The ITO, Ward-1(3)(2), Vadodara V. Shri Ratilal Laxmidas Patel(HUF), Vadodara

ITA 440/AHD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3990 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 440/AHD/2017 ( ASSESSMENT YEAR : 2008-09) INCOME-TAX OFFICER WARD 1(3)(2), ROOM NO.304, 3 RD FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, VADODARA / VS. SHRI RATILAL LAXMIDAS PATEL (HUF) 16, ANANDVAN SOCIETY, NEW SAMA, SAVLI ROAD, VADODARA - 390024 ./ ./ PAN/GIR NO. : AAEHP1672B ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MUDIT NAGPAL, SR. D.R. / RESPONDENT BY : WRITTEN SUBMISSION DATE OF HEARING 16/10/2018 !'# / DATE OF PRONOUNCEMENT 01/11/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-5, VADODARA (CIT(A) IN SHORT), DATED 24 .11.2016 ARISING IN THE ASSESSMENT ORDER DATED 27.07.2015 PA SSED BY THE ITA NO.440/AHD/17 [ITO VS. SHRI RATILAL L. PATEL (H UF)] A.Y. 2008-09 - 2 - ASSESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA DS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN BY UNANIMOUSLY ALLOWING THE SALE CONSIDERA TION AS CAPITAL GAINS IN TERMS OF SECTION (1) R.W.S. 2(47)(V) OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING ASSESSEES MODUS OPERANDI AND INTENTION TO COMMERCIALLY EXPLOIT THE LAND WHICH IS ACQUIRED BY THE ASSESSEE MANY YEARS BACK UP SUB- DIVIDING INTO VARIOUS RESIDENTIAL PLOTS IN COLLABOR ATION WITH M/S. DHARTI DEVELOPERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN BY DIRECTING TO ALLOW DEDUCTION U/S.54EC O F THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE FACT ON RECORD AND MER IT OF THE CASE. 3. WHEN THE MATTER WAS CALLED FOR HEARING, IT WAS N OTICED THAT THE ASSESSEE SEEKS TO RELY UPON WRITTEN SUBMISSIONS AND HAS OPTED OUT FROM THE ORAL HEARING AVAILABLE IN THE PROCEEDI NGS. IT IS NOTICED FROM THE WRITTEN SUBMISSIONS THAT THE ASSES SEE FILED RETURN OF INCOME FOR AY 2008-09 WHEREIN THE ASSESSEE INTER ALIA DECLARED GAIN ON SALE OF PLOT OF LAND AMOUNTING TO RS.76,71,712/- UNDER THE HEAD LONG TERM CAPITAL GAINS. THE AO H OWEVER DISPUTED THE CHARACTERIZATION OF GAINS AND HELD THA T ACTIVITY OF SALE OF SUB-DIVISION OF LAND INTO VARIOUS RESIDENTI AL PLOTS AND SALE THEREOF TANTAMOUNTS TO BUSINESS VENTURE AND GAIN AR ISING THEREFORE IS LIABLE TO BE TAXED UNDER THE HEAD BUSINESS INCO ME. THE AO ACCORDINGLY DENIED THE CONCESSIONAL TAX TREATMENT A VAILABLE ON ITA NO.440/AHD/17 [ITO VS. SHRI RATILAL L. PATEL (H UF)] A.Y. 2008-09 - 3 - LONG TERM CAPITAL GAINS AND ALSO DENIED CONSEQUENT DEDUCTION CLAIMED BY THE ASSESSEE UNDER S.54EC OF EQUIVALENT AMOUNT AVAILABLE ON INCOME ARISING FROM LONG TERM CAPITAL GAINS. THE CIT(A) HOWEVER FOUND THAT IDENTICAL ISSUE CROPPED U P IN AY 2009-10 WHERE THE PREDECESSOR CIT(A) HAS REVERSED T HE ACTION OF THE AO AND ALLOWED THE POSITION TAKEN BY THE ASSESS EE. IT WAS POINTED OUT IN THE WRITTEN SUBMISSION THAT THE CO-O RDINATE BENCH OF ITAT IN ITA NO.858/AHD/2015 HAS ENDORSED THE POS ITION TAKEN BY THE CIT(A) AND DISMISSED THE APPEAL OF THE REVEN UE. 4. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE AO. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE TAXABILITY OF GAINS ARISING ON SUB-DIVISION OF LAND AND SALE OF CERTAIN PLOTS ARISING FROM THE SUB-DIVISION IN QUES TION. IT IS THE CASE OF THE ASSESSEE THAT ACTION ARISING OF SALE OF PLOTS IS CHARGEABLE UNDER THE HEAD CAPITAL GAINS WHEREAS T HE REVENUE CONTENDS THAT SUCH INCOME IS IN THE NATURE OF BUSIN ESS ACTIVITY AND THUS CHARGEABLE UNDER THE HEAD BUSINESS INCOME. 6. WE STRAIGHTWAY NOTICE THAT IDENTICAL ISSUE CAME UP FOR HEARING BEFORE THE TRIBUNAL IN SUBSEQUENT AY 2009-1 0 WHERE THE TRIBUNAL AGREED WITH THE FINDINGS OF THE CIT(A) THA T THE POSITION TAKEN BY THE ASSESSEE FOR ITS CHARGEABILITY UNDER T HE HEAD CAPITAL GAINS CANNOT BE FAULTED. THE CO-ORDINATE BENCH AC CORDINGLY DISMISSED THE APPEAL OF THE REVENUE. IN PARITY WIT H THE DECISION ITA NO.440/AHD/17 [ITO VS. SHRI RATILAL L. PATEL (H UF)] A.Y. 2008-09 - 4 - RENDERED IN ASSESSEES OWN CASE IN AY 2009-10 ON ID ENTICAL FACTS, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A ). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 01/11/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 01/11/201 8