Manish Nayansukh Gandhi, Pune V. Income-tax Officer,

ITA 824/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7751 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DOSHI
• Keywords: Capital asset
• Section: 143(3); 2(14); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 824 /P U N/201 5 / ASSESSMENT YEAR : 20 11 - 12 SHRI MANISH NAYANSUKH GANDHI, 85, HERMES HERITAGE, FACE - 1, SHASTRI NAGAR, KALYANI NAGAR, PUNE 411014 PAN : AGJPG5149H ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 2(3), AURANGABAD / RESPONDENT ASSESSEE BY : S HRI S.N. DOSHI REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 08 - 08 - 2017 / DATE OF PRONOUNCEMENT : 09 - 0 8 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL HAS BEEN FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2, AURANGABAD DATED 27 - 03 - 2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE FACTS AS EMANATING FROM RECORD S ARE : THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31 - 07 - 2011 DECLARING TOTAL INCOME OF RS.3,310/ - . THE CASE OF THE ASSESSEE WAS SELECTED 2 ITA NO . 824/PUN/2015, A.Y. 2011 - 12 FOR SCRUTINY. ACCORDINGLY, STATUTORY NOTICE U/S. 143(2) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRE D TO AS THE ACT ) WAS ISSUED TO THE ASSESSEE ON 27 - 09 - 2012. DESPITE, REPEATED SERVICE OF NOTICE, THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER. THE NOTICE DATED 21 - 05 - 2013 ISSUED U/S. 142(1) WAS RETURNED BY POSTAL AUTHORITIES WITH THE REMAR KS LEFT. THEREAFTER, NOTICE WAS SENT ON THE NEW ADDRESS OF THE ASSESSEE ON 08 - 10 - 2013 WHICH WAS DULY SERVED ON 11 - 10 - 2013. DESPITE SERVICE OF NOTICE , THE ASSESSEE FAILED TO APPEA R BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS LEFT WITH NO O THER OPTION BUT TO PROCEED WITH THE ASSESSMENT U/S. 144 OF THE ACT. THE ASSESSING OFFICER MADE ADDITIONS TO THE TUNE OF RS.53,78,714/ - ON ACCOUNT OF UNEXPLAINED CASH AND CHEQUE DEPOSITS IN BANK ACCOUNT NO. 5002619506 MAINTAINED WITH CITI BANK, AURANGABAD AND INTEREST INCOME. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27 - 02 - 2014 PASSED U/S. 143(3) R.W.S. 144 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER GR ANTED PART RELIEF TO THE ASSESSEE BY DELETING THE ADDITIONS OF RS.36,09,524/ - . STILL AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS RAISED TWO GROUNDS IN THE APPEAL , WHICH ARE AS FOLLOWS : 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ESTIMATING THE NET PROFIT AT RS.27,924/ - AS AGAINST THE BUSINESS LOSS DECLARED AT RS.7,47,901/ - . 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN ASSESSING THE SHORT TERM CAP ITAL GAIN AT RS.8,00,000 WHICH IN FACT REPRESENTS THE GAIN AROSE ON THE SALE OF RURAL AGRICULTURAL LAND NOT FOLLOWING IN THE DEFINITION OF CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(IIIB) OF I.T. ACT, 1961. 3 ITA NO . 824/PUN/2015, A.Y. 2011 - 12 4. SHRI S.N. DOSHI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSING GROUND NO. 1. IN RESPECT OF GROUND NO. 2 , THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION OF RS. 8,00,000/ - ON ACCOUNT SHORT TERM CAPITA L GAIN. THE ASSESSEE HAD AGRICULTURAL LAND SITUATED AT GAT NO. 249, VILLAGE JAIPUR, TAL. & DISTT. - AURANGABAD. THE SAID AGRICULTURAL LAND IS RURAL AGRICULTURAL LAND AND DOES NOT FALL WITHIN THE MEANING OF CAPITAL ASSET DEFINED U/S. 2(14) OF THE ACT, HENCE , IS EXEMPT FROM CAPITAL GAIN TAX. ALTHOUGH, THE ENTIRE FACTS WERE NARRATED BEFORE THE FIRST APPELLATE AUTHORITY BUT THE PARTICULAR GROUND WAS NOT RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE HIMSELF SHOULD NOT HAVE OFFERED THE GA IN ARISING FROM SALE OF RURAL AGRICULTURAL LAND IN THE RETURN OF INCOME , H OWEVER, THE ASSESSEE ERRONEOUSLY OFFERED THE GAIN ARISING ON SALE OF AGRICULTURAL LAND IN THE RETURN OF INCOME. THE LD. AR PRAYED THAT THE GROUND NO. 2 RAISED BY THE ASSESSEE IN APPEAL BE TREATED AS ADDITIONAL GROUND AND MAY BE REMITTED BACK FOR ADJUDICATION AFTER VERIFICATION OF FACTS. THE LD. AR SUBMITTED THAT THE ASSESSEE CAN RAISE ADDITIONAL GROUND BEFORE THE APPELLATE AUTHORITIES IN RESPECT OF CLAIMS NOT MADE IN RETURN F ILED BY HIM. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PRUTHVI BROKERS & SHAREHOLDERS REPORTED AS 349 ITR 336. 5. ON THE OTHER HAND SHRI AJAY MOD I REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUBMITTED THAT THE ASSESSEE NEVER RAISED THE PLEA OF RURAL AGRICULTURAL LAND BEFORE THE AUTHORITIES BELOW. THE ADDITIONAL GROUND TAKEN BY T HE ASSESSEE AT SECOND APPELLATE STAGE IN A SUBJECT MATTER OF VERIFICATION. 4 ITA NO . 824/PUN/2015, A.Y. 2011 - 12 6. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE IN APPEAL HAS RAISED TWO GROUND. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NO. 1 WITH RESPECT OF ESTIMATION OF NET PROFIT. ACCORDINGLY, GROUND NO. 1 IS DISMISSED AS NOT PRESSED. 7. IN GROUND NO. 2 T HE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION OF RS.8,00,000/ - ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THE ORAL REQUEST OF THE LD. AR OF THE ASSESSEE TO TREAT GROUND NO. 2 AS ADDITIONAL GROUND IS A CCEPTED. THE ISSUE RAISED IN GROUND NO. 2 WAS NOT AGITATED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THOUGH IT IS EMANATING FROM THE DOCUMENTS ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT THE SHORT TERM CAPITAL GAIN HAS ARISEN FROM SALE OF AGRICU LTURAL LAND COMPRISING IN GAT NO. 249, VILLAGE JAIPUR, TAL. & DISTT. - AURANGABAD. THEREFORE, THE GAIN ARISING FROM SALE OF RURAL AGRICULTURAL LAND IS NOT TAXABLE. THE CONTENTION OF THE ASSESSEE IS THAT AS PER LAND REVENUE RECORDS, THE LAND IS CLASSIFIED A S AGRICULTURAL LAND, THE ASSESSEE IS PERFORMING AGRICULTURAL ACTIVITIES ON THE SAID LAND AND THIS LAND IS MORE THAN 8 KM AWAY FROM THE NEAREST MUNICIPAL LIMITS OF AURANGABAD. FURTHER, THE POPULATION OF VILLAGE IS ONLY 1337 AS PER THE CERTIFICATE OF TALATH I (AT PAGE 19 OF THE PAPER BOOK). 8. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. THEREFORE, THE ASSESSING OFFICER WAS CONSTRAINED TO PASS ASSESSMENT ORDER BY INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THERE IS DISCUSSION ABOUT THE SALE OF LAND AT GAT NO. 249, VILLAGE JAIPUR, TAL. & DISTT. - AURANGABAD, THE LAND WAS ALLEGEDLY PURCHASED ON 05 - 11 - 2008 FOR RS.7,00,000/ - AND WAS SOLD ON 09 - 07 - 2010 FOR SALE 5 ITA NO . 824/PUN/2015, A.Y. 2011 - 12 CONSIDERATION OF RS.15,00,000/ - . THUS, SHORT TERM CAPITAL GAIN OF RS.8,00,000/ - WAS COMPUTED. THE ISSUE RACKEDUP BY THE ASSESSEE IN GROUND NO. 2 RAISED AS ADDITIONAL GROUND WITH RESPECT TO SALE OF AGRICULTURAL LAND REQUIRES DETAILED V ERIFICATION . THUS, WITHOUT COMMENTING OF MERITS OF THE GROUND RAISED, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AND ADJUDICATION OF THE FRESH CLAIM RAISED BY THE ASSESSEE. THE ASSESSING OFFICER BEFO RE DECIDING THIS ISSUE SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NO. 2 RAISED AS ADDITIONAL GROUND IN THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 09 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 09 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, AURANGABAD 4. THE PR. COMMISSIONER OF INCOME TAX - 2, AURANGABAD 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE