Shri Dilip Panraj Sonigara, Pune V. ACIT, Pune

ITA 1309/PUN/2013

• Counselvise Citation: 130924514 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 24-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Capital asset; Business income; Income from undisclosed sources; Cost of acquisition; Capital receipt
• Section: 54B; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS. 1308 & 1309/PN/2013 (ASSESSMENT YEARS : 2008-09 & 2009-10) SHRI DILIP PANRAJ SONIGARA, LAXMI APARTMENT, STATION ROAD, CHINCHWAD, PUNE - 411033 .. APPELLANT PAN NO.ACNPS6852M VS. ACIT, CIRCLE-9, PUNE .. RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 09-12-2014 DATE OF PRONOUNCEMENT : 31-12-2014 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS DATED 17-04-2013 OF THE CIT(A)-V, P UNE RELATING TO ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY. S INCE COMMON ISSUES ARE INVOLVED IN BOTH THESE APPEALS, THEREFOR E, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF IN THIS COMMON ORDER. ITA NO.1308/PN/2013 (A.Y. 2008-09) : 2. GROUNDS OF APPEAL NO. 1 TO 1.1 BY THE ASSESSEE R EAD AS UNDER : 1.0) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. [A] HAS ERRED IN HOLDING THAT THE NET RECEIPT S OF RS.46,49,250/- ON SALE OF AGRICULTURAL LAND RECEIVED BY THE APPELLANT AS TAXABLE BUSINESS INCOME OF THE APPELLANT. 2 1.1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE FINDING OF THE LEARNED C.I.T.[A] THAT THE NET RECEIPTS OF RS.46, 49,250/- ON SALE OF AGRICULTURAL LAND RECEIVED BY THE APPELLANT CONSTIT UTE TAXABLE BUSINESS INCOME OF THE APPELLANT BEING ARBITRARY, PERVERSE AN D BASED ON SURMISES AND CONJECTURES AND THEREFORE THE SAME MAY PLEASE BE V ACATED. THE REASONS GIVEN BY THE LEARNED C.I.T.[A] IN SUPPORT OF H IS SAID CONCLUSION BEING DEVOID OF MERITS AND LEGALLY UNSUSTAINABLE AND T HE SAME MAY PLEASE BE DELETED AND THE ADDITION MAY PLEASE BE DELE TED. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 30-09-2008 DECLARING TOTAL INCOME OF RS.3,32,113 /- AND NET AGRICULTURAL INCOME OF RS46, 49,250/-. THE CASE WAS REOPENED U/S.147 OF THE I.T.ACT BY ISSUING NOTI CE U/S.148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS 46 ,49,250/- ON SALE /TRANSFER OF AGRICULTURAL LAND AS UNDER : A. LAND ADMEASURING 1 HECTARE AND 0.46 HECTARE LOCA TED AT VILLAGE PUSANE, GUT NO.598, TALUKA MAVAL, DIST: PUNE. B. LAND ADMEASURING 1 HECTARE AND 0.99 HECTARE LOCAT ED AT VILLAGE PUSANE, GUT NO.616, TALUKA MAVAL, DIST: PUNE. 2.2 ON BEING QUESTIONED BY THE AO, IT WAS SUBMITTED THAT THESE RECEIPTS ARE FROM THE SALE/TRANSFER OF LAND AT PUSA NE. THE LAND WAS PURCHASED VIDE PURCHASE DEED DATED 04-12-2007 WHICH WAS SOLD TO A DEVELOPER M/S. KIRTI DEVELOPERS THROUGH M/S. ACHUTD AS FOR A CONSIDERATION OF RS.47,81,250/-. ACCORDING TO THE AO, SINCE THE ASSESSEE HAS TRANSFERRED THE LAND TO A DEVELOPER, T HEREFORE, CERTAINLY THE SAME WAS NOT FOR AGRICULTURAL ACTIVITIES BUT FOR DE VELOPING AND BUILDING ACTIVITIES. THE ASSESSEE GOT A SALE CONSIDERATION OF RS.47,81,250/- FOR A PURCHASE COST OF RS.1,32,000/- WITHIN A SPAN OF 3 Y EARS. THE AO NOTED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.54,89,4 90/- AS INCOME HAVING BEEN DERIVED FROM SALE OF AN AGRICULTURAL LA ND AND THE SAME HAS 3 NOT BEEN INCLUDED IN THE RECEIPT OF TOTAL INCOME. ON BEING QUESTIONED BY THE AO, IT WAS SUBMITTED THAT THE INCOME SO DERIVED WAS EXEMPT AND HENCE THE SURPLUS ARISING OUT OF TRANSFER HAS NOT B EEN INCLUDED IN THE TAXABLE INCOME. IT WAS SUBMITTED THAT THE ASSESSEE IS MAINLY CARRYING ON THE PROPRIETARY BUSINESS OF MONEY LENDING. DURING THE YEAR THERE WAS CAPITAL RECEIPTS OF RS.46,49,250/- ON SALE/TRANSFER OF CULTIVATED LAND LOCATED AT VILLAGE PUSANE, TAL : MAVAL, DIST : PUNE . THE ABOVE LAND WAS PURCHASED DURING THE YEAR 2004 FOR A CONSIDERATION OF RS.1,32,000/-. AFTER DEDUCTING THE PURCHASE COST THE DIFFERENCE OF RS.46,49,250/- HAS BEEN DECLARED BY THE ASSESSEE AS AGRICULTURAL INCOM E. THE PROVISIONS OF SECTION 2(14)(III) OF THE I.T. ACT WAS BROUGHT TO T HE NOTICE OF THE AO. THE ASSESSEE FURTHER FILED THE 7/12 EXTRACT CONTAIN ING AGRICULTURAL CROPS ON THE LAND FOR MORE THAN A DECADE. IT WAS SUBMITT ED THAT THE AGRICULTURAL LAND IS LOCATED AT VILLAGE PUSANE AND THE POPULATIO N OF THE VILLAGE AS PER CERTIFICATE ISSUED BY THE GRAM PANCHAYAT/TALATHI IS AROUND 972 WHICH IS LESS THAN 10000. FURTHER, THE LAND IS ALSO LOCATED AT A DISTANCE OF MORE THAN 8 KMS FROM ANY MUNICIPAL CORPORATION, CANTONM ENT BOARD OR NAGAR PALIKA. THE SAID AGRICULTURAL LAND HAS BEEN EXCLUSIVELY CLASSIFIED UNDER AGRICULTURAL LAND AND NO DEVELOPMENT ZONE AS PER REGIONAL PLAN APPROVED BY GOVERNMENT OF MAHARASHTRA UNDER MRTP AC T. FURTHER, AGRICULTURAL LAND WAS HELD IN HIS PERSONAL NAME AND NOT IN THE NAME OF ANY BUSINESS CONCERN. IT WAS FURTHER SUBMITTED THA T THE ASSESSEE IS NOT CARRYING ON THE BUSINESS ACTIVITIES OF LAND DEVELOP MENT INCLUDING THE SELLING OF PLOTS ETC. AND NEVER TRADED IN LAND. RE LYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT THE SURPLUS GENERAT ED FROM THE SALE OF THE 4 SAID AGRICULTURAL LAND IS A CAPITAL RECEIPT NOT CHA RGEABLE TO INCOME TAX. THE CBDT CIRCULAR NO.04/2007 DATED 15-06-2007 WAS A LSO RELIED UPON. 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE. RELYING ON THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF G. VENKATASWAMI NAIDU & CO. VS. CIT REP ORTED IN 35 ITR 594 AND FOLLOWING THE DECISION OF THE AO IN THE CAS E OF BROTHER OF THE ASSESSEE NAMELY SHRI JITENDRA P. SONIGARA FOR A. Y. 2008-09 UNDER IDENTICAL CIRCUMSTANCES, THE AO TREATED THE INCOME AS BUSINESS RECEIPT AND NOT AGRICULTURAL INCOME. WHILE HOLDING SO, THE AO FURTHER NOTED THAT THE LAND IN QUESTION IS SITUATED AT VILLAGE PUSANE, GUT NO.612, TALUKA MAVAL, DIST : PUNE. ALTHOUGH THIS LAND WAS USED FO R AGRICULTURAL ACTIVITIES IN THE LONG PAST, HOWEVER, THE STATUS NO LONGER REMAINS THE SAME. AT PRESENT, THERE IS NO AGRICULTURAL ACTIVI TY ON THE SAID PIECE OF LAND. THE FAMILY MEMBERS OF THE ASSESSEE ARE ENGAG ED IN PURCHASE AND SALE OF EXTENSIVE TRACTS OF LAND. FURTHER, THE LAN D IN QUESTION HAS BEEN SOLD TO BUILDERS AND PROMOTERS OF RESIDENTIAL PROPE RTIES WHO HAVE INFUSED HEAVY DOSES OF FINANCE INTO THE LAND. THE INTENDED USE OF LAND IN THE FORESEEABLE FUTURE IS CLEARLY NON AGRICULTURAL. THE AO ACCORDINGLY HELD THAT THE LAND SOLD DURING THE YEAR IS NON AGRICULTU RAL LAND AND TREATED THE SURPLUS OF RS.46,49,250/- AS PROFIT OF THE ASSESSEE FROM LAND DEALING BUSINESS. 4. BEFORE CIT(A) THE ASSESSEE REITERATED THE SAME A RGUMENTS AS MADE BEFORE THE AO. VARIOUS DECISIONS WERE ALSO RELIED UPON BY THE ASSESSEE TO SUBSTANTIATE THAT THE INCOME FROM SALE OF THE LA ND IS A CAPITAL RECEIPT NOT EXIGIBLE TO TAX. HOWEVER, THE LD.CIT(A) WAS AL SO NOT SATISFIED WITH 5 THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD TH E ACTION OF THE AO BY OBSERVING AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS REPLY OF THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAD PUR CHASED LAND LOCATED AT SR. NO. 616, 577 & 598 AT VILLAGE PUSANE, TAL. MAVAL , DIST, PUNE DURING THE F.Y. 2004 FOR TOTAL COST OF RS.1,32,000/- INCLUDING ST AMP DUTY AND REGISTRATION. THE SAID LAND WAS SOLD VIDE SALE DEED EXE CUTED IN DECEMBER 2007 FOR TOTAL CONSIDERATION OF RS.47,81,250/- AND AF TER DEDUCTING THE AGGREGUTE COST, NET CAPITAL RECEIPT OF RS.46,49,250/- WAS SHOWN AS EXEMPT. IT IS IMPORTANT TO NOTE THAT THE APPELLANT I S NOT AN AGRICULTURIST AND ITS MAIN BUSINESS IS JEWELLERY & MONEY LENDING BUSIN ESS. IN THE ASSESSMENT ORDER, THE APPELLANT'S REPLY SHOWS THAT THE APP ELLANT IS ALSO ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPERS AS APP ARENT FROM PARA (F) & (G) ON PAGE 6 OF THE ASSESSMENT ORDER. FURTHER, APPELLANT'S BROTHER SHRI. JITENDRA P. SONIGRA IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND SHRI. JITENDRA SONIGRA ACQUIRED 11 ADJACENT PLOTS IN VILLAGE PUSANE, TAL. MAVAL, DIST. PUNE ON VARIOUS DAT ES IN 2004, 2005 & 2006 & SOLD THE SAME IN A.Y. 2008-09 TO SHRI. N. V. A CHYUTDAS, ANOTHER DEVELOPER. THE APPELLANT HAS ALSO SOLD ITS LAND TO SHR I. N. V. ACHYUTDAS WHO IS THE SAME DEVELOPER. THIS FACT CLEARLY SHOWS THAT THE DOMINANT INTENTION OF ACQUIRING LAND WAS TO SELL THEM AFTER CO NSOLIDATING THE SAME AT THE HIGHER PROFIT AND NOT-TO- CULTIVATE THE LAND . THIS FACT CAN BE PROVED BY THE FACT THAT THE LANDS WERE ACQUIRED BY THE APPE LLANT AS WELL AS HIS BROTHER SHRI. JITENDRA P. SONIGRA ALMOST AT THE SAME TIME AND SOLD TO THE SAME PERSON I.E. SHRI. N. V. ACHYUTDAS WHICH IS NOTHI NG BUT A COORDINATED EFFORT TO EARN HIGH PROFIT. THE FACT T HAT THE PLOTS ARE NEAR TO HINJEWADI, AN ESTABLISHED IT. PARK ON THE OUTSKIRTS OF PUNE, CLEARLY SHOWS THAT THE DOMINANT INTENTION WAS NOT TO CULTIVATE THE LAND BUT TO SALE THEM AT HIGHER PROFIT WHICH IS ALSO CLEAR FROM THE HIGH MA RGIN OF PROFIT SHOWN BY THE APPELLANT FROM SALE OF LANDS. 7. IN THIS CASE, THE APPELLANT HAS BOUGHT AND SOLD THE LAND WITHIN A SPAN OF THREE YEARS GOES ON TO PROVE THAT THE INTENTI ON WAS NOT TO CARRY OUT AGRICULTURAL OPERATION BUT TO CARRY OUT THE ACT IVITY OF CONSOLIDATION OF PLOTS IN A SYSTEMATIC WAY TO EARN HIGHER BUSINESS PROFITS. THIS ACTIVITY HAS RESULTED INTO SALE CONSIDERATION OF RS.47,81,250/ - WHILE THE PURCHASE CONSIDERATION WAS MERELY RS.1,32,000/-. AN A GRICULTURIST WILL NOT DO CONSOLIDATION IN SUCH A SYSTEMATIC MANNER AS HAS BEEN DONE IN THIS CASE. THEREFORE, INTENTION TO MAKE PROFIT IS CLE ARLY ESTABLISHED IN THE ABOVE TRANSACTIONS. THIS INFERENCE IS BUTTRESSED BY THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DELHOUSIE INVESTMENT TRUST CO. LTD. VS. CIT REPORTED IN 68 ITR 486 AT PAGE NOS.4 90 & 491 WHEREIN IT WAS HELD THAT WHERE SHARES WERE ACTUALLY SOLD AT A VERY HIGH PROFIT LEADS TO THE INFERENCE THAT THE PURCHASES AND SALES WERE AN ADVENTURE IN THE NATURE OF TRADE. IF THIS ANALOGY IS APPLIED TO THE CA SE OF THE APPELLANT, IT IS ABSOLUTELY CLEAR THAT THE APPELLANT IS ENGAGED IN BUSI NESS OF LAND DEALINGS, WHAT TO SAY ADVENTURE IN THE NATURE OF TRAD E. THE APPELLANT CLAIMS THAT IT WAS HIS AGRICULTURAL LAND BUT THIS CLAI M HAS NO MERIT BECAUSE WHAT IS TO BE SEEN IS THE REAL NATURE AND EFFE CT OF SUCH TRANSACTIONS, WHICH IS SUBJECT MATTER OF DISPUTE BETWEEN THE APPELLANT AND THE ASSESSING OFFICER. THE NATURE AND TRANSACTION, INTENTION ETC. ARE TO BE SEEN TO DETERMINE WHETHER A TRANSACTION CARRIED ON BY AN APPELLANT IS IN THE NATURE OF INVESTMENT OR BUSINESS ACTIVITY. AS M ENTIONED HEREINBEFORE, IF THE RELEVANT CRITERION AS CONTAINED IN THE ACT AND ENUNCIATED BY THE HIGHEST COURT OF THE LAND FROM TIM E TO TIME ARE APPLIED 6 TO THE FACTS OF THE PRESENT CASE, THEY LEAD TO ONE AN D ONLY ONE CONCLUSION WHICH IS THAT THE APPELLANT HAS CARRIED OUT THE BUSINE SS OF TRADING IN LAND TRANSACTIONS IN A SYSTEMATIC WAY WHICH IS PROVED BY THE FACT THAT THE PURCHASE WAS NOT MADE WITH AN INTENTION OF LONG TERM MOTIVE OF AGRICULTURAL OPERATION AS THE ADJOINING LANDS WERE PU RCHASED AND SOLD AFTER CONSOLIDATION. THE APPELLANT HAS CLAIMED THAT T HE SAID LAND IN QUESTION IS BEYOND 8 KMS OF THE BOUNDARY OF MUNICIPAL LIMIT AND IS RESERVED AS AGRICULTURAL AND NO DEVELOPMENT OF LAND A S PER REVENUE RECORDS AND THEREFORE, QUESTION OF DEVELOPMENT OF LA ND DOES NOT ARISE. 8. THE ARGUMENT IS BEREFT OF MERIT. THE MOTIVE TO PU RCHASE AND SALE OF LAND IS IMPORTANT IN DECIDING THE REAL NATURE OF THE TRANSACTION. THE APPELLANT CAN TRADE IN AGRICULTURAL LAND TOO, IN OR DER TO DERIVE PROFIT. THE IMPORTANT CRITERIA OF TRADE IS TO BE DECIDED NOT ON THE BASIS OF THE COMMODITY BUT WHETHER THERE WAS PROFIT MOTIVE OR NOT . IN THIS CASE, THE APPELLANT HAS DONE TRANSACTION IN A CO-ORDINATED WAY ALONGWITH HIS BROTHER AND THIS FACT CLINCHES THE ISSUE AGAINST THE APP ELLANT. 9. THE APPELLANT HAS RELIED UPON THE DECISION OF THE HON'BLE ITAT MUMBAI IN THE CASE OF (TO VS. ANTHONY JOHN PEREIRA (2 008) 24 SOT 454 MUMBAI. THE FACTS OF THE CASE ARE DISTINGUISHABLE AS IN THAT CASE, THE REVENUE HAD ACCEPTED THAT AGRICULTURAL OPERATION WA S CARRIED OUT IN THE SAID LAND. BUT IN THE PRESENT CASE, THE APPELLANT COUL D NOT PROVE WITH EVIDENCE THAT HE HAD CARRIED OUT AGRICULTURAL ACTIV ITY IN THE SAID LAND. 10. THE APPELLANT HAS ALSO RELIED UPON THE DECISION OF THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF (TO VS. RAMJI BHAI P CHOUDHARY VS. DOT (2009) 26 DTR (AHM)(TRIB.) THE FACTS OF THE CASE DO NOT SUPPORT THE APPELLANT. IN THAT CASE, THE LAND WAS AGRICULTUR AL AND AFTER SALE DEED, THE SAME WAS CONVERTED INTO NON-AGRICULTURAL. IN THI S CASE, THE LAND MAY BE AGRICULTURAL IN REVENUE RECORDS BUT THE FACT OF A PPELLANT BEING A FAMILY MEMBER OF BUILDER AND DEVELOPER AND HIS PURCHASE, CON SOLIDATION AND SALE IN A SYSTEMATIC WAY UNDISPUTEDLY PROVES PROFIT MOTI VE IN THE TRANSACTION AND THEREFORE, THE RELIANCE OF THE APPEL LANT AT THE ABOVE MENTIONED JUDGMENT OF AHMEDABAD TRIBUNAL IS MISPLACED . 11. THE APPELLANT HAS FURTHER RELIED UPON THE JUDGME NT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF D.L.F. UNITED LTD. V S.CIT REPORTED IN 158 ITR 342 (DELHI). IN THE ABOVE CASE, AGRICULTURAL LAN D WAS ACQUIRED BY THE GOVERNMENT AND THEREFORE, IT WAS HELD THAT COMPENSATI ON RECEIVED BY THE GOVERNMENT IS NOT ASSESSABLE TO TAX AS PROFITS OF THE APPELLANT'S BUSINESS. SINCE THERE WAS NO SALE BUT ACQUISITION BY THE GOVERNMENT, THE HON'BLE HIGH COURT CAME TO THE ABOVE CONCLUSION. THE APPELLANT'S CASE IS NOT OF ACQUISITION BY GOVERNMENT BUT PURCHASE AND SALE IN SYSTEMATIC MANNER TO EARN HIGHER PROFIT AND THEREFORE, RELIANC E OF THE APPELLANT ON THE ABOVE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IS ALSO MISPLACED. 12. THE APPELLANT HAS RELIED UPON THE JUDGMENT OF TH E HON'BLE GUJARAT HIGH COURT IN THE CASE OF MANIBHAI MOTIBHAI PATEL VS. CIT 22 CTR (GUJ.) 168. IN THAT CASE, THE ACTUAL USE OF LAND FOR AGRICUL TURAL PURPOSES WAS ESTABLISHED BUT IN THE PRESENT CASE THE USE OF LAND FOR AGRICULTURAL PURPOSE HAS NOT BEEN ESTABLISHED AND THEREFORE, THE APP ELLANT CANNOT DRAW ANY SUPPORT FROM THE ABOVE CASE. 13. LASTLY THE APPELLANT HAS RELIED UPON THE JUD GMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. V.A TRIVEDI REPORTED IN 172 ITR 95 (BOM). THIS CASE TOO HAS DISTINGUISHING FEATU RE SUCH AS INTENTION TO SALE OF AGRICULTURAL LAND WAS TO FORESTAL L ACQUISITION BY THE 7 GOVERNMENT AND THEREFORE, PROFIT MOTIVE COULD NOT H AVE BEEN IMPUTED IN THE TRANSACTION. 14. THUS, AFTER ANALYSING THE ISSUE IT CAN BE SEEN THAT : (I) THE APPELLANT IS FAMILY MEMBER OF A BUILDER AND DEVELOPER AND WHO HAS SHOWN PROFIT FROM LAND DEVELOPMENT ACTIV ITY IN THE PAST AS WELL AS FUTURE A.Y. INCLUDING THE CURRENT A.Y. II) HE HAS ACQUIRED THE LAND ADJACENT TO EACH OT HER FOR THE PURPOSE OF CONSOLIDATION AND FUTURE SALE TO EARN HIGHE R PROFIT, III) THAT THE APPELLANT IS NOT AN AGRICULTURIST HAS BEEN PROVED IN THE DISCUSSIONS MADE IN THE ABOVE PARAS, IV) THE MOTIVE IN THE SERIES OF LAND TRANSACTIONS CARRI ED OUT BY THE APPELLANT'S FAMILY WAS NOT TO CULTIVATE THE LAND FOR AGRICULTURE BUT TO EARN VERY HIGH PROFIT. THEREFORE, I DO NOT FIND ANY JUSTIFICATION TO INTERF ERE IN THE ORDER OF THE ASSESSING OFFICER TREATING AN AMOUNT OF RS. 46,49 ,250/- AS BUSINESS INCOME. ACCORDINGLY, GROUND NO.1 IS DISMISSED. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE IS A MONEY LENDER AND NOT ENGAGED IN THE BUSINESS OF DEVELOPMENT OR SALE OF L AND. THE LAND SOLD IN QUESTION IS SITUATED IN VILLAGE PUSANE WHICH IS BEY OND 8 KMS FROM THE LIMITS OF NEARBY MUNICIPAL CORPORATION AND POPULATI ON OF THE VILLAGE IS LESS THAN 10000. SO FAR AS THE DECISION IN THE CAS E OF THE BROTHER OF THE ASSESSEE WHICH HAS BEEN RELIED UPON BY THE ASSESSIN G OFFICER, HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HA S DECIDED THE ISSUE AGAINST THE ASSESSEE. HOWEVER, THE FACTS OF THE PR ESENT CASE ARE DIFFERENT FROM THAT OF THE CASE OF THE BROTHER OF THE ASSESSE E. IN THE CASE OF THE BROTHER OF THE ASSESSEE, THERE WERE MULTIPLE TRANSA CTIONS IN PURCHASE AND SALE OF LAND. THE AGRICULTURAL ACTIVITY DECLARED B Y THE ASSESSEE WAS DISPROVED. THE BROTHER OF THE ASSESSEE, WHO WAS A DEALER IN LAND, HAS 8 SOLD THE LAND AFTER CONSOLIDATION OF THE SAME. UND ER THESE FACTS AND CIRCUMSTANCES, THE TRIBUNAL HAD DECIDED THE ISSUE A GAINST THE BROTHER OF THE ASSESSEE BY HOLDING THAT THE INCOME FROM SALE O F AGRICULTURAL LAND CONSTITUTE BUSINESS INCOME OF THE ASSESSEE. 5.1 HOWEVER, THE CASE OF THE ASSESSEE IS DIFFERENT. THE GOVERNMENT RECORDS SHOW THAT THE LAND IS AGRICULTURAL LAND. AL THOUGH THE ASSESSEE HAS CARRIED OUT AGRICULTURAL ACTIVITIES, HOWEVER, BECA USE OF MEAGRE INCOME FROM AGRICULTURAL ACTIVITY WHICH IS LESS THAN THE E XPENDITURE INCURRED BY THE ASSESSEE, THE ASSESSEE HAS NOT DECLARED ANY AGR ICULTURAL INCOME. HE SUBMITTED THAT THE ASSESSEE PURCHASED 3 ADJOINING L ANDS ON 29-12-2004 VIDE GUT NOS. 577, 616 AND 598 FOR A CONSIDERATION OF RS.1,20,000/-. ON 04-12-2007, HE SOLD 2 PIECES OF LAND VIDE GUT NOS. 598 AND 616 FOR A CONSIDERATION OF RS.45,31,250/-. SIMILARLY, ON 13- 09-2007, HE SOLD ONE PIECE OF LAND VIDE GUT NO.577 FOR A CONSIDERATION O F RS.2,50,000/-. SIMILARLY, THE LAND PURCHASED ON 30-07-2004 VIDE GU T NO.612 FOR A CONSIDERATION OF RS.44,350/- WAS SOLD ON 21-04-2008 FOR A CONSIDERATION OF RS.55,43,750/-. HE SUBMITTED THAT THE LAND WAS SHOWN AS ASSET IN THE BALANCE SHEET OF THE ASSESSEE. SINCE THE LAND IN Q UESTION WAS AGRICULTURAL LAND AND SHOWN IN THE BALANCE SHEET OF THE ASSESSEE , THEREFORE, THE STATUS OF THE LAND HAS TO BE SEEN AT THE TIME OF SALE. RE FERRING TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . MINGUEL CHANDRA PAIS AND ANOTHER REPORTED IN 282 ITR 618 HE DREW THE ATTENTION OF THE BENCH TO THE OBSERVATIONS AT PAGE 629 OF THE ORDER AND SUBMITTED THAT IF AGRICULTURAL OPERATIONS ARE BEING CARRIED O N IN THE LAND IN QUESTION AT THE TIME WHEN THE LAND IS SOLD AND FURTHER IF TH E ENTRIES IN THE REVENUE 9 RECORDS SHOW THAT THE LAND IN QUESTION IS AGRICULTU RAL LAND, THEN A PRESUMPTION ARISES THAT THE LAND IS AGRICULTURAL IN CHARACTER AND UNLESS THAT PRESUMPTION IS REBUTTED BY EVIDENCE LED BY THE REVENUE, IT MUST BE HELD THAT THE LAND WAS AGRICULTURAL LAND IN CHARACT ER AT THE TIME WHEN IT WAS SOLD. 5.2 HE SUBMITTED THAT IN HIS SUBMISSION BEFORE THE ASSESSING OFFICER, IT WAS ERRONEOUSLY MENTIONED THAT THE MAIN BUSINESS ACTIVITIES OF THE ASSESSEE IS THAT OF PROMOTER AND BUILDER WHEREIN HE IS CONSTRUCTING THE FLATS AND SHOPS AND SELLING THOSE CONSTRUCTED FLATS AND SHOPS. REFERRING TO THE AFFIDAVIT FILED BY THE ASSESSEE, HE SUBMITTE D THAT IT WAS A MISTAKE WHICH WAS COMMITTED IN THE OFFICE OF THE TAX CONSUL TANT WHO INADVERTENTLY FILED THE SAME REPLY GIVEN IN THE CA SE OF THE BROTHER OF THE ASSESSEE WHO IS A PROMOTER AND BUILDER AND ALSO DEA LER IN LAND. IN THE SAID AFFIDAVIT, IT HAS FURTHER BEEN MENTIONED THAT THE ASSESSEE HAS NEVER CARRIED ON THE BUSINESS AS PROMOTER AND BUILDER. S INCE THE CIT(A) IN HIS ORDER FOR A.Y. 2008-09 AND 2009-10 HAS PLACED RELIA NCE ON THE ABOVE REFERRED ERRONEOUS AND MISTAKEN STATEMENT ABOUT HIS BUSINESS OF PROMOTER AND BUILDER, THEREFORE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME SHOULD BE IGNORED AND IT HA S TO BE HELD THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF PROMOTER AND BUILDER IN LAND. 5.3 REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NITIN M. RAJHANS VIDE ITA NO.150/PN /2012 ORDER DATED 30-12-2013 HE SUBMITTED THAT UNDER IDENTICAL CIRCUM STANCES THE TRIBUNAL HAS DISMISSED THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HAD HELD THAT THE LAND, WHICH IS AGRICULTURAL FOR THE PAST 1 1 YEARS, COULD NOT 10 BECOME NON-AGRICULTURAL LAND BECAUSE NO AGRICULTU RAL OPERATIONS WERE CARRIED OUT DURING THE LAST 2 YEARS. ACCORDINGLY, THE ORDER OF THE CIT(A) HOLDING THAT THE LAND IN QUESTION SOLD BY THE ASSE SSEE WAS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III)(B) O F THE ACT AND THUS THE SURPLUS ON SALE OF SUCH LAND WAS NOT LIABLE TO BE T AXED AS CAPITAL GAIN WAS UPHELD. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI KRISHNAKUMAR K. GOYAL VS. ACIT AND OTHERS VIDE ITA NO.1299/PN/2012 AND ITA NO.1300/PN/2012 ORDER D ATED 15-09- 2014 FOR A.Y. 208-09 HE SUBMITTED THAT UNDER IDENTI CAL CIRCUMSTANCES THE TRIBUNAL ALLOWED THE APPEAL FILED BY THE ASSESS EE WHERE SUCH INCOME ON SALE OF AGRICULTURAL LAND WAS HELD BY THE REVENU E AUTHORITIES AS BUSINESS INCOME. IN THE SAID DECISION IT HAS FURTH ER BEEN HELD THAT MERELY BECAUSE ASSESSEE IS DEALING IN PURCHASE AND SALE OF LAND THE SAME CANNOT BE A CONCLUSIVE FACTOR IN HOLDING THAT THE IMPUGNED SALE OF LAND WAS A BUSINESS TRANSACTION. HE ACCORDINGLY SUBMITTED THA T THE ORDER OF THE CIT(A) BE SET-ASIDE AND THE GROUNDS RAISED BY THE A SSESSEE BE ALLOWED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT UNDER IDENTICAL CIRCUMSTANCES THE SURPLUS FROM SALE OF LAND BY THE BROTHER OF THE ASSESSEE HAS BEEN CONSIDERED AS BUSINESS INCOME, THEREFORE, THERE IS NO JUSTIFICATION TO CONSIDER THE SALE IN THE HANDS OF THE ASSESSEE AS A CAPITAL RECEIPT. HE SUBMITTED THAT THE VARIOUS DECISIONS R ELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE AND NO T APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE TRIBUNAL HAS ALREAD Y CONSIDERED THE CASE IN DETAIL IN CASE OF THE BROTHER OF THE ASSESSEE. THIS PARTICULAR LAND IS 11 ADJACENT TO THE LAND SOLD BY HIS BROTHER. HE ACCOR DINGLY SUBMITTED THAT THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMIS SED. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE A SSESSEE HAS PURCHASED THE LAND BEARING GUT NOS. 577, 5798, 616 ON 29-12- 2004 FOR A CONSIDERATION OF RS.1,20,000/-. SIMILARLY, HE PURC HASED LAND BEARING GUT NO.612 ON 30-07-2004 FOR RS.44,350/-. THE ASSESSEE SOLD 2 PIECES OF LAND VIDE GUT NO.598 AND 616 ON 04-12-2007 FOR A CO NSIDERATION OF RS.45,31,250/-. SIMILARLY, HE SOLD LAND BEARING GU T NO.577 ON 13-09- 2007 FOR A CONSIDERATION OF RS.2,50,000/-. AFTER D EDUCTING THE COST OF RS.1,32,000/- THE ASSESSEE DECLARED THE SURPLUS OF RS.46,49,250/- AS EXEMPT. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF THE BROTHER OF THE ASSESSEE WHERE HE HAS AL SO PURCHASED AND SOLD LAND BEARING THE FOLLOWING GUT NOS. WHICH ARE AS PE R PARA 4 OF THE ORDER OF THE TRIBUNAL VIDE ITA NO.849/PN/2012 ORDER DATED 15-09-2014. SR.NO. GUT NO. DATE OF PURCHASE TOTAL CONSIDERATIO DATE OF SALE SALE CONSIDERATION 1 GUT NO.572 1 7/03/2005 38,845 04/12/2007 1,781,250 2 GUT NO. 597 21/10/2004 38,420 04/12/2007 718,750 3 GUT NO.579 16/08/2004 22,110 04/12/2007 750,000 4 GUTNO.610 10/01/2006 158,540 1 1/12/2007 3,781,250 5 GUTNO.576 21/08/2004 22,340 13/09/2007 6 GUTNO.613 30/07/2004 40,585 13/09/2007 7 GUTNO.614 23/08/2004 28,830 13/09/2007 5,978,125 8 GUT NO. 606 06/07/2006 46,870 13/09/2007 9 GUT NO. 61 5 21/08/2004 24,890 13/09/2007 3,312,500 12 10 GUTNO.611 09/08/2004 14,110 J 04/12/2007 1,281,250 11 GUTNO.617 02/12/2002 61,740 13/09/2007 2,796,875 1/2 SHARE 497,280 20,400,000 THE PROFIT FROM THE SALE CONSIDERATION WAS TREATED AS BUSINESS INCOME BY THE AO WHICH WAS UPHELD BY THE CIT(A) AND ON FURTHE R APPEAL THE TRIBUNAL DECIDED THE ISSUE AGAINST THE ASSESSEE BY OBSERVING AS UNDER : 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. UNDISPUTEDLY, THERE IS A PLETHORA OF JUDICIAL RULINGS ON THE ISSUE AS TO WHETHER A PARTICULAR TRANSACTION INVOLVES SALE OF INVESTMENT TO B E TAXED AS UNDER THE HEAD 'CAPITAL GAINS' OR SALE OF STOCK-IN-TRADE SO A S TO BE TAXED UNDER THE HEAD 'BUSINESS INCOME'. SO HOWEVER, IT'S A TRITE LA W THAT WHETHER A PARTICULAR TRANSACTION IS TO BE UNDERSTOOD AS SALE OF IN VESTMENT OR A TRADING ACTIVITY IS LIABLE TO BE DECIDED HAVING REGA RD TO THE RELEVANT FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. IN THE PRESEN T CASE, WHAT IS SOUGHT TO BE MADE OUT BY THE REVENUE IS THAT THOUGH T HE SURPLUS IN QUESTION IS ARISING OUT SALE OF AGRICULTURAL LANDS BUT T HE SAME IS LIABLE TO BE ASSESSED AS 'BUSINESS INCOME' BECAUSE ASSESSEE HAS UNDERTAKEN A SERIES OF TRANSACTIONS IN A SYSTEMATIC WAY WHICH HAVE GEN ERATED PROFITS AND SUCH ACTIVITY BEING IN THE LINE OF THE EXISTING B USINESS OF THE ASSESSEE; THEREFORE, IT IS LIABLE TO BE TREATED AS A BUSINESS ACT IVITY. 9. FIRSTLY, THE PLEA OF THE ASSESSEE THAT HE IS NOT IN T HE BUSINESS OF LAND DEVELOPING OR THE BUSINESS OF PLOTTING AND SELLING THEREOF. THE SAID PLEA, IN OUR VIEW, IS QUITE IRRELEVANT. IN ANY CASE, THE ASSESSING OFFICER HAS FACTUALLY BROUGHT OUT THAT DURING THE PRECEDING AS W ELL AS CURRENT AND SUBSEQUENT ASSESSMENT YEARS, ASSESSEE HAS DECLARED INCOME FROM LAND TRADING I.E. OUT OF SALE AND PURCHASE OF LANDS. THERE IS NO NEGATION TO THE AFORESAID FACTUAL PREMISE OF THE ASSESSING OFFICER DETAIL ED IN PARA 3.1 OF THE ASSESSMENT ORDER. THEREFORE, THE LOWER AUTHORITIES A RE FACTUALLY JUSTIFIED IN ESTABLISHING THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF LANDS. 10. SECONDLY, THE PLEA OF THE ASSESSEE IS THAT THE 7/12 EXTRACTS OF THE LAND SHOW CONDUCT OF AGRICULTURAL ACTIVITY AND THAT THE ASSESSEE HAD INDEED A. Y. : 2008-09 UNDERTAKEN AGRICULTURAL ACTI VITY ON THE LAND DURING HIS PERIOD OF HOLDING. IN THIS CONTEXT, ASSESSEE ALSO PRO DUCED BEFORE THE ASSESSING OFFICER ZEROX COPIES OF FEW SALE PATTIES CLAIMI NG SALE OF AGRICULTURAL PRODUCE/CROPS. THE ASSESSING OFFICER NOTED THAT ASSESSEE FURNISHED A SALE BILL ISSUED BY ONE M/S KAMTHE & CO. DA TED 13.08.2010 IN TERMS OF WHICH ASSESSEE CANVASSED OF HAVING SOLD GROUNDNU TS TO THE SAID CONCERN. THE ASSESSING OFFICER CARRIED OUT A VERIFICATI ON EXERCISE AND RECORDED STATEMENT OF ONE SHRI PHOOLCHAND ALIAS NAVNA TH EKNATH KAMTHE, WHO IS THE PROPRIETOR OF M/S KAMTHE & CO.. TH E STATEMENT OF THE SAID PERSON IS FORMING PART OF THE ASSESSMENT ORDER AS ANN EXURE- C. THE DEPOSITION MADE BY THE PROPRIETOR OF M/S KAMTHE & CO. CLEARLY ESTABLISHES BOGUS NATURE OF CLAIM MADE BY THE ASSESSEE BASE D ON THE SALE BILL PURPORTED TO BE ISSUE BY M/S KAMTHE & CO.. THERE IS NO MATERIAL LEAD BY THE ASSESSEE EITHER BEFORE THE LOWER AUTHORITIES OR B EFORE US TO DISPUTE THE AFORESAID INFERENCE DRAWN BY THE ASSESSING OF FICER. 13 THEREFORE, FACTUM OF THE ASSESSEE HAVING UNDERTAKEN AN AGRICULTURAL ACTIVITY HAS BEEN FOUND TO BE FACTUALLY ERRONEOUS BY THE LOWER AUTHORITIES. REMAINING ON THIS ASPECT, WE FIND THAT T HE CIT(A) NOTED THAT ASSESSEE HAD CREDITED AN AMOUNT OF RS.319/- ON ACCOUNT O F AGRICULTURAL INCOME FROM SUCH LAND, WHICH IS APPROXIMATELY 18 ACRE S. THE CIT(A) HAS FOUND IT NOT ONLY TO BE INSUFFICIENT BUT ALSO UNTENAB LE, HAVING REGARD TO THE VERIFICATION EXERCISE CARRIED OUT BY THE ASSESSING OFFICER BY RECORDING THE STATEMENT OF THE PROPRIETOR OF M/S KAMTHE & CO.. FOR ALL THE ABOVE REASONS, WE ARE IN AGREEMENT WITH THE INFERENCE DRAWN BY THE LOWER AUTHORITIES THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THAT A NY AGRICULTURAL ACTIVITY WAS GENUINELY CARRIED OUT ON THE SAID LAND D URING THE PERIOD IT HAS BEEN HELD BY THE ASSESSEE. BE THAT AS IT MAY, THE AFO RESAID CIRCUMSTANCES ARE ENOUGH TO DEDUCE THAT THE MOTIVE OF THE ASSESSEE TO ACQUIRE THE LAND IN QUESTION WAS NOT TO UNDERTAKE CUL TIVATION OR ANY OTHER AGRICULTURAL OPERATIONS ON THE SAID LAND. THE AFORESAID INFERENCE GETS STRENGTHENED BY THE FACT THAT OTHER THAN THE LAN DS IN QUESTION, THERE IS NO MATERIAL TO SHOW THAT THE ASSESSEE WAS A. Y. : 2008 -09 HOLDING AGRICULTURAL LANDS IN PAST FOR THE PURPOSE OF UNDERTAK ING AGRICULTURAL ACTIVITIES. 11. IN VIEW OF THE AFORESAID DISCUSSION, WE ARE UNABLE TO ACCEPT THE PLEA OF THE ASSESSEE THAT THE INTENTION OF THE ASSESSEE TO PURCHASE THE IMPUGNED AGRICULTURAL LANDS WAS TO UNDERTAKE AGRICULT URAL OPERATIONS. ON THE CONTRARY, THE MANNER IN WHICH ASSESSEE HAS UNDERT AKEN ACQUISITION OF LANDS, WHICH ARE ADJACENT TO EACH OTHE R, BY WAY OF MULTIPLE ACQUISITIONS AND THEREAFTER SOLD THE SAME ON PROXIMATE DATES TO THE BUYER, WHO IS ALSO A LAND DEVELOPER, TANTAMOUNTS TO UN DERTAKING A TRADING ACTIVITY AND THEREFORE SURPLUS ON SUCH SALE IS LIABLE TO BE TAXED AS A BUSINESS INCOME. 12. THE FACTUM OF THE ASSESSEE HAVING BOUGHT AND SOLD AN AGRICULTURAL LAND WHICH DOES NOT FALL WITHIN THE DEFINITION OF 'C APITAL ASSETS' IN TERMS OF SECTION 2(14)(III) OF THE ACT DOES NOT MITIGUTE TH E TAXABILITY OF THE SURPLUS ARISING ON ITS SALE AS BUSINESS INCOME BECAUSE THE FA CTS AND CIRCUMSTANCES OF THE CASE SHOW THAT ASSESSEE HAS INDEED UNDE RTAKEN TRADING OF AGRICULTURAL LANDS. THE ACTIVITY OF TRADI NG IN AGRICULTURAL LANDS AS STOCK-IN-TRADE DEFINITELY IS ASSESSABLE AS BUSINESS INCOME. 13. IN VIEW OF THE AFORESAID DISCUSSION, WE THEREFORE AFFIRM THE ORDERS OF THE LOWER AUTHORITIES AND THE ASSESSEE HAS TO FAIL IN ITS APPEAL. 14. BEFORE PARTING, WE MAY ALSO REFER TO OUR DECISIO N IN THE CASE OF SHRI KRISHNAKUMAR K. GOYAL VIDE ITA NO.1299/PN/2012 & OTHER OF EVEN DATE WHEREIN ALSO SOMEWHAT SIMILAR ISSUE WAS BEFORE US. I N THE SAID CASES ALSO ASSESSEE HAD EARNED A SURPLUS ON A SALE OF AGRICUL TURAL LANDS. IN THOSE CASES, WE HAVE INFERRED, HAVING REGARD TO THE IR FACTS AND CIRCUMSTANCES, THAT THE SURPLUS COULD NOT BE TREATED AS BUSINESS INCOME. IN THOSE CASES, ASSESSEE HAD A HISTORY OF HOLDING AGRICULTU RAL LANDS (APART FROM THE LANDS SOLD) AND SUCH A. Y. : 2008-09 LANDS WER E BEING HELD FOR A SUBSTANTIAL PERIOD OF TIME. IT ALSO STOOD ESTABLISHED THA T ASSESSEES WERE UNDERTAKING AGRICULTURAL ACTIVITY IN THE PAST ON TH E OTHER AGRICULTURAL LANDS HELD BY THEM. SUCH LIKE FEATURES ARE COMPLETELY MISSING IN THE PRESENT CASE INASMUCH AS THERE IS NO MATERIAL TO SHOW THA T EITHER IN THE PAST OR IN THE SUBSEQUENT YEARS ASSESSEE HAS ENGAGED HIMSELF IN ANY AGRICULTURAL ACTIVITY. RATHER, THE CLAIM OF THE ASSESSE E OF HAVING UNDERTAKEN AGRICULTURAL ACTIVITY ON THE IMPUGNED LA ND HAS ALSO BEEN FOUND TO BE FACTUALLY INCORRECT. 14 15. BE THAT AS IT MAY, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE INCLINED TO UPHOLD THE ORDER S OF THE AUTHORITIES BELOW TREATING THE SURPLUS ON SALE OF LAND AT VILLAGE PUSANE AMOUNTING TO RS.1,99,02,720/- AS A BUSINESS INCOME. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 7.1 SINCE THE LAND IN QUESTION IS ADJACENT TO THE LAND DEALT BY THE BROTHER OF THE ASSESSEE, THEREFORE, WE DO NOT FIND ANY REASON AS TO WHY A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE TRIBUNAL IN THE CASE OF THE BROTHER OF THE ASSESSEE HAS TO BE ADOPTED. THE VAR IOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPL ICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTINGUISHABLE. THE VARIO US DISTINGUISHABLE FEATURES BROUGHT BEFORE US BY THE LD. COUNSEL FOR T HE ASSESSEE ARE ALSO WITHOUT MUCH SUBSTANCE AND ARE NOT APPLICABLE TO TH E FACTS OF THE PRESENT CASE. FURTHER, THE ASSESSEE HAS FAILED TO SUBSTANT IATE HIS CLAIM OF EARNING AGRICULTURAL INCOME FROM THE SAID LAND BY CARRYING OUT AGRICULTURAL ACTIVITIES. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF THE BROTHER OF THE ASSESSEE, WE FIND NO REASON T O TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE COORDINATE BENCH OF THE TRIBUNAL. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS U NDER : 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION (I. E. RS.2,51,005/-) MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ALL EGED LOW HOUSEHOLD EXPENSES AND THE SAID ADDITION ARE BASED ON SU RMISES AND CONJECTURES AND THE SAME MAY PLEASE BE DELETED. 8.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE FAMILY OF THE ASSESSEE CONSIST OF 4 MEMBERS INCLUDING 2 SCHOOL GOING CHILDREN. THE ASS ESSEE IS A REPUTED PERSON BEING ONE OF THE REPUTED JEWELLERS OF PIMPRI CHINCHWAD AREA AND 15 HAS VERY HIGH STANDARD OF LIVING. HOWEVER, HE HAS NOT SHOWN ANY WITHDRAWAL DURING THE YEAR. WHEN CONFRONTED BY TH E AO IT WAS STATED THAT THE TOTAL DRAWINGS OF THE FAMILY IS RS.1,08,99 5/-, THE DETAILS OF WHICH ARE AS UNDER : MRS. RADIA DILIP SONIGARA : RS.40,053/- DILIP PANRAJ SONIGARA (INDIVIDUAL) : -- DILIP P. SONIGARA (HUF) : RS.68,942/- -------------------- TOTAL : RS.1,08,995/- -------------------- HOWEVER, THE AO NOTED THAT THE WITHDRAWAL AS DECLAR ED BY THE ASSESSEE IS VERY LOW LOOKING AT THE STANDARD OF LIVING OF TH E ASSESSEE AND THE COST OF LIVING. LOOKING TO THE INFLATIONARY FACTORS, FA MILY FUNCTION ETC. THE AO HELD THAT THE EXPENSES OF THE ASSESSEE MAY NOT B E LESS THAN RS.3,60,000/- PER YEAR. AFTER CONSIDERING RS.1,08, 995/- DISCLOSED BY THE ASSESSEE HE ADDED BALANCE AMOUNT OF RS.2,51,005/- A S INCOME FROM UNDISCLOSED SOURCES. 9. BEFORE CIT(A) THE ASSESSEE MADE MORE OR LESS THE SAME ARGUMENTS. IT WAS SUBMITTED THAT THE EXPENSES IN T HE CASE OF THE INDIVIDUAL AMOUNTING TO RS.24,000/- WAS SHOWN TOWA RDS HOUSEHOLD EXPENSES. IT WAS SUBMITTED THAT THE TOTAL WITHDRAW AL OF THE FAMILY COMES TO RS.1,32995/-. RELYING ON VARIOUS DECISIONS IT W AS SUBMITTED THAT THE ADDITION MADE BY THE AO IS NOT AT ALL JUSTIFIED. 10. HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED W ITH THE EXPLANATION GIVEN BY THE ASSESSEE AND DISMISSED THE GROUNDS RAISED BEFORE HIM BY OBSERVING AS UNDER : 16 17. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS SUBMISSIONS OF THE APPELLANT MADE IN THIS BEHALF. THE ASSE SSING OFFICER MADE VERY INTERESTING OBSERVATION THAT THE APPELLANT, BEING THE MAIN PERSON OF THE FAMILY HAS NOT SHOWN ANY WITHDRAWAL DURI NG THE FINANCIAL YEAR ON ACCOUNT OF HOUSEHOLD PURPOSES. WHEN CONFRONTED , THE APPELLANT TRIED TO CORRELATE THE SAME WITH MEAGER WITHDRAWAL O F FAMILY MEMBERS AS WELL AS HUF. WHILE BEFORE THE ASSESSING OFFICER, NO WITH DRAWAL WAS SHOWN BY THE APPELLANT, IN REPLY, THE APPELLANT HAS SHOWN W ITHDRAWAL OF RS.24,000/-. THIS STAND OF THE APPELLANT CANNOT BE AC CEPTED AS THE WITHDRAWAL SHOWN BY THE APPELLANT AMOUNTING TO RS. 24,000/- WAS NOT BEFORE THE ASSESSING OFFICER AS IT IS CLEAR FROM THE ASSESSME NT ORDER. THIS SHOWS THAT THE WITHDRAWAL OF RS.24,000/- SHOWN BY THE A PPELLANT IS NOTHING BUT AN AFTERTHOUGHT AND THEREFORE THE SAME N EEDS TO BE REJECTED. EVEN OTHERWISE, WITHDRAWAL OF RS.24,000/- CLAIMED TO HAVE BEEN SHOWN BY THE APPELLANT IS ACCEPTED, THEN TOO TOTAL WITHDRAWAL OF RS.1,32,995/- IS TOO MEAGER TO EXPLAIN THE HOUSEHOLD WITHDRAWAL EXPENSES OF THE FAMILY. THEREFORE, THE ACTION OF THE ASSESSING OFFICER IN MAKIN G ADDITION OF RS.2,51,005/- IS JUSTIFIED AND THEREFORE THE SAME IS UPH ELD. THUS, GROUND NO.2 IS DISMISSED. 10.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE AS SESSEE IS IN APPEAL BEFORE US. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDER OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. ADMITTEDLY, THE ASSESSEE H AS NOT SHOWN ANY WITHDRAWAL IN HIS INDIVIDUAL CAPACITY AND THE WITHD RAWAL BY HIS WIFE AND HUF WAS SHOWN AT RS.1,08,995/-. ALTHOUGH THE AMOUN T OF RS.24,000/- WAS CLAIMED AS WITHDRAWAL IN INDIVIDUAL HAND BEFORE THE CIT(A), HOWEVER, HE DID NOT ACCEPT THE SAME ON THE GROUND T HAT IT WAS NOT STATED SO BEFORE THE AO. EVEN BEFORE US ALSO NO EVIDENCE WHATSOEVER WAS PRODUCED TO SHOW THAT THERE WAS WITHDRAWAL OF RS.24 ,000/- IN INDIVIDUAL CAPACITY. THEREFORE, THE PLEA OF LD. COUNSEL FOR T HE ASSESSEE CANNOT BE ACCEPTED. HOWEVER, THE AO HAS ESTIMATED THE FAMILY EXPENSES OF RS.30,000/- PER MONTH WHICH COMES TO RS.3,60,000/- PER ANNUM. THE SAME WAS BASED ONLY ON ESTIMATE BASIS. SUCH ESTIMA TION BY THE AO IN OUR OPINION APPEARS TO BE ON THE HIGHER SIDE. CONS IDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPI NION THAT MONTHLY 17 EXPENSES OF RS.25,000/- WILL BE FAIR AND REASONABLE WHICH COMES TO RS.3 LAKHS PER ANNUM. SINCE THE ASSESSEE HAS ALREADY SH OWN WITHDRAWAL OF RS.1,08,995/-, THEREFORE, THE ADDITION TO THE EXTEN T OF RS.1,91,005/- IS SUSTAINED AS AGAINST RS.2,51,005/- SUSTAINED BY THE CIT(A). THE ASSESSEE GETS RELIEF ON THIS ACCOUNT TO THE EXTENT OF RS.60,000/-. GROUNDS RAISED BY THE ASSESSEE IS ACCORDINGLY PARTLY ALLOWE D. 12. GROUND OF APPEAL NO.3 IS REGARDING CHARGING OF INTEREST U/S.234A, 234B AND 234C. 12.1 AFTER HEARING BOTH THE SIDES, WE ARE OF THE CO NSIDERED OPINION THAT CHARGING OF INTEREST UNDER THE ABOVE PROVISIONS ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THEREFORE, THIS GROUND BY THE ASSESSEE IS DISMISSED. ITA NO.1309/PN/2013 (A.Y. 2009-10) : 13. GROUND OF APPEAL NO. 1 TO 1.1 BY THE ASSESSEE A RE AS UNDER: 1.0) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED C.I.T. [A] HAS ERRED IN HOLDING THAT THE NET RECEIPT S OF RS.54,89,490/- ON SALE OF AGRICULTURAL LAND RECEIVED BY THE APPELLANT AS TAXABLE BUSINESS INCOME OF THE APPELLANT. 1.1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE FINDING OF THE LEARNED C.I.T.[A] THAT THE NET RECEIPTS OF RS.54, 89,490/- ON SALE OF AGRICULTURAL LAND RECEIVED BY THE APPELLANT CONSTITU TE TAXABLE BUSINESS INCOME OF THE APPELLANT BEING ARBITRARY, PERVERSE AN D BASED ON SURMISES AND CONJECTURES THE SAME MAY PLEASE BE VACATED. THE RE ASONS BY THE LEARNED C.I.T.[A] IN SUPPORT OF HIS SAID CONCLUSION BE ING DEVOID OF MERITS AND LEGALLY UNSUSTAINABLE AND THE SAME MAY PLEASE BE V ACATED AND THE ADDITION MAY PLEASE BE DELETED. 13.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUND IS IDENTICAL TO GROUND OF APPEAL NO.1 AND 1.1 IN ITA NO.1308/PN/ 2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN 18 DISMISSED. FOLLOWING THE SAME RATIO, THIS GROUND B Y THE ASSESSEE IS DISMISSED. 14. GROUND OF APPEAL NO. 1.2 BY THE ASSESSEE IS AS UNDER: 1.2) WITHOUT PREJUDICE TO ABOVE, IN THE FACTS AN D CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED C.I.T [A] ERRED IN CONF IRMING THE REJECTION MADE BY THE ASSESSING OFFICER IN RESPECT ALTERNATIVE CLA IM OF THE APPELLANT FOR DEDUCTION U/S 54B OF THE IT ACT CLAIME D BY THE APPELLANT DURING THE ASSESSMENT PROCEEDING IN RESPECT OF REINVESTME NT OF SALE PROCEEDS OF SALE OF AGRICULTURAL LAND IN PURCHASE OF A NOTHER AGRICULTURAL LAND. 14.1 AFTER HEARING BOTH SIDES WE FIND THE ASSESSEE HAS MADE AN ALTERNATE CLAIM BEFORE CIT(A) THAT DEDUCTION U/S.54 B MAY BE ALLOWED. HOWEVER, HE DISMISSED THE SAME ON THE GROUND THAT O RIGINAL LAND ITSELF WAS TREATED BY HIM AS BUSINESS ASSET ACQUIRED FOR T HE PURPOSE OF CONSOLIDATION AND SELL AT VERY HIGH PROFIT. HE THE REFORE REJECTED THE CLAIM OF THE ASSESSEE. AS PER PROVISIONS OF SECTION 54B CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRICULTURE PURPOSES IS NOT TO BE CHARGED IN CERTAIN CASES UPON FULFILMENT OF THE CONDITIONS MENTIONED THEREIN . IN THE INSTANT CASE, WE HAVE ALREADY HELD THAT THE LAND IS NOT AGRICULTU RAL LAND. THEREFORE, THIS GROUND BY THE ASSESSEE IS DISMISSED. 15. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER : 2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED C.I.T [A] ERRED IN CONFIRMING THE ADDITION (I.E. RS. 72,000/-) MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ALLEGED INCOME FROM LETTING OUT OF SHOP AND THE SAID ADDITION ARE BASED ON SURMISES AND CONJECTURES AND THE SAME MAY PLEASE BE DELETED. 15.1 FACTS OF THE CASE, IN BRIEF, ARE THAT DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS 3 SHOPS IN HIS POSSESSION, I.E. ONE SHOP AT LAXMI APARTMENT AND SHOP NO. 2 & 3 19 AT GOLD CRAFT, CHINCHWAD. THE ASSESSING OFFICER NOT ICED THAT THE ASSESSEE WAS CARRYING OUT THE BUSINESS OF MONEY LEN DING FROM SHOP AT LAXMI APARTMENT. HOWEVER, IN RESPECT OF THE OTHER 2 SHOPS NO INCOME WAS SHOWN. ON BEING CONFRONTED BY THE AO, THE ASSE SSEE SUBMITTED THAT HE WAS ALSO CONDUCTING MONEY LENDING BUSINESS FROM SHOP NO. 2 & 3 AT GOLD CRAFT AT CHINCHWAD. FURTHER, HIS HUF WAS ALSO DOING ORNAMENT BUSINESS FROM THE SAID SHOPS. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAS ALLOWED THE HUF TO CONDUCT THE BUSINESS FROM THE SAID PREMISES BUT NO RENTAL RECEI PT HAS BEEN SHOWN. ACCORDINGLY, HE MADE ADDITION OF RS.36,000/- PER SH OP AND MADE ADDITION OF RS. 72,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 16. IN APPEAL THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER : 17. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS REPLY OF THE APPELLANT. THE APPELLANT'S CLAIM THAT HE IS DOING MONEY LENDING BUSINESS FROM THESE SHOPS ALSO CANNOT BE ACCEPTED WITHOUT PROOF. AS REGARDS, THE APPELLANT ALLOWING HIS HUF TO CONDUCT OR NAMENT BUSINESS FROM THE 2 SHOPS LOCATED AT GOLD CRAFT CHINCHWAD, IT IS CLEAR THAT THE APPELLANT HAS ALLOWED HIS HUF TO CARRY OUT THE BUSINESS WITHOUT ANY RENT. THIS BEING SO, I DO NOT FIND ANY MERIT IN THE SUBMISSION S OF THE APPELLANT THAT THE ASSESSING OFFICER HAS MADE ADDITION PURELY ON ASSUMPTION. THEREFORE, I DO NOT FIND ANY JUSTIFICATION TO INTERF ERE WITH THE ORDER OF THE ASSESSING OFFICER AND ACTION OF THE ASSESSING OFFICER, MAKI NG ADDITION OF RS.72,000/- ON ACCOUNT OF RENTAL INCOME FROM THE 2 SH OPS IS UPHELD. THUS, THE GROUND IS DISMISSED. 16.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE AS SESSEE IS IN APPEAL BEFORE US. 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. WE FIND THE ASSESSEE HAS NOT SHOWN ANY RENTAL INCOM E FROM THE 2 SHOPS BEARING 2 & 3 AT GOLD CRAFT AT CHINCHWAD. THE AO NOTED THAT ALTHOUGH 20 HUF WAS DOING ORNAMENT BUSINESS FROM THE SAID SHOPS THE ASSESSEE HAS NOT CHARGED ANY RENT FROM THE HUF. THEREFORE, HE MA DE ADDITION OF RS.72,000/- BEING RENTAL INCOME OF RS.36,000/- PER SHOP PER ANNUM. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO AT BEST COULD HAVE ADDED THE ANNUAL LET OUT VALUE OF THE PR OPERTY INSTEAD OF RS.72,000/-. HOWEVER, THE ASSESSEE DID NOT BRING A NY MATERIAL TO SHOW WHAT IS THE ANNUAL LET OUT VALUE OF THE PROPERTY. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE ALSO COULD NOT BRING ANY OTHER MAT ERIAL TO TAKE A CONTRARY VIEW THAN THE VIEW TAKEN BY THE LD.CIT(A). UNDER T HESE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE AO . ACCORDINGLY, THE SAME IS DISMISSED. 18. GROUND OF APPEAL NO.3 BY THE ASSESSEE READS AS UNDER : 3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION (I.E. RS.2,5 1,005/-) MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ALLEGED LOW HOU SEHOLD EXPENSES AND THE SAID ADDITION ARE BASED ON SURMISES AND CONJECT URES AND THE SAME MAY PLEASE BE DELETED. 18.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSEE HAS SHOWN WITHDRAWAL OF RS.60,000/- AS HOUSEHOLD EXPENSES. O N BEING QUESTIONED BY THE AO, THE ASSESSEE SUBMITTED THAT AN AMOUNT OF RS.36,000/- WAS SHOWN TO HAVE WITHDRAWN BY HIS WIFE AND ANOTHER RS. 8,000/- BY THE HUF. THUS, TOTAL WITHDRAWAL SHOWN WAS RS.1,04,000/ -. ACCORDING TO THE AO, CONSIDERING THE STATUS OF THE FAMILY, THE W ITHDRAWAL SHOWN IS VERY LOW. HE, THEREFORE, ESTIMATED THE HOUSEHOLD E XPENSES AT RS.4 LAKHS PER ANNUM AND MADE ADDITION OF RS.2,96,000/- TO THE TOTAL INCOME OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE CIT(A). 21 19. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTI CAL GROUND HAS COME UP BEFORE US IN THE PRECEDING ASSESSMENT YEAR IN AS SESSEES OWN CASE, WHEREIN WE HAVE HELD THAT RS.3 LAKHS FOR A.Y. 2008- 09 WILL BE REASONABLE ESTIMATE TOWARDS HOUSEHOLD EXPENSES. SI NCE THE ASSESSMENT YEAR INVOLVED IS 2009-10, THEREFORE, CONSIDERING TH E POSSIBLE INFLATION AND INCREASE IN THE HOUSEHOLD EXPENSES, WE HOLD THA T RS.3,50,000/- WILL BE REASONABLE HOUSEHOLD EXPENSES FOR THE IMPUGNED A SSESSMENT YEAR. SINCE THE ASSESSEE HAS ALREADY DECLARED RS.1,04,000 /-, THEREFORE, WE RESTRICT THE ADDITION TO RS.2,46,000/- AS AGAINST R S.2,96,000/- HELD BY THE CIT(A). THE ASSESSEE ACCORDINGLY GETS RELIEF OF RS .50,000/-. GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY PARTLY ALLOWE D. 20. GROUNDS OF APPEAL 4 BY THE ASSESSEE RELATES TO CHARGING OF INTEREST U/S.234A, 234B AND 234C. 20.1 AFTER HEARING BOTH THE SIDES, WE ARE OF THE CO NSIDERED OPINION THAT CHARGING OF INTEREST UNDER THE ABOVE PROVISIONS ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THEREFORE, THIS GROUND BY THE ASSESSEE IS DISMISSED. 21. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31-12-2014. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 31 ST DECEMBER, 2014 SATISH 22 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE