Kruti Lalitkumar Jain, Pune V. Deputy Commissioner of Income-tax, Circle - 7, Pune

ITA 338/PUN/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8164 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 12-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Capital Gains
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.338/PUN/2018 / ASSESSMENT YEAR : 2013-14 KRUTI LALITKUMAR JAIN, 10 TH FLOOR, KUMAR BUSINESS CENTRE (KBC), OPP. PUNE CENTRAL BUND GARDEN ROAD, PUNE-411001. PAN : AFXPU2261C ....... / APPELLANT / V/S. DCIT, CIRCLE-7, PUNE. / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI S. P. WALIMBE / DATE OF HEARING : 25.03.2021 / DATE OF PRONOUNCEMENT : 26.03.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 5, PUNE (CIT(A) FOR SHORT) DATED 26.10.2017 FOR THE ASSESSMENT YEAR 2013-14. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL AND DERIVING INCOME UNDER THE HEAD SALARIES, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS FILED ON 30.07.2013 DECLARING TOTAL INCOME OF RS.71,48,938/-. AGAINST THE 2 ITA NO.338/PUN/2018 SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-7, PUNE (THE ASSESSING OFFICER) VIDE ORDER DATED 11.03.2016 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) AT A TOTAL INCOME OF RS.4,05,01,938/-. WHILE DOING SO, THE ASSESSING OFFICER ASSESSED THE GAINS ARISING ON SALE OF LAND SITUATED AT SURVEY NO.150, VILLAGE- CHAROLI BK AS A BUSINESS PROFITS AS AGAINST THE CLAIM THAT IT SHOULD BE ASSESSED AS LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER TREATED THE LAND SOLD FOR A CONSIDERATION OF RS.9,60,00,000/- AS STOCK IN TRADE AND ACCORDINGLY, ASSESSED TO CAPITAL GAINS. THE ASSESSING OFFICER TAKING INTO CONSIDERATION THE FACT THAT THE LAND WAS PURCHASED WITH BORROWED FUNDS AND LANDS WERE NEVER SHOWN IN WEALTH TAX RETURN AND EVEN IN THE EARLIER YEAR ALSO THE ASSESSEE SOLD THE OPEN LAND SITUATED AT SURVEY NO.36, YEOLEWADI, PUNE HAD TO COME CONCLUSION THAT LAND IN QUESTION IS STOCK IN TRADE, ACCORDINGLY, ASSESSED TO BE AS BUSINESS PROFITS. 3. BEING AGGRIEVED BY THE ASSESSMENT ORDER, AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A) CHALLENGING THE ACTION OF THE ASSESSING OFFICER TREATING THE LAND SOLD AS STOCK IN TRADE. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE LAND WAS HELD FOR THE PERIOD OF 5 YEARS AND IT CANNOT BE TREATED AS STOCK IN TRADE. HOWEVER, IT APPEARS THAT HE HAD NOT RESPONDED TO THE HEARING NOTICE ISSUED BY THE LD. CIT(A) ON SEVERAL OCCASIONS. THEREFORE, THE LD. CIT(A) WAS CONSTRAINED TO PASS AN EX-PARTE ORDER AND DISMISSED THE APPEAL FOR NON- PROSECUTION IN LIMINE PLACING RELIANCE ON THE FOLLOWING DECISIONS :- (I) M/S. CHEMIPOL VS. UNION OF INDIA & ORS., CENTRAL EXCISE APPEAL NO.62 OF 2009 DT. 17.09.2009 (BOM.); 3 ITA NO.338/PUN/2018 (II) CIT VS. S. CHENIAPPA MUDALIAR, AIR 1969 SC 1068 (SC); (III) SUNDERLAL MANNALAL VS. NANDRAMDAS DWARKADAS, AIR 1958 (SC); (IV) CIT VS. M/S. MULTIPLAN INDIA PVT. LTD., 38 ITD 320 (DEL.); (V) CIT VS. B. N. BHATTACHARGEE & ANR., 118 ITR 461 (SC). 4. BEING AGGRIEVED, THE APPELLANT IS BEFORE US IN THE PRESENT APPEAL. 5. EVEN BEFORE US, WHEN THE MATTER WAS CALLED ON, THE APPELLANT HAD MOVED AN ADJOURNMENT PETITION. THE SAME WAS REJECTED AND WE PROCEEDED TO DISPOSE THE CASE AFTER HEARING THE LD. SR. DR. 6. ON PERUSAL OF THE IMPUGNED ORDER, IT IS EVIDENT THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL IN LIMINE FOR NON-PROSECUTION. NOW, THE LAW IS SETTLED TO THE EXTENT THAT EVEN THE LD. CIT(A) IS BOUND TO DISPOSE OF THE APPEAL ON MERIT EVEN IN THE CASE OF EX-PARTE ORDERS. THE SETTLED POSITIONS OF LAW MANDATES THE CIT(A) TO DISPOSE OF THE APPEAL BY ADJUDICATING THE ISSUE RAISED IN APPEAL ON MERITS. 7. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) SHOULD GO INTO TO THE MERITS OF THE ISSUE IN APPEAL AND DISPOSE THE APPEAL. SINCE THE LD. CIT(A) HAD NOT DISPOSED OF THE MATTER ON MERITS, WE REMAND THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION BASED ON THE MATERIAL ON RECORD ON MERIT. 4 ITA NO.338/PUN/2018 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 26 TH DAY OF MARCH, 2021. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 26 TH MARCH, 2021. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-5, PUNE. 4. THE PR. CIT-4, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.