SHRI SHEETAL KATARIA, JAIPUR V. PR. COMMISSIONER OF INCOME TAX, AJMER

ITA 318/JPR/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5647 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 07-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DHK
• Assessee Lawyers: O P BHATEJA ITP
• Keywords: Capital asset; Business income; Revision of order; Depreciation; Set aside
• Section: 143(3); 54B; 142(1); 263; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 318/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. SHRI SHEETAL KATARIA S/O SHRI MOHAN LAL KATARIA, A-13, MAHAVEER NAGAR, TONK ROAD, JAIPUR. CUKE VS. THE PRINCIPAL CIT, C.R. BUILDING, JAIPUR ROAD, AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AFDPK 6127 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI O.P. BHATEJA (ITP) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17.07.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/07/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE REVISION ORDER DATED 31 ST JANUARY, 2019 OF LD. PRINCIPAL CIT AJMER PASSED UND ER SECTION 263 OF THE IT ACT FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUNDS :- 1. THAT THE LD. PR.CIT, AJMER HAS GROSSLY ERRED O N FACTS AND IN LAW IN INVOKING PROVISIONS OF SECTION 263 OF THE I.T. A CT, 1961 AND PASSING ORDER U/S 263 OF THE ACT, VIDE HIS ORDER DA TED 31.01.2019. 2. THAT THE LD. PR. CIT, AJMER ERRED ON FACTS AND I N LAW IN MAKING HIS OBSERVATIONS FOR TREATING THE GAIN ON SALE OF L AND AS BUSINESS INCOME AS AGAINST LONG-TERM CAPITAL GAIN SHOWN AND ASSESSED BY THE LD. AO. 3. THAT IN VIEW OF THE LEGAL AND FACTUAL POSITION O F THE CASE THE ORDER PASSED BY THE LD. PR.CIT, AJMER U/S 263 OF TH E ACT 2 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. DESERVES TO BE VACATED AND THE ASSESSMENT ORDER FRA MED BY THE LD. AO BE RESTORED. 4. THAT THE CASE LAWS RELIED UPON BY THE LD. PR. CI T, AJMER ARE NOT RELEVANT TO THE CASE OF THE APPELLANT AND DESERVE T O BE IGNORED. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETU RN OF INCOME ON 23 RD JULY, 2014 DECLARING TOTAL INCOME OF RS. 16,31,000/-. THE ASS ESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 21 ST DECEMBER, 2016 AT THE TOTAL INCOME OF RS. 16,51,00 0/-. SUBSEQUENTLY, ON EXAMINATION OF THE RECORD, THE LD. PR. CIT OBSERVED THAT THE ASSESSEE HAS PURCHASED AGRICULTURAL LANDS OF RS. 4, 22,409/- ON DIFFERENT DATES AND LATER ON SOLD THE SAME AFTER PLOTTING TO 19 (NINETE EN) PERSONS FOR RS. 44,70,802/- AND AVAILED EXEMPTION UNDER SECTION 54B OF RS. 41,0 1,137/- AGAINST THE LONG TERM CAPITAL GAIN WHICH IS NOT ALLOWABLE AS THE ASSESSEE HAS CARRIED OUT PURCHASE AND SALE OF LAND AS BUSINESS VENTURE AFTER PLOTTING OF THE S AME. ACCORDINGLY, A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE IT ACT WAS ISSUED T O THE ASSESSEE ON 26.10.2018 WHEREBY THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE CLAIM OF EXEMPTION UNDER SECTION 54B SHOULD NOT BE DISALLOWED. THE AS SESSEE FILED HIS REPLY TO THE SHOW CAUSE NOTICE AND GIVEN THE DETAILS OF SALE PRI CE, INDEXED COST, HOLDING PERIOD AND CAPITAL GAIN IN RESPECT OF THE PLOTS OF LAND SO LD DURING THE YEAR UNDER CONSIDERATION. IT WAS ALSO CONTENDED THAT THE LAND WAS REGISTERED AS AGRICULTURAL LAND IN THE LAND REVENUE RECORDS TILL THE SALE IN T HE YEAR 2013-14. THUS THE ASSESSEE HAS REITERATED ITS CLAIM THAT WHAT WAS SOL D BY THE ASSESSEE WAS CAPITAL ASSETS AND, THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 54B OF THE IT ACT WHEN ANOTHER AGRICULTURAL LAND WAS PURCHASED BY THE ASSESSEE WITHIN A PERIOD 3 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. PRESCRIBED UNDER SECTION 54B OF THE ACT. THE LD. P R. CIT WAS NOT IMPRESSED WITH THE REPLY AND EXPLANATION AND HELD THAT THE ULTIMATE MO TIVE OF THE ASSESSEE WAS TO DERIVE MORE PROFIT BY SELLING THE LAND BY MAKING SM ALL PLOTS WHICH ESTABLISHED THAT THE INTENTION OF THE ASSESSEE WAS NOT TO RESALE THE AGRICULTURAL LAND AS IT IS BUT TO DIVIDE THIS SINGLE PIECE OF LAND TO MULTIPLE PIECES OF LAND BEING PLOTS AND SALE THEM TO MAKE PROFITS. ACCORDINGLY, IT WAS HELD THAT THE OR DER PASSED BY THE AO UNDER SECTION 143(3) IS ERRONEOUS IN SO FAR AS PREJUDICIA L TO THE INTERESTS OF THE REVENUE. THE SAID ASSESSMENT ORDER DATED 21 ST DECEMBER, 2016 WAS SET ASIDE TO THE FILE OF THE AO FOR MAKING A FRESH ENQUIRY AND ADJUDICATION AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE HAS FILED THE PRESENT APPEAL. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT WHILE PASSING THE SCRUTINY ASSESSMENT ORDER UNDER SECTION 143(3), THE A.O. HAS DULY CONSIDERED THE CLAIM OF DEDUCTION UNDER SECTION 54B OF THE ACT AND , THEREFORE, THE AO HAS TAKEN A VIEW WHICH IS POSSIBLE VIEW ON THIS ISSUE ON WHICH THE LD. PR. CIT IS NOT PERMITTED TO INVOKE PROVISIONS OF SECTION 263 MERELY BECAUSE HE DID NOT AGREE WITH THE VIEW OF THE AO. THE LD. A/R HAS REFERRED TO THE NOTICE ISS UED UNDER SECTION 142(1) AND SUBMITTED THAT THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS REGARDING THE SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN. IN R EPLY, THE ASSESSEE FURNISHED ALL THE DETAILS OF LONG TERM CAPITAL GAIN ARISING FROM SALE OF THE PLOTS OF LAND IN QUESTION. SATISFIED WITH THE REPLY OF THE ASSESSEE, THE AO AC CEPTED THE CLAIM UNDER SECTION 54B OF THE ACT. HE HAS FURTHER CONTENDED THAT THE PERIOD OF HOLDING IN SOME OF THE CASES IS MANY YEARS AND, THEREFORE, THE ASSESSEE IS HOLDING THE LAND IN QUESTION AS CAPITAL ASSET AND NOT STOCK-IN-TRADE, MERELY BECAUS E THE ASSESSEE SOLD THE LAND BY 4 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. DIVIDING INTO PLOTS WILL NOT CHANGE THE NATURE AND CHARACTER OF THE LAND BEING CAPITAL ASSET. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. SOHAN KHAN & MOHAN KHAN, 304 ITR 194 (RAJ.) AND SUBMITTED THAT THE HONBLE HIGH COURT HA S HELD THAT MERE FACT THAT THERE WAS A SERIES OF TRANSACTIONS OF SALE ONLY, BY SELLI NG THE PART OF THE WHOLE LAND PURCHASED IN ONE GO, WOULD NOT RENDER THE ACTIVITY OF SALE TO BE AN ADVENTURE IN THE NATURE OF TRADE. THE LD. A/R HAS THUS SUBMITTED TH AT IN THE CASE IN HAND, THE ASSESSEE HAS PURCHASED THE LAND IN ONE GO AND MEREL Y BECAUSE THE LAND WAS SOLD AFTER DIVIDING THE SAME INTO PLOTS WILL NOT AMOUNT TO ACTIVITY IN THE NATURE OF ADVENTURE AND TRADE. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF CIT VS. KASTURI ESTATES PVT. LTD., 62 ITR 578 (MADRAS) AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THE SALE OF IMMOVABLE PROPERTY BEING LAND CONVERTED INTO A HOUSE SITE WITH A VIEW TO GET A BETTER PRICE FOR LAND COULD NOT BE SAID THAT THE TRANSACTION IS ANYTHING MORE THAN REALIZATION OF A CAPITAL INVESTMENT OR CONVERSION OF ONE FORM OF ASSET INTO ANOTHER. HE HAS ALSO REFERRED TO A SERIES OF DECISIONS ON THE POINT WHERE SALE OF LA ND BY DIVIDING INTO PLOTS WAS HELD TO BE SALE OF CAPITAL ASSET, NOT THE ACTIVITY OF TR ADE OR BUSINESS. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T IT IS A CASE OF MULTIPLE SALE TRANSACTIONS. HE HAS FILED A COPY OF SALE DEED IN O NE OF THE PLOTS AND SUBMITTED THAT A MAP IS ATTACHED TO THE REGISTERED SALE DEED WHICH SHOWS THAT THE ASSESSEE HAS NOT MERELY DIVIDED THE LAND INTO PLOTS BUT IT IS A WELL PLANED PLAN FOR DEVELOPMENT OF LAND INTO A RESIDENTIAL COLONY. THEREFORE, THE LAND IN QUESTION WAS NO MORE AN AGRICULTURAL LAND AND CONSEQUENTLY EVEN IF THE SAME IS TREATED AS CAPITAL ASSET, THE DEDUCTION UNDER SECTION 54B IS NOT AVAILABLE. THE LD. D/R HAS THUS CONTENDED THAT 5 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. THE CONDITIONS AS PRESCRIBED UNDER SECTION 54B ARE NOT SATISFIED IN THIS CASE AND ACCORDINGLY WHEN THE AO HAS NOT CONDUCTED ANY ENQUI RY, THE LD. PR. CIT IS JUSTIFIED IN SETTING ASIDE THE ORDER BY INVOKING THE JURISDIC TION UNDER SECTION 263 OF THE IT ACT. HE HAS RELIED UPON THE IMPUGNED ORDER OF LD. PR. CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THOUGH THE SCRUTINY ASSESSMENT WAS COMPLETE D UNDER SECTION 143(3) ON 21 ST DECEMBER, 2016, HOWEVER, THE ASSESSMENT ORDER IS CO MPLETELY SILENT ABOUT ANY ENQUIRY OR ANY FINDING OF THE AO ON THE ISSUE OF AL LOWABILITY OF DEDUCTION UNDER SECTION 54B OF THE ACT. FOR SAKE OF COMPLETENESS, WE REPRODUCE THE ASSESSMENT ORDER DATED 21 ST DECEMBER, 2016 AS UNDER :- DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE CARRIED OUT THE BUSINESS OF BROKERAGE AGENT. ON EXAMINATION OF RECORDS IT IS SEEN THAT THE ASSES SEE CHARGED DEPRECIATION ON CAR AMOUNTING TO RS. 1,72,311/- AND PAD INTEREST OF RS. 21948/- ON ICICI CAR LOAN. THE ASSESSEE HAS NOT FURNISHED ANY DETAIL S & EVIDENCES AS TO WHETHER SEPARATE VEHICLE MAINTAINED BY HIM FOR PERS ONAL AFFAIRS. NO LOG BOOK WAS MAINTAINED. THUS, THE USE OF VEHICLE FOR PERSON AL AFFAIRS CANNOT BE DENIED BY THE ASSESSEE. SINCE THE WHOLE EXPENDITURE IS NOT IN THE BUSINESS EXPEDIENCY, IT WOULD BE REASONABLE & JUSTIFIED TO D ISALLOWED A SUM OF RS. 20,000/- AND ADDED BACK TO THE INCOME OF THE ASSESS EE. WITH THESE REMARKS, THE TOTAL INCOME OF THE ASSESSE E IS COMPUTED AS UNDER:- TOTAL INCOME AS PER RETURN OF INCOME RS. 16,31,000 /- ADD: (I) DISALLOWANCE OUT OF EXPENSES DEBITED TO P&L ACCOUNT RS. 20,000/- TOTAL ASSESSED INCOME RS. 16,51,000/- 6 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. ASSESSED AT RS. 16,51,000/-. ISSUED DEMAND NOTICE. ITNS 150 ATTACHED TO THIS ORDER WHICH IS FORMING PART OF THE ASSESSMENT ORDER. IT IS MANIFEST FROM THE ASSESSMENT ORDER THAT IT DO ES NOT REVEAL ANY ENQUIRY CONDUCTED BY THE AO OR ANY THOUGHT PROCESS OF THE A O ON THE ISSUE OF DEDUCTION UNDER SECTION 54B OF THE ACT. THUS THERE IS A COMPL ETE LACK OF ENQUIRY ON THE PART OF THE AO PARTICULARLY ON THE CLAIM OF DEDUCTION UNDER SECTION 54B OF THE ACT. IT IS PERTINENT TO NOTE THAT THE DEDUCTION UNDER SECTION 54B IS AVAILABLE ONLY WHEN THE LONG TERM CAPITAL GAIN IS DERIVED FROM SALE OF AGRI CULTURAL LAND WHICH IS BEING USED BY THE ASSESSEE FOR AGRICULTURAL PURPOSES IN THE TWO Y EARS IMMEDIATELY PRECEDING THE DATE ON WHICH TRANSFER TOOK PLACE. FOR READY REFER ENCE, WE QUOTE SECTION 54B AS UNDER :- 65 54B. 66 [(1)] 67 [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHER E THE CAPITAL GAIN ARISES] FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHI CH THE TRANSFER TOOK PLACE, WAS BEING USED BY 68 [THE ASSESSEE BEING AN INDIVIDUAL OR HIS PARENT, OR A HINDU UNDIVIDED FAMILY] FOR AGRICULTURAL PURPOSES 69 [(HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET)], AND THE ASSESSEE HAS, W ITHIN A PERIOD OF TWO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING 70 USED FOR AGRICULTURAL PURPOSES, THEN, INSTEAD OF THE CAPITAL GAIN BEING C HARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER T OOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER THAN T HE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS THE NEW ASSET), THE DIF FERENCE BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WI THIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAI N IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSE T, THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFE R WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE REDU CED, BY THE AMOUNT OF THE CAPITAL GAIN.] 7 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. 7 [(2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT UT ILISED BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LAT ER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME 72 WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB-SECTI ON (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE O F THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN, (I) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUCH AMO UNT IN ACCORDANCE WITH THE SCHEME AFORESAID. THUS THE DEDUCTION UNDER SECTION 54B ON THE CAPITAL GAIN ON TRANSFER OF AGRICULTURAL LAND USED FOR AGRICULTURAL PURPOSES IS ALLOWED IF T HE ASSESSEE HAS WITHIN THE PERIOD OF TWO YEARS FROM THE DATE OF SALE, PURCHASED ANOTHER LAND BEING USED FOR AGRICULTURAL PURPOSES. THERE ARE TWO SIGNIFICANT CONDITIONS MAN DATORY FOR ALLOWING THE CLAIM UNDER SECTION 54B VIZ. (1) THAT THE EXISTING ASSET MUST BE AN AGRICULTURAL LAND USED FOR AGRICULTURAL PURPOSES AT LEAST FOR TWO YEARS PR IOR TO THE DATE OF SALE AND (2) THE ASSESSEE WITHIN A PERIOD OF TWO YEARS AFTER THE DAT E OF SALE HAS PURCHASED ANOTHER LAND TO BE USED FOR AGRICULTURAL PURPOSES. THESE T WO CONDITIONS ARE FACTUAL IN NATURE AND IT IS INCUMBENT UPON THE AO TO VERIFY WHETHER T HE EXISTING LAND WAS BEING USED FOR AGRICULTURAL OPERATIONS AT LEAST FOR TWO YEARS PRIOR TO THE DATE OF SALE. AS IT IS APPARENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT EVEN WHISPERED ABOUT ANY 8 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. ENQUIRY OR VERIFICATION OF THIS FACT. AS FAR AS THE NOTICE ISSUED UNDER SECTION 142(1) DATED 1 ST AUGUST, 2016, THE AO HAS JUST ASKED FOR THE DETAIL S AND EVIDENCE OF SHORT TERM AND LONG TERM CAPITAL GAIN. NO QUERY HAS BEEN RAISED BY THE AO ON THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 54B OF THE ACT. A CCORDINGLY, IT IS A CLEAR CASE OF COMPLETE LACK OF ENQUIRY ON THE PART OF THE AO WHIC H RENDERS THE ASSESSMENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. FURTHER, WE NOTE THAT IN THE SALE DEED THE DESCRIPTION OF THE P LOT OF LAND HAS BEEN GIVEN WITH RESIDENTIAL PLOT NUMBER SITUATED IN A NEWLY DEVELOP ED RESIDENTIAL COLONY, NAMELY, SHANTI NATH NAGAR-II, AJMER ROAD, KEKRI. THIS FACT IS ALSO CORROBORATED BY THE MAP OF THE SAID COLONY ATTACHED TO THE REGISTERED SALE DEED. THEREFORE, IT IS NOT A SIMPLE CASE OF SALE OF THE LAND BY DIVIDING INTO PLOTS BUT THE ASSESSEE HAS DEVELOPED THE LAND IN QUESTION INTO A RESIDENTIAL COLONY, NAMELY, SHANTI NATH NAGAR-II. ONCE THE LAND WAS CONVERTED INTO RESIDENTIAL COLONY, IT WAS NO MORE AN AGRICULTURAL LAND IN TERMS OF SECTION 54B OF THE I.T. ACT, THEREFORE, EV EN IF THE LAND SOLD IS TREATED AS CAPITAL ASSET, IT HAS LOST ITS CHARACTER OF AGRICUL TURAL LAND NOT BEING USED FOR AGRICULTURAL PURPOSE AND CONSEQUENTLY THE DEDUCTION UNDER SECTION 54B CANNOT BE ALLOWED AS THE NECESSARY CONDITION PRESCRIBED IN TH E SAID SECTION IS NOT SATISFIED. SINCE THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX HAS SET ASIDE THE ASSESSMENT ORDER TO THE RECORD OF THE ASSESSING OFFICER FOR FR ESH CONSIDERATION, THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX. THE DECISIONS RELIED U PON BY THE LD. A/R OF THE ASSESSEE ARE ENTIRELY ON DIFFERENT ASPECTS WHERE TH E LAND WAS SOLD BY THE ASSESSEE BY DIVIDING INTO PLOTS AND THEREFORE, IT WAS HELD THAT THERE WAS NO CHANGE OF CHARACTER FROM CAPITAL ASSET TO STOCK-IN-TR ADE. IN THE CASE IN HAND, THE 9 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR. ISSUE IS NOT LIMITED TO THE CAPITAL GAIN OR BUSINES S INCOME BUT THE ISSUE IS ALLOWING THE DEDUCTION UNDER SECTION 54B WITHOUT CONDUCTING A MINIMUM ENQUIRY BY THE AO WHETHER THE CONDITIONS PRESCRIBED UNDER SECTION 54B ARE SATISFIED OR NOT. ACCORDINGLY, THOSE DECISIONS WILL NOT HELP THE CASE OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29/07/20 19. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/07/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI SHEETAL KATARIA, JAIPUR. 2. THE RESPONDENT THE PR.CIT, AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 318/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 10 ITA NO. 318/JP/2019 SHRI SHEETAL KATARIA, JAIPUR.