL AND NON - AGRICULTURE NATURE OF EACH LAND. WE REQUEST TO CONSIDER UPDATE 7/12 EXTRACT OF EACH LAND. 6. THE LD. CIT (A) HAS WRONGLY CONSIDERED AGRICULTURAL LAND AS A NON AGRICULTURAL LAND . 5 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 7. THE LD. CIT (A) HA S WRONGLY CONSIDERED THIRD PARTY LAND (MR. DATTATRAY SAKARAM RAUT LAND) AS ASSESSES LAND AND TAXED WRONGLY. 8. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE HEARING. 6. BEFORE US, AT THE OUTSET, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT SOLITARY ISSUE IS WITH REGARD TO THE ADDITION MADE ON SALE OF LAND. 7. BEFORE US, THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND LD. CIT(APPEALS). THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED HAT HE ALONG WITH THE CO - OWNERS WAS INVOLVED IN TRANSFER OF LAND VIA 3 SELL AGREEMENTS. THESE TRANSFERS HAVE BEEN REGISTERED BY MISGUIDING THE ASSESSEE AND THE OTHER CO - OWNERS BY THOSE CO MPANIES. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT TRANSFERRED ANY PIECE OF LAND WILLINGLY TO THESE COMPANIES WHEREAS HE WAS TRAPPED AND MISGUIDED BY THE DIRECTORS OF THOSE COMPANIES AND TH O SE COMPANIES HAS GOT TRANSFERRED LAND IN THEIR FAVOUR BY FRAUD AND MISGUIDING THE ASSESSEE AND OTHER CO - OWNERS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT GOT ANY CONSIDERATION FOR THE TRANSFER OF SALE OF LAND AND DUE TO NON RECEIPT OF CONSIDERATION, THE ASSESSEE AND OTHER CO - OWNERS FILED SUIT BEFORE THE COURT OF ALIBAUG FOR REVOCATION AND CANCELLATION OF THE SALE AGREEMENT/DEEDS. IT WAS FURTHER SUBMITTED THAT THOSE COMPANIES FILED REPLY IN THE COURT OF ALIBAUG WHEREIN THEY HAVE CLEARLY STATED AND AGREED TO THE FACT THAT IT HAS NEVER PAID ANY CONSIDERATI ON TO THE ASSESSEE AND THE SAID CLAUSE OF SALE DEED WHICH DISCUSSES OF THE PAYMENT ALREADY MADE WAS INCORPORATED INADVERTENTLY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE ALONG WITH OTHER CO - OWNERS REQUESTED TO THE CIVIL COURT OF ALIBAUG 6 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 THAT SINCE EVEN T HE TRANSFEREE COMPANIES HAVE ACCEPTED THAT NO CONSIDERATION HAS FLOWN FROM THEM TO THE ASSESSEE AND IN VIEW OF THE SAME, REQUESTED TO CONCLUDE THE SUIT BY CANCELING AND CONSIDERING THE SALE DEEDS TO BE NULL AND VOID. THE LD. AR OF THE ASSESSEE ALSO FILED THE COPY OF REPORT RECEIVED UNDER RTI FROM THE LAND REVENUE AUTHORITY WHEREIN THE NAME OF THE ORIGINAL OWNER HAVE BEEN INCORPORATED WHICH IS PLACED AT PAGE 23 ONWARDS OF THE PAPER BOOK. HE, THEREFORE, SUBMITTED THAT THESE FACTS WERE NOT AVAILABLE BEFORE T HE LOWER AUTHORITIES AT THE TIME OF ADJUDICATING THE ISSUE AND THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER SO THAT THE ASSESSEE CAN PRODUCE EVIDENCES TO SUBSTANTIATE ITS CLAIM. 8 . THE LD. DR ON THE OTHER HAND DID NOT CONTR OVERT THE SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE BUT HOWEVER SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS WITH RESPECT TO THE ALLEGED PROFIT RECEIVED ON SALE OF LAND. IT IS THE ASSESSEES CONTENTION THAT THE ASSESSEE HAS NEVER RECEIVED AN Y SALE CONSIDERATION AND HAS FILED SUIT BEFORE THE COURT OF ALIBAUG FOR REVOCATION AND CANCELLATI ON OF THE SALE AGREEMENT/DEEDS. IN THE REVENUE RECORDS , THE NAME OF THE ORIGINAL OWNER HAS ALSO BEEN REGISTERED WHICH IS EVIDENT FROM THE COPY OF R EVENUE RECOR DS WHICH IS PLACED BY THE ASSESSEE IN THE PAPER BOOK . WE FIND THESE DEVELOPMENTS WERE NOT AVAILABLE BEFORE THE LOWER AUTHORITIES AT THE TIME OF DEALING WITH THE ISSUE. THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE 7 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 OPINION THAT THE MATTER NEEDS TO BE RE - VERIFIED & RE - ADJUDICATED BY THE ASSESSING OFFICER AFTER CONSIDERING THE FACTUAL POSITION AND WE , THEREFORE, RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE MATTER AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER. THUS, GROUNDS RAISED BY THE AS SESSEE IN THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1242/MUM/2017 FOR ASSESSMENT YEAR 2010 - 11 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 66 2 / PUN/2019 (ASSESSEE - SMT. LAXMIBEN MANJI PATEL) ASSESSMENT Y EAR 2011 - 12 11 . BEFORE US, BOTH THE PARTIES HEREIN ARE UNANIMOUS IN STATING THAT FACTS AND CIRCUMSTANCES IN THIS CASE AND SUBMISSIONS OF BOTH THE PARTIES ARE IDENTICAL TO ITA NO.1242/MUM/2017. THEREFORE, OUR DECISION RENDERED IN ITA NO.1242/MUM/2017 FOR THE ASSESSMENT YEAR 2010 - 11 S HALL APPLY MUTATIS - MUTANDIS IN ITA NO.662/PUN/2019 FOR THE ASSESSMENT YEAR 2011 - 12. THUS, IN THIS CASE ALSO, WE REMIT THE ISSUE TO THE FILE OF ASSESSING OFFICER AS PER DIRECTIONS MENTIONED IN ITA NO.1242/MUM/2017. THUS, GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 8 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 12 . IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.6 6 2/PUN/2019 FOR ASSESSMENT YEAR 2011 - 12 IS ALLOWED FOR STATISTICAL PURPOSES. 13 . TO SUM UP, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 21 ST DAY OF FEBRUARY, 2020. SD/ - SD/ - GEORGE MATHAN ANIL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER / PUNE; / DATED : 21 ST FEBRUARY, 2020 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 2, PUNE. 4. THE CIT (APPEALS) - 2, THA NE. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 9 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 DATE 1 DRAFT DICTATED ON 19 .02.2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 19 . 0 2 .20 20 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 10 ITA NO. 1242/MUM/2017 ITA NO. 6 6 2 /PUN/20 1 9 A.Y S . 2010 - 11 & 2011 - 12 11 DATE OF DISPATCH OF ORDER