A.C.I.T.. 2(1), Nagpur V. SHRI RAJU PANDURANG DHOBLE, Nagpur

ITA 232/NAG/2015

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8880 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2015
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: MANOR MORYANI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Question of law; Fair market value; Capital receipt
• Section: 43CA; 50C; 260A; 250; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.232/NAG./2015 (ASSESSMENT YEAR : 200607 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE2(1), AAYAKAR BHAWAN CIVIL LINES, NAGPUR 440 001 . APPELLANT V/S RAJU PANDURANG DHOBLE MUNIRAJ, MANKAPUR FARAS KORADI ROAD, NAGPUR 440 030 PAN AYJPD8795L . RESPONDENT REVENUE BY : SHRI A.R. NINAWE ASSESSEE BY : SHRI MANOR MORYANI DATE OF HEARING 22.03.2017 DATE OF ORDER 27.03 .2017 O R D E R PER SHAMIM YAHYA, A.M. THE PRESENT APPEAL PREFERRED BY THE REVENUE IS DIRE CTED AGAINST IMPUGNED ORDER DATED 28 TH MAY 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS)2(1), NAGPUR, FOR ASSESSMENT YEAR 200607. 2. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BE LOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE A SSESSEE WAS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF PLO T. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE P ROVISIONS OF SECTION 50C OF THE ACT, ARE NOT APPLICABLE IN ASSES SEES CASE. 2 RAJU PANDURAN DHOBLE 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE ASSESSEES RETURNED INCOME OF ` 75,809. 2. BRIEF FACTS ARE THAT THE ASSESSING OFFICER, ON THE B ASIS OF INFORMATION RECEIVED FROM THE OFFICE OF THE SUB-REG ISTRAR OF PROPERTIES, IT WAS GATHERED THAT THE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION, HAD SOLD ONE PROPERTY SITUATED AT MO UZA ZINGABAI TAKLI, SHEET NO. 1029/29 1 CITY SURVEY NO. 24, KHASARA NO. 19/2, PHK NO. 11, NAGPUR, DISTRICTNAGPUR. THE ASSESSING OFFICER F URTHER NOTED THAT RETURN OF INCOME HAS NOT BEEN FILED BY THE ASSESSEE AND SINCE THE SAID TRANSACTION HAS NOT BEEN REPORTED BY THE ASSESSEE, A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 22 ND MARCH 2010. DURING THE COURSE OF PROCEEDINGS UNDER SECTION 148 OF THE ACT, DETAILED INFORMATION WERE FILED BY THE ASSESSEE FROM TIME TO TIME AND VARIOUS AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH VARIOU S OTHER ENTITIES IN RESPECT OF THE SAID PLOT OF LAND WAS ALSO FURNISHED . THE ASSESSING OFFICER PERUSED THE VARIOUS AGREEMENTS ENTERED INTO BY THE ASSESSEE AND NOTED THAT THE ASSESSEE HAD INHERITED THE SAID AGRICULTURAL LAND AND HAD SOLD THE SAID PLOT OF LAND TO ONE ADIVASI S AMAJ UNNATI GRUHA NIRMAN SAHAKARI SANSTHA, NAGPUR (ASUGNSS) FOR A CONS IDERATION OF ` 9,20,000 VIDE AGREEMENT DATED 8 TH APRIL 2000. THE ASSESSING OFFICER NOTED THAT WHILE THE POSSESSION OF THE PROPERTY WAS HANDED OVER BY THE ASSESSEE TO THE SAID ASUGNSS, NO REGISTERED DOCU MENT IN RESPECT 3 RAJU PANDURAN DHOBLE OF THE SAID TRANSACTION WAS ENTERED INTO BY THE APP ELLANT. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE H AD ENTERED INTO ANOTHER AGREEMENT WITH ONE M/S. MAHARANA & BOSE ASS OCIATES, NAGPUR, FOR DEVELOPMENT OF THE SAID PLOT OF LAND ON 20 TH OCTOBER 2004 WHICH WAS DULY EXECUTED AND REGISTERED WITH THE APP ROPRIATE AUTHORITY ON 21 ST OCTOBER 2004 AND CONSEQUENTLY NOTED THAT THERE WAS A CONTRADICTION IN THE SUBMISSION OF THE APPELLANT AS THE SAME PLOT COULD NOT BE SOLD BY THE APPELLANT TO DIFFERENT ENTITIES. THE ASSESSEE ALSO FILED BEFORE THE ASSESSING OFFICER A DEED OF CANCEL LATION CANCELLING THE ABOVE DEED OF AGREEMENT OF DEVELOPMENT ENTERED INTO ON 20 TH OCTOBER 2004 WITH MAHARANA & BOSE ASSOCIATES, NAGPUR. IT WAS ALSO NOTED THAT DEED OF CANCELLATION WAS DULY EXECUTED ON 16 TH MARCH 2006 AND DULY REGISTERED WITH THE APPROPRIATE AUTHORITY. FURTHER, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD ALSO SUBMITTED ANOTHER AGREEMENT OF DEVELOPMENT DATED 16 TH MARCH 2006 ENTERED INTO BETWEEN THE ASSESSEE AND 9 OTHER MEMBERS AND MAHARANA & BOSE ASS OCIATES, NAGPUR, IN RESPECT OF 66 PLOTS OF LAND HAVING TOTAL AREA OF 97368.18 SQ. FT. SITUATED AT KHASARA NO.19/2, MOUZA ZINGABAL TAKIL, PH NO.11, CITY SURVEY NO.24/1, SHEET NO.1032/70, NMC WARD TAH . AND DISTT. NAGPUR, AT A TOTAL CONSIDERATION OF ` 90 LAKH (MARKET VALUE OF THE SAID PROPERTY SHOWN AT ` 1,80,10,000). THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS NOT ABLE TO VALIDLY EXPLAIN THE VA RIOUS AGREEMENTS 4 RAJU PANDURAN DHOBLE ENTERED INTO BY IT WITH VARIOUS ENTITIES FROM TIME TO TIME AND ALSO NOTED THAT THE AGREEMENT OF DEVELOPMENT DATED 16 TH MARCH 2006 ENTERED INTO WITH MAHARANA & BOSE ASSOCIATES, NAGPUR , IN RESPECT OF 66 PLOT OF LAND WAS FOR A TOTAL CONSIDERATION OF ` 90 LAKH WHILE THE MARKET VALUE OF THE SAID PROPERTY WAS SHOWN TO ` 1,80,10,000 AND, THEREFORE, THE PROVISIONS OF SECTION 50C, WOULD BE ATTRACTED. THE ASSESSING OFFICER, THEREFORE, DETERMINED THE LONG T ERM CAPITAL GAIN AFTER DEEMING THE SALE CONSIDERATION UNDER SECTION 50C, TO BE ` 1,80,10,000, AND ALSO ASSUMING THE ASSESSEE 50% OWN ER OF THE ENTIRE PROPERTY DETERMINED THE TOTAL LONG TERM CAPITAL GAI N AT ` 1,41,85,415. CONSEQUENTLY, THE LONG TERM CAPITAL GAIN OF ` 70,92,707, WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. THE LEARNED CO MMISSIONER (APPEALS) HAS DISMISSED THE ASSESSEES APPEAL FOR N ONPROSECUTION. UPON ASSESSEES APPEAL, THE TRIBUNAL RESTORED THE MA TTER TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) FOR PASSING AN A PPROPRIATE SPEAKING ORDER. IN COMPLIANCE TO THE ORDER OF THE T RIBUNAL, THE LEARNED COMMISSIONER (APPEALS) DELETED THE ADDITION HOLDING AS UNDER: 7.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE WRITTEN SUBMISSIONS OF THE APPELLANT. THE LD. AO HA S BROUGHT TO TAX AN AMOUNT OF RS. 70,92,707/- AS CAPITAL GAIN (B EING HIS 50% SHARE) IN RESPECT OF SALE OF THE SAID IMMOVABLE PRO PERTY. IT IS SEEN THAT VARIOUS DOCUMENTS WERE ENTERED INTO FROM TIME TO TIME AND WERE THEN NOT EXECUTED/CANCELLED FOR VARIETY OF REASON AS STATED ABOVE BY THE APPELLANT IN ITS SUBMISSIONS. N O RELIANCE CAN BE PLACED ON SUCH CANCELLED DOCUMENTS AND NO CONCLU SION CAN BE DRAWN THERE FROM. HENCE THE VITAL DOCUMENT TO BE CO NSIDERED IS THE AGREEMENT OF DEVELOPMENT THAT WAS FINALLY ENTER ED 5 RAJU PANDURAN DHOBLE INTO BY THE CO-OWNERS WITH MAHARANA & BOSE ASSOCIAT ES, NAGPUR DATED 16 TH MARCH 2006. IT IS ON THE BASIS OF THIS DOCUMENT ONLY THAT THE ID. AO HAS QUANTIFIED THE AD DITIONS MADE. IN THE SAID DOCUMENT THE BRIEF HISTORY OF ALL PAST AGREEMENTS IS ALSO MENTIONED. 7.4 THE ACTION OF THE LD. AO OF BRINGING TO TAX RS. 70,92,707/- AS CAPITAL GAIN IS BASED ON TWO FUNDAMENTAL PREMISES: THAT THE APPELLANT IS 50% OWNER OF THE SAID PROPERT Y AND CONSEQUENTLY AN AMOUNT OF ` 45 LAKH RECEIVED (BEING 50% OF THE TOTAL SALE CONSIDERATION OF ` 90 LAKH) IS REQUIRED TO BE BROUGHT TO TAX AS A CONSIDERATION RECEIVED BY THE APPELLANT IN RESPECT OF SALE OF THE SAID PROPERTY. THAT THE PROVISIONS OF SECTION 50C WOULD BE APPLICA BLE SINCE THE MARKET VALUE FOR STAMP DUTY PURPOSES OF THE SAID PR OPERTY IS ` 1,80,10,000 AND THAT THEREFORE, THE DEMAND SALE CON SIDERATION OF THE SAID PROPERTY WOULD HAVE TO BE TAKEN AT THAT AM OUNT. 7.5 BOTH THE ABOVE PREMISES OF THE LD. AO ARE ERRON EOUS. WITH RESPECT TO THE FIRST PREMISES THAT THE APPELLANT IS A SOLE OWNER OF THE 50% OF THE SAID PROPERTY, VARIOUS EVIDENCES WER E FURNISHED BY THE APPELLANT BEFORE THE LD. AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS TO ESTABLISH THAT APPELLANT IS ONLY ONE OF THE FIVE CO-OWNERS OF THE SAID 50% OF THE PROPERTY. THE APPELLANT HAD SUBMITTED BEFORE THE LD. AO DURING THE COURSE O F ASSESSMENT PROCEEDINGS COPIES OF PURCHASE AGREEMENT AND PURCHA SE DEED RELATED TO THE SAID PLOT OF LAND FROM EACH OF THE O THER RESPECTIVE CO-OWNERS, WHICH ARE DULY REGISTERED WITH THE REGIS TRAR. THE SAID PLOTS OF LAND WERE OWNED BY THE 4 OTHER RELATIVES O F THE APPELLANT WHILE THE APPELLANT OWNS ONLY THE PLOTS OF LAND NO. 184 TO 193. THE BREAK-UP AND OWNERSHIP OF THE PLOTS OF LAND IS REPRODUCED HEREUNDER: PURCHASED BY PLOTS NO. YUVRAJ MAHALLE PLOT NO.125 TO 130 PADMA MAHALLE PLOT NO.131 TO 137 RAMDAS MAHALLE PLOT NO.138 TO 144 APARNA R. DHOBLE PLOT NO.172 TO 181 RAJU DHOBLE PLOT NO.184 TO 193 7.6 THE RELEVANT PLOTS OF LAND WERE PURCHASED BY EA CH OF THE RESPECTIVE PERSONS AND CONSIDERATION OF PLOT OF LAN D WAS ALSO PAID BY THE INDIVIDUAL PERSON SEPARATELY AND DULY ACCEPTED BY THE SAID ASUGNSS. THE APPELLANT HAD SUBMITTED COPIES OF THE SAID PURCHASE - , 6 RAJU PANDURAN DHOBLE DOCUMENTS BEFORE THE LD. AO DURING THE COURSE OF AS SESSMENT PROCEEDINGS AND THE REFERENCE TO THE SAME CAN BE SE EN ON PAGE 7 OF THE ASSESSMENT ORDER WHEREIN IT WAS SUBMITTED BY TH E APPELLANT AS UNDER:- 'THESE PLOTS WERE DULY PURCHASED BY THEM OUT OF THE IR INCOME AND ACCUMULATED SAVINGS AND SALE CONSIDERATI ON RECEIVED IS KEPT AS UNSECURED LOAN WITH THE ASSESSE E ON GOOD FAITH AND ALSO FURNISHED THE CONFIRMATION OF T HE SAME FOR YOUR KIND VERIFICATION. THAT THE ASSESSEE ALSO HEREWITH SUBMITTED THE COPY OF PURCHASE DEED OF THE FOLLOWING SHRI YUVRAJ S/O RAMDAS MAHALLE FROM PLOT NO. 125 TO 130 SMT. PADMA W/O RAMDAS MAHALLE FROM PLOT NO. 131 TO 137 SHRI RAMDAS S/O SIARAM MAHALLE FROM PLOT NO. 138 TO 144. 7.7 THE LD. AO HAS ALSO TAKEN DUE COGNIZANCE OF THE ABOVE SUBMISSION OF THE APPELLANT AND HAS NOT GIVEN ANY C ONTRARY FINDING IN THIS REGARD AS HE HAS NOT COME TO THE CONCLUSION THAT THE SAID PROPERTY DOCUMENTS ENTERED INTO BY THE RESPECTIVE P ERSONS FOR PURCHASE OF THE RESPECTIVE PLOTS OF LAND ARE BOGUS OR FRAUDULENT IN ANY MANNER. THE APPELLANT HAS DULY ACCOUNTED FOR TH E RESPECTIVE CO- OWNER'S SALE CONSIDERATION RECEIVED AND THE SAM E IS ACCOUNTED FOR AS UNSECURED LOAN WITH THE APPELLANT AND THE AP PELLANT HAS ALSO FURNISHED THE CONFIRMATION OF THE SAME WITH ID. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 7.8 THE MOST RELIABLE EVIDENCE WITH THE OWNERSHIP O F THE SAID PROPERTY IS THE FINAL SALE AGREEMENT ENTERED INTO B Y THE APPELLANT (BEING ONE OF THE CO-OWNER WITH MAHARANA & BOSE ASS OCIATES, NAGPUR DATED 16TH MARCH 2006 WHICH IS A FINAL DOCUMENT AND IS AN AGREEMENT OF DEVELOPMENT AND IS DULY REGISTERED). P ERUSAL OF THE SAID AGREEMENT CLEARLY POINTS OUT TO FACT THAT THE APPELLANT, WHO IS ONE OF THE SEVERAL CO-OWNERS OF THE SAID PROPERTY O WNS ONLY PLOTS OF LAND NO. 184 TO 193 (BEING 8 PLOTS HAVING TOTAL AREA OF 924.12 SQ. MTRS.). THE SAID AGREEMENT FURTHER EVIDENCES TH E FACT THAT THE VARIOUS AGREEMENTS THAT WERE ENTERED INTO BY THE AP PELLANT ALONG WITH DIFFERENT CO-OWNERS IN THE PAST STAND OVERRULE D BY THIS AGREEMENT. THIS DOCUMENT IS THE FINAL DOCUMENT IN R ESPECT OF THE SAID PROPERTY AND ALSO EVIDENCES THAT THE APPELLANT HAS RECEIVED A CONSIDERATION OF RS. 45 LACS IN RESPECT OF THE SAID PROPERTY AND THAT THE AMOUNT OF RS. 45 LACS IS BEING PAID TO THE APPE LLANT NOT ONLY FOR HIS SHARE OF THE PLOT BUT ALSO ON BEHALF OF OTHER 4 PARTIES BEING PARTY NO. 1-A TO D IN ACCORDANCE WITH THE RESPECTIV E PARTIES. THUS IT IS VERY CLEARLY MENTIONED IN THE SAID REGISTERED AGREEMENT OF DEVELOPMENT ITSELF THAT THE APPELLANT HAD RECEIVED A CONSIDERATION 7 RAJU PANDURAN DHOBLE OF RS. 45 LACS WHICH IS BEING RECEIVED IN LIEU OF H IS OWN 8 PLOTS AND FOR THE PLOTS OWNED BY THE OTHER PERSONS TO WHOM TH E APPELLANT IS MANDATED TO DISTRIBUTE THEIR SHARE IN PROPORTION TO THE AREA OF LAND HELD BY THEM. THE ABOVE FACTS BECAME VERY CLEAR FRO M THE EXTRACTS OF THE SAID AGREEMENT OF DEVELOPMENT WHICH IS REPRO DUCED HEREUNDER:- . WHEREAS, THE PARTY NO.1 A TO J ARE THE SOLE AND ABSOLUTE OWNERS OF 66 (SIXTY SIX) PLOTS AS DETAILED HEREIN U NDER: PARTY NO.1A SHRI YUVRAJ S/O RAMDAS MAHALLE, PLOT NO.125 TO 130 (6 PLOTS TOTAL AREA (739.83 SQ.MTRS.) PARTY NO.1BSMT. PADMA W/O RAMDAS MAHALE PLOT NOS. 131 TO 137 (7 PLOTS TOTAL AREA 823.66 SQ.MTRS.) PARTY NO. 1-C- SHRI RAMDAS S/O. SITARAM MAHALLE, PL OT NOS. 138 TO F44 (7 PLOTS TOTAL AREA 829.49 SQ. MTRS.) PARTY NO.1-0- SMT. APARNA W/O, RAJU DHOBLE, PLOT NOS. 172 TO 179 (8 PLOTS TOTAL:AREA 941.63 SQ. MTRS.) PARTY NO. 1-E- SHRI RAJU SB. PANDURANGJI DHOBLE, PLOT NOS. 186 TO 193 (8 PLOTS TOTAL AREA 924.12 SQ. MTRS.) PARTY NO. 1-F- MISS. MADHURI KESMAVRAO PIMPALE, @ S MT. MADHURI W/O. MANOJ DHOBLE, PLOT NOS. 145 TO 151(7 PLOTS TOTAL AREA 825.54 SQ. MTRS.) PARTY NO.1-G- SHRI NARESH SB. KESHAVRAO PIMPALE, PLOT NOS. 152 TO 157 (6 PLOTS TOTAL AREA 739.63 SQ. MTRS.) PARTY NO. 1-H- SHRI MANOJ S/O. KESHAVRAO PIMPALE, P LOT NOS. 158 TO 162 (5 PLOTS TOTAL AREA 1265.61 SQ. MTRS.) PARTY NO. 1-I - SHRI KESHAV NARAYANRAO P1 MAPLE PLO T NOS. 163 TO 171 (9 PLOTS TOTAL AREA 1256.70 SQ. MTRS.) PARTY NO. 1-I- SHRI MANOJ 5/0. PANDURANGJI DHOBLE, PLOT NOS. 196 TO 198 (3 PLOTS TOTAL AREA 699.05 SQ. MTRS.) WHEREAS, THE PARTY NO. 1 A TO I HAVE BECOME THE OWN ERS OF THEIR RESPECTIVE PLOTS AS DETAILED ABOVE BY VIRTUE OF SAL E DEEDS EXECUTED IN THEIR FAVOUR BY ADIVAST SAMAJ UNNATI GRUHA NIRMA N SAHAKARI SANSTHA MARYADIT LTD. NAGPUR (HEREIN AFTER REFERRED TO AS THE 'SAID SOCIETY') AND THE SAME ARE DULY REGISTERED IN THE O FFICE OF SUB REGISTRAR, NAGPUR ON 14.03.2006. AND WHEREAS, THE PARTY NQ.1 A TO J HAVE EXECUTED ME MORAN 8 RAJU PANDURAN DHOBLE DUM OF UNDERSTANDING WITH THE PARTY NO.2 ON 27.01.2 006 AND THEREBY COVENANT TO COMPLETE CERTAIN FORMALITIES SU CH' AS; TO GET THE SALE DEEDS EXECUTED AND REGISTERED IN THEIR FAV OUR FROM THE SAID SOCIETY AFTER GETTING THE SAID PLOTS DULY REGU LARIZED FROM NAGPUR IMPROVEMENT TRUST AND TO GET THEIR RESPECTIV E NAMES MUTATED ON THE REVENUE AND OTHER RELEVANT RECORDS E TC. TO FACILITATE THE PAYMENTS IT IS MUTUALLY AGREED BE TWEEN THE PARTIES AND PARTICULARLY BETWEEN THE PARTY NO.1 A TO I THAT THE PARTY NO.2 SHALL MAKE THE PAYMENT OF RS. 45,00,000/- TO P ARTY NO. 1-E WHO SHALL RECEIVE THE SAME TOR SELF AND ON BEHALF O F PARTY NO.1-A TO D AND IT SHALL BE THE RESPONSIBILITY OF THE PART Y NO.1-E TO DISTRIBUTE THE AMOUNT OF CONSIDERATION TO THE PARTY NO. 1-A TO D IN ACCORDANCE WITH THEIR RESPECTIVE PLOT AREAS. SIM ILARLY THE PARTY NO.2 SHALL MAKE THE PAYMENT OF RS. 45,00,000/- TO P ARTY NO.1-I WHO SHALL RECEIVE THE SAME FOR AND ON BEHALF OF PAR TY NO.1 -F TO I AND IT SHALL BE THE RESPONSIBILITY OF THE PARTY N O.1J TO-DISTRIBUTE THE AMOUNT OF CONSIDERATION TO THE PARTY NO.1-F TO I IN ACCORDANCE WITH THEIR RESPECTIVE PLOT AREAS. THE PARTY NO.1A T O J SPECIFICALLY AGREE AND COVENANT THAT THE PAYMENT OF CONSIDERATIO N SO MADE BY THE PARTY NO.2 TO THE PARTY NO.1-E AND I SHALL BE D EEMED TO BE MADE TO THEM AND THEY SHALL NOT LAY ANY CLAIM AGAIN ST THE PARTY NO. 2 IN RESPECT THEREOF... 7.9 THUS THE ABOVE EXTRACT OF THE DULY REGISTERED A GREEMENT OF DEVELOPMENT CLEARLY EMPHASIZES ON THE FACT THAT THE APPELLANT IS OWNER OF ONLY 8 PLOT OF LAND BEING NO.184 TO 193 WH ILE THE CONSIDERATION THAT IS BEING RECEIVED IS FOR A TOTAL OF ALL PLOTS (36) OWNED BY THE PARTY NO.1A TO PARTY NO.1E. IN FACE OF SUCH CLEAR ASSERTION OF THE FACTS THERE IS NO BASIS TO COME TO THE CONCLUSION THAT THE APPELLANT IS THE SOLE OWNER OF THE 50% OF THE PLOT OF LAND. 7.10 IT IS ALSO IMPORTANT TO NOTE THAT THE TREATMEN T GIVEN BY THE APPELLANT IN RESPECT OF THE CONSIDERATION OF RS. 45 LACS RECEIVED BY IT ON BEHALF OF 4 OTHER OWNERS OF THE RESPECTIVE PL OTS HAS BEEN REFLECTED AS UNSECURED LOAN IN THE PERSONAL BALANCE SHEET OF THE APPELLANT WHICH WAS DULY FURNISHED DURING THE COURS E OF ASSESSMENT PROCEEDINGS ALONG WITH CONFIRMATIONS OF THE RELEVANT PARTIES. ALSO, IT IS STATED BY THE APPELLANT THAT T HE SAID AMOUNT OF UNSECURED LOAN HAS BEEN DULY PAID TO THE SAID PARTI ES IN SUBSEQUENT YEARS. THUS OUT OF THE TOTAL SALE CONSID ERATION OF RS. 45 LACS THE APPELLANT'S SHARE IN RESPECT OF THE SAID S HARE COMES TO ONLY RS. 9,76,774/- WHICH HAS BEEN DULY SHOWN BY THE APP ELLANT IN ITS P&L A/C UNDER THE HEAD 'BY SALE OF PLOT'. THE TOTAL PROFIT EARNED BY THE APPELLANT FROM THE SAID TRANSACTION AS PER THE SAID P&L A/C IS RS. 75,808/- AND IT IS THE AMOUNT THAT THE APPELLAN T HAS OFFERED TO TAX OUT OF ITS BUSINESS OF SALE OF PLOT OF LAND. 9 RAJU PANDURAN DHOBLE 7.11 FURTHER THE SECOND LIMB OF THE LD. AO'S ARGUME NT IS THAT THE PROVISIONS OF SECTION 50C WOULD BE APPLICABLE IN RE SPECT OF SALE OF THE SAID PLOT OF LAND AND SINCE THE STAMP DUTY RATE IN RESPECT OF THE SAID PLOT OF LAND WAS RS. 90 , 00 , 500/-, IT IS THE SAID AMOUNT THAT SHOULD BE DEEMED TO BE THE CONSIDERATION RECEIVED I N RESPECT OF THE SAID SALE OF PLOT OF LAND. HERE ALSO THE SAID C ONCLUSION OF THE LD. AO IS MISPLACED IN VIEW OF THE FACT THAT THE APPELL ANT IS IN THE BUSINESS OF TRADING IN PLOTS OF LAND AND HENCE IN S UCH CIRCUMSTANCES THE DEEMING PROVISIONS OF SECTION 50C WOULD NOT BE ATTRACTED. EVIDENTLY THE LD. AO HAS FAILED TO CONSI DER THE FACT THAT THE APPELLANT HAS PURCHASED THE SAID PLOT OF LAND W ITH THE INTENTION TO SELL THE SAME TO PERSPECTIVE CUSTOMERS AFTER DEV ELOPING IT. THE SAID FACT IS EVIDENCED BY THE TREATMENT GIVEN BY TH E APPELLANT TO THE PURCHASE AND SALE OF PLOT IN ITS P&L A/C AND BA LANCE SHEET. AS DISCUSSED ABOVE, THE SALE OF PLOTS CREDITED TO THE INCOME AND EXPENDITURE A/C AND THE VARIOUS EXPENSES RELATED TO THE SAID SALE HAVE BEEN DEBITED IN THE SAID ACCOUNT. 7.12 FURTHER, THE DEVELOPMENT CHARGES AND LAYOUT EX PENSES HAVE ALSO BEEN FURNISHED BY THE APPELLANT TO EVIDENCE TH AT IT IS ENGAGED IN THE BUSINESS OF DEVELOPING PLOTS OF LAND AND SEL LING THEM. ALSO THE FACT THAT THE APPELLANT HAD ENTERED INTO THE AG REEMENT OF DEVELOPMENT (EXTRACT REPRODUCED ABOVE) WITH MAHARAN A & BOSE ASSOCIATES, NAGPUR ALSO EVIDENCES THE FACT THAT THE APPELLANT IS IN THE BUSINESS OF PURCHASING PLOTS AND DEVELOPING THE M AND SELLING THEM. IN SUCH CIRCUMSTANCES THE QUESTION OF BRINGIN G TO TAX SUCH A SALE AS CAPITAL GAIN WOULD NOT ARISE. THERE IS ENOU GH JUDICIAL AUTHORITY TO COME TO THE CONCLUSION THAT WHERE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN PLOTS OF LAND , THE PROVISIONS OF SECTION 50C WOULD NOT BE APPLICABLE. IN THE CASE OF CIT V. M/S KAN CONSTRUCTION AND COLONIZERS (P) LTD [2012] 20 T AXMANN.COM 381 (ALL.), THE HONORABLE ALLAHABAD HIGH COURT HAS HELD AS UNDER: '6. CONSIDERED THE RESPECTIVE SUBMISSIONS OF THE LE ARNED COUNSEL FOR THE PARTIES AND PERUSED THE RECORD. AT THE VERY OUTSET, IT MAY BE NOTED THAT THE ONLY QUESTION INVOLVED IS WHETHER THE PROFIT AND GAINS WHICH ACCR UED TO THE ASSESSEE COMPANY OUT OF THE SALE OF LAND IS TO BE TREATED AS CAPITAL GAINS OR IS GAINS OUT OF BUSINES S TRANSACTION. IT MAY BE MENTIONED HERE THAT IN THE A PPEAL THE REVENUE HAS NOT DISPUTED THE FINDING OF TRIBUNA L THAT THE LAND IN QUESTION WAS STOCK-IN-TRADE, ON THE GRO UND OF BEING PERVERSE OR AGAINST THE MATERIAL ON RECORD. T HE TRIBUNAL HAS CATEGORICALLY FOUND AS A FACT THAT 'TH ERE IS NO MATERIAL TO CONTROVERT THIS CONTENTION OF THE ASSES SEE THAT THE PLOTS OF LAND SOLD WERE HELD BY THE ASSESSEE CO MPANY AS STOCK IN TRADE.' THIS FINDING IN OUR CONSIDERED OPINION IS SUFFICIENT TO DISPOSE OF THE APPEAL. 10 RAJU PANDURAN DHOBLE 7. HOWEVER, IT IS DESIRABLE TO CONSIDER THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE LEARNED COUNSEL FOR THE PARTIES TO BRING HOME THE POINT IN THEIR FAVOUR. 12. SECTION 50C ALSO USES THE WORD 'CAPITAL ASSET'. FOR APPLICABILITY OF SECTION 50C ONE OF THE ESSENTI AL REQUIREMENTS IS THAT AN ASSET SHOULD BE CAPITAL ASS ET. FROM THE RATIO OF THE VARIOUS JUDICIAL PRONOUNCEMEN TS REFERRED TO ABOVE, IT CAN BE CULLED OUT THAT WHETHE R SALE OF LAND IS SALE OF CAPITAL ASSET OR STOCK IN TRADE IS ESSENTIALLY A QUESTION OF FACT. THERE IS NO RULE OF THUMB TO ADDRESS THE SAID ISSUE. SEVERAL PRINCIPLES HAVE BEE N EVOLVED IN THE JUDICIAL DECISIONS, BUT ALTHOUGH ARE MORE IN THE NATURE OF GUIDELINES. THE QUESTION HAS TO BE AN SWERED IN EACH CASE HAVING REGARD TO THE CIRCUMSTANCES OF THAT CASE. THERE MAY BE FACTORS BOTH FOR AND AGAINST A PARTICULAR POINT OF VIEW. THE COURT HAS TO ANSWER T HE QUESTION ON A CONSIDERATION OF ALL OF THEM IN A PRO CESS OF EVOLUTION. THE INFERENCE HAS TO BE DRAWN ON A CUMUL ATIVE CONSIDERATION. 13. COMING TO THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS A BUILDER. CONSTRUCTION OF BUILDINGS IS ITS BUSINESS. THE ASSESSEE HAS SOLD NUMBER OF BUILDINGS REFERRED TO ABOVE, WITH REGARD TO WHICH THERE IS NO DISPUTE. THE DISPUTE IS WITH REGARD TO THE SALE OF PLOTS. INVESTMENT IN PURCHASE AND SALE OF PLOTS BY A BUILD ER WHO IS INDULGED IN SELLING BUILDINGS IS ANCILLARY AND I NCIDENTAL TO HIS BUSINESS ACTIVITY. IT IS A MATTER OF RECORD THA T THE ASSESSEE HAS TREATED THE LAND AS STOCK IN TRADE WHI CH FINDS CORROBORATION FROM ITS BALANCE SHEET. STOCK I N TRADE HAS BEEN EXCLUDED FROM THE DEFINITION OF CAPITAL AS SET. ACCORDING TO THE WEBSTER'S NEW INTERNATIONAL DICTIO NARY, THE 'STOCK-IN-TRADE' IS 'A. THE GOODS KEPT FOR SALE BY A SHOPKEEPER. B. THE FITTINGS AND APPLIANCES OF A WOR KMAN.' IN OTHER WORDS, THE STOCK-IN-TRADE INCLUDES ALL SUC H CHATTELS AS ARE REQUIRED FOR THE PURPOSES OF BEING SOLD OR LET TO HIRE ON A PERSON'S TRADE. ACCORDING TO STROU D'S JUDICIAL DICTIONARY, 4TH EDITION, VOLUME 5 PAGE 262 3 'STOCK-IN-TRADE COMPRISES ALL SUCH CHATTELS AS ARE REQUIRED FOR THE PURPOSES OF BEING SOLD, OR LET TO HIRE ON A PERSON'S TRADE. IN ADDL. CIT V. PUT CO (P.) LTD. [1983] 140 ITR 740 (BOM), THE ASSESSEE WAS MONEY LENDER, WHO PURCHASED A SHIP IN SATISFACTION OF HIS MAJOR PORTION OF OUTSTA NDING LOAN. THE SHIP WAS CONSIDERED AS STOCK IN TRADE OF THE ASSESSEE'S MONEY LENDING BUSINESS. 11 RAJU PANDURAN DHOBLE 14. IT IS APT TO CONSIDER THE DECISIONS RELIED BY THE LEARNED COUNSEL FOR THE DEPARTMENT. RELIANCE WAS PL ACED ON HIMATLAL GOVINDJI V. CWT [1977] 106 ITR 658 (GUJ .) A CASE UNDER THE WEALTH TAX ACT DECIDED BY GUJARAT HI GH COURT. ISSUE THEREIN WAS WHETHER THE LAND IN QUESTI ON WAS AGRICULTURAL LAND WITHIN THE MEANING OF SECTION 2(E )(I) OF WEALTH TAX ACT ON THE VALUATION DATE. THE SECOND CA SE RELIED UPON IS CIT V. GEMINI PICTURES CIRCUIT (P.) LTD. [1998]220 ITR 43 / 85 TAXMAN 594 (SC), WHEREIN THE APEX COURT CONSIDERED THE QUESTION AS TO WHETHER TH E LAND IS AGRICULTURAL OR NOT AND THE CRITERIA TO DET ERMINE THE LAND AS AGRICULTURAL LAND WITH REFERENCE TO SECTION 45 OF THE INCOME-TAX ACT. THE LAST CASE IS MAHA VEER ENTERPRISES V. UNION OF INDIA [2000] 244 ITR 789 1[ 1997] TAXMAN 220 (RAJ.) WHEREIN THE RAJASTHAN HIGH COURT CONSIDERED THE QUESTION OF CAPITAL GAINS WITH REFER ENCE TO SALE OF LAND. THE ISSUE WAS WHETHER THE LAND WAS AGRICULTURAL LAND OR NOT. NONE OF THE RELIED UPON D ECISIONS HAVE ANY A PP LICAT I O N TO THE FACTS OF THE PRESENT CASE AS THEY WERE RENDERED IN A DIFFERENT FACTUAL MATRIX AN D THE LEGAL ISSUES INVOLVED THEREIN WERE ALTOGETHER DIFFE RENT THAN THE ONE ENGAGED IN THE PRESENT CASE. THE ISSUE ADDRESSED IN THESE CASES RELATES TO WHEN THE INCOME FROM SALE OF LAND WILL BE TREATED AS AGRICULTURAL INCOME , EXEMPT UNDER THE ACT, NOT INVOLVED IN THE CASE IN HANDS. I N THIS APPEAL THE COURT IS REQUIRED TO ADDRESS THE ISSUE A S TO WHETHER THE SALE TRANSACTION OF LAND ON THE FACTS O F THE PRESENT CASE IS CAPITAL RECEIPT OR REVENUE RECEIPT. THEREFORE, THE RELIED UPON CASES BY THE LEARNED COU NSEL FOR THE DEPARTMENT ARE DISTINGUISHABLE ON FACTS AND LAW AS WELL. THESE DECISIONS DO NOT HELP THE DEPARTMENT AN Y FURTHER. 15. THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL ON ANALYSIS OF THE FACTS OF THE CASE H AVE REACHED TO THE CONCLUSION THAT SECTION 50C HAS NO APPLICATION AS IT WAS A CASE OF TRANSFER OF PLOTS W HICH WAS STOCK IN TRADE. AN INCOME EARNED FROM SUCH TRANSACT ION IS LIABLE TO BE TAXED AS INCOME FROM BUSINESS ACTIVITY . ALTERNATIVELY, THE FINDING RECORDED BY THE TRIBUNAL WHICH IS LAST FACT FINDING COURT, IN THIS REGARD IS ESSEN TIALLY A FINDING OF FACT OR AT THE MOST IS A MIXED QUESTION OF FACT, BUT IT IS NOT A SUBSTANTIAL QUESTION OF LAW TO WARR ANT THE INTERFERENCE UNDER SECTION 260A OF THE INCOME TAX A CT. 16. THE VIEW TAKEN BY THE TRIBUNAL IS ON TERRA-FIRMA. THE INFERENCE DRAWN BY THE TRIBUNAL IS BASED ON REL EVANT CONSIDERATION... 12 RAJU PANDURAN DHOBLE THERE IS NO MERIT IN THE APPEAL. THE APPEAL IS DISM ISSED BY HOLDING THAT ON THE FACTS OF THE PRESENT CASE, T HE TRIBUNAL HAS RIGHTLY HELD THAT THE PROVISIONS OF SE CTION 50C ARE NOT APPLICABLE WITH RESPECT OF SALE OF LAND AS SALE OF LAND WAS NOT CAPITAL ASSET. 7.13 ALSO, ON IDENTICAL FACTS, IN THE CASE OF ASST. CIT V. EXCELLENT LAND DEVELOPERS (P.) LTD. [2010] 1 ITR (TRIB.) 563 (DELHI), THE HONORABLE ITAT DELHI BENCH HAS HELD AS UNDER: 10. THERE IS NO DISPUTE TO THE FACT THAT THE PROPER TY OWNED BY THE ASSESSEE WAS ITS INVENTORY AND AS SUCH FORMING PART OF ITS STOCK-IN-TRADE. THE PROFIT ON S ALE OF SAID STOCK-IN-TRADE IS ASSESSABLE UNDER SECTION 28 OF THE ACT. SECTION 28 PRESCRIBES THAT THE PROFITS AND GAI NS OF ANY BUSINESS OR PROFESSION WHICH WAS CARRIED ON BY THE ASSESSEE SHALL BE CHARGEABLE TO TAX UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. UNDE R SECTION 145(1) INCOME CHARGEABLE UNDER THE HEAD 'PR OFITS AND GAINS OF BUSINESS OR PROFESSION' SHALL BE COMPU TED IN ACCORDANCE WITH EITHER THE CASH OR MERCANTILE SYSTE M OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCO UNTING. AS PER THE MERCANTILE SYSTEM OF ACCOUNTING THOSE IN COME WHICH ACCRUES TO THE ASSESSEE IS CHARGEABLE TO TAX. ON THE SALE OF STOCK-IN-TRADE, WHAT ACCRUES TO THE ASS ESSEE IS ACCRUING AS PER THE SALE DEED EXECUTED BY THE ASSES SEE. THE ASSESSEE HAS DECLARED THE INCOME ON THE BASIS O F SALE DEED EXECUTED BY IT. THERE IS NO PROVISION IN SECTI ON 28 TO SUBSTITUTE THE ACCRUED CONSIDERATION FOR MARKET VAL UE OF SUCH CONSIDERATION. THE ASSESSING OFFICER HAS SIMPL Y APPLIED THE WEALTH-TAX RULES FOR VALUING THE PROPER TY BUT HAS NEITHER EXAMINED THE PURCHASER NOR HAS INDEPENDENTLY FOUND OUT WHETHER THE ASSESSEE HAS RECEIVED ANY CONSIDERATION OVER AND ABOVE THE STATE D CONSIDERATION. EXCEPT THE SUSPICION OR AN OPINION T HAT THE PROPERTY IS UNDERVALUED, NO MATERIAL IS AVAILABLE T O THE ASSESSING OFFICER TO PRESUME THAT ANY 'ON MONEY' WA S RECEIVED BY THE ASSESSEE OR THAT ANYTHING OVER AND ABOVE THE STATED CONSIDERATION ACCRUED TO THE ASSESSEE. W HERE THE ASSET SOLD BY THE ASSESSEE IS A CAPITAL ASSET, THE INCOME FROM WHICH IS CHARGEABLE AS CAPITAL GAIN. PRIOR TO INSERTION OF SECTION 50C THERE WAS NO PROV ISION TO SUBSTITUTE THE FAIR MARKET VALUE FOR THE CONSIDERAT ION ACCRUING AS A RESULT OF TRANSFER FOR THE PURPOSE OF CAPITAL GAIN UNDER SECTION 48 OF THE ACT. WHILE CONSIDERING THOSE PROVISIONS THE HON'BLE DELHI HIGH COURT IN THE CASE OF 13 RAJU PANDURAN DHOBLE SMT. NILOFER I. SINGH [2009] 309 ITR 233 HELD THAT THE REVENUE IS NOT JUSTIFIED IN SUBSTITUTING ACTUAL SAL E CONSIDERATION IN AGREEMENT TO SELL BY THE VALUE ARR IVED AT BY THE DEPARTMENTAL VALUATION OFFICER. IT WAS ALSO HELD THAT THERE IS NO NECESSITY TO COMPUTE THE FAIR MARK ET VALUE. SECTION SOC WAS INTRODUCED BY THE FINANCE AC T, 2002, WITH EFFECT FROM APRIL 1, 2003, WHEREIN THE ASSESSING OFFICER IS EMPOWERED TO SUBSTITUTE THE VA LUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PU RPOSE OF SECTION 48 TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER FOR THE PURPOSE OF COMPUTING GAIN. HOWEVER, THE SAID PROVISION IS ONLY WITH REFERENCE TO COMPUTATION OF CAPITAL GAIN AND BEING A DEEMING PROVISION WILL STRICTLY APPLY FOR THE PURPO SE OF COMPUTING CAPITAL GAIN ALONE. THE SETTLED LAW IN TH IS REGARD IS THAT DEEMING PROVISIONS ARE TO BE STRICTL Y CONSTRUED AND WILL NOT EXTEND TO AREAS OTHER THAN T HE SAME IS DEEMED TO APPLY. THE DEEMING PROVISION PRESUMES AN UNREAL THING AS THE REAL THING. THEREFO RE, THE PROVISIONS OF SECTION 50C CANNOT BE IMPORTED WHILE COMPUTING PROFITS AND GAINS OF BUSINESS OR PROFESSI ON. IN SUCH A SITUATION ONLY THE INCOME ACCRUING TO THE AS SESSEE CAN BE TAXED UNDER SECTION 28 OF THE ACT. SINCE THE RE IS NO FINDING THAT THE CONSIDERATION RECEIVED BY THE A SSESSEE ON SALE OF STOCK-IN-TRADE IS OVER AND ABOVE THE STA TED CONSIDERATION, THE ASSESSING OFFICER IS NOT JUSTIFI ED IN MAKING ANY ADDITION BY ESTIMATING THE FAIR MARKET V ALUE. 11. THE ISSUE IS NO MORE RES INTEGRA. THE SANCTITY OF THE SALE PRICE VIS-A-VIS ITS FAIR MARKET VALUE IS COVER ED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS: (1) CIT V. GULSHAN KUMAR (DECD.)[2002] 257 ITR 703 (DEL HI); (2) CIT V. MS. SUSHILA MITTAL [2001] 250 ITR 531 (DELHI ); (3) DEV KUMAR LAIN V. ITO [2009] 309 ITR 240 (DELHI); A ND (4) CIT V. SMT. NILOFER I. SINGH [2009] 309 ITR 233 (DE LHI). 12. THE DECISION OF HANEMP PROPERTIES (P.) LTD. V. ASST. CIT [2006] 285 ITR (AT) 26 (DELHI) ; [2006] 101 LTD 19 IS A DECISION WITH REFERENCE TO THE DETERMINATION OF T HE 'PURCHASE PRICE' AND NOT THE SALE PRICE AND, THEREF ORE, HAS NO APPLICATION NOR CAN IT LEAD TO THE INVOCATIO N OF SECTION 142A OF THE ACT. 13. SECONDLY, FOR COMPARISON WITH THE FAIR MARKET V ALUE OF AN ASSET THERE ARE SPECIFIC SECTIONS LIKE SECTION 5 0C OR SECTION 55A WHICH HAVE NO APPLICATION WHATSOEVER TO THE DETERMINATION OF SALE PRICE TO STOCK-IN-TRADE. REFE RENCE IS 14 RAJU PANDURAN DHOBLE MADE TO THE DECISION OF THE MUMBAI-INCOME-TAX APPEL LATE TRIBUNAL IN THE CASE OF INDERLOK HOTELS (P.) LTD. V /S ITO, [2009] 318 ITR (AT) 234. 14. IN THE RESULT THE APPEAL IS DISMISSED. 15. PRONOUNCED IN THE OPEN COURT ON DECEMBER 11, 20 09. 8. IN VIEW OF THE ABOVE FACTS IT IS EVIDENT THAT TH E PROVISIONS OF SECTION 50C WOULD NOT BE APPLICABLE IN THE CASE OF THE APPELLANT AS IT IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF PLOT OF LAND AND HENCE THERE IS NO QUESTION OF BRINGING TO TAX A NY CAPITAL GAIN ARISING ON SALE OF SUCH PLOTS. IN VIEW OF THE ABOVE FACTS AND THE CLEAR JUDICIAL POSITION, THE ABOVE GROUNDS OF APPEA L ARE HEREBY ALLOWED AND THE LD. AO IS DIRECTED TO ACCEPT THE IN COME FROM BUSINESS IN THE CASE OF THE APPELLANT AT RS.75,809/ - AS SHOWN IN THE INCOME AND EXPENDITURE A/C. THESE GROUNDS ARE T HEREFORE ALLOWED. 3. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL B EFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LEARNED COMMI SSIONER (APPEALS) IS CORRECT IN OBSERVING THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE FOLLOWING PREMISES: I) THAT THE APPELLANT IS 50% OWNER OF THE SAID PROPERT Y AND CONSEQUENTLY AN AMOUNT OF ` 45 LAKH RECEIVED (BEING 50% OF THE TOTAL SALE CONSIDERATION OF ` 90 LAKH) IS REQUIRED TO BE BROUGHT TO TAX AS A CONSIDERATION RECEIVED BY THE A PPELLANT IN RESPECT OF SALE OF THE SAID PROPERTY. II) THAT THE PROVISIONS OF SECTION 50C WOULD BE APPLICA BLE SINCE THE MARKET VALUE FOR STAMP DUTY PURPOSES OF THE SAID PR OPERTY IS ` 1,80,10,000 AND THAT THEREFORE, THE DEMAND SALE CON SIDERATION OF THE SAID PROPERTY WOULD HAVE TO BE TAKEN AT THAT AMOUNT . 5. AS REGARDS THE ISSUE NO.(I) ABOVE, THE LEARNED COMM ISSIONER (APPEALS), AFTER DUE EXAMINATION OF DOCUMENTS AND R ECORDS HAS GIVEN 15 RAJU PANDURAN DHOBLE A CLEAR FINDING THAT THE ASSESSEE IS THE OWNER OF O NLY EIGHT PLOT WHILE THE CONSIDERATION IS BEING RECEIVED FOR THE TOTAL O F ALL THE PLOTS NUMBERING 36. FURTHERMORE, THE LEARNED COMMISSIONER (APPEALS) HAS FOUND THAT ` 44 LAKH BY THE ASSESSEE ON BEHALF OF FOUR OTHER OW NERS OF THE RESPECTIVE PLOTS HAS BEEN REFLECTED AS UNSECURE D LOAN IN THE PERSONAL BALANCE SHEET OF THE ASSESSEE WHICH WAS DUL Y FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONG W ITH CONFIRMATION OF RELEVANT PARTIES. THE LEARNED COMMISSIONER (APPE ALS) HAS ALSO ACCEPTED THAT THE ASSESSEE HAD DULY PAID THE UNSECU RED LOAN SUBSEQUENTLY. WE FIND THAT THIS TREATMENT OF SALE P ROCEEDS OF ` 45 LAKH UNSECURED LOAN AND ACCEPTANCE BY THE LEARNED COMMIS SIONER (APPEALS) THEREOF AS GENUINE IS BASED ON THE ASSESS EES STATEMENT BEFORE THE LEARNED COMMISSIONER (APPEALS) THAT THES E HAVE BEEN PAID IN SUBSEQUENT YEARS. HOWEVER, IN OUR CONSIDERED OPI NION, THIS ASPECT NEEDS FACTUAL VERIFICATION AT THE LEVEL OF THE ASSE SSING OFFICER. HENCE, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER AS TO WHETHER OR NOT THE ASSESSEE HAS REPAID THOSE AMOUNTS TREAT ED AS UNSECURED LOAN. IF THEY HAVE BEEN SO REPAID, THE LEARNED COM MISSIONER (APPEALS)S FINDING IN PARA7.10 IN HIS APPELLATE O RDER WILL STAND AFFIRMED. 6. NOW, AS REGARDS THE SECOND LIMB OF THE ISSUE REGARD ING APPLICABILITY OF SECTION 50C, THE LEARNED COMMISSIO NER (APPEALS) HAS 16 RAJU PANDURAN DHOBLE GIVEN A FINDING THAT SINCE THE ASSESSEE IS IN THE B USINESS OF TRADING IN PLOTS OF LAND, HENCE, THE DEEMING PROVISIONS OF SEC TION 50C OF THE ACT WOULD BE ATTRACTED. FOR THIS PROPOSITION, THE LEARN ED COMMISSIONER (APPEALS) HAS RELIED UPON SEVERAL CASE LAWS IN HIS APPELLATE ORDER AS MENTIONED ABOVE WHICH DULY SUPPORTS THE CASE OF THE ASSESSEE. FURTHERMORE, THE LEARNED COUNSEL FOR ASSESSEE SUBMI TTED THAT TO PLUG IN SITUATION LIKE THIS, SECTION 43CA HAVE BEEN INTR ODUCED BY FINANCE ACT, 2013, W.E.F. 1 ST APRIL 2013 AND BY WAY OF THIS AMENDMENT, TRANSFER OF ASSET OTHER THAN CAPITAL HAS BEEN BROUG HT UNDER THE AMBIT OF SECTION 50C. HOWEVER, LEARNED COUNSEL FOR ASSESS EE SUBMITTED THAT THESE AMENDMENTS ARE PROSPECTIVE IN NATURE AND DO N OT APPLY TO THE ASSESSEES CASE WHICH IS EARLIER TO THE ASSESSMENT YEAR 201415. FOR THIS PROPOSITION, THE LEARNED COUNSEL FOR ASSESSEE HAS ALSO PLACED RELIANCE UPON THE FOLLOWING DECISIONS:- I) KHIALDAS CONSTRUCTION PVT. LTD. V/S ACIT, IT(SS)A N O.36/IND./ 2010, ORDER DATED 26.2.2013; II) ACIT V/S M/S. NIPUN BUILDERS & DEVELOPERS PVT. LTD. , ITA NO. 3867/DEL./2011, DATED 28.6.2013; AND III) INDERLOK HOTELS PVT. LTD. V/S ITO, [2009] 122 TTJ 1 45 (MUM.) 7. UPON CAREFUL CONSIDERATION, WE FIND THAT SINCE THE P LOTS SOLD WERE STOCKINTRADE OF THE ASSESSEE AND THE CONCERNED AS SESSMENT YEAR IS 200607, PROVISIONS OF SECTION 50C ARE CLEARLY NOT APPLICABLE. HENCE, IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE FIND 17 RAJU PANDURAN DHOBLE NO INFIRMITY IN THE FINDINGS OF THE LEARNED COMMISS IONER (APPEALS) THAT PROVISIONS OF SECTION 50C ARE NOT APPLICABLE THE PR ESENT CASE AS THE PLOT OF LAND WAS ASSESSEES STOCKINTRADE. CONSEQU ENTLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.2017 SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 27.05.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR