SHRI MANGILAL AGRAWAL S/o SHRI RAMLAL AGRAWAL, Dewas V. THE ACIT 1(1), Ujjain

ITA 55/IND/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99242 (ITAT-INDORE)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2015
• Assessment Year: 1995-1996
• Appeal Filed On: 21-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Business income; Block assessment
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 55/IND/2015 A.Y. : 1995-96 SHRI MANGILAL AGRAWAL, DEWAS ACIT, 1(1), VS. UJJAIN APPELLANT RESPONDENT PAN NO. AAMPA6172B A PPELLANT S BY : SHRI S.S. DESHPANDE, C. A. RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 19.11.2014 FOR THE ASSESSM ENT YEAR 1995-96. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UND ER :- DATE OF HEARING : 03.12. 2015 . DATE OF PRONOUNCEMENT : 21 . 1 2 .2015 M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 2 2 THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITIO N MADE BY THE LD. AO OF RS. 447207/- ON ACCOUNT OF PROFIT ON SALE OF PLOT AT GOMATI NAGAR COLONY, DEWAS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S DOING THE BUSINESS OF GRAINS AND OIL SEEDS UNDER TH E PROPRIETORSHIP FIRM NAMED AS MANGILAL RAMLAL AGRAWA L, DEWAS AND M/S. AGRAWAL CATTLE FEEDS AND PROTEINS, DEWAS. THE ASSESSEE HAS MADE THE BUSINESS OF LAND DEVELOPMENT AND ASSESSEE HAS SOLD SOME OF THE PLOTS BY M/S. RAMBHAR OSE LAND & FINANCE COMPANY, AND NOT BY THE ASSESSEE. THE AO WAS OF THE VIEW THAT THE ASSESSEE HIMSELF HAS CARRIED OUT THAT BUSINESS. THERE WAS SURVEY U/S 133A OF THE ACT, WHE REIN HE HAS ADMITTED THAT THE LAND PURCHASED BY HIM AND SOL D 15 PLOTS DURING THE YEAR UNDER CONSIDERATION AND AO HA S MADE THE ASSESSMENT BY OBSERVING AS UNDER :- I. TOTAL COST INCLUDING REGISTRATION EXPENSES OF 13.95 ACRES OF LAND IS RS. 33,98,830/-. II. THE TOTAL AREA OF THE PLOTS DEVELOPED 25,708 SQ.MTRS. I.E. 2,76,618/- SQ.FTS M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 3 3 III. THUS, COST PER SQ.FT. WILL BE RS. 12.28. IV. SALE OF PRICE OF 22,840 SQ.FT. ( 17 PLOTS) IS RS. 7,27,855/- I.E. SALE PRICE PER SQ.FT. IS RS. 31.86. V. PROFIT PER SQ.FT. IS RS. 19.58. VI. THUS, PROFIT IN RESPECT OF PLOTS OF AREA 22,840 SQ.FT. IS RS. 4,47,207/- CONSIDERING THESE FACTS, THE INCOME OF RS. 4,47,207/- IS TO BE ASSESSED IN THE HANDS OF THE APPELLANT. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE APPEAL. 5. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSION, WHICH IS REPRODUCED AS UNDER :- THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM TRADING OF GRAINS AND OIL SEEDS. THE RETURN OF INCO ME WAS FILED DECLARING THE INCOME OF RS 1,91,942/-. THE ASSESSEE WAS ALSO DERIVING INCOME FROM THE PARTNERSHIP FIRM IN THE NAME OF RAMBHAROSE LAND M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 4 4 AND FINANCE CO., TUKOGANJ ROAD DEWAS. THIS FIRM WAS DOING BUSINESS OF DEVELOPMENT AND SALE OF PLOTS AND DEVELOPED A COLONY IN THE NAME OF GOMATI NAGAR. THIS FIRM WAS HOLDING THE LAND OF 13.95 ACRES. A SEARCH WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE AND THE RELATED PERSONS AND SOME PAPERS OF THE FIRM WERE FOUND AND SEIZED. A DIARY WAS SEIZED AS A- 1/ 22 CONTAINING THE AMOUNTS RECEIVED ON SALE AND BOOKING OF PLOTS IN GOMATI NAGAR. THE TOTA L SALE DISCLOSED IN THIS DIARY SHOWED THE FIGURE OF R S 1,24,05,503/-. THE ASSESSMENT OF THIS FIRM WAS COMPLETED U/S 144/158BC AND FOR THE FIRST YEAR THE LD AO INCLUDED THE AMOUNT OF CONTRIBUTION MADE BY THE MEMBERS OF THE FIRM AND ESTIMATED THE EXPENSES. HE DETERMINED THE INCOME OF THE TOTAL RECEIPTS RECEIVED FOR SALE OF THE PLOT AND DETERMINED THE INCOME AT RS 51,48,590/- FOR THE A.Y. 1993-94. FOR THE A.Y. 1 994-95 HE TAXED THE AMOUNT ON THE BASIS OF THE FIGURES MENTIONED IN A DIARY (RS 1,24,05,503 - RS 17,91,377) RS. 1,06,14,126/- AND ESTIMATED THE M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 5 5 NET PROFIT AT 15% AND DETERMINED THE INCOME AT RS 15,92,118/-. FOR THE BLOCK PERIOD FROM 01.04.1995 HE INCLUDED THE TOTAL SALES OF RS 17,91,377/- ON THE BASIS OF THE DIARY AND FURTHER MADE THE ADDITION OF THE AMOUNTS RECEIVED ON BOOKING OF PLOTS AT RS 13,17,763/-. 2.1 IN APPEAL THE LD CIT(A) ESTIMATED THE NET PROFI T AT 10% OF THE TOTAL SALES AND ACCORDINGLY UPHELD THE ADDITION. THE SALES FOUND BY THE LD CIT(A) IS AS UNDER: A.Y. 1993-94 RS 35,13, 001/- A.Y. 1994-95 RS. 71,01,125/- BLOCK ASSESSMENT RS 17,91,3 77/- FROM 01.04 1995 ________ ________ RS 1,24,05,503/- M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 6 6 THUS ALL SALES EFFECTED BY THE FIRM PERTAINING TO GOMATI NAGAR HAVE BEEN TAXED IN THE HANDS OF M/S. R AMBHAROSE FINANCE COMPANY. THE ASSESSMENT FOR THE A.Y. 1995-96 OF THE ASSESSEE WAS COMPLETED U/S 143(3)/148 ON 30.03.2001. THE ADDITION WAS MADE ON THE GROUND THAT THE ASSESSEE HAS SOLD THE PLOTS OF GOMATI NAGAR AND THE PROFIT I S TAXED AT RS 4,47,207/-. THE LD AO FURTHER OBSERVED THAT THE ASSESSMENT FOR THE A. Y. 1995-96 IN THE CA SE OF THE FIRM HAS NOT BEEN COMPLETED AND THE REGISTRI ES OF THE PLOTS WERE SIGNED BY THE ASSESSEE AND AS SUC H THE INCOME IS TAXED IN THE HANDS OF THE ASSESSEE. IN APPEAL THE LD CIT(A) ALLOWED THE APPEAL ON THE GROUND THAT THE FIRM RAMBHAROSE LAND AND FINANCE HAD COME INTO EXISTENCE AND THE PLOTS WERE SOLD BY THEM AND AS SUCH THE INCOME CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE. IN APPEAL BEFORE THE TRIBUNAL THE SAME WAS DECIDED M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 7 7 EX-PARTY AND THE HON'BLE TRIBUNAL SET ASIDE THE MAT TER FOR EXAMINING THE DETAILS FILED BY THE ASSESSEE. DURING THE COURSE OF THE FRESH ASSESSMENT PROCEEDINGS THE LD AO OBSERVED THAT NO ASSESSMENT HAS BEEN FRAMED IN THE HANDS OF THE FIRM FOR THE A. Y. 1995-96 AND AS SUCH THE ASSESSEE'S CONTENTION THAT THE AMOUNT IS ALREADY TAXED IN THE HANDS OF THE FIR M IS INCORRECT AND ON THIS GROUND HE REPEATED THE ADDITION AS MADE IN THE ORIGINAL ASSESSMENT. THE LD CIT(A) IN APPEAL UPHELD THE SAID ADDITION. IT IS HUMBLY SUBMITTED THAT THE PLOTS BELONG TO THE FIRM AND THE FIRM HAS SOLD THE SAID PLOTS. THE AMOUNTS MENTIONED IN THE DIARY HAS ALREADY BEEN TAXED IN TH E HANDS OF THE FIRM AS MENTIONED ABOVE. THE SALE PRIC E HAS ALREADY BEEN INCLUDED IN THE ASSESSMENT YEARS AND THE AMOUNT HAS BEEN TAXED. IT IS SUBMITTED THAT UNDER NO CIRCUMSTANCES THE PROFIT ARISING ON -THE SALE OF SAID PLOTS CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE. THE ADDITION MADE DESERVES TO BE DELETED. 6. LD. DR HEAVILY RELIED UPON THE ORDERS OF THE AUTHOR ITIES BELOW 7. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 8 8 IT IS THE CASE OF THE DEPARTMENT THAT THE ASSESSEE HAS SOLD THE LAND AND THE ASSESSEE HAS ADMITTED DURING THE COURS E OF SURVEY. THEREFORE, THE TOTAL RECEIPT OF LAND AT RS. 1,24,05,503/- WHICH IS SEIZED DURING THE DIARY OF T HE FIRM TOWARDS THE SALE OF PLOT OF GOMTI NAGAR COLONY IN B ETWEEN 1993 TO 2001. THEREFORE, WHEN THE ASSESSEE HIMSELF HAS ADMITTED REGARDING THIS SALE OF PLOTS, THEREFORE, T HE AO HAS RIGHTLY TAXED THE SAME IN THE HANDS OF THE ASSESSE E. I FIND THAT DURING THE COURSE OF SURVEY, FOLLOWING PAPERS WERE FOUND AND FROM THE FOLLOWING DETAILS, THE FIRM HAS RECEIV ED THE AMOUNT IN VARIOUS YEARS, WHICH READS AS UNDER :- A.Y. 1993-94 RS 35,13,001/- A.Y. 1994-95 RS. 71,01,125/- BLOCK ASSESSMENT RS. 17,91,377/- 1.4.95 TO 5.12.2001 ________________ RS 1,24 ,05,503/- 8. I FIND THAT OUT OF THIS TOTAL SALES MADE BY M/S. RAMBHAROSE LAND & FINANCE COMPANY LIMITED HAS BEEN ASSESSED AND THEY HAVE DULY PAID THE TAX ON THIS AM OUNT. I M/S.AGRAWAL LAND & FINANCE CO., DEWAS VS. ITO,DEWAS I.T.A.NO. 96/IND/2015 9 9 FIND THAT THIS REQUIRES VERIFICATION AT THE END OF THE AO AND THE MATTER IS RESTORED TO THE AO AND THE AO IS DIRECTED TO VERIFY WHETHER THE ASSESSEE HAS ALREADY PAID THE TAXES FOR THE ABOVE INCOME AS STATED IN THE TABLE IN THE NAME OF THE FI RM M/S.RAMBHAROSE LAND & FINANCE COMPANY OR THE ASSESS EE FIRM. IF THE ASSESSEE HAS ALREADY BEEN TAXED FOR TH E SAID AMOUNT, THE AO IS DIRECTED TO PASS THE ORDER AFTER DUE VERIFICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 21 ST DECEMBER, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 21 ST DECEMBER, 2015. CPU* 3.12.