ACIT, Jaipur V. SMT RENU AGARWAL, Jaipur

ITA 125/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91872 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income
• Section: 143(3); 50C

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 VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 125/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 THE ACIT CENTRAL CIRCLE- 3 JAIPUR CUKE VS. SMT. RENU AGARWAL 25, DAYAL NAGAR GOPALPURA BYE PASS JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAOPA 6576 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH, JCIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL, CA SHRI MRIDUL GOYAL, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25/06/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 17 /07/2015 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 30-11-2012 FOR THE ASSESSM ENT YEAR 2007-08 WHEREIN SOLITARY GROUND RAISED BY THE REVENUE IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HIGHER SIDE ERRED IN DIRE CTING THE AO TO TAX THE PROFIT ARISING FROM SALE OF PLOTS OF LAND UNDER ITA NO. 125/JP/2013 ACIT , CENTRAL CIRCLE- 3. JAIPUR VS. SMT. RENU AGA RWAL . . 2 THE HEAD INCOME FROM CAPITAL GAINS INSTEAD OF INCOME FROM BUSINESS AND PROFESSION AS HELD BY THE AO. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF INVESTMENT IN LONG TERM AND SHORT TERM CAPITAL GAIN IN PROPERTY. THE ASSESSEE FILED THE RETURN ON 31-10-20 7 AT RS. 1,34,14,320/-. THE CASE OF THE ASSESSEE WAS SCRUTINIZED U/S 143(3) OF THE ACT. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE H AD SHOWN LONG TERM CAPITAL GAIN FROM SALE OF PLOTS BEARING NOS. 69/20, PRATAP NAGAR, JAIPUR AND PLOT NO.6 SCHEME NO. 2 AT RS. 31,45,085/- AND C LAIMED LONG TERM CAPITAL GAINS. THE AO GAVE REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE ON THIS ISSUE. THE LD. AR SUBMITTED THAT THE SALE PROCEEDS ON LAND SHOULD NOT BE TREATED AS BUSINESS INCOME VIDE HIS LETTER DATED 10-12- 2009 AND SUBMITTED THAT CAPITAL GAIN PERTAINS TO SA LE OF PLOTS AT PRATAP NAGAR AND SCHEME NO. 2. THESE PLOTS WERE ACQUIRED B Y THE ASSESSEE IN FINANCIAL YEAR 2001-02 AND THE ASSESSEE WAS HOLDING THESE PLOTS AS CAPITAL ASSETS AND NOT TRADING ASSETS. HOWEVER, IF THE PROF IT FROM THE SALE OF THE ABOVE PLOTS IS TREATED AS BUSINESS INCOME, THE ASSE SSEE HAS NO OBJECTION IN TREATING SO PROVIDED NO PENALTY U/S 271 (1) ( C) IS INITIATED AGAINST THE ASSESSEE ON THIS ISSUE. THE AO AFTER CONSIDERING TH E ASSESSEE'S REPLY AND ITA NO. 125/JP/2013 ACIT , CENTRAL CIRCLE- 3. JAIPUR VS. SMT. RENU AGA RWAL . . 3 VARIOUS CASE LAWS CITED IN HIS ORDER, ASSESSED THE TOTAL SALE PROCEEDS FROM SALE OF PLOTS AS BUSINESS INCOME. 2.2 BEING AGGRIEVED BY THE ORDER OF THE AO, THE ASS ESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO HAD PARTLY ALLOWED ASSESSEE'S APPEAL BY OBSERVING AS UNDER:- 3. AFTER GOING THROUGH RIVAL SUBMISSIONS, IT IS S EEN THAT THOUGH THE APPELLANT IS ENGAGED IN REAL ESTATE BUSINESS BUT NO ACTIVITY WAS CONDUCTED ON THE TWO PLOTS OF L AND WHICH WERE LATER SOLD OFF, THEREFORE, THE PROFIT ON THE S ALE OF THE TWO PLOTS OF LAND (PLOT NO. 69/20, PRATAP NAGAR & PLOT NO. 6, SCHEME NO.2) HAS BEEN CORRECTLY SHOWN AS LONG TERM CAPITAL GAINS, HOWEVER, THE AOS ACTION OF TAKING THE SALE CONSIDERATION OF PLOT AT PRATAP NAGAR U/S 50C AS PE R SUB- REGISTRAR VALUATION/ STAMP DUTY VALUATION IS IN ORD ER, AS THE SALE VALUE SHOWN BY THE APPELLANT FOR LONG TERM CAP ITAL GAINS IS LESS THAN THE STAMP DUTY VALUATION. THE AO IS DI RECTED TO COMPUTE LONG TERM CAPITAL GAINS ACCORDINGLY. 2.3 NOW REVENUE IS BEFORE US AND THE LD. DR DREW OU R ATTENTION ON LD. ARS SUBMISSION THAT ASSESSEE HAD OPENLY ADMITTED BEFORE THE AO THAT THE SALE PROCEEDS ARE TRADING ASSETS AND NOT CAPITA L ASSETS. THEREFORE, THE LD. CIT(A) WAS WRONG IN CHANGING THE HEAD OF INCOME FROM BUSINESS INCOME TO LONG TERM CAPITAL GAIN. ITA NO. 125/JP/2013 ACIT , CENTRAL CIRCLE- 3. JAIPUR VS. SMT. RENU AGA RWAL . . 4 2.4 AT THE OUTSET, THE LD. AR OF THE ASSESSEE ARGUE D THAT THE ASSESSEE HAS MAINTAINED TWO PORTFOLIOS IN BOOKS OF ACCOUNT M AINTAINED BY HER. THE LD. AR DREW OUR ATTENTION TOWARDS INVENTORY DISCLOS ED IN SCHEDULE 9 OF BALANCE SHEET AT PAGE 7 & 12 OF THE PAPER BOOK AND ARGUED THAT THE ASSESSEE HAD SHOWN THESE PLOTS UNDER THE HEAD INVE STMENT. THEREFORE, THE ASSESSEE HAD RIGHTLY CLAIMED CAPITAL GAIN ON SA LE OF PLOTS WHICH IS NOT TRADING RECEIPTS. THEREFORE, HE REQUESTED TO CONFIR M THE ORDER OF THE LD. CIT(A). 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE RECORDS THAT THE ASSESSEE SINCE INCEPTION HAD DISCLOSED THE PURCHASE OF LANDS UNDER THE HEAD INVESTMENT AND THE ASSESSEE HAD ALSO DISCLOSED THESE PLOTS UND ER THE SAME HEAD UPTO DATE OF SALE OF PLOTS IN THE BALANCE SHEET. THE ASS ESSEE HAD ALSO SHOWN CERTAIN STOCKS IN LAND UNDER THE HEAD INVENTORIES DURING THE YEAR. IT PROVES THAT ASSESSEE'S INTENTION WAS CLEAR AT THE T IME OF ACQUIRING THESE PLOTS FOR THE PURPOSE OF INVESTMENT. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) WHICH IS SU STAINED. THUS THE SOLITARY GROUND OF THE REVENUE IS DISMISSED. ITA NO. 125/JP/2013 ACIT , CENTRAL CIRCLE- 3. JAIPUR VS. SMT. RENU AGA RWAL . . 5 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/07/ 2015. SD/- SD/- VKJ-IH-RKSYKUH ( VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17/07/2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CENTRAL CIRCLE- 3, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SMT. RENU AGARWAL, 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.125/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR