DCIT, Cir.-1, Jalgaon V. Sau Nisha Anil Jain, Jalgaon

ITA 804/PUN/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7670 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANTKUMAR C LEUVA
• Assessee Lawyers: SUNIL PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER SR.NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 804/PN/08 2005-06 DY. CIT CIR. 1, JALGAON SOU NISHA ANIL JAIN JAIN BUNGLOW, SUYOG COLONY, JALGAON. PAN ACOPJ 5461 B 2. 805/PN08 2005-06 -DO- SOU JYOTI A. JAIN SAME AS ABOVE PAN ACOPJ 5460 B 3. 806/PN/08 2005-06 -DO- SOU VINEETA A. JAIN SAME AS ABOVE PANADHP J 7438 D 4. 807/PN/08 2005-06 -DO- SMT SHOBHANA A. JAIN SAME AS ABOVE] PAN AAKPJ 4726 C APPELLANT BY: SHRI HEMANT KUMAR C. LEUVA RESPONDENTS BY: SHRI SUNIL PATHAK AND SHRI NIKHIL PATHAK ORDER PER SHAIALENDRA KUMAR YADAV, JM ALL THESE FOUR DEPARTMENTAL APPEALS RELATE TO THE S AME GROUP OF ASSESSES RAISING A COMMON ISSUE. THEREFORE , THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DEPOSED O FF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENC E. ITA NO. 804/PN/2008 FOR A.Y. 2005-06 IN THE CASE OF SOU NISHA ANIL JAIN, 2. THE SOLITARY GROUND RAISED BY THE REVENUE IN THI S APPEAL READS AS UNDER: PAGE 2 OF 5 ITA NO. 804 TO 807/PN/2008 JAIN GROUP A.Y. 2005-06 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN TREATING THE INCOME FRO M THE SALE OF THE AGRICULTURAL LAND AS LONG TERM CAPI TAL GAIN AS INSTEAD OF THE INCOME FROM THE ADVENTURE IN THE NATURE OF TRADE, AS DETERMINED BY THE A.O. 3. THE ASSESSEE, AN INDIVIDUAL FILED A RETURN OF IN COME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE PURCHAS ED CERTAIN AGRICULTURAL LANDS BETWEEN THE FINANCIAL YE AR 1996- 97 AND 1997-98 AND SOLD THEM ALONG WITH OTHER CO-OW NERS TO M/S. JAIN IRRIGATION SYSTEMS LTD., AND SHOWN THE LONG TERM CAPITAL GAIN OF RS. 1,79,50,099/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HELD THAT THE SALE OF AGRICULTURAL LANDS WAS ADVENTURE IN THE NATURE OF TRADE AND TAXED THE SAME AS INCOME FROM BUSINESS . 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE DETAILED SUBMISSIONS MADE BY THE ASSESSEE WAS OF THE OPINION THAT THE ASSESSING OFFICER WAS WRONG IN HOLDING THAT THE SALE OF AGRICULTURAL LANDS WAS ADVENTURE IN THE NATURE OF T RADE AND ACCORDINGLY DIRECTED HIM TO TAX THE SURPLUS ON THE SALE OF TRANSACTION AS LONG TERM CAPITAL GAINS. BEING AGGRI EVED, THE REVENUE IS IN APPEAL BEFORE US WHO SUPPORTED THE OR DER OF ASSESSING OFFICER WHILE LEARNED AR SUPPORTED THE OR DER OF THE CIT(A). PAGE 3 OF 5 ITA NO. 804 TO 807/PN/2008 JAIN GROUP A.Y. 2005-06 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. AFTER TAKING INTO CONSIDERA TION THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE NOT INC LINED TO INTERFERE WITH THE REASONED FINDING OF THE CIT(A). THE CIT(A) WAS JUSTIFIED IN HIS CONCLUSION TO HOLD THAT THE REASONS ASSIGNED BY THE ASSESSING OFFICER ARE NOT S UFFICIENT TO HOLD THAT THE SALE OF LANDS AS ADVENTURE IN THE NATURE OF TRADE. THE REVENUE HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO SUGGEST THAT THERE WAS ANY USE OF INFLUEN CE IN GETTING A HIGHER PRICE EXCEPT DRAWING INFERENCE BEC AUSE OF THE SELLERS BUSINESS RELATIONS WITH THE PURCHASER. THE ASSESSING OFFICER HAS FAILED TO PROVE THAT THE ASSE SSEE ALONG WITH HER HUSBAND INFLUENCED THE COMPANY TO PURCHASE THE LAND. THE ASSESSING OFFICER MERELY PRESUMED THAT THE ASSESSEE ALONG WITH HER HUSBAND A ND RELATIVES INFLUENCED THE DECISION OF THE SALE WITHO UT ANY MATERIAL. THE HIGHER PRICE RECEIVED BY THE ASSESSE E WAS ACCOUNTED FOR WHILE COMPUTING CAPITAL GAINS. FETCHI NG HIGHER PRICE CANNOT BE THE VALID REASON FOR TREATIN G THE TRANSACTION AS ADVENTURE IN THE NATURE OF TRADE. TH US THE TRANSACTION IS NOT NECESSARILY IN THE NATURE OF TRA DE BECAUSE THE PURCHASE WAS MADE WITH THE INTENTION TO RESALE FOR A BETTER PRICE. THE GENUINENESS OR OTHER WISE ABOUT THE RECEIPT OF THE MONEY WAS NOT DISPUTED BY THE PAGE 4 OF 5 ITA NO. 804 TO 807/PN/2008 JAIN GROUP A.Y. 2005-06 ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER WAS WRONG IN HOLDING THAT THE TRANSACTION WAS ADVENTURE IN THE NATURE OF TRADE. THE BURDEN LIES ON THE ASSESSING O FFICER TO ESTABLISH THAT THE PROFIT EARNED IN THE TRANSACTION WAS REVENUE REALIZATION AND NOT CAPITAL GAINS. THE MER E EARNING OF THE SURPLUS OR REALIZATION OF PROFIT IS NOT SUFFICIENT TO HOLD THE SAME AS ADVENTURE IN THE NAT URE OF TRADE. THE ASSESSEE IS NOT A PERSON DEALING WITH LA ND AND THEREFORE, THE ASSESSING OFFICER HAD WRONGLY CONCLU DED THAT THE TRANSACTION FELL IN THE CATEGORY OF ADVENTURE I N THE NATURE OF TRADE. IN VIEW OF THESE DISCUSSIONS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE ACCORD INGLY CONFIRM THE ORDER OF THE CIT(A). ITA NO. 805 TO 807/PN/2008 IN THE CASES OF SOU JYOT I ASHOK JAIN, SOU VINEET ATUL JAIN AND SMT SHOBHANA A JIT JAIN RESPECTIVELY. 6. IN THESE CASES, THE FACTS AND CIRCUMSTANCES OF T HE CASE ARE SIMILAR TO THOSE IN THE CASE OF SOU. NISHA ANIL JAIN IN ITA NO. 804/PN/2008. IN THESE CASES AS WELL, THE ASSESSING OFFICER HELD THAT THE SALE OF AGRICULTURA L LAND WAS ADVENTURE IN THE NATURE OF TRADE. FOR THE DETAI LED REASONING GIVEN IN PRECEDING PARAGRAPHS WHILE DEALI NG WITH THE APPEAL IN THE CASE OF SOU. NISHA ANIL JAIN (SUP RA), WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE CIT( A). WE PAGE 5 OF 5 ITA NO. 804 TO 807/PN/2008 JAIN GROUP A.Y. 2005-06 ACCORDINGLY UPHOLD THE ORDERS OF THE CIT(A) IN THES E CASES AS WELL. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 25 TH JANUARY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT II NASIK 4. THE CIT(A)- II NASIK 5. THE D.R, B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE