ARYA INVESTMENT AND CONSTRUCTION CO., MUMBAI V. DCIT CEN CIR 6, PALGHAR

ITA 6355/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9922 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 27-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITRA
• Assessee Lawyers: JAY SHAH
• Keywords: Business income; Question of law; Cost of acquisition
• Section: 143(3); 153A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.6355/MUM/2016 ( ASSESSMENT YEAR 2006-07) M/S.ARYA INVESTMENT AND CONSTRUCTION CO. 51-53, A-WING, MITTAL COURT, J.B.MARG, NARIMAN POINT, MUMBAI 400 021. PAN:AALFA 2919F ...... A PPELLANT VS. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCULE-6, MUMBAI .... RESPONDENT APPELLANT BY : SHRI JAY SHAH RESPONDENT BY : SHRI S.K.MITRA DATE OF HEARING : 04/09//2017 DATE OF PRONOUNCEMENT : 06 /09/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE P ERTAINING TO ASSESSMENT YEAR 2006-07 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-36, MUMBAI DATED 08/08/2016, WHICH IN TURN, ARISES OUT OF ORDER P ASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/03/2014. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- THE FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO EACH OTHER: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LEARN ED ASSESSING OFFICER IN 2 ITA NO.6355/MUM/2016 ( ASSESSMENT YEAR 2006-07) TREATING THE ASSESSED INCOME AS THE INCOME ASSESSED IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S 147 OF TH E INCOME TAX ACT, 1961 AT RS.48,71,868/-, WITHOUT CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING THE GROUNDS RA ISED BY THE APPELLANT I.E TREATING THE TRANSACTION OF SALE OF LAND AS BUSINES S INCOME INSTEAD OF CAPITAL GAIN, ON THE ALLEGED PLEA THAT THE SAID ISSUE WAS A RISE IN THE ORIGINAL(REOPENING) ASSESSMENT PROCEEDINGS. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE IMPUG NED ASSESSMENT WAS MADE BY THE ASSESSING OFFICER CONSEQUENT TO A SEARCH ACT ION CONDUCTED IN THE CASE OF M/S. ARYA GROUP OF COMPANIES ON 29/04/2011. IN THE IMPUGNED ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A OF THE ACT, THE TO TAL INCOME HAS BEEN ASSESSED AT RS.48,71,868/- AS AGAINST THE INCOME DE CLARED BY THE ASSESSEE IN THE RETURN OF RS.12,94,648/-. THE DIFFERENCE BETWE EN THE ASSESSED AND THE RETURNED INCOME WAS ON ACCOUNT OF TREATMENT OF PROF IT ON SALE OF LAND, WHICH HAS BEEN ASSESSED AS BUSINESS INCOME INSTEAD OF I NCOME UNDER THE HEAD CAPITAL GAIN DECLARED BY THE ASSESSEE. 4. AT THE TIME OF HEARING, LD. REPRESENTATIVE FOR T HE ASSESSEE POINTED OUT THAT THE STAND OF THE ASSESSING OFFICER WAS SIMILAR TO THE ASSESSMENT MADE EARLIER FOR THE IMPUGNED ASSESSMENT YEAR UNDER SECT ION 143 R.W.S. 147 OF THE ACT DATED 29/12/2008. THE CIT(A) HAS ALSO AFFIRMED THE ACTION OF THE ASSESSING OFFICER, AGAINST WHICH ASSESSEE IS IN FURTHER APPEA L BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE POINTED OUT THAT FOR THE INSTANT ASSESSMENT YEAR, WHILE DEA LING WITH THE STATED DISPUTE IN AN APPEAL ARISING FROM THE ASSESSMENT ORDER PASS ED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 28/12/2008, THE TRIBUN AL VIDE ITS ORDER IN ITA NO.4803/MUM/2009 DATED 13/08/2010 HAS UPHELD THE ST AND OF THE ASSESSING OFFICER ASSESSING THE INCOME FROM SALE OF LAND AS BUSINESS INCOME. THE LD. 3 ITA NO.6355/MUM/2016 ( ASSESSMENT YEAR 2006-07) REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT APPE AL OF THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 13/08/2010(SUPRA) I S PENDING BEFORE THE HONBLE HIGH COURT ON THE FOLLOWING QUESTION OF LAW :- 'I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE NOTICE DATED 1 1-10-2007 UNDER SECTION 148 OF THE ACT FOR REOPENING THE ASSESSMENT FOR ASSESSMENT YEA R 2006-07 WAS VALID, THAT IS, THE JURISDICTIONAL CONDITIONS FOR THE ISSUE OF THE SAID NOTICE WERE SATISFIED? II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE GAINS MADE BY THE APPELLANT FROM SALE OF PLOTS OF LAND AT VILLAGE PANVEL, TALUKA ALIBAG, DIST. RAIGAD HAD BEEN CORRECTLY ASSESSED AS ' INCOME FROM PROFITS' AND GAINS OF BUSINESS OR PROF ESSION' AND NOT AS 'CAPITAL GAINS' AS OFFERED BY THE APPELLANT IN ITS RETURN OF INCOME ? III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN TAW IN CONFIRMING THE DETERMINATION OF BUSINESS INCOME AT S.48,71,870/- IGNORING THE GROUND OF APPEAL REGARDING DISCREPANCY IN PURCHASE COST?' 6. IN THIS BACKGROUND, THE LD. REPRESENTATIVE FOR T HE ASSESSEE REFERRED TO THE DECLARATION UNDER SECTION 158A(1) OF THE ACT IN THE PRESCRIBED FORM NO.8 AND SUBMITTED THAT THE QUESTION OF LAW INVOLVED IN THE CAPTIONED APPEAL IS SIMILAR TO THOSE PENDING IN THE ASSESSEES OWN CASE BEFORE THE HONBLE HIGH COURT FOR THE INSTANT ASSESSMENT YEAR ITSELF. THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER BE DI RECTED TO APPLY THE FINAL DECISION ON THE QUESTION OF LAW PENDING BEFORE THE HON'BLE HIGH COURT IN THE INSTANT ASSESSMENT YEAR ALSO AND CONSEQUENTLY, ASSE SSEE WOULD NOT RAISE THE QUESTION OF LAW INVOLVED IN THE PRESENT APPEAL BEFO RE THE HON'BLE HIGH COURT REPETITIVELY. 7. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT OBJE CTED TO THE SAID PRAYER OF THE ASSESSEE, THOUGH REITERATING THAT SO FAR AS THE ORDER OF THE TRIBUNAL IS CONCERNED, THE MATTER STANDS COVERED AGAINST THE AS SESSEE. 8. HAVING CONSIDERED THE RIVAL STANDS, IN MY VIEW, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSM ENT YEAR 2006-07 DATED 4 ITA NO.6355/MUM/2016 ( ASSESSMENT YEAR 2006-07) 13/08/2010 (SUPRA), THE GROUNDS RAISED BY THE ASSES SEE ARE LIABLE TO BE DECIDED AGAINST THE ASSESSEE. I HOLD SO. SIMULTAN EOUSLY, IN VIEW OF THE PROVISIONS OF SECTION 158A(1) OF THE ACT AND THE DE CLARATION FILED BY THE ASSESSEE IN THE PRESCRIBED FORM NO.8, THE ASSESSING OFFICER IS DIRECTED TO APPLY THE FINAL DECISION ON THE QUESTION OF LAW WHICH IS PENDING BEFORE THE HON'BLE HIGH COURT IN THE ASSESSEES OWN CASE FOR ASSESSMEN T YEAR 2006-07. NOTABLY, THE QUESTIONS OF LAW PENDING BEFORE THE HON'BLE H IGH COURT FOR ASSESSMENT YEAR 2006-07 IN INCOME TAX APPEAL NO.6965 OF 2010, INTER-ALIA, INCLUDES THE FOLLOWING QUESTIONS OF LAW:- II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE GAINS MADE BY THE APPELLANT FROM SALE OF PLOTS OF LAND AT VILLAGE PANVEL, TALUKA ALIBAG, DIST. RAIGAD HAD BEEN CORRECTLY ASSESSED AS ' INCOME FROM PROFITS' AND GAINS OF BUSINESS OR PROF ESSION' AND NOT AS 'CAPITAL GAINS' AS OFFERED BY THE APPELLANT IN ITS RETURN OF INCOME ? III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN TAW IN CONFIRMING THE DETERMINATION OF BUSINESS INCOME AT S.48,71,870/- IGNORING THE GROUND OF APPEAL REGARDING DISCREPANCY IN PURCHASE COST?' WHICH ARE SIMILAR TO THE DISPUTE RAISED IN THE INS TANT APPEAL. 9. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMI SSED SUBJECT TO THE AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 06/09/2017 SD/- (G.S. PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 06/09/2017 VM , SR. PS 5 ITA NO.6355/MUM/2016 ( ASSESSMENT YEAR 2006-07) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI