Shri Alkesh Laxmanbhai Patel, Ahmedabad V. The Dy.CIT, Central Circle-1(2), Ahmedabad

ITA 1680/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5893 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VASUNDRA UPMANYA
• Keywords: Business income; Depreciation; Initiation of penalty proceedings
• Section: 153A

Judgement Text

, * ** *M MM MH* H*H* H* IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER /. I.T.A. NOS.1678, 1679, 1680 & 1681/AHD/2016 ( / ASSESSMENT YEARS:2009-10, 2010-11, 2011-12 & 2012-1 3) SHRI ALKESH LAXMANBHAI PATEL, 7, MARUTI HILLS BUNGALOWS, SATELLITE, AHMEDABAD 380 015 / VS. DCIT, CENTRAL CIRCLE 1(2), AHMEDABAD. ! /. '# /. PAN/GIR NO . : AKRPP 0657 P ( $ / APPELLANT) .. ( %&$ / RESPONDENT) $ ' / APPELLANT BY : SHRI PARIN SHAH, A.R. %&$ ( ' /RESPONDENT BY : SHRI VASUNDRA UPMANYA, CIT-D.R. ) * ( +! / DATE OF HEARING 06/03/2018 ,- ( +! /DATE OF PRONOUNCEMENT 21/03/2018 . / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THESE ARE FOUR APPEALS BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 1, AHMEDABAD, DATED 15/03/2016, 15/03/2016, 10/03/2016 & 16/03/2016 FOR THE ASSESSMENT YEARS (AYS) 2009-10 , 2010-11, 2011-12 & 2012-13 RESPECTIVELY. 2. SINCE IN ALL FOUR APPEALS ASSESSEE ARE SAME AND ISSUES ARE COMMON ONLY AMOUNTS AND ASSESSMENT YEARS ARE DIFFERENT. THEREFORE, FOR THE SAKE OF CONVENIENCE, WE WOULD 2 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 LIKE TO DISPOSE OF ALL FOUR APPEALS BY WAY OF A COM MON ORDER. 3. FIRST WE TAKE UP ITA NO.1678/AHD/2016 FOR A.Y. 2009-10. FOLLOWING GROUNDS HAS TAKEN BY THE ASSESSE E IN THIS APPEAL. 1. LD. CIT (A) ERRED IN LAW IN CONFIRMING ORDER OF AO FRAMING ASSESSMENT U/S.143 (3) R W S 153A OF THE AC T IN ABSENCE OF ANY INCRIMINATING MATERIAL REGARDING ANY UNDISCLOSED INCOME PERTAINING TO THE APPELLANT FOUND DURING THE COURSE OF SEARCH. LD. CIT (A) OUGH T TO HAVE QUASHED THE ORDER BEING ILLEGAL, UNLAWFUL AND THEREFORE VOID AB INITIO. IT BE SO HELD NOW. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT AO GRANTED ADEQUATE OPPORTUNITY TO THE APPELLANT BY ELABORATELY DISCUSSING GROUNDS FOR REJECTION OF THE CLAIM IN THE ORDER. LD. CIT (A) FAILED TO APPRECIAT E THAT FAILURE TO ISSUE SHOW-CAUSE NOTICE AS REGARDS THE CLAIMS MADE IN THE RETURN OF INCOME BEFORE ANY MODIFICATION BY AO VITIATES THE ASSESSMENT PROCEEDINGS. 3. LD. CIT (A) ERRED IN LAW IN AND ON FACTS CONFI RMING DISALLOWANCE MADE BY AO OF INTEREST EXPENSES OF RS.1,69,442/- ON BORROWINGS FOR ACQUISITION OF RENT ED PROPERTY. LD. CIT(A) OUGHT TO HAVE DELETED DISALLOWANCE OF INTEREST PAID TO AXIS BANK ON BORROWING FOR ACQUIRING RENTED PROPERTY AND RENT IS ASSESSED AS HOUSE PROPERTY INCOME BY AO. 4. BOTH THE LOWER AUTHORITIES ERRED IN LAW AND ON FACTS FAILING TO ASCERTAIN THE DOCUMENTARY EVIDENCE SUBSTANTIATING THAT PROPERTY ACQUIRED FROM AXIS BAN K LOAN IS RENTED TO RELIANCE FRESH FETCHING RENTAL IN COME OFFERED TO TAX LD. CIT (A) OUGHT TO HAVE ALLOWED INTEREST CLAIMED U/S 24(B) OF THE ACT. 5. LEVY OF INTEREST U/S 234A, 234B, 234C & 234D O F THE ACT IS UNJUSTIFIED. 6. INITIATION OF PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE ACT IS UNJUSTIFIED. 3 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 4. THE RELEVANT FACTS AS CULLED OUT FROM THE MATER IALS ON RECORD ARE AS UNDER:- THE APPELLANT IS AN INDIVIDUAL AND DERIVES INCOME BY WAY OF SHARE FROM PARTNERSHIP FIRMS. HE HAD FILED H IS ORIGINAL RETURN OF INCOME U/S.139 FOR A.Y.2009-10 O N 29/03/2011 DECLARING TOTAL INCOME OF RS.14,49,660/- . 4.1 A SEARCH OPERATIONS WAS CARRIED OUT U/S.132 ON 27/04/2011 AND THEREAFTER IN CASE OF SAVVY GROUP WH EREIN STATEMENT OF THE PARTNERS OF THE FIRM AND OTHERS WE RE RECORDED AND A DISCLOSURE WAS MADE. SOME OF THE PLA CES OF BUSINESS WERE COVERED UNDER SURVEY. HENCE, THE PROCEEDINGS U/S.153A WERE INITIATED BY ISSUING NOTI CE ON 22/09/2011 IN RESPONSE TO WHICH THE APPELLANT FILED RETURN ON 20/12/2012 DECLARING SAME INCOME OF RS. 14,49,66 0/-. 4.2 THE AO ALSO NOTICED THAT THE APPELLANT HAD SHOW N STCG OF RS.10,95,402/- ON SALE OF AGRICULTURE LAND AT PLOT JOINTLY OWNED AT C. G. ROAD, AND WHILE COMPUTING TH E PROFIT HE HAD CLAIMED DALALI, LEGAL AND OTHER EXPS. OF RS. 98,000/-, REGISTRATION AND STAMP EXPS. OF RS.2,06,598/-. THE AO BY ORDER SHEET ENTRY DATED 23/01/2014 PROPOSED TO DISA LLOW THE SAID EXPS., OF COURSE WITHOUT GIVING ANY COGENT REASONING. THE APPELLANT BY REPLY DATED 10/03/2014 POINTED OUT THAT REGISTRATION & STAMP DUTY WERE INC URRED AS PER THE PROVISIONS OF RELEVANT LAW AND IT WAS A GEN UINE EXPENDITURE FOR COMPUTING PROFIT ON SALE OF IMMOVAB LE PROPERTY. HOWEVER, THE AO CONCLUDED THAT THE SAID E XPS. WERE TO BE GENERALLY BY THE BUYER AND THERE WAS NO PROOF OF THE EXPS., BORNE BY THE BUYER. THE APPELLANT SUBMIT S THAT THE AO HAS FAILED TO APPRECIATE THE UNDERSTANDING B ETWEEN 4 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 THE APPELLANT AND THE BUYER, APART FROM THE EXPLANA TION THAT THE SAME WERE INCURRED NORMALLY IN CASH AND TH E SAME BE DEDUCTED FROM THE SALE CONSIDERATION IN CASE, TH EY ARE PAID INITIALLY BY THE PURCHASER. SIMILARLY, AS REGA RDS THE DALALI EXPS, OF RS.98,000/-, THERE WAS NO DOCUMENTA RY PROOF. 4.3 THE AO ALSO NOTICED THAT THE APPELLANT HAD CLAI MED INTEREST EXPS. OF RS.1,69,442/- AGAINST PROPERTY IN COME WITHOUT GIVING ANY DETAILS. THE APPELLANT BY REPLY DATED 10/03/2014 IN RESPONSE TO THE ORDER SHEET ENTRY DAT ED 03/03/2014 SUBMITTED THAT THE INTEREST WAS CLAIMED IN RESPECT OF BORROWINGS USED FOR THE RENTED PROPERTY SITUATED AT MAUYRA ATRIA, OPP. ATITHI RESTAURANT WHICH WAS PURCHASE OUT OF LOAN TAKEN FROM AXIS BANK, LAW GARD EN BRANCH AND THE COPY OF BANK CERTIFICATE WAS ENCLOSE D. HOWEVER, THE AO CONCLUDED THAT THE BOOKS OF ACCOUNT S DID NOT REFLECT AXIS BANK ACCOUNT NOR COPY OF SAID BANK ACCOUNT WAS ENCLOSED WITH THE REPLY SO THAT THE EXP LANATION COULD NOT BELIEVED. 5. AGAINST THE SAID ORDER APPELLANT FILED APPEAL BE FORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNED ORDER. SO FAR GROUND NOS.1 AND 2 ARE CONCE RNED. APPELLANT DID NOT WANT TO PRESS THESE GROUNDS. SAME ARE DISMISSED AS NOT PRESSED. 7. SO FAR GROUND NOS. 3 & 4 ARE CONCERNED. LD. AO H AS DISCUSSED THIS ISSUE IN HIS ORDER AT PAGE NO.3 & 4, PARA 5 & 5.2. IN SUPPORT OF ITS CONTENTION REGARDING DISALLO WANCE OF 5 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 INTEREST OF RS.1,69,442/- TO PAID ON LOAN TAKEN FRO M AXIS BANK FOR PURCHASE OF RENTAL PROPERTY SITUATED AT MA URYA ATRIA COMPLEX, OPP. ATITHI RESTAURANT, AHMEDABAD. I T WAS SUBMITTED BY THE APPELLANT THAT LOAN WAS TAKEN FROM AXIS BANK FOR PURCHASE OF PROPERTY FROM WHICH THE RENT W AS RECEIVED AND INCOME WAS ASSESSED AS HOUSE PROPERTY INCOME. HE FURNISHED COPY OF STATEMENT OF AXIS BANK SHOWING PAYMENT OF INSTALLMENTS. HE CLAIMED DEDUCTI ON U/S.24(B) OF THE ACT IN PAPER BOOK FILED BEFORE US. SAME ARE REFLECTED AT PAGE NO.45 TO 50. IN VIEW OF THE ABOVE EXPLANATION GIVEN BY THE APPELLANT, WE ARE SATISFIED WITH THE CONTENTION OF THE APPELLANT, HENCE, WE ALLOW THIS GROUND OF APPEAL OF THE APPELLANT. 8. SO FAR GROUND NO.5 WITH REGARD TO CHARGING OF IN TEREST U/S.234A, 234B, 234C & 234D OF THE ACT IS CONCERNED . SAME IS CONSEQUENTIAL AND NEED NOT TO BE ADJUDICATE D. 9. SO FAR GROUND NO.6 WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS CONCERNED. SAME IS PREMATURE AND NEED NOT TO BE ADJUDICATED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1678/AHD/2016 FOR ASST. YEAR 2009-10 IS ALLOWED. 11. NOW WE COME TO ITA NO.1679/AHD/2016 FOR ASST YE AR 2010-11: 1. LD. CIT (A) ERRED IN LAW IN CONFIRMING ORDER OF AO FRAMING ASSESSMENT U/S.143 (3) R W S 153A OF THE AC T IN ABSENCE OF ANY INCRIMINATING MATERIAL REGARDING ANY UNDISCLOSED INCOME PERTAINING TO THE APPELLANT FOUND DURING THE COURSE OF SEARCH. LD. CIT (A) OUGH T TO 6 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 HAVE QUASHED THE ORDER BEING ILLEGAL, UNLAWFUL AND THEREFORE VOID AB INITIO. IT BE SO HELD NOW. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT AO GRANTED ADEQUATE OPPORTUNITY TO THE APPELLANT BY ELABORATELY DISCUSSING GROUNDS FOR REJECTION OF THE CLAIM IN THE ORDER. LD. CIT (A) FAILED TO APPRECIAT E THAT FAILURE TO ISSUE SHOW-CAUSE NOTICE AS REGARDS THE CLAIMS MADE IN THE RETURN OF INCOME BEFORE ANY MODIFICATION BY AO VITIATES THE ASSESSMENT PROCEEDINGS. 3. LD. CIT (A) ERRED IN LAW IN AND ON FACTS CONFI RMING DISALLOWANCE BY AO OF RS.10,91,728/- DEPRECIATION CLAIMED ON MOTOR CAR. LD. CIT(A) OUGHT TO HAVE HELD DEPRECIATION AS ALLOWABLE U/S.32(1) OF THE ACT ON MOTOR CAR USED FOR THE PURPOSE OF BUSINESS OF LAND TRADING AND OF THE PARTNERSHIP FIRMS. 4. LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRM ING ACTION OF AO TREATING PROFIT FROM LAND TRADING ACTI VITY AS INCOME FROM OTHER SOURCES INSTEAD OF INCOME F ROM BUSINESS AND THEREBY DISALLOWING DEPRECIATION ON MOTOR CAR. LD. CIT(A) OUGHT TO HAVE HELD PROFIT FRO M FREQUENT & REGULAR TRANSACTION OF TRADING IN LAND A S BUSINESS INCOME WARRANTING TO ALLOWING DEPRECIATI ON ON ASSET USED FOR EARNING THIS INCOME U/S.57(III) O F THE ACT. 5. LEVY OF INTEREST U/S 234A, 234B, 234C & 234D O F THE ACT IS UNJUSTIFIED. 6. INITIATION OF PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE ACT IS UNJUSTIFIED. 12. SO FAR GROUND NOS.1 AND 2 ARE CONCERNED. APPELL ANT DID NOT WANT TO PRESS THESE GROUNDS. SAME ARE DISMI SSED AS NOT PRESSED. 13. SO FAR GROUND NOS. 3 & 4 WITH REGARD TO CONFIRM ATION OF DISALLOWANCE OF RS.10,91,728/- FOR DEPRECIATION CLAIMED ON MOTOR CAR ARE CONCERNED, SAME ARE INTERCONNECTED . 7 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 LOWER AUTHORITIES HELD THAT THE APPELLANT WAS NOT B EING ANY BUSINESS. THEREFORE, HE WAS NOT ENTITLED FOR DEPREC IATION. LD. AR DREW OUT ATTENTION TOWARDS THE CIT(A)S ORDE R AT PAGE NO.4, PARA 7 & 7.2, IN WHICH APPELLANT STATED THAT HE WAS ENGAGED IN THE ACTIVITY OF PURCHASE AND SALE OF LAND HELD FOR TRADING. THE PROFIT WAS OFFERED FOR TAX AS BUSINESS INCOME, HE PREPARED THE ACCOUNTS WHICH JUSTIFIED TH E CLAIM OF THE ASSESSEE THAT HE CARRIED OUT AN ADVENTURE AN D BUSINESS OF TRADING IN LAND WHICH AMOUNTED TO BUSIN ESS ACTIVITY. WE ARE CONVINCED WITH THE CONTENTION OF T HE APPELLANT AND ALLOW THIS GROUND OF APPEAL. 14. SO FAR GROUND NO.5 WITH REGARD TO CHARGING OF I NTEREST U/S.234A, 234B, 234C & 234D OF THE ACT IS CONCERNED . SAME IS CONSEQUENTIAL AND NEED NOT TO BE ADJUDICATE D. 15. SO FAR GROUND NO.6 WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS CONCERNED. SAME IS PREMATURE AND NEED NOT TO BE ADJUDICATED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1679/AHD/2016 FOR ASST. YEAR 2010-11 IS ALLOWED. 17. NOW WE COME IN ITA NO.1680/AHD/2016 FOR ASST YE AR 2011-12: 1. LD. CIT (A) ERRED IN LAW IN CONFIRMING ORDER OF AO FRAMING ASSESSMENT U/S.143 (3) R W S 153A OF THE AC T IN ABSENCE OF ANY INCRIMINATING MATERIAL REGARDING ANY UNDISCLOSED INCOME PERTAINING TO THE APPELLANT FOUND DURING THE COURSE OF SEARCH. LD. CIT (A) OUGH T TO HAVE QUASHED THE ORDER BEING ILLEGAL, UNLAWFUL AND THEREFORE VOID AB INITIO. IT BE SO HELD NOW. 8 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT AO GRANTED ADEQUATE OPPORTUNITY TO THE APPELLANT BY ELABORATELY DISCUSSING GROUNDS FOR REJECTION OF THE CLAIM IN THE ORDER. LD. CIT (A) FAILED TO APPRECIAT E THAT FAILURE TO ISSUE SHOW-CAUSE NOTICE AS REGARDS THE CLAIMS MADE IN THE RETURN OF INCOME BEFORE ANY MODIFICATION BY AO VITIATES THE ASSESSMENT PROCEEDINGS. 3. LD. CIT (A) ERRED IN LAW IN AND ON FACTS CONFI RMING DISALLOWANCE BY AO OF RS.2,92,500/- OF BROKERAGE WHILE COMPUTING LTCG/STCG ON SALE OF LAND. LD. CIT(A) OUGHT TO HAVE ALLOWED DEDUCTION OF INCIDENTA L EXPENSES INCURRED IN CONNECTION WITH TRANSACTION OF LAND U/S.48 OF THE ACT. 4. LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT ADJ UDICATING CONTENTION RAISED WITHOUT PREJUDICE TO ABOVE GROUND THAT DISALLOWANCE IN ANY CASE DESERVED TO BE DELETE D SINCE AGAINST INVESTMENT OF RS.1,49,15,380/- IN THE NEW AGRICULTURAL LAND LTCG WAS CLAIMED ONLY TO EXTENT OF RS.1,22,99,290/-. 5. THE LD. CIT(A) ERRED IN LAW IN AND ON FACTS CONF IRMING DISALLOWANCE MADE BY AO OF COST OF IMPROVEMENT OF RS.9,60,000/- INDEXED AT RS.20,82,093/- COMPUTING LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND AT MAKARBA. LD. CIT(A) OUGHT TO HAVE ALLOWED COST OF IMPROVEMENT INCURRED AND RIGHTFULLY CLAIMED ON LAND PURCHASED IN 1995 BY THE APPELLANT. 6. LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING CONTENTION RAISED WITHOUT PREJUDICE TO ABOVE GROUND THAT TOTAL INVESTMENT IN NEW AGRICULTU RAL LAND TO BE CONSIDERED AS AGAINST WHICH EXEMPTION IS CLAIMED. THUS EVEN IF THE IMPROVEMENT COST IS ADDED , LTCG WOULD STILL BE COMPUTED CONSIDERING TOTAL INVESTMENT IN NEW AGRICULTURAL LAND. 7. LEVY OF INTEREST U/S 234A, 234B, 234C & 234D O F THE ACT IS UNJUSTIFIED. 8. INITIATION OF PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE ACT IS UNJUSTIFIED. 9 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 18. SO FAR GROUND NOS.1 AND 2 ARE CONCERNED. APPELL ANT DID NOT WANT TO PRESS THESE GROUNDS. SAME ARE DISMI SSED AS NOT PRESSED. 19. SO FAR GROUND NOS. 3 & 4 WITH REGARD TO LTCG/ST CG ARE CONCERNED. AO HAS DISCUSSED AT PAGE NO.2 & 3, P ARA 5 & 5.4 AND PAGE NO.3 & 4, PARA 6 & 6.2. SAME HAS DIS CUSSED BY LD. CIT(A) AT PAGE NO.7 & 8, PARA 8 & 8.2. SO FA R BROKERAGE EXPENSES RS.2,92,500/- ARE CONCERNED. APP ELLANT SOLD PROPERTY AT LILAPUR AND EARNED LONG TERM CAPIT AL GAINS. SIMILARLY, LAND WAS SOLD IN SHILAJ, BLOCK NO.65 AND EARNED SHORT TERM CAPITAL GAINS. THE APPELLANT CLAIMED THA T HE HAS INCURRED EXPENSES OF BROKERAGE OF RS.2,25,000/- AND RS.67,500/- AND HE HAS STATED THAT PAYMENT OF BROKE RAGE OF RS.2,25,000/- WAS MADE BY ACCOUNT PAYEE CHEQUE FOR SALE OF LAND IN LILAPUR. THE EXPENSES WERE INCURRED IN R ELATION TO TRANSACTION OF THE LAND WHICH WAS ALLOWABLE DEDUCTI ON U/S.48 OF THE ACT. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNED ORDER AND PAPER BOOK FILED BY THE APPELLAN T. NO SUCH LEDGER ACCOUNT FOR PAYMENT OF BROKERAGE, WAS FURNISHED. CONTENTION OF THE APPELLANT THAT EVEN WI THOUT REDUCING COST OF BROKERAGE THE INVESTMENT MADE IN T HE NEW AGRICULTURAL LAND WAS MORE THAN A CAPITAL GAIN EARN ED WAS MISLEADING AND DISTORTED FORM OF CONTENTION WHICH W AS CONTRARY TO THE PROVISION OF THE LAW. IN OUR CONSID ERED OPINION, ANY CLAIM MADE BY THE APPELLANT, WHICH WAS NOT SUBSTANTIATED WITH ANY CONCRETE PROOF. SUCH EXPENSE S CANNOT BE ALLOWED U/S.48 OF INCOME TAX ACT. THEREFO RE, THESE GROUNDS OF APPEAL ARE DISMISSED. 10 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 20. SO FAR GROUND NO.5 WITH REGARD TO COST OF IMPRO VEMENT OF RS.9,60,000/- INDEXED AT RS.20,82,093/- COMPUTIN G LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND AT M AKARBA IS CONCERNED. LD. AR SUBMITTED THAT COST OF IMPROVEMENT INCURRED RIGHTFULLY CLAIM ON LAND PURCHASED IN 1995 BUT DESP ITE OF THE FACT THAT SEVERAL OPPORTUNITIES WERE GIVEN BY T HE LOWER AUTHORITIES. APPELLANT DID NOT DISCHARGE HIS ONES B Y PRODUCING BILL OF THE EXPENSES INCURRED FOR IMPROVE MENT IN SUPPORT OF HIS CLAIM. IN OUR CONSIDERED OPINION, WE MUST HAVE SPENT SOME AMOUNT MAINTAINING THE LAND, THEREFORE, 50% OF THE AMOUNT SHOULD BE ALLOWED. THEREFORE, WE DIRECT THE AO TO C ALCULATE THE 50% COST OF IMPROVEMENT OF THE AGRICULTURAL LAN D AND GIVE THE EFFECT OF THE SAME TO THE APPELLANT. 21. SO FAR GROUND NO.7 WITH REGARD TO LEVYING OF IN TEREST IS CONCERNED, SAME TO BE CALCULATED AS PER LAW BY THE AO. 22. SO FAR GROUND NO.8 WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS CONCERNED. WE DO NOT WANT TO ADJUDICATION BECAUSE SAME IS PREMATURE. 23. IN THE RESULT, APPEAL IN ITA NO.1680/AHD/2016 I S PARTLY ALLOWED. 24. IN THE LAST WE COME TO ITA NO.1681/AHD/2016 FOR ASST YEAR 2012-13: 1. LD. CIT (A) ERRED IN LAW IN CONFIRMING ORDER OF AO FRAMING ASSESSMENT U/S.143 (3) R W S 153A OF THE AC T IN ABSENCE OF ANY INCRIMINATING MATERIAL REGARDING ANY UNDISCLOSED INCOME PERTAINING TO THE APPELLANT 11 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 FOUND DURING THE COURSE OF SEARCH. LD. CIT (A) OUGH T TO HAVE QUASHED THE ORDER BEING ILLEGAL, UNLAWFUL AND THEREFORE VOID AB INITIO. IT BE SO HELD NOW. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT AO GRANTED ADEQUATE OPPORTUNITY TO THE APPELLANT BY ELABORATELY DISCUSSING GROUNDS FOR REJECTION OF THE CLAIM IN THE ORDER. LD. CIT (A) FAILED TO APPRECIAT E THAT FAILURE TO ISSUE SHOW-CAUSE NOTICE AS REGARDS THE CLAIMS MADE IN THE RETURN OF INCOME BEFORE ANY MODIFICATION BY AO VITIATES THE ASSESSMENT PROCEEDINGS. 3. LD. CIT (A) ERRED IN LAW IN AND ON FACTS CONFI RMING DISALLOWANCE BY AO OF RS.4,00,314/- DEPRECIATION CLAIMED ON MOTOR CAR. LD. CIT(A) OUGHT TO HAVE HELD DEPRECIATION AS ALLOWABLE U/S.32(1) OF THE ACT ON MOTOR CAR USED FOR THE PURPOSE OF BUSINESS OF LAND TRADING AND OF THE PARTNERSHIP FIRMS. 4. LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRM ING ACTION OF AO TREATING PROFIT FROM LAND TRADING ACTI VITY AS INCOME FROM OTHER SOURCES INSTEAD OF INCOME F ROM BUSINESS AND THEREBY DISALLOWING DEPRECIATION ON MOTOR CAR. LD. CIT(A) OUGHT TO HAVE HELD PROFIT FRO M FREQUENT & REGULAR TRANSACTION OF TRADING IN LAND A S BUSINESS INCOME WARRANTING TO ALLOWING DEPRECIATI ON ON ASSET USED FOR EARNING THIS INCOME U/S.57(III) O F THE ACT. 5. LEVY OF INTEREST U/S 234A, 234B, 234C & 234D O F THE ACT IS UNJUSTIFIED. 6. INITIATION OF PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE ACT IS UNJUSTIFIED. 25. SO FAR GROUND NOS.1 AND 2 ARE CONCERNED. APPELL ANT DID NOT WANT TO PRESS THESE GROUNDS. SAME ARE DISMI SSED AS NOT PRESSED. 26. SO FAR GROUND NOS. 3 & 4 WITH REGARD TO DEPRECI ATION CLAIMED ON MOTOR CAR ARE CONCERNED. IN ITA NO.1679/AHD/2016, WE HAVE ALREADY GIVEN RELIEF TO T HE 12 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 APPELLANT AND ALLOWED THE DEPRECIATION CLAIMED ON M OTOR CAR AND SAME DEPRECIATION IS ALLOW U/S.32(1) OF THE ACT. 27. SO FAR GROUND NO.5 IS CONCERNED. SAME IS CONSEQUENTIAL AND NEED NOT TO BE ADJUDICATED. 28. SO FAR GROUND NO.6 WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS CONCERNED. SAME IS PREMATURE AND NEED NOT TO BE ADJUDICATED. 29. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1681/AHD/2016 FOR ASST. YEAR 2012-13 IS ALLOWED. 30. IN THE RESULT, APPEALS FILED BY THE ASSESSEE IN ITA NOS.1678, 1679 & 1681/AHD/2016 ARE ALLOWED AND ITA NO.1680/AHD/2016 IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 21/03/2018 SD/- SD/- IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD; DATED 21/03/2018 PRITI YADAV, SR.PS 13 ITA NOS. 1678, 1679, 1680 &1681/AHD/2016 SHRI ALKESH LAXMANBHAI PATEL ASST.YEARS 2009-10, 2010-11, 2011-12 & 2012-13 / COPY OF THE ORDER FORWARDED TO : 1. $ / THE APPELLANT 2. %&$ / THE RESPONDENT. 3. + ) /+ / CONCERNED CIT 4. ) /+ () / THE CIT(A)- 11, AHMEDABAD. 5. 234 %+ , , / DR, ITAT, AHMEDABAD 6. 46 7* / GUARD FILE. / BY ORDER, &2+ %+ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 06/03/2018 (DICTATION-PAD 7 PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 07/03/2018. 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE F 6. AIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COME 7. S BACK TO THE SR.P.S./P.S. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 10. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER TRUE COPY