Gundecha Mahesh Suresh, Ratnagiri V. Dy Commissioner of Income-tax, Ratnagiri

ITA 973/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2010 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition
• Section: 50C; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.973/PN/2011 (ASSESSMENT YEAR :2006-07) GUNDECHA MAHESH SURESH, MAHESH CONSTRUCTION, RAM LANE, RATNAGIRI VS. DY. COMMISSIONER OF INCOME- TAX, RATNAGIRI CIRCLE, RATNAGIRI (APPELLANT) (RESPONDENT) PAN NO. AFFPG4751A APPELLANT BY: SHRI RAJESH SANGHVI RESPONDENT BY: SMT. SHAILJA RAI DATE OF HEARING : 22-01-2013 DATE OF PRONOU NCEMENT : 18-03-2013 ORDER PER R.S. PADVEKAR, JM:- THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGN ED ORDER OF THE LD.CIT(A), KOLHAPUR DATED 15-03-2011 FOR THE A.Y. 2006-07. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD.CIT(A) HAS ERRED BY TREATING THE SALE OF LAND TRANSACTIONS A S A CAPITAL ASSETS AND CONSEQUENTIALLY AS CAPITAL GAINS INSTEAD OF B USINESS LOSS AS TREATED BY THE APPELLANT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD.CIT(A) HAS ERRED BY NOT ALLOWING AN EXPENDITURE OF RS.534,800/ - FOR LAND DEVELOPMENT ETC, BEING A PART OF THE ABOVE MENTIONED S ALE OF LAND TRANSACTION. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD.CIT(A) HAS ERRED BY APPLYING THE PROVISIONS OF SEC.50C, TO TH E APPELLANTS BUSINESS OF BUILDING AND DEVELOPING. 2. THE FIRST ISSUE IS WHETHER THE ASSESSING OFFICER IS JUSTIF IED IN APPLYING THE PROVISIONS OF SECTION 50C TO THE PLOT OF LAND SOLD BY THE ASSESSEE TO ONE SHRI UMESH SHETE. THE FACTS WHICH ARE NOTED BY THE ASSESSING OFFICER ARE AS UNDER. THE ASSESSES IS A BUILDER AND DEVELOPER. 2 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I THE ASSESSEE HAD PURCHASED A PLOT OF LAND ADMEASURING 1596 SQ. MTRS BEARING CTS NO. 187/188A,B, (SURVEY NO. 270 A1A1A1A1A1A) IN RATNAGIRI CITY DURING THE FINANCIAL YEAR 2004-05 FOR RS.9380 00/-. THE COST OF THE PLOT WAS SHOWN AT RS.15,38,860/- INCLUDING REGIS TRATION CHARGES AND STAMP DUTY. THE ASSESSEE SOLD THE SAID PLO T IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2006-07 ON 02-0 4-2005 FOR RS.5,00,000/-. THE VALUATION MADE FOR PAYMENT OF THE STAMP DUTY WAS RS.10,91,400/- BUT THE SALE CONSIDERATION WAS SHOWN AT R S.5,00,000/-. THE ASSESSEE PLEADED THAT THERE WAS A LITIGATION IN CONNE CTION WITH THE SAID PLOT OF LAND AND THERE WAS A FINANCIAL CRUNCH TO THE A SSESSEES FATHER DUE TO SURVEY ACTION U/S.133A OF THE INCOME-TAX ACT TAKEN BY THE INCOME-TAX DEPARTMENT AND HENCE, THE ASSESSEE WAS FOR CED TO SALE THE SAID PLOT FOR RS.5,00,000/-. THE ASSESSEE COULD NOT GET G OOD PRICE AS THE TITLE WAS NOT CLEAR AND LITIGATION WAS GOING ON IN THE CIVIL C OURT AT RATNAGIRI. THE ASSESSING OFFICER RECORDED THE TITLE HISTORY OF THE SAID PLOT. THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSESS EE THAT SAID PLOT WAS PART OF THE ASSESSEES STOCK IN TRADE AND HELD TH E SAME AS CAPITAL ASSET. THE ASSESSING OFFICER APPLIED THE PROVISIONS OF SECTIO N 50C OF THE INCOME-TAX ACT AND ADOPTED THE VALUATION MADE BY THE STAMP DUTY AUTHORITY AS PER THE SALE DEED DATED 02-04-2005 WHICH IS RS.10,91,400/- AND AFTER ALLOWING THE COST OF PURCHASE OF STAMP DUTIES AND REGISTRATION CHARGES, WORKED OUT THE SHORT TERM CA PITAL GAIN AT RS.87,340/-. 2.1 THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE L D.CIT(A). THE LD.CIT(A) EXAMINED THE BALANCE SHEET OF THE ASSESSEE AND HELD THAT THE ASSESSING OFFICER WAS RIGHT IN COMING TO THE CONCLUSION THAT THE PLOT OF LAND AT MALNAKA, RATNAGIRI WAS A CAPITAL ASSET AS THE A SSESSEE HAS SHOWN THE SAME IN THE CURRENT ASSET AND NOT AS STOCK IN TRADE. THE 3 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I LD.CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THIS ISSUE. THE FINDING AND REASONING GIVEN BY THE LD.CIT(A) ARE AS UNDER: 5.3. THE SUBMISSIONS OF THE APPELLANT ARE CAREFULLY EXAMINED WITH REFERENCE TO THE FACTS OF THE CASE AND THE MATERIAL PLACED ON RECORD. THE MAIN POINT FOR DETERMINATION IN THIS CA SE IS WHETHER THE PLOT OF LAND SITUATED AT CTS NO.L87/188A,B SOLD BY THE APPELLANT DURING THE YEAR WAS STOCK-IN-TRADE OF THE OF THE BUSINESS AS CLAIMED BY THE APPELLANT OR CAPITAL ASS ET AS HELD BY THE ASSESSING OFFICER. THE CONTENTION OF THE APPELLA NT IS THAT SAID LAND WAS CLASSIFIED AND SHOWN AS CURRENT ASSET IN T HE BALANCE SHEET OF THE APPELLANT AS THE APPELLANT WAS ENGAGED, INTER-ALIA, IN THE BUSINESS OF CONSTRUCTION. IT IS CLAIMED THAT THE PROPERTY WAS PURCHASED IN HIS REGULAR COURSE OF THE BUSINESS FOR THE DEVELOPMENT OF THE PROPERTY AND IT WAS A BUSINESS A SSET AND SHOWN AS SUCH IN THE BALANCE SHEET UNDER THE HEAD CURRENT ASSETS. IT WAS ALSO ARGUED THAT THE INTENTION WAS NOT TO EARN SURPLUS FROM THE ASSET BUT ONLY TO DEVELOP THE ASSE T IN THE NORMAL COURSE OF HIS BUSINESS. IT WAS ALSO POINTED OUT THA T THE LAND HAD TO BE SOLD WITHIN A SHORT PERIOD OF TIME OF ITS PUR CHASE WITHOUT ANY DEVELOPMENT AS THERE WERE DISPUTES AND LITIGATIONS AMONGST THE FAMILY MEMBERS OF THE OWNERS OF THE LAND AND ALSO TO PAY H UGE AMOUNT OF INCOME-TAX LIABILITY. TO DECIDE THE ISSUE, IT IS NECESSARY TO REFER TO THE MEANING OF THE TERM 'CAPITAL ASSET' AS DEFINED IN SEC. 2(14) OF THE I.T. ACT, WHICH READS AS UNDER :- 'CAPITAL ASSET' MEANS PROPERTY OF ANY KIND HELD BY A N ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE (I) ANY STOCK-IN-TRADE, CONSUMABLE STORES O R RAW MATERIAL HELD FOR THE PURPOSE OF HIS BUSINE SS OR PROFESSION; (II) ......... 5.3.1. IN THE CASE OF THE APPELLANT, THE BREAK-UP O F CURRENT ASSETS SHOWN IN THE BALANCE SHEET AS ON 31/03/2005 I.E. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR IN WHICH T HE PLOT WAS PURCHASED AND AS ON 31/03/2006, AS FURNISHED BY TH E APPELLANT ARE AS FOLLOWS:- CURRENT ASSET AS ON 31/03/2005 ___________________________________________________ ____________ PARTICULARS DR. AMOUNT CR. AMOUNT ___________________________________________________ ____________ BANK ACCOUNTS 11,21,800.50 7,366.00 JANATA SAHAKARI BANK 1577 66,966.00 SYNDICATE BANK 10,54,834.00 SYNDICATE BANK 1236 7,366.00 CASH IN HAND 10,22,478.00 CASH 10,22,478.00 CURRENT ASSETS 15,38,860.00 LAND MALNAKA 15,38,860.00 DEPOSITS (ASSET) 76,275.01 DEPOSIT TELECOM 4,000.00 PPF A/C NO. 72,275.01 LOANS & ADVANCES (ASSET) 6,00,000.00 ADVANCE FOR LAND-YAYATI SALVI 5,00,000 4 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I ARVIND JAIN 1,00,000 STOCK-IN-HAND 144,03,707.00 WP TARA PARK 1,44,03,707.00 SUNDRY DEBTORS 959,244.00 ARIHANT CONSTRUCTION 9,59,244.00 TOTAL 1,97,22,364.51 7,366.00 1,97,22,364.51 ___________________________________________________ ____________ 1,97,22,364.51 1,97,22,364.51 ___________________________________________________ ____________ CURRENT ASSETS AS ON 31/03/2006 ___________________________________________________ ____________ PARTICULARS DR. AMOUNT CR. AMOUNT ___________________________________________________ ____________ CLOSING STOCK 82,55,350.00 STOCK WIP SANKESHWAR PLAZA WIP TARA PARK WIP TARA RESIDENCY 82,55,350.00 DEPOSITS (ASSET) 1,11,665.25 DEPOSIT TELECOM 4,000 MSEB DEPOSIT TARA PARKI 18,450 PPF A/C MAHESH 89,215.25 LOANS AND ADVANCES (ASSET) 2,67,000.00 ARCHANA ASHOK NACHANKAR 67,000.00 ARVIND JAIN 2,00,000 SUNDRY DEBTORS 24,63,008.00 ARIHANT CONS SANKESHWAR NAGAR1,62,691.00 ARIHANT CONSTRUCTION 23,00,317.00 CASH IN HAND 5,87,010.50 CASH 5,87,010,50 BANK ACCOUNTS 6,29,098.47 JANATA SAHKARI BANK 1577 1,490.25 SYNDICATE BANK A/C803/30847 4,07,913.00 SYNDICATE BANK 1177(307/1806) 2,05,375.00 SYNDICATE BANK 1236(307/2180) 8,491.95 SYNDICATE BANK 1288(307/2610) 5,828.00 LAND TARA RESIDENCY 35,56,359 PREPAID INSURANCE 10,2825.00 ___________________________________________________ ____________ 1,59,79,776.22 ___________________________________________________ ____________ 5.3.2. FROM THE DETAILS OF CURRENT ASSETS FILED BY T HE APPELLANT AND REPRODUCED ABOVE, IT COULD BE SEEN THAT THE LAND IN QUESTION AT MALNAKA WAS SHOWN AS 'CURRENT ASSET' AND NOT AS 'STOCK-IN-TRADE' IN THE BALANCE SHEET OF THE APP ELLANT. IT COULD ALSO BE NOTICED FROM THE DETAILS OF CURRENT A SSETS THAT IT IS ONLY WHEN THE DEVELOPMENT OF LAND FOR CONSTRUCTION HAS COMMENCED AND A PARTICULAR PROJECT IS IN EXECUTION; IT IS SHOWN AS WORK-IN-PROGRESS UNDER THE HEAD 'STOCK IN HAND' IN THE BALANCE SHEET. THEREFORE, THERE IS MERIT IN THE OBSERVATION OF THE ASSESSING OFFICER THAT THE GENERAL PRACTICE FOLLOWE D BY THE BUILDERS AND DEVELOPERS INCLUDING THE APPELLANT IS THAT THE COST OF THE LAND OF THE PROJECT IS DEBITED TO THE TRA DING ACCOUNT ONLY WHEN THE PROJECT IS CONSTRUCTED UP TO A STAGE W HEN THERE IS SALEABLE VALUE TO THE PROJECT AND NOT THE OPEN LA ND. IT IS THE 5 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I NORMAL METHOD OF ACCOUNTING IN CASE OF DEVELOPERS A ND BUILDERS THAT BEFORE THE LAND IS DEVELOPED AND THE PROJECT I S COMMENCED, THE OPEN LAND IS SHOWN AS CAPITAL ASSET AND NOT AS STOCK IN TRADE IN THE-BALANCE SHEET. AS POINTED OUT BY THE ASSESSING OFFICER AT PARA 5.4 OF THE ASSESSMENT ORDER, THE AP PELLANT ALSO FOLLOWED THE SAME SYSTEM OF ACCOUNTING OVER A PERIO D OF TIME. THE APPELLANT ALSO COULD NOT ESTABLISH THAT SOME DE VELOPMENT HAD TAKEN PLACE ON THE LAND IN QUESTION PRIOR TO ITS SALE DURING THE YEAR. ON THE CONTRARY, AS PER THE CERTIFICATE ISSUED BY SHRI S.P. MAHAJANI, ADVOCATE AND FILED BY THE APPELLANT, IT WAS PRACTICALLY IMPOSSIBLE FOR THE APPELLANT TO COMMENC E THE WORK ON THE PROPERTY IN QUESTION AND HENCE, THE APPELLANT D ECIDED TO SELL THE PROPERTY AS ON WHERE BASIS' AND ULTIMATELY SOL D AT A LOSS. ALL THESE FACTS INDICATE THAT THE LAND IN QUESTION WHICH WAS SOLD DURING THE YEAR HAS NOT REACHED A STAGE OF STOCK IN TRADE AND THEREFORE, IT CANNOT BE CLASSIFIED AS 'STOCK-IN-TRA DE' OR RAW MATERIAL' OF THE BUSINESS OF THE APPELLANT. IT IS P RECISELY FOR THIS REASON THAT IT WAS NOT EVEN INCLUDED IN THE VALUE O F STOCK-IN- TRADE IN THE BALANCE SHEET AS ON 31/03/2005 AND THE REFORE, IT FALLS WITHIN THE AMBIT OF CAPITAL ASSET U/S.2(14) O F THE I.T. ACT, NOTWITHSTANDING THE FACT THAT IT WAS SHOWN AS A 'CU RRENT ASSET' IN THE BALANCE SHEET AS ON 31/03/2005. 5.3.3. DURING THE APPELLATE PROCEEDINGS, THE APPELLA NT FILED A COPY OF THE SALE DEED DATED 02/04/2005 FOR THE SALE OF LAND, DRAWING ATTENTION TO CLAUSE E' OF THE SALE DEED WHEREIN IT WAS MENTIONED THAT THE APPELLANT HAS DECIDED TO CONSTRU CT A BUILDING ON THE SAID LAND AND SELL THE FLATS AND COMMERCIAL UNITS FROM SUCH CONSTRUCTION, BUT THE APPELLANT COULD NOT EXECUTE T HE PROJECT DUE TO DISPUTES AND THE INCOME-TAX LIABILITY OF HIS FATHER . BUT THE FACT REMAINS THAT THE LAND REMAINED AS LAND ONLY BEFORE IT WAS SOLD AND THERE WAS NO DEVELOPMENT AT ALL ON THE LAND WHI CH WAS ALSO CERTIFIED BY AN ADVOCATE. THEREFORE, MERELY BECAUSE THE INTENTION WAS TO DEVELOP THE LAND IN THE COURSE OF HIS BUSINES S OF CONSTRUCTION, IT WOULD NOT CONVERT A CAPITAL ASSET INTO A STOCK IN TRADE UNLESS THE LAND WAS ACTUALLY DEVELOPED BEFORE IT WAS SOLD. AS OBSERVED BY THE ASSESSING OFFICER, THE APPELLANT HAS NOT OBTAINED ANY PERMISSION FOR COMMENCEMENT OF THE PROJE CT NOR DID THE APPELLANT GIVE ANY NAME TO THE PROPOSED PROJECT AS HE DID IN THE CASE OF OTHER PROJECTS. IT IS ALSO NOT THE CASE THAT THE APPELLANT WAS REGULARLY DEALING IN PURCHASE AND SALE OF LAND OR INTENDED TO DEAL IN PURCHASE AND SALE OF LAND. IN THESE CIRCUMSTANCES, THE PLOT OF LAND IN QUESTION CANNOT BE SAID TO BE STOCK -IN-TRADE OF THE BUSINESS OF THE APPELLANT AND THEREFORE, THE LO SS CLAIMED BY THE APPELLANT ON SALE OF THE PLOT IS A CAPITAL LOSS AND NOT ALLOWABLE AS DEDUCTION U/S.37 OF THE I.T. ACT. ACCO RDINGLY, THE ACTION OF THE ASSESSING OFFICER IN TREATING THE SAI D ASSET AS CAPITAL ASSET OF THE APPELLANT AND THE LOSS ON SALE OF LAND AS CAPITAL LOSS CANNOT BE FAULTED WITH. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LEARNED COUNSEL SUBMITS THAT THE ASSES SEE IS NOT AN 6 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I INVESTOR BUT IS A BUILDER AND DEVELOPER. HE ARGUES THAT THE PLOT WAS PURCHASED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE B UT DUE TO COMPULSION ON ACCOUNT OF FINANCIAL CRUNCHES, THE ASSESSEE W AS FORCED TO SALE THE SAID PLOT OF LAND. HE SUBMITS THAT AS PER THE TIT LE HISTORY NOTED BY THE AUTHORITIES BELOW, THERE IS NO DISPUTE OF THE CORE FACT THAT THE SAID PLOT OF LAND WAS IN LITIGATION. HE SUBMITS THAT NOMENCLATURE GIVEN IN THE BALANCE SHEET CANNOT BE DECISIVE AS ADMITTEDLY NO OTHE R ASSETS ARE THERE. HE SUBMITS THAT IN THE SALE DEED ITSELF THE ASSESSEE HAS MENTIONED THAT THE SAID PLOT OF LAND WAS PURCHASED FOR CONSTRUCTION BUS INESS AS HE WAS DESIRING TO CONSTRUCT BUILDING ON THE SAID PLOT. HE THEREFO RE PLEADED THAT THE POT OF LAND WAS PART OF STOCK-IN-TRADE. HE FURTHER P LEADS THAT AS THE PLOT OF LAND IS STOCK-IN-TRADE AND SECTION 50C IS NOT APPLICA BLE. HE RELIED ON THE DECISION IN THE CASE OF INDERLOK HOTEL PVT. LTD. ITO REPORTED IN 12 2 TTJ (MUMBAI) 145. PER CONTRA THE LD. DR SUPPORTED AND R ELIED ON THE DECISION OF THE AUTHORITIES BELOW. 4. THE FIRST ISSUE IS TO BE DETERMINED WHETHER THE PLOT O F LAND IN QUESTION IS A PART OF THE ASSESSEE STOCK-IN-TRADE OR IT IS INDEPENDENT INVESTMENT AS PER THE DOCUMENT ON RECORD, MORE PARTICU LARLY SALE DEED. WE FIND THAT IT IS MENTIONED IN THE SALE DEED THAT THE ASS ESSEE HAD PURCHASED SAID PLOT OF LAND FOR BUSINESS PURPOSE. HE WAS C OMPELLED TO SALE THE SAID PLOT DUE TO THE REASONS RECORDED BY BOTH THE AUTHORITIES BELOW I.E. DUE TO LITIGATION AS WELL AS FINANCIAL CRUNCH. IN THIS CASE, IT IS UNDISPUTED FACT THAT THE ASSESSEE IS A BUILDER AND DEVELO PER ONLY. THE RESERVATION OF THE LD.CIT(A) FOR NOT ACCEPTING THE CONTENT ION OF THE ASSESSEE THAT IT IS PART OF STOCK-IN-TRADE IN THE BALANCE SHEET, THE ASSESSEE HAS SHOWN SAID PLOT UNDER HEAD CURRENT ASSE T. IN OUR OPINION, GROUPING OF ASSET ALONE CANNOT BE DECISIVE FOR NOT TREATING THE SAID PLOT OF LAND AS A PART OF ASSESSEES BUSINESS ASSET , BEING PART OF STOCK-IN-TRADE. WE THEREFORE HOLD THAT BOTH THE PARTIES BELOW ERRED IN 7 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I HOLDING THAT THE PLOT OF LAND IN QUESTION IS NOT PART OF STO CK-IN-TRADE AS TAKEN. WE ACCORDINGLY DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 5. NEXT ISSUE IS WHETHER SECTION 50C WAS RIGHTLY APPLIED BY THE ASSESSING OFFICER BY DISCARDING SALE CONSIDERATION SHOWN IN T HE RESPECTIVE SALE DEED. THIS ISSUE STANDS SQUARELY COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT MUMBAI IN THE CASE OF INDERLOK HOTELS PVT. LTD. (SUPRA) THAT PROVISIONS OF SECTION 50C CANN OT BE APPLIED TO THE PLOT IN QUESTION AND THIS ISSUE IS ALSO DECIDED IN FA VOUR OF THE ASSESSEE. ACCORDINGLY, THE GROUND NOS. 1 AND 3 ARE ALLOWED. 5.1 SO FAR AS GROUND NO.2 IS CONCERNED THAT IS IN RESPECT OF DISALLOWANCE OF THE EXPENDITURE OF RS.5,34,800/- FOR LAND DE VELOPMENT ETC. PERTAINING TO THE PLOT OF LAND WHICH WAS SOLD. THE ASS ESSING OFFICER HAS NOTED THAT IN RESPECT OF THE PLOT OF LAND IN RATNAGIR I, THE PURCHASE COST WAS RS.10,04,060/- INCLUDING REGISTRATION CHARGES AND STAM P DUTIES BUT THE ASSESSEE HAS DEBITED RS.15,38,860/-. THERE WAS A DIFFERENCE OF RS.5,34,800/- IN THE PURCHASE COST OF THE PLOT AS RECORDE D IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER SOUGHT THE EXPLANATION ON THE DIFFERENCE. THE ASSESSEE COULD NOT EXPLAIN WHY TH ERE WAS A DIFFERENCE TO THE EXTENT OF RS.5,38,800/-. THE LEARNED COU NSEL ARGUED THAT THE ASSESSEE HAS SUFFICIENT EVIDENCE TO PROVE THAT THE ASSESSEE HAS INCURRED EXPENSES ON THE DEVELOPMENT OF THE SAID PLOT OF LAND. HE PLEADED FOR RESTORING THE ISSUE TO THE FILE TO THE ASSESS ING OFFICER. THE LD. DR HAS NO OBJECTION TO RESTORE THE FILE TO THE FILE OF T HE ASSESSING OFFICER. WE THEREFORE RESTORE GROUND NO. 2 TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSEE SHOULD PRODUCE DOCUMENTARY EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER IN RESPECT OF THE ADDITIONAL COST OF RS.5,34,800/- DEBITED ON ACCOUNT OF THE SAID PLOT. NEEDLESS TO SAY THE ASSESSING OFFICER SHOULD GIVE OPPORTUNITY 8 ITA NO.973/PN/2011 GUNDECHA MAHESH SURESH, RATNAGIR I OF BEING HEARD TO THE ASSESSEE. HENCE, GROUND NO. 2 IS A LLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 18.03.2013 SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER RK/PS PUNE, DATED: 18 TH MARCH, 2013 COPY TO 1 THE ASSESSEE 2 THE DEPARTMENT 3 THE CIT(A), KOLHAPUR. 4 5 THE CIT - I AND II, KOLHAPUR THE CCIT-II, PUNE 6 THE DR, ITAT BENCH , PUNE . 7 GUARD FILE. // TRUE COPY // BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE