S.MMohammed Abbas, Coimbatore V. ACIT, Coimbatore

ITA 691/CHNY/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2529 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KUMUDHA
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset; Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , . , ' BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER / ITA NO.691/CHNY/2015 && /ASSESSMENT YEAR : 2011-12 MR. S.M. MOHAMMED ABBAS NO.25A-4/1, AMI MID TOWN D.B. ROAD, R.S. PURAM COIMBATORE-641 002. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-II, COIMBATORE-641 018. PAN: ADEPM5956C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR, ADVOCATE /RESPONDENT BY : MS. D.KUMUDHA, JCIT /DATE OF HEARING : 30.10.2018 /DATE OF PRONOUNCEMENT : 12.11.2018 / O R D E R PER N.R.S.GANESAN, JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-2, COIMBATORE D ATED 30.01.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI S.SRIDHAR, LEARNED COUNSEL FOR THE ASSESSE , SUBMITTED THAT THE ASSESSEE CONVERTED THE LAND INTO HOUSING PLOTS AND SOLD IT TO VARIOUS PERSONS. ACCORDING TO THE COUNSEL, THE VERY SAME L AND WAS THE SUBJECT OF WEALTH TAX ASSESSMENT. THE LAND WAS TREATED AS CAPITAL ASSET BY THE ASSESSE. PLACING RELIANCE ON THE JUDGEMENT OF MADRA S HIGH COURT IN CIT VS. A. MOHAMMED MOHIDEEN (1989) 176 ITR 393, THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THE OWNER OF T HE LAND DEVELOPED 2 THE LAND AND CONVERTED INTO HOUSE SITES WITH A VIEW TO GET A BETTER PRICE, IT COULD HARDLY BE SAID THAT THE TRANSACTION IS ANY THING MORE THAN REALIZATION OF CAPITAL INVESTMENT OR CONVERSION OF ONE FORM OF ASSET INTO ANOTHER. THEREFORE, BOTH THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN TAKING THE PROFIT ON SALE OF LAND AS BUSINESS. ON A QUERY FROM THE BENCH, WHETHER THE ASSESSEE HAS CONVERTED THE LAND INTO HO USING PLOTS ONLY DURING THE YEAR UNDER CONSIDERATION OR IT IS A REGU LAR BUSINESS OF THE ASSESSE, THE LEARNED COUNSEL SUBMITTED THAT FACT I S NOT COMING OUT OF THE RECORDS. 3. ON THE CONTRARY, MS. KUMUDHA, LEARNED DR SUBMITT ED THAT THE ASSESSEE ENGAGED IN THE REAL ESTATE BUSINESS. THE A SSESSEE CONVERTED THE LAND INTO HOUSING PLOTS AND SOLD TO VARIOUS PER SONS, THEREFORE THE TRANSACTION OF THE ASSESSEE WAS IN THE NATURE OF AN ADVENTURE IN THE NATURE OF TRADE. HENCE, THE PROFIT ON SALE OF LAND HAS TO BE NECESSARILY TREATED UNDER THE HEAD BUSINESS INCOME. THE LEAR NED DR FURTHER SUBMITTED THAT IT IS NOT KNOWN WHETHER THE ASSESSEE HAS CONVERTED ANY ANOTHER LAND INTO HOUSING PLOTS IN THE EARLIER ASSE SSMENT YEARS OR NOT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. THE ASSESSEE ADMITTEDLY CONVERTED THE LAND INTO HOUSING SITES AN D SOLD TO VARIOUS PERSONS DURING THE YEAR UNDER CONSIDERATION. IT IS NOT KNOWN WHETHER THE 3 ASSESSE IS IN THE HABIT OF DIVIDING THE LAND INTO H OUSING PLOTS IN THE EARLIER ASSESSMENT YEARS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY BOTH THE ORDERS OF THE AUTHO RITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER . THE ASSESSING OFFICER SHALL RE-EXAMINE TH E MATTER AFRESH IN THE LIGHT OF THE ANY OTHER MATERIALS THAT MAY BE FILED BY THE ASSESSEE AND BRING ON RECORD WHETHER THE ASSESSEE HAS CONVERTED ANY OTHER LAND, OTHER THAN THE SUBJECT MATTER OF LAND DURING THE YE AR UNDER CONSIDERATION AND IN THE EARLIER ASSESSMENT YEARS AS HOUSING PLOT S AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW IN THE LIGH T OF THE JUDGEMENT OF THE MADRAS HIGH COURT IN CIT VS. A.MOHAMMED MOHIDEE N CITED SUPRA. 5 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2018 SD/- SD/- ( . ) ( . . . ) ( A.MOHAN ALANKAMONY ) (N.R.S.GANESAN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /CHENNAI, /DATED 12 TH NOVEMBER, 2018. SOMU /COPY TO: 1. APPELLANT 2. RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF