Income-tax Officer, V. Shri Bharat Vadilal Shah, Nashik

ITA 2119/PUN/2013

• Counselvise Citation: 211924514 RSA 2013
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Assessee Lawyers: V L JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Cost of acquisition
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.2119/PN/2013 (ASSESSMENT YEAR : 2004-05) INCOME TAX OFFICER, WARD 2(1), NASHIK. . APPELLANT VS. SHRI BHARAT VADILAL SHAH, B-17, MANGAL PARK APARTMENT, GOVIND NAGAR, NASHIK. PAN : AQTPS5220K . RESPONDENT DEPARTMENT BY : SHRI P. S. NAIK ASSESSEE BY : SHRI V. L. JAIN DATE OF HEARING : 20-10-2014 DATE OF PRONOUNCEMENT : 30-10-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, NASHIK DATED 19.09.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.1 2.2008 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 OF THE INCO ME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2004-0 5. 2. IN THIS APPEAL, ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT ESSENTIALLY THE GRIEVANCE IS DIRECTED AG AINST THE DECISION OF THE CIT(A) IN HOLDING THAT THE TRANSACTION IN RESPECT O F SALE OF LANDS AT SURVEY NO.21/1B AND 23/1B, DEOLALI, DISTRICT- NASHIK IS NO T ASSESSABLE IN THE HANDS OF THE ASSESSEE BUT IN THE HANDS OF M/S VIRAJ ESTATES PVT. LTD.. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE A LONG WITH OTHER TWO CO- OWNERS WAS FOUND TO HAVE EXECUTED A REGISTERED SALE -DEED WHEREBY LANDS AT SURVEY NO.21/1B AND 23/1B WERE SOLD FOR RS.38,00,00 0/-, HAVING A VALUE OF ITA NO.2119/PN/2013 RS.99,66,000/- FOR THE STAMP DUTY PURPOSES. HOWEVE R, NO INCOME IN RESPECT OF SUCH SALE OF LAND WAS SHOWN BY THE ASSESSEE. TH E ASSESSING OFFICER VIDE HIS ORDER U/S 143(3) R.W.S. 147 OF THE ACT DATED 30 .12.2008 BROUGHT TO TAX CAPITAL GAIN ON SUCH SALE OF LAND OF RS.27,07,137/- . INITIALLY, WHEN THE MATTER TRAVELLED BEFORE THE TRIBUNAL, THE ISSUE WAS SET-AS IDE TO THE FILE OF THE CIT(A) VIDE ORDER DATED 30.01.2012 IN ITA NO.1022/PN/2009 WITH CERTAIN DIRECTIONS. THE CIT(A) HAS PASSED THE IMPUGNED ORDER IN TERMS O F THE MATTER HAVING BEEN SET-ASIDE BY THE TRIBUNAL. 4. IN THE IMPUGNED ORDER, CIT(A) NOTED THAT IN THE CASE OF ONE OF THE CO- OWNERS OF THE IMPUGNED LAND, SHRI MANOHAR SHRIDHAR PATIL, THE CIT(A)-I, THANE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE H OLDING THAT THE PROFIT ON SALE OF IMPUGNED LAND WAS ASSESSABLE IN THE HANDS O F M/S VIRAJ ESTATES PVT. LTD.. ACCORDINGLY, THE ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS DIRECTED TO BE DELETED. AGGRIEVED WITH THE AFORESA ID FINDING OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT THE ORDER OF THE CIT(A)-I, THANE DATED 28.02.2012 I N THE CASE OF ONE OF THE CO- OWNER, SHRI MANOHAR SHRIDHAR PATIL WAS A SUBJECT-MA TTER OF APPEAL BEFORE THE TRIBUNAL IN ITA NO.1166/PN/2012 DATED 25.07.2014 FO R ASSESSMENT YEAR 2004-05. IN TERMS OF THE SAID DECISION, THE TRIBUN AL HELD THAT THE CIT(A) CORRECTLY CAME TO CONCLUDE THAT THE SALE OF IMPUGNE D LAND WAS ASSESSABLE IN THE HANDS OF THE M/S VIRAJ ESTATES PVT. LTD. AND NO T IN THE HANDS OF THE APPELLANT THEREOF I.E. SHRI MANOHAR SHRIDHAR PATIL. 6. THE CASE BEFORE US PERTAINS TO ANOTHER CO-OWNER OF THE LAND, WHICH WAS A SUBJECT-MATTER OF CONSIDERATION BY THE TRIBUNAL I N THE CASE OF SHRI MANOHAR SHRIDHAR PATIL DATED 25.07.2014. THE FOLLOWING DIS CUSSION IN THE ORDER OF THE TRIBUNAL IS RELEVANT :- ITA NO.2119/PN/2013 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPO NDENT-ASSESSEE IS AN INDIVIDUAL AND THE DISPUTE REVOLVES AROUND LONG TERM CAPITAL GAIN OF RS.26,02,681/- ASSESSED IN THE HANDS OF THE ASSESSE E WITH RESPECT TO A PROPERTY SITUATED AT SURVEY NO.21/1B & 23/1B DEOLAL I, DISTRICT- NASHIK. AS PER THE ASSESSING OFFICER A DEVELOPMENT AGREEMENT DATED 30.12.2013 WAS EXECUTED BY ASSESSEE AND TWO OTHER PERSONS WITH SHR I RAJESH PATHARKAR WITH RESPECT TO THE AFORESAID PROPERTY FOR A CONSIDERATI ON OF RS.38,00,000/-. THE SAID AGREEMENT HAS FORMED THE BASIS FOR THE ASSESSI NG OFFICER TO INFER THAT ASSESSEE EARNED LONG TERM CAPITAL GAIN ON SALE OF S UCH PROPERTY WHICH HAS BEEN COMPUTED AT RS.26,02,681/-. IN COMPUTING SUCH CAPITAL GAIN, THE ASSESSING OFFICER CONSIDERED THE CONSIDERATION IN T ERMS OF SECTION 50C OF THE ACT AT RS.99,66,000/- AND AFTER REDUCING THE INDEXE D COST OF ACQUISITION, TOTAL CAPITAL GAIN WAS WORKED OUT AT RS.79,13,291/- AND A SSESSEES SHARE CAME TO RS.26,02,681/-. 4. THE ASSESSEE HAS RESISTED THE ASSESSABILITY OF S UCH GAIN IN HIS HANDS ON THE PLEA THAT THE TRANSACTION DID NOT BELO NG TO HIM, BUT TO ONE M/S VIRAJ ESTATE PVT. LTD. (I.E. VEPL), A CONCERN WHO H AS DULY REFLECTED THE ENTIRE TRANSACTIONS IN ITS BOOKS OF ACCOUNT AND RETURNS OF INCOME. IN ORDER TO SUPPORT HIS PLEA THAT THE INCOME ARISING FROM THE SAID TRAN SACTION IS NOT ASSESSABLE IN HIS HANDS, ASSESSEE REFERRED TO A CHRONOLOGY OF EVE NTS STARTING FROM THE ACQUISITION OF LAND IN QUESTION. 5. IN ORDER TO ADJUDICATE THE CONTROVERSY, THE FOLL OWING CHRONOLOGY OF EVENTS IS WORTHY OF NOTICE. ON 05.01.1993, BY W AY OF TWO SEPARATE AGREEMENTS OF SALE, VEPL ACQUIRED THE PROPERTY AT S URVEY NO.21/1B & 23/1B DEOLALI, DISTRICT- NASHIK FROM DHIRAJLAL CHIMANLAL SHAH & OTHERS AND SHISHIR GOVARDHANDAS SHAH & OTHERS FOR A TOTAL CONSIDERATIO N OF RS.18,00,000/-. ON 21.08.2000, VEPL ENTERED INTO A MOU WITH ASSESSEE A ND TWO OTHERS, NAMELY S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V . SHAH WHEREBY ASSESSEE AND THE OTHER TWO PERSONS WERE TO DEVELOP THE PROPERTY FOR CONSIDERATION PAYABLE TO VEPL AND IN TERMS OF THE S AID MOU, THE FINAL CONVEYANCE DEED OF THE SAID PROPERTY WAS TO BE DIRE CTLY MADE IN THE NAMES OF ASSESSEE AND THE OTHER TWO PERSONS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V. SHAH. ON 16.09.2000 BY WAY OF A SALE-DEED ONE GROUP OF THE ORIGINAL OWNERS, I.E. SHISHIR GOVARDHA NDAS SHAH & OTHERS EXECUTED THE SALE DEED OF A PART OF THE PROPERTY IN THE NAMES OF ASSESSEE AND S/SHRI SAMPURNANAD KESHAV GAVANDE. ON 16.12.2000, THE SECOND SET OF ORIGINAL OWNERS, I.E. DHIRAJLAL CHIMANLAL SHAH & OT HERS EXECUTED THE SALE DEED OF THE REMAINING PORTION OF THE PROPERTY IN THE NAM E OF ASSESSEE AND TWO OTHERS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE A ND SHRI BHARAT V. SHAH. ON 02.02.2002, THE MOU DATED 21.08.2000 ENTE RED BY ASSESSEE AND TWO OTHERS WITH VEPL FOR DEVELOPMENT OF THE PROPERT Y WAS CANCELLED ON ACCOUNT OF CERTAIN DISPUTES AND NON-PASSING OF VACA NT POSSESSION BY VEPL, AS REQUIRED BY THE MOU. SUBSEQUENTLY, A DEVELOPMEN T AGREEMENT DATED 30.12.2003 WAS EXECUTED BY ASSESSEE AND TWO OTHERS, NAMELY, S/SHRI SAMPURNANAD KESHAV GAVANDE AND SHRI BHARAT V. SHAH WITH SHRI RAJESH PATHARKAR FOR A CONSIDERATION OF RS.38,00,000/-. T HE ASSESSING OFFICER HAS HELD THAT CAPITAL GAIN ON EXECUTION OF THE SAID DEV ELOPMENT AGREEMENT DATED 30.12.2003, HAS ARISEN IN THE HANDS OF THE ASSESSEE AND TWO OTHER PERSONS. 6. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF THE ASSESSEE THAT HE WAS ONLY A NOMINEE OF VEPL. THE PAYMENTS R EFLECTED IN THE DEVELOPMENT AGREEMENT WERE RECEIVED BY VEPL AND THA T EVEN THE PURCHASE CONSIDERATION FOR THE PROPERTY WAS PAID BY VEPL. A S PER THE ASSESSING OFFICER, PAYMENTS MADE BY VEPL CAN, AT BEST, BE UND ERSTOOD TO HAVE BEEN ITA NO.2119/PN/2013 MADE ON BEHALF OF THE ASSESSEE AND TWO OTHERS BUT T HE OWNERSHIP OF THE PROPERTY VESTED WITH ASSESSEE AND TWO OTHER CO-OWNE RS. IT WAS, THUS, THE CASE OF THE ASSESSING OFFICER THAT BY WAY OF SALE-D EEDS DATED 06.09.2000 AND 16.12.000, ASSESSEE AND TWO OTHER CO-OWNERS HAD ACQ UIRED THE PROPERTY AND THE SUBSEQUENT DEVELOPMENT AGREEMENT DATED 30.12.20 03 EXECUTED BY ASSESSEE AND TWO OTHERS WITH SHRI RAJESH PATHARKAR FOR A CONSIDERATION OF RS.38,00,000/- GAVE RISE TO CAPITAL GAINS IN THE HA NDS OF THE ASSESSEE AND TWO OTHER PERSONS. 7. THE CIT(A) HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE TRANSACTION IN QUESTION DOES NOT BELONG TO THE ASSE SSEE INASMUCH AS THE LAND IN QUESTION HAS BEEN PURCHASED AND SOLD FOR AND ON BEHALF OF VEPL, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 8. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE HAS PRIMARILY RELIED UPON THE ORDER OF THE ASSESSING OF FICER IN SUPPORT OF THE CASE OF THE REVENUE WHOSE REASONING, WE HAVE ALREADY ADV ERTED TO IN EARLIER PARAS 5 & 6 ABOVE, AND THE SAME ARE NOT BEING REPEATED FO R THE SAKE OF BREVITY. 9. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FO R THE RESPONDENT-ASSESSEE POINTED OUT THAT THE CIT(A) CAM E TO A FACTUAL FINDING, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, AND THE DOCUMENTARY EVIDENCE ON RECORD THAT THERE WAS NO ER ROR IN HOLDING THAT THE TRANSACTION IN QUESTION DID NOT BELONG TO THE ASSES SEE. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE CRUX OF THE DISPUTE IS AS TO WHETHER THE INCOME ARISING AS A RESULT OF THE DEVELOPMENT AGREEMENT DATED 30.12.2003 EXECUTED BY ASSESSEE AND TWO OTHERS WITH SHRI RAJESH PATHARKAR IS LIABLE TO BE A SSESSED IN THE HANDS OF THE ASSESSEE OR NOT. THE CASE SETUP BY THE ASSESSEE IS THAT THE SAID TRANSACTION DOES NOT BELONG TO HIM. IN THIS CONTEXT, WE FIND T HAT THE CIT(A) IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE HIM CALLED FOR A RE MAND REPORT FROM THE ASSESSING OFFICER. IN TERMS OF HIS COMMUNICATION, THE CIT(A) REQUIRED THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS/DOCUME NTS AS TO WHETHER (I) PAYMENTS FOR PURCHASE OF LAND ARE MADE BY VEPL; (II ) SALE PROCEEDS ARE RECEIVED BY VEPL; (III) INCOME IS DISCLOSED BY VEPL ; AND, (IV) ALL THE TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNT O F VEPL. THE CIT(A) CATEGORICALLY RECORDS THAT VIDE A REPORT DATED 18.0 1.2012, THE ASSESSING OFFICER REPORTED THAT THE LAND IN QUESTION WAS PUR CHASED BY M/S VEPL AND THE PAYMENT WAS ALSO MADE BY THEM. THEREAFTER, TH E CIT(A) PERUSED OTHER DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE, SU CH AS, BANK STATEMENT, LEDGER ACCOUNT, AUDITED BALANCE-SHEET AND PROFIT & LOSS ACCOUNT OF VEPL. ON THE BASIS OF HIS EXAMINATION, HE HAS CONCLUDED A S UNDER :- 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AND THE SUBMISSION OF THE APPELLANT AND I FIND THAT THE LAND IN QUESTION WAS ACQUIRED BY M/S. VIRAJ ESTATE PVT. LTD. (FORMERLY MAHAVIR LAND DEVELOPERS) VIDE TWO AGREEME NTS TO SALE DT. 05.01.1993 AND THEN AN MOV DT. 21.08.2000 WAS E NTERED INTO BETWEEN M/S. VIRAJ ESTATE PVT. LTD. AND SHRI. S.K. GAVANDE, SHRI. BHARAT W. SHAH AND SHRI. MANOHAR SHRIDHAR PATIL (TH E APPELLANT) FOR DEVELOPMENT OF THE LAND. ACCORDINGLY, THE SALE DEED S DATED 16.09.2000 AND 16.12.2000 WERE ENTERED INTO BETWEEN THE ORIGINAL LAND OWNERS AND THESE THREE CO-OWNERS. ON PERUSAL O F THE SALE ITA NO.2119/PN/2013 DEEDS, IT IS NOTICED THAT THE PAYMENT OF RS.18,00,0 00/- HAS BEEN MADE BY CHEQUES FROM BANK ACCOUNT WITH GODAVARI CO- OPERATIVE BANK LTD., NASHIK BETWEEN MAY 1999 TO JULY 2000 AND THE SAME HAS BEEN RECORDED IN THE BOOKS OF M/S. VIRAJ ESTATE PVT. LTD. THE A.O. HAS ALSO ACCEPTED THESE FACTS IN HIS REMAND RE PORT THAT THE PURCHASE CONSIDERATION HAD BEEN PAID BY M/S. VIRAJ ESTATE PVT. LTD. 4.1 ON FURTHER PERUSAL OF THE SALE DEEDS, IT IS NOT ICED THAT THE M/S. VIRAJ ESTATE PVT. LTD. WAS A CONFIRMING PA RTY AND TWO CLAUSES OF THE AGREEMENT AS MENTIONED AT PARA 4 THE REOF CLEARLY ESTABLISHED THAT THE APPELLANT AND TWO OTHER CO-OWN ERS WERE THE NOMINEES OF M/S. VIRAJ ESTATE PVT. LTD. BOTH THE CLAUSES OF SALE AGREEMENT ARE REPRODUCED AS UNDER:- 'THE VENDORS HAVE ENTERED INTO AGREEMENT OF SALE IN FAVOUR OF THE CONFIRMING PARTY WITH RIGHTS GIVEN FOR DEVEL OPMENT AND SALE OF THE PROPERTY WITH A RIGHT TO NOMINATE A PER SON FOR THE COMPLETION OF THE CONVEYANCE OR SALE DEED. THE CONF IRMING PARTY HAS NOMINATED THE PURCHASER AND FOR THE SAKE OF THIS THE CONFIRMING PARTY HAS JOINED IN THIS DEED. AND WHEREAS IN PURSUANCE OF THE AGREEMENT IN FAVOUR OF THE CONFIRMING PARTY, AND THE REQUEST OF THE CONFIR MING PARTY AND AS NOMINATED BY THE CONFIRMING PARTY AND VENDOR S ALSO AGREED TO EXECUTE THE SALE DEED IN FAVOUR OF THE PU RCHASER AS REQUESTED AND NOMINATED BY THE CONFIRMING PARTY. FURTHER IN THE BALANCE SHEET OF M/S. VIRAJ ESTATE P VT. LTD., THE LANDS IN QUESTION ARE SHOWN IN SCHEDULE 'G-2' AS ADVANCE AGAINST PURCHASE OF LAND 21/23 RS.18,00,000/-, EXPENSES 21/ 23 AT RS.14,03,425/-. THIS ADVANCE FOR LAND IN QUESTION I S THE PART OF TOTAL ADVANCES AT RS.38.71 CRORES RECORDED IN THE BOOKS O F ACCOUNT AND BALANCE SHEET AS ON 31.03.2006 OF M/S. VIRAJ ESTATE PVT. LTD. THEREFORE, IT IS CLEARLY ESTABLISHED BY THE APPELLA NT WITH THE HELP OF DOCUMENTARY EVIDENCES THAT THE PURCHASE OF LAND BY THE APPELLANT AND TWO OTHER CO-OWNERS WAS MADE FOR AND ON BEHALF OF M/S. VIRAJ ESTATE PVT. LTD. 4.2 NOW, COMING TO THE SALE OF THE SAID LAND VIDE A DEVELOPMENT AGREEMENT DT. 31.12.2003, IT IS NOTICED THAT THE APPELLANT AND TWO OTHER CO-OWNERS HAVE AGREED TO TR ANSFER THE DEVELOPMENT RIGHTS IN THE SAID LAND TO SHRI. RAJESH ARUN PATHARKAR FOR CONSIDERATION OF RS.38,00,000/-. THE EARNEST MO NEY OF RS.3,51,000/- BY CHEQUES HAS BEEN RECEIVED AND BALA NCE AMOUNT WAS TO BE RECEIVED LATER ON. THE RECEIPT OF EARNEST MONEY AT RS.3,51,000/- IS ALSO DULY REFLECTED IN THE BOOKS O F ACCOUNT OF M/S. VIRAJ ESTATE PVT. LTD. FINAL SALE DEED HAS BEEN EXE CUTED BY RAJESH ARUN PATHARKAR AND ORS. TO SHRINE OF INFANT JESUS T RUST ON 19/01/2007 AND M/S. VIRAJ ESTATE PVT. LTD. GOT ITS BALANCE CONSIDERATION OF RS.30,00,000/- ON 14.02.2007 FROM SHRI. RAJESH A. PATHARKAR. THIS AMOUNT IS FOUND CREDITED IN THE BAN K ACCOUNT OF M/S. VIRAJ ESTATE PVT. LTD. WITH HDFC BANK ON 15/02 /2007. ON FURTHER VERIFICATION IT IS NOTICED THAT, THE SCHEDU LE 'J' FORMING PART OF PROFIT & LOSS A/C, ALSO SHOWS PROFIT ON SALE OF LAN D AT SURVEY NO.21/23 WHICH IS UNDER CONSIDERATION AND THE SAME HAS BEEN ITA NO.2119/PN/2013 INCLUDED IN THE BUSINESS PROFIT OF 2.36 CRORES OF M /S. VIRAJ ESTATE PVT. LTD. 4.3 IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES AND DOCUMENTARY EVIDENCES, I AM OF THE CONSIDERED VIEW THAT LAND IN QUESTION HAS BEEN PURCHASED AND SOLD FOR AND ON BEH ALF OF M/S. VIRAJ ESTATE PVT. LTD. FURTHER, SINCE THE LAND IN Q UESTION WAS A STOCK-IN-TRADE, THE PROFIT THEREON IS LIABLE TO BE ASSESSED AS BUSINESS INCOME AND NOT AS LONG TERM CAPITAL GAIN. THEREFORE, I HOLD THAT THE PROVISIONS OF SECTION 50C ARE NOT APP LICABLE AND NO ADDITION ON ACCOUNT OF CAPITAL GAIN IS CALLED FOR I N THE CASE OF APPELLANT. THIS VIEW ALSO GETS SUPPORT FROM THE ORD ER OF ID. CIT(A)-II, NASHIK IN THE CASE OF SHRI. BHARAT W. SHAH (SUPRA). THUS, THE A.O IS DIRECTED TO DELETE THE ADDITION. 11. AS PER THE AFORESAID DISCUSSION, IT IS EVIDENT THAT THE CIT(A) NOTICED THAT THE LAND IN QUESTION WAS INDEED ACQUIR ED BY VEPL VIDE TWO AGREEMENTS TO SALE DATED 05.01.1993; AND, ON 21.08. 2000 VEPL ENTERED INTO A DEVELOPMENT AGREEMENT WITH S/SHRI SAMPURNANAD KES HAV GAVANDE AND SHRI BHARAT V. SHAH AND ASSESSEE BEFORE US I.E. SHR I MANOHAR SHRIDHAR PATIL FOR DEVELOPMENT OF LAND. ACCORDINGLY, THE SALE-DEE DS DATED 16.09.2000 AND 16.12.2000 WERE ENTERED INTO BETWEEN ORIGINAL LAND OWNERS AND THE AFORESAID THREE CO-OWNERS. AS PER THE CIT(A), THE SAID SALE- DEEDS SHOWED THAT PAYMENTS FOR ACQUISITION OF LAND WERE MADE BY VEPL THROUGH THEIR BANK ACCOUNTS. IT IS ALSO NOTICED BY THE CIT(A) THAT PA YMENTS HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT OF M/S VEPL. THE ASSESSING OFFICER IS STATED TO HAVE ACCEPTED THE POSITION IN HIS REMAND REPORT THAT THE PURCHASE CONSIDERATION HAS BEEN PAID BY VEPL. BEFORE US, THERE IS NO MATE RIAL LEAD BY THE REVENUE TO NEGATE THE AFORESAID FINDINGS OF THE CIT(A). IN THE COURSE OF HEARING BEFORE US, THE LEARNED COUNSEL HAS FURNISHED A PAPER BOOK WHICH, INTER-ALIA, CONTAINS THE MATERIAL RELIED UPON BY THE CIT(A) IN COMING TO HIS CONCLUSION. IT IS QUITE CLEAR THAT THE FINDING OF THE CIT(A) IS BORNE OUT O F THE MATERIAL ON RECORD. 12. IN SUPPORT OF HIS CONCLUSION THAT THE TRANSACTI ON WAS BELONGING TO THE VEPL, THE CIT(A) HAS ALSO REFERRED TO A CLAU SE OF SALE-DEED TO POINT OUT THAT ASSESSEE AND TWO OTHER CO-OWNERS WERE NOMINEES OF VEPL AND VEPL HAD SIGNED THE DEEDS AS A CONFIRMING PARTY. APART THEREFROM, IT IS ALSO ASSERTED BY THE CIT(A) THAT IN THE BALANCE-SHEET OF VEPL, THE TRANSACTION IN QUESTION HAS BEEN REFLECTED AS ADVANCES AGAINST PUR CHASE OF LAND. ON THE BASIS OF THE SAID DOCUMENTARY EVIDENCE, THE CIT(A) HAS CONCLUDED THAT PURCHASE OF LAND BY THE ASSESSEE AND TWO OTHER CO-O WNERS IS FOR AND ON BEHALF OF THE VEPL. WE HEREBY AFFIRM THE FINDINGS OF THE CIT(A) AS NOTHING TO THE CONTRARY HAS BEEN LEAD BEFORE US BY THE REVENUE . 13. IN THE SAME MANNER, THE CIT(A) ALSO EXAMINED TH E IMPUGNED DEVELOPMENT AGREEMENT DATED 30.12.2003 AND NOTICED THAT CONSIDERATION THEREON HAS BEEN CREDITED IN THE BOOKS OF ACCOUNT O F VEPL. THE CIT(A) ALSO RECORDS THAT THE PROFITS ON SALE OF SUCH LAND HAVE ALSO BEEN CREDITED IN THE PROFIT & LOSS ACCOUNT OF VEPL, AS A PART OF BUSINES S PROFIT. 14. IN THE FACE OF THE AFORESAID FACTUAL APPRECIATI ON OF THE MATTER, THE CIT(A) REACHED AN INESCAPABLE CONCLUSION THAT T HE LAND IN QUESTION WAS INDEED PURCHASED AND SOLD BY THE ASSESSEE AND TWO O THER CO-OWNERS FOR AND ON BEHALF OF VEPL. THEREFORE, THE INCOME THEREOF W AS NOT LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. HAVING REGA RD TO THE MATERIAL AND ITA NO.2119/PN/2013 EVIDENCE ON RECORD, WE HEREBY AFFIRM THE ORDER OF T HE CIT(A) BECAUSE THERE IS NO COGENT REASON OR MATERIAL LEAD BY THE REVENUE, W HICH WOULD REQUIRE US TO INFER TO THE CONTRARY. THUS, THE ULTIMATE CONCLUSI ON OF THE CIT(A) IS HEREBY AFFIRMED. 15. ONE ARGUMENT RAISED BY THE REVENUE IS THAT THE CIT(A) HAS REFERRED TO AN ORDER OF HIS PREDECESSOR IN THE CASE OF CO-OWNER SHRI BHARAT V. SHAH FOR ASSESSMENT YEAR 2004-05, WHICH HAS SINCE B EEN SET-ASIDE AND REMANDED BACK FOR ADJUDICATION AFRESH BY THE TRIBUN AL. IN THIS CONTEXT, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE FURNISHED A COPY OF ORDER OF THE TRIBUNAL DATED 30.01.2012 VIDE ITA NO.1022/PN/2009 WHEREBY THE ORDER OF THE CIT(A)-II, NASHIK DATED 08.06.2009 RELATING TO SHRI BHARAT V. SHAH FOR ASSESSMENT YEAR 2004-05 HAS BEEN SET-ASIDE TO THE F ILE OF THE CIT(A) FOR ADJUDICATION AFRESH. 16. WE HAVE PERUSED THE SAID DECISION AND FIND THAT THE SAME DOES NOT TURN MUCH WITH REGARD TO THE PRESENT CONTR OVERSY BEFORE US. IN ITA NO.1022/PN/209 (SUPRA), THE TRIBUNAL DEALT WITH AN APPEAL OF THE REVENUE WHEREBY SIMILAR ADDITION ON ACCOUNT OF LONG TERM CA PITAL GAIN BASED ON THE DEVELOPMENT AGREEMENT DATED 30.12.2003 WAS DELETED BY THE CIT(A) IN THE HANDS OF ANOTHER CO-OWNER. THE TRIBUNAL NOTED THAT THE CIT(A) HAD ALLOWED RELIEF ON THE GROUND THAT THE PROPERTY IN QUESTION DID NOT QUALIFY TO BE A CAPITAL ASSET AND THUS THE TRANSACTION THEREOF DID NOT GIV E RISE TO CAPITAL GAINS AND THEREFORE, THE QUESTION OF INVOKING SECTION 50C OF THE ACT DID NOT ARISE. HOWEVER, THE TRIBUNAL NOTED THAT WHILE ALLOWING REL IEF IN THE HANDS OF THE CO- OWNER, THE CIT(A) DID NOT DETERMINE THE PRELIMINARY ISSUE RAISED BEFORE HIM WHICH WAS TO THE EFFECT THAT THE GAIN ARISING IN TE RMS OF THE DEVELOPMENT AGREEMENT DATED 30.12.2003 WAS NOT AT ALL ASSESSABL E IN THE HANDS OF THE ASSESSEE AS THE TRANSACTION DID NOT BELONG TO HIM, RATHER IT BELONGED TO VEPL. THE SAID PERTINENT ISSUE WAS NOT ADJUDICATED BY THE CIT(A) AND THE TRIBUNAL CONCLUDED THAT THE CIT(A) OUGHT TO HAVE ADJUDICATED THE PRELIMINARY GROUND AND ONLY THEREAFTER CONSIDERED THE ALTERNATIVE PLEA OF NON-APPLICABILITY OF SECTION 50C OF THE ACT. FOR THE AFORESAID REASONIN G, THE ORDER OF THE CIT(A) WAS SET-ASIDE AND THE MATTER WAS REMANDED BACK TO H IS FILE TO BE ADJUDICATED AFRESH. 17. AS CAN BEEN SEEN FROM THE AFORESAID DISCUSSION, IN THE IMPUGNED ORDER, THE CIT(A) HAS INDEED DETERMINED TH E PERTINENT POINT RAISED BY THE ASSESSEE TO THE EFFECT THAT THE TRANSACTION DID NOT BELONG TO HIM. THE TRIBUNAL VIDE ORDER DATED 30.01.2012 (SUPRA) PRECIS ELY REQUIRED THE CIT(A) TO ADDRESS SUCH CONTROVERSY. SINCE THE SAID CONTROVER SY HAS ALREADY BEEN ADDRESSED BY THE CIT(A) IN THE IMPUGNED ORDER, THE SAME HAS BEEN DEALT WITH BY US ON ITS MERITS AFTER CONSIDERING THE RIVAL STA NDS. THEREFORE, THE RELIANCE PLACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE O N THE DECISION OF THE TRIBUNAL IN THE CASE OF CO-OWNER, SHRI BHARAT V. SH AH DATED 30.01.2012 (SUPRA) IS OF NO AVAIL FOR ADJUDICATING THE PRESENT CONTROVERSY. THUS, ON THIS GROUND REVENUE FAILS. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 7. FOLLOWING THE AFORESAID PRECEDENT, WHICH HAS BEE N RENDERED IN THE CASE OF A CO-OWNER OF THE IMPUGNED LANDS, WE THEREF ORE FIND NO REASON TO ITA NO.2119/PN/2013 INTERFERE WITH THE CONCLUSION DRAWN BY THE CIT(A) T O THE EFFECT THAT THE INCOME, IF ANY, ARISING AS A RESULT OF IMPUGNED TRANSACTION IS ASSESSABLE IN THE HANDS OF M/S VIRAJ ESTATES PVT. LTD. AND NOT IN THE HANDS OF THE ASSESSEE. THE ORDER OF THE CIT(A) IS HEREBY AFFIRMED AND THE REVENUE HA S TO FAIL ON THIS ASPECT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2014. SD/- SD /- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 30 TH OCTOBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE