Deputy Commissioner of Income-tax, V. Shri Dilip Narayn Borawake, Pune

ITA 2424/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4324 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Capital asset; Business income; Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS. 2423 TO 2425/PUN/2016 $ $ / ASSESSMENT YEARS : 2011-12 TO 2013-14 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, PUNE ....... / APPELLANT / V/S. SHRI DILIP NARAYAN BORAWAKE, 759/37, SAKHUNANDAN, DECCAN GYMKHANA, PUNE 411 004 PAN : AABHB2720B / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 17.07.2018 / DATE OF PRONOUNCEMENT : 01.08.2018 / ORDER PER D. KARUNAKARA RAO, AM THERE ARE THREE APPEALS FILED BY THE REVENUE UNDER CONS IDERATION AGAINST THE SEPARATE ORDERS OF CIT(A)-3, PUNE, COMMONLY DATED 04-07-2016 FOR THE A.YRS. 2011-12 TO 2013-14. REVENUE RAISED THE G ROUNDS WITH SIMILAR ISSUES IN ALL THESE 3 APPEALS AND THEREFORE, THE SAID ISSUES ARE BEING ADJUDICATED IN THIS COMPOSITE ORDER. 2. WE SHALL TAKE UP THE FACTS, FIGURES AND ISSUES/GROUNDS PERTAINING TO A.Y. 2011-12 FOR REFERENCE. GROUNDS RAISED BY THE REVE NUE FOR A.Y. 2011-12 ARE EXTRACTED HERE AS UNDER : 1 . ON THE FACTS AND C I RCUMSTANCES OF THE CASE , THE LD . C I T(A) ERRED IN NOT APP R ECIATING THAT THE CLAUSES OF DEVELOPMENT AGREEMENT ENTERED INTO BY ASSESSEE W I TH THE DEVELOPER M/S AMAR BUILDER CLEARLY SHOW THAT THE 2 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE INTENTION OF THE ASSESSEE WAS TO COMMERCIALLY EXPLO IT THE LAND , HENCE THE CONSIDERATION RECEIVED BY THE ASSESSEE OVER AND ABO VE THE CONSIDERATION OFFERED AS SALE CONSIDERATION IN AY . 2007 - 08 SHOULD HAVE BEEN HELD AS BUSINESS INCOME OF THE ASSESSEE FOR AY . 2012-13. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN NOT APPRECIATING THAT THERE IS NO VIOLATION OF PRINCIPL E OF CONSISTENCY AS NO CAPITAL GAIN RESPECT OF SUCH LAND WAS OFFERED TO TAX BY THE ASSESSEE I N AY . 2009-10 AND 2010-11 . 3 . THE APPELLANT PRAYS THAT ORDER OF THE CIT(A) BE HEL D TO BE BAD IN LAW AND QUASHED AND ALSO RESTORE BACK THE ORDER OF THE AO . 4. THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE O R RAISE ANY GROUNDS OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS. 3. BRIEFLY STATED RELEVANT FACTS FROM THE FILE FOR A.Y. 2011-1 2 ARE THAT THE ASSESSEE IS AN HUF AND FILED THE RETURN OF INCOME ON 28-0 9-2011 DECLARING TOTAL INCOME OF RS.10,80,61,837/-. DURING THE ASSESSMENT P ROCEEDINGS, AO NOTICED THAT AN AMOUNT OF RS.13,13,61,700/- WAS CLAIMED AS CAPITAL GAINS FOR THIS YEAR. IN RESPONSE TO THE QUERIES FROM THE AO, A SSESSEE DUTIFULLY FILED THE NECESSARY DETAILS AND FACTS RELATING TO THE SAID CLAIM OF CAPITAL GAINS. ACCORDINGLY, THE FACTS INCLUDE THAT THE ASSESSEE OWNS A LAND AT SOPAN BAUG, PUNE AND THE SAME WAS TO BE DEVELOPED VIDE DEVELOPMENT AGREEMENT DATED 05-09-2005 IN ASSOCIATION WITH M/S. AMAR BUILDINGS. ACCORD ING TO THE INCOME SHARING SCHEME, ASSESSEE GETS 30% OF THE GROSS S ALES IN RESPECT OF THE UNITS WHERE SQ.FT. RATE OF CONSTRUCTED AREA SOLD DOE S NOT EXCEED 1800 SQ.FT. IN RESPECT OF SQ.FT.OF CONSTRUCTED AREA EXCEEDS R S.1800/SQ.FT., ASSESSEE WILL GET SHARE OF SALES @35%. FURTHER, AS PER THE DEVE LOPMENT AGREEMENT DEED, THE WHOLE OF THE PROJECT SHALL BE COMPLETED WITHIN 3 YEARS FROM THE DATE OF SAID DEVELOPMENT AGREEMENT DT.05-09-2005, I.E. IN THE YEAR 2008. THE ASSESSEE HAS RIGHT TO SPECIFIC PERFORMANCE IN CASE O F FAILURE OF THE BUILDER TO COMPLETE THE PROJECT IN TIME. THE PAYMENT ALSO SHALL BE PAID WITHIN THREE YEARS. HOWEVER, ASSESSEE STARTING RECEIVING THE PAYMENT FROM THE A.Y. 2007-08 ONWARDS TO A.Y. 2010-1. THE SAID AMOUNT WAS REFLECTED BY THE ASSESSEE IN THE RETURN OF INCOME AS CAPITAL GAINS IN T HAT A.Y. 2007-08. IT 3 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE IS UNDISPUTED FACT THAT OUT OF RS.1800 PER SQ.FT. ASSESSEE S SHARE @ 30% COMES TO RS.540 PER SQ.FT. AND MULTIPLYING THE SAME TO THE ENTIRE SALEABLE AREA THE TOTAL SALE CONSIDERATION OF ASSESSEES SHARE CO MES TO RS.13,13,61,798/-. HOWEVER, AO OF THAT YEAR TAXED THE SAME UNDER THE HEAD BUSINESS INCOME AND HELD THE WHOLE ARRANGEMENT CONSTIT UTES AN ADVENTURE IN THE NATURE OF TRADE. CIT(A) GRANTED RELIEF IN THAT YEAR. THE REVENUE ACCEPTED THE DECISION OF CIT(A) AND THERE IS NO APPEAL BE FORE THE ITAT BY THE DEPARTMENT. THEREFORE, AS PER THE TAXATION OF THE CAPIT AL GAINS, FOR THE A.Y. 2007-08 IS CONCERNED, IT IS A FINALIZED ISSUE AND THE SAID AM OUNT RECEIVED FROM M/S. AMAR BUILDERS IS TAXABLE UNDER THE HEAD CAPITAL GAINS. FUR THER, THIS ISSUE OF PROPER HEAD OF INCOME IS NOT RELEVANT FOR S UBSEQUENT ASSESSMENT YEARS, I.E. 2008-09 TO 2010-11 AS ASSESSEE D ID NOT RECEIVE ANY INCOME OUT OF THE SAID TRANSACTION. 4. IN THE YEAR UNDER CONSIDERATION, I.E. A.Y. 2011-12, THE ASSESSEE RECEIVED A SUM OF RS.6,91,38,302/- (PAGES 43 TO 46 OF THE PAPER BOOK). HOWEVER, THE AO DEALT WITH THIS ISSUE IN PARA NO.3 OF THE O RDER AND TAXED THE SAME AS BUSINESS INCOME. FOR THE SAKE OF COMPLETENESS, THE SAID PARA IS EXTRACTED AS UNDER : 3. IT SHOWS CLEAR INTENTION OF THE ASSESSEE TO CONTROL THE SALE OF THE CONSTRUCTED AREA AND SHARE THE ACCELERATED PROFIT OF THE BUSINESS A ND IT IS THEREFORE THE ASSESSEE HAS MADE THE ARRANGEMENT BY SHARING THE SALES OF THE CONSTRUCTED UNITS. THIS ARRANGEMENT IS NOTHING BUT THE ADVENTURE IN THE NATURE OF TRADE BUT GENERATED INCOME TO BE SHOWN AS CAPITA L GAIN TO REDUCE THE TAX LIABILITY. HENCE THE PROCEEDS OF SALE OF LAND IS T REATED AS BUSINESS INCOME AND NOT AS CAPITAL GAINS. (EMPHASIS SUPPLIED) THE ALLEGATION OF INTENTION OF ASSESSEE TO CONTROL THE SALE OF THE CONSTRUCTED AREA IS THE SOLITARY REASON FOR ALTERING THE HEAD OF INCOM E FROM CAPITAL GAINS TO PROFIT AND GAINS FROM BUSINESS AND PROFESSION. 4 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE 5. AGGRIEVED WITH THE SAME, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE BEING TH E OWNER OF THE LAND, THE GAINS DERIVED FROM THE SAID ARRANGEMENT, CONSTITUTES CAPIT AL GAINS ONLY. ASSESSEE CONTENDED THAT THE AOS FINDING THAT THE ASSE SSEE INTENDS TO CONTROL THE SALE OF CONSTRUCTED AREA AND THE ARRANGEME NT WAS NOTHING BUT ADVENTURE IN THE NATURE OF TRADE IS NOT CORRECT AND SU STAINABLE AS THE SAME IS THE ACTIVITY OF THE DEVELOPER. THE CIT(A) DEALT WITH THE SUBMISSIONS OF THE ASSESSEE AND ALSO RELIED ON THE FINDING OF HIS PREDECESSOR FOR THE A.Y. 2007- 08, EXTRACTED THE RELEVANT PORTION OF THE SAID ORDER OF T HE CIT(A) IN PARA NO.4.1 TO 4.9 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE AS PER THE CONTENTS OF PARA NO.4.1 OF HIS ORDER. THE SAID OPERATIO NAL PARA IS EXTRACTED HERE AS UNDER : 4.1 IN VIEW OF THE ABOVE FACTS, THE ISSUE AT HAND FOR THE YEAR UNDER CONSIDERATION BEING SIMILAR, THE DECISION FOR A.Y. 2070-08 (SUPRA) IS FOLLOWED AND GROUNDS NO.2 AND 3 ARE ALLOWED. 6. AGGRIEVED WITH THE SAID FINDING OF THE CIT(A) IN FAVOUR OF THE ASSESSE E, THE REVENUE IS IN APPEAL WITH THE GROUNDS EXTRACTED ABOVE. 7. REFERRING TO GROUND NO.2 OF THE APPEAL OF THE REVENUE, LD. DR FOR THE REVENUE SUBMITTED THAT, BY AN ARRANGEMENT OF INCOME SHA RING @30% OF GROSS SALES IN CASES OF UNITS @ RS. 1800/- PER SQ.FT AND INCOME SHARING @35% OF THE GROSS SALES IN CASES EXCEEDING RS.1800/- PER SQ.FT., THERE IS A MECHANISM OF CONTROL OF SALES BY THE ASSESSEE THROUGH TH E SAID DEVELOPMENT AGREEMENT (SUPRA). THEREFORE, IT IS NOT A PLAIN CASE OF SALE OF LAND TO EARN CAPITAL GAINS FOR TAXATION UNDER THE HEAD CAPITAL GAINS AND IT HAS MUCH MORE THAN THE MERE SALE TRANSACTION. REFERRING TO THE P RINCIPLE OF CONSISTENCY, LD. DR FAIRLY SUBMITTED THAT THE ISSUE OF TAX ATION OF SIMILAR INCOME UNDER THE HEAD CAPITAL GAINS FOR THE A.Y. 2007-0 8 HAS ATTAINED 5 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE FINALITY AS THE REVENUE ACCEPTED THE FINDING OF THE CIT(A). FURTHER, LD. DR FOR THE REVENUE SUBMITTED THAT THIS ISSUE IS NOT THERE FO R THE A.YRS. 2007-08 TO 2010-11 AND THE INCOME RETURNED UNDER THE HEAD C APITAL GAINS STAND ACCEPTED BY THE REVENUE FOR ALL THESE ASSESSMENT YEARS. 8. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT SO FAR AS THE ASSESSEE IS CONCERNED, THE LAND OWNERSHIP IS TRANSFERRED AGAINST A CONSIDERATION AND THE SAME IS THE REALIZATION OF SALE PROC EEDS OF THE LAND REALIZED BY WAY OF THE SAID INCOME SHARING MECHANISM. THER EFORE, THERE IS NO CONTROL OF BUSINESS OPERATION BY THE ASSESSEE RELATING TO THE DETERMINATION OF SALE PRICE OF SQ.FT. OF SALEABLE AREA AND MAR KETING OF THE SAME TO THE TO THE CUSTOMERS, I.E. THE FLAT BUYERS. IN EFFE CT, FOR ASSESSEE, IT IS THE CASE OF SALE OF LAND AND THE REALIZATION OF SALE PROCEED S ARE DONE THROUGH THE ARRANGEMENT MENTIONED ABOVE. RELYING ON THE FINDING OF CIT(A) STARTING FROM THE A.Y. 2007-08 ONWARDS, LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT IT IS A CASE OF SETTLED ISSUE FOR TAXING THE INCOME UNDER THE HEAD CAPITAL GAINS ONLY. FURTHER, LD. COUNSEL SUBMITTED THE FOLLOWING WRITTEN SUBMISSION IN THIS REGARD. FOR THE SAKE OF COMPLETENESS, T HE SAID SUBMISSIONS ARE EXTRACTED HERE AS UNDER : 1. THESE ARE THE THREE APPEALS OF THE DEPT. FOR A .YS. 2011 - 12 TO 2013 - 14. THE ASSESSEE OWNED LAND AT SOPAN BAUG, P UNE. THIS LAND WAS HELD BY THE ASSESSEE SINCE 1954. FOR MORE THAN 50 YEARS, THE ASSESSEE CULTIVATED THE LAND. THEREAFTER, THE ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S. AMAR BUILDERS AS PER WHICH THE ASSESSEE TRANSFERRED THE ENTIRE DEVELOPMENT RIGHTS IN THE SAID LAND TO M/S. AMAR BUILDERS. AS PER THE AGREEMENT, M/S. AMAR BUILDERS AGREED TO PAY 30% OF THE GROSS SALE PROCEE DS ON SALE OF FLATS / UNITS TO THE ASSESSEE. IT WAS FURTHER AGREED THAT M/S. AM AR BUILDERS WILL PAY 30% OF THE SALE PROCEEDS WHERE THE RATE OF SALE OF UNIT IS UPTO RS.1800/- PER SQ.FT. IT WAS ALSO AGREED THAT IN CASE, THE SELLING RATE EXCE EDED RS.1800/- PER SQ.FT., THE ASSESSEE WOULD RECEIVE ADDITIONAL 5% OF THE SEL LING RATE IN EXCESS OF RS.1800/-. THE COPY OF THE DEVELOPMENT AGREEMENT IS GIVEN ON PAGES 1 - 38 OF THE PAPER BOOK. 2. THE ASSESSEE HAS OFFERED CAPITAL GAIN OVER THE YEARS ON SALE OF THE SAID LAND. IN A.Y. 2007 - 08, THE ASSESSEE WORKED OUT CA PITAL GAIN BY CONSIDERING 30% OF RS.1800/- WHICH WORKS OUT TO RS.540/- PER SQ .FT. THIS RATE WAS CONSIDERED FOR THE ENTIRE SALEABLE AREA AND ACCORDI NGLY, THE TOTAL SALE 6 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE CONSIDERATION WAS WORKED OUT AT RS.13,13,61,698/- F OR A.Y. 2007 - 08 AND THE SAME WAS DULY OFFERED TO TAX AS LONG TERM' CAPITAL GAIN BY THE ASSESSEE. 3. SINCE THE ASSESSEE HAD ALREADY CONSIDERED THE IN ITIAL SALE CONSIDERATION AT RS.13,13,61,700/- IN A.Y. 2007 - 08, THE AMOUNTS RECEIVED TILL THE CUMULATIVE TOTAL REACHED RS.13,13,61,700/- WERE CON SIDERED AS OFFERED TO TAX IN A.Y. 2007 - 08. THUS, NO CAPITAL GAINS IN RESPEC T OF THIS LAND WERE OFFERED TO TAX IN A. Y S. 2008 - 09 TO 2010 - 11. THEREAFTER, THE ASSESSEE ADOPTED A SYSTEM OF OFFERING THE ACTUAL AMOUNT RECEIVED IN EA CH YEAR AS LONG TERM CAPITAL GAIN IN THAT YEAR. THE YEAR WISE DETAILS OF AMOUNTS RECEIVED FROM AMAR BUILDERS IS AS UNDER SR FINANCIAL ASSESSMENT AMOUNT CUMULATIVE NO YEAR YEAR RECEIVED AMOUNT IN WHICH TAXED 1 2006-07 2007-08 4,00,00,000/- 4,00,00,000/- 2 2007-08 2007-08 1 , 00,00,000/- 5,00,00,000/- 3 2008-09 2007-08 2,35,00,000/- 7 , 35,00,000/- 4 2009-10 2007-08 4,45,00,000/- 11,80 , 00,000/- 5 2010-11 2007-08 1,33,61,700/- 13,13,61,700/- 6 2010-11 2011-12 6,91,38,300/- 20,05 , 00,000/- 7 2011-12 2012-13 6 , 50,00,000/- 26,55 , 00 , 000/- 8 2012-13 2013-14 8,55,00,000/- 35,10,00,000/- 4. ACCORDINGLY , IN THIS MANNER, THE ASSESSEE HAS WORKED OUT CAPITAL GAIN OVER THE YEARS. THE LEARNED A.O. HAS NOT ACCEPTED T HE CLAIM OF THE ASSESSEE AND HAS HELD THAT THE ENTIRE CONSIDERATION RECEIVED BY THE ASSESSEE IS TAXABLE AS BUSINESS INCOME. ACCORDINGLY, HE TAXED THE ENTIR E AMOUNT OFFERED BY THE ASSESSEE AS LONG TERM CAPITAL GAIN IN A.Y. 2007 - 0 8 AS BUSINESS INCOME AND FURTHER, FOR THE SUBSEQUENT YEARS I.E. A.YS. 2011 - 12 TO 2013 - 14 , THE A.O . HAS TAXED THE LONG TERM CAPITAL GAIN AS BUSINESS INCOME . 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE TH E LEARNED CIT(A) FOR ALL THE YEARS. FOR A.Y. 2007 - 08, THE LEARNED CIT(A) H AS HELD THAT THE AMOUNT RECEIVED ON SALE OF THE LAND IS TAXABLE AS LONG TER M CAPITAL GAIN AND NOT AS BUSINESS INCOME AND ACCORDINGLY, REVERSED THE ORDER OF THE LEARNED A.O. THE LEARNED CIT(A) HAS NOTED - THAT THE ASSESSEE OWNED THE LAND FOR MORE THAN 50 YEARS AND HAS BEEN REFLECTED AS A CAPITAL ASSET . FURTHER, THE LEARNED CIT(A) HAS ALSO NOTED THAT THE ASSESSEE IS NOT A BUILDER/D EVELOPER. IT IS ALSO HELD BY THE CIT(A) THAT AS PER THE AGREEMENT ENTERED INTO W ITH M/S. AMAR BUILDERS, THE ASSESSEE HAS TRANSFERRED THE DEVELOPMENT RIGHTS IN THE SAID LAND AND HAS NOT ENTERED INTO ANY PARTNERSHIP OR JOINT VENTURE WITH M/S. AMAR BUILDERS. AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF VENKATASWAMI NAIDU & CO. V. CIT [35 ITR 594], THE LE ARNED CIT HAS HELD THAT THE GAIN IS TAXABLE AS LONG TERM CAPITAL GAIN. THE COPY OF THE ORD ER OF CIT(A) FOR A.Y. 2007 - 08 IS ENCLOSED ON PAGES 76 - 88 OF THE PAPER BOOK. 7 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE FOR A.YS. 2011 - 12 TO 2013 - 14, THE LEARNED CIT(A ) HAS AGAIN ALLOWED THE CLAIM OF THE ASSESSEE AND HAS HELD THAT THE GAIN ON SALE OF LAND IS TAXABLE AS LONG TERM CAPITAL GAIN. BASICALLY, THE LEARNED CIT( A) HAS FOLLOWED THE ORDER PASSED FOR A.Y. 2007 - 08. NOW, THE DEPT. HAS FILED AN APPEAL AGAINST THE ORDERS OF THE CIT(A) FOR A.YS. 2011 - 12 TO 2013 - 14 . HOWEVER, FOR THE MAIN YEAR I.E. A.Y. 2007 - 08, THE ORDER OF THE CIT(A) H AS BEEN ACCEPTED AND NO APPEAL HAS BEEN FILED BY THE DEPT. FOR THE SAID YEA R. THIS FACT IS ALSO ACCEPTED BY THE LEARNED D.R. IN THE COURSE OF HEARING. IN TH ESE CIRCUMSTANCES, WHEN THE DEPT. HAS ACCEPTED THE ORDER FOR A.Y. 2007 -08, THE RE IS NO REASON TO DISPUTE THE SAME FOR THE SUBSEQUENT YEARS. FOR THIS PROPOSI TION, THE ASSESSEE PLACES RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF RADHOSOAMI SATSANG [193 ITR 321]. ACCORDINGLY, IT IS SUBMITTED THAT SINCE THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED FOR A. Y. 2007 - 08, THE RE IS NO REASON TO TREAT THE CAPITAL GAIN OFFERED IN THE SUBSEQUENT YEARS AS BUS INESS INCOME. 9. FROM THE ABOVE WRITTEN SUBMISSIONS OF THE ASSESSEE, IT IS EVIDENT THAT ASSESSEE OFFERED RS.13,13,61,798/- FOR THE A.Y. 2007-08 THOU GH THE SAME WAS RECEIVED IN PARTS OVER THE ASSESSMENT YEARS 2007- 08 TO 2010-11 (SL.NO.1 TO 5 OF THE TABLE OF THE WRITTEN NOTE). THE SAID AMOUNT N OW STANDS DECIDED TAXABLE UNDER THE HEAD CAPITAL GAINS. THEREFORE, LD. COU NSEL RELIED ON SETTLED PRINCIPLE OF CONSISTENCY AS DISCUSSED IN PARA NO.5 O F THE NOTE ABOVE AND SUBMITTED FOR CONFIRMING THE ORDER OF THE CIT(A). 10. PRINCIPLE OF CONSISTENCY : FURTHER, LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE SOURCE OF GAINS AND TAXABILIT Y OF THE SAME UNDER THE PROPER HEAD OF INCOME IS SAME LITIGIOUS ISSUE. FU RTHER, HE SUBMITTED THAT THE SAME IS DECIDED BY THE CIT(A) FOR THE A.Y. 2007-08 IN FAVOUR OF ASSESSEE AND DISMISSING THE ORDER OF THE AO. AO ATTEMPTED TO TREAT THE SAME AS TAXABLE UNDER THE HEAD BUSINESS INCOME. THE SUM OF RS.6,91,38,300/- HAS THE SAME SOURCE IN THE TRANSACTION O F TRANSFER OF LAND TO M/S. AMAR BUILDERS THROUGH THE DEVELOPMENT AGREEMENT (SUPRA). THEREFORE, CONSIDERING THE COMMONALITY OF THE FACTS ON THE SOURCE OF INCOME, THE AMOUNT SHOULD BE TAXABLE UNDER THE SAME HEAD, I.E. CAPITAL GAINS. LD. COUNSEL RELIES ON THE SUPREME COURT IN THE CASE OF RASHO SOAMI SATSANG (SUPRA) AND SUBMITTED THAT WHEN THE DEPARTMENT ACCEPTE D THE ORDER OF 8 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE CIT(A) FOR THE A.Y. 2007-08, THERE IS NO REASON TO DISPUTE THE SAME FOR THE SUBSEQUENT YEARS, I.E. A.YRS. 2011-12 TO 2013-14. ON THIS GROUND OF PRINCIPLE OF CONSISTENCY ALSO, LD. COUNSEL FOR THE ASSESSEE SUBMITS FOR DISMISSING THE APPEALS OF THE REVENUE FOR ALL THE 3 YEARS. 11. FURTHER, BEFORE US, LD. COUNSEL FOR THE ASSESSEE FILED TH E COMPUTATION OF INCOME FOR ALL THE ASSESSMENT YEARS STARTING FROM A.Y. 20 07-08 TO 2012-13 AND THE FINDING OF CIT(A) FOR THE A.Y. 2007-08 IN SUPPORT OF THE CONTENTION THAT THE AMOUNT WAS TAXED UNDER THE HEAD CAPITAL GAINS. DECISION OF THE TRIBUNAL 12. WE HEARD BOTH THE PARTIES ON THIS LIMITED ISSUE, I.E. TAX ING OF THE SALE PROCEEDS OF THE LAND UNDER THE PROPER HEAD OF INCOME, I.E., CAPITAL GAINS IN THIS CASE. AO IS OF THE VIEW, THE CORRECT HEAD OF INCOME IS BUSINESS INCOME. WE HAVE ALSO PERUSED THE ORDERS OF THE REVENUE AND T HE ORDER OF CIT(A) FOR THE A.Y. 2007-08 AND THE PAPER BOOK FILED BEFORE US AS W ELL AS THE WRITTEN SUBMISSIONS FILED BEFORE US. ON PERUSAL OF THE ABOVE AS WE LL AS THE MATERIAL AVAILABLE ON RECORD, IT IS EVIDENT THAT THE INCOME STREAMS ARE ONE AND THE SAME FROM THE A.Y. 2007-08 ONWARDS. BOTH THE SUMS OF RS .13.13 CRORES & RS.6.91 CRORES HAS THE ORIGIN IN THE DEVELOPMENT AGREEMEN T WITH THE M/S. AMAR BUILDERS. IT IS A SETTLED ISSUE AND THE GAIN OF RS.13.1 3 CRORES IS SUBJECTED TO TAX UNDER THE HEAD CAPITAL GAINS FINALLY FO R THE A.Y. 2007-08 AND DISTURBING THE SAME BY THE AO, WHEN THE FACTS ARE ID ENTICAL, VIOLATES THE SET PRINCIPLES OF CONSISTENCY. IN THIS REGARD, WE PERUSED THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GOPAL PUROH IT REPORTED IN 336 ITR 287 AND THE LEGAL PROPOSITION LAID DOWN BY THE APEX COURT REA DS AS UNDER : 9 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE QUESTION FORMULATED : (B) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE ITAT WAS JUSTIFIED IN HOLDING THAT PRINCIPL E OF CONSISTENCY MUST BE APPLIED HERE AS AUTHORITIES DID NOT TREAT THE ASSES SEE AS A SHARE TRADER IN PRECEDING YEAR, INSPITE OF EXISTENCE OF SIMILAR TRA NSACTION, WHICH CANNOT IN ANY WAY OPERATE AS RES JUDICATA TO PRECLUDE THE AUTHORI TIES FROM HOLDING SUCH TRANSACTIONS AS BUSINESS ACTIVITIES IN CURRENT YEAR ? THE HONBLE HIGH COURT ANSWERED THE ABOVE QUESTION AS UNDER : 3. IN SO FAR AS QUESTION (B) IS CONCERNED, THE TRIB UNAL HAS OBSERVED IN PARAGRAPH 8.1 OF THE JUDGMENT THAT THE ASSESSEE HAS FOLLOWED A CONSISTENT PRACTICE IN REGARD TO THE NATURE OF THE ACTIVITIES, THE MANNER OF KEEPING RECORDS AND THE PRESENTATION OF SHARES AS INVESTMENT AT THE END OF THE YEAR, IN ALL THE YEARS. THE REVENUE SUBMITTED THAT A DIFFERENT VIEW SHOULD BE TAKEN FOR THE YEAR UNDER CONSIDERATION, SINCE THE PRINCIPLE OF RE S JUDICATA IS NOT APPLICABLE TO ASSESSMENT PROCEEDINGS. THE TRIBUNAL CORRECTLY ACC EPTED THE POSITION, THAT THE PRINCIPLE OF RES JUDICATA IS NOT ATTRACTED SINCE EA CH ASSESSMENT YEAR IS SEPARATE IN ITSELF. THE TRIBUNAL HELD THAT THERE OUGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FACTS AND CIRCUM STANCES ARE IDENTICAL, PARTICULARLY IN THE CASE OF THE ASSESSEE . THIS APPROACH OF THE TRIBUNAL CANNOT BE FAULTED. THE REVENUE DID NOT FURNISH ANY JUSTIFICATION FOR ADOPTING A DIVERGENT APPROACH FOR THE ASSESSMENT YEAR IN QUESTION. QUESTION (B), THEREFORE, DOES NOT ALSO R AISE ANY SUBSTANTIAL QUESTION. 13. FURTHER, WE ALSO PERUSED ANOTHER JUDGMENT IN THE CA SE OF RADHOSOAMI SATSANG (SUPRA) AND FIND, IN PRINCIPLE, THE PRINCIPLE OF CONSIST ENCY IS AFFIRMED. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT WITHOUT GOING INTO THE MERITS OF THE CASE ON THIS PRINCIPLE OF CONSISTENCY ISSUE ALONE, THE ASSESSEE IS ENTITLED TO RELIEF. THEREFORE, IN OUR OPINION, THE ORDER OF CIT(A) IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE REVENUE ARE DISMISSED AND IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY, THE GROUNDS RAISED BY THE REVENUE ON ME RITS HAVE ALSO TO BE DISMISSED AS ADJUDICATION OF THE SAME BECOMES AN A CADEMIC EXERCISE. AS SUCH, THE GROUNDS ON MERITS ARE DISMISSED AS ACADEMIC. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 10 ITA NOS.2423 TO 2425/PUN/2016 SHRI DILIP NARAYAN BORAWAKE ITA NOS. 2424 AND 2425/PUN/2016 A.YRS. 2012-13 & 2013-14 15. THESE TWO APPEALS ARE ALSO FILED BY THE REVENUE WITH S IMILAR ISSUES. THE FACTS, GROUNDS/ISSUES, DECISION OF AO/CIT(A), ARGUMENTS O F THE PARTIES ARE SAME AS THAT OF APPEAL FOR A.Y. 2011-12. THEREFORE, OU R DECISION GIVEN IN APPEAL ITA NO.2423/PUN/2016, HOLDING THAT THE ASSESSEE IS ENTITLED TO RELIEF TECHNICALLY, APPLY TO THESE APPEALS TOO. ACCORDINGLY, TH E GROUNDS RAISED BY THE REVENUE IN BOTH THE APPEALS ARE DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 17. TO SUM UP, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 01 ST DAY OF AUGUST, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 01 ST AUGUST, 2018. SATISH ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, PUNE 4. THE PR. CIT-2, PUNE 5. , , ' , / DR, ITAT, B BENCH, PUNE. 6. % / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE