The ACIT, Central Circle-1(3), Ahmedabad V. Shri Bachubhai B. Dodiya, Ahmedabad

ITSSA 123/AHD/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5439 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-09-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: MEHUL PATEL
• Keywords: Capital asset; Set aside; Capital Gains
• Section: 143(3); 2(14); 201; 69A; 131; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 1(3), AHMEDABAD (APPELLANT) VS SHRI BACHUBHAI B. DODIYA A/55, PRESTIGE BUNGLOWS, B/H. HARIOMNAGAR, NR. YASH BUNGALOW, GHODASAR, AHMEDABAD PAN: ABJPD1926C (RESPONDENT) REVENUE BY : S H RI O.P. VAISHNAV , CIT - D . R. ASSESSEE BY: SHRI MEHUL PATEL, A.R. DATE OF HEARING : 30 - 10 - 2 018 DATE OF PRONOUNCEMENT : 31 - 10 - 2 018 / ORDER P ER : AMARJIT SINGH, A CCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A. Y. 2011 - 12 , ARI SES FROM ORDER OF THE CIT(A) - I, AHMEDABAD DATED 31 - 1 2 - 2 013 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 153B(1)(B) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL: - (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,18,13,560/ - MADE U/S. 69A OF THE ACT (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS OUGHT TO HAVE UPHELD THE O RDER U/S. 143(3) OF THE ACT. (3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. I T (SS) A NO . 123 / A HD/20 14 A SS ESSMENT YEAR 2011 - 12 I.T (SS) .A NO. 123 /AHD /20 14 A.Y. 2011 - 12 PAGE NO ACIT VS. SHRI BACHUBHAI B. DODIYA 2 3. THE SOLITARY GROUND OF THE APPEAL OF THE REVENUE IS AGAINST THE ADDITION OF RS. 1,18,13,560/ - MAD E U/S. 69. 4. THE BRIEF FACT OF THE CASE IS THAT SEARCH U/S. 132 OF THE ACT W A S CONDUCTED ON 9 TH MARCH, 2011 IN THE CASE OF MA KS ON G ROUP. DURING T HE COURSE OF SEARCH A MEMORANDUM OF UNDERSTANDING FOR SALE OF LAND AT VITHALPARA BETWEEN ASSESSEE AND SHRI K H ODIDAS J. PATEL (AN EMPLOYEE OF SHRI CHIMANLAL B HAT EJA ) WAS FOUND AND SEIZED F R O M THE RESIDENCE OF SHRI K HODIDAS J P ATEL. SHR I CHI MANLAL B H ATEJA HAS AD MITTED THAT HE HAS PAID TOTAL P RICE OF THE LAND AT R S. 2 , 88 , 96 , 820/ - OUT OF WHICH RS. 11,90,000/ - WAS PAID BY CHEQUE AND REMAINING PART OF RS. 2 , 77 , 06 , 820/ - WAS PAID BY CAS H FOR PURCHASE OF THIS LAND . AFTER REDUCING THE COST OF LAND, THE ASSESSING OFFICER HAS ADDED THE BALANCE AMOUNT OF RS.1,18,13,560 AS CASH RECEIVED BY THE ASSESSEE FROM SHRI CHIMANLAL BHATEJ U/S. 69 OF THE ACT. 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER: - 6. I HAVE GONE THROUGH THE ASSESSMENT ORD ER AND SUBMISSIONS OF THE A.R. OF THE APPELLANT CAREFULLY. IT IS SEEN THAT THE LAND WHICH WAS SOLD BY THE APPELLANT WAS AN AGRICULTURAL LAND HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN PARA 4 WHEREIN HE OBSERVES THAT THE ASSESSEE HAS NOT SHOWN ANY SHORT TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND AT SURVEY NO.191/2 & 200, VILLAGE VITHALAPARA, DIST. SURENDRANAGAR. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOT CONTROVERT FACTS THAT THE LAND IN QUESTION WAS AN AGRICULTURAL LAND. A PERUS AL OF THE REGISTERED DEED FOR THE SALE OF THIS LAND TO SHRI CHIMANLAL BHATHEJA ALSO SHOWS THAT THIS LAND IS AN AGRICULTURAL LAND. 6.1 ONCE IT IS HELD THAT THE LAND IN QUESTION IS AGRICULTURAL LAND THEN, THE SAME CANNOT BE 'CAPITAL ASSETS' WITHIN THE MEANIN G OF 'CAPITAL ASSETS' AS DEFINED IN SECTION 2(14) OF THE I.T. ACT, 1961. SINCE, AGRICULTURAL LAND IS NOT 'CAPITAL ASSETS' AS PER THE ACT, ANY GAIN RESULTING FROM THE SALE OF AGRICULTURAL LANDS IS NOT TAXABLE AS CAPITAL GAINS. 6.2 FURTHER, THE ASSESSING OFF ICER, IN THIS CASE, HAS HELD THAT THE INCOME OF RS. 1,18,13,560/ - IS TAXABLE U/S.69A OF THE I.T. ACT, 1961 BEING THE UNDISCLOSED INCOME OF THE APPELLANT. IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT FOUND THE APPEL LANT TO BE THE OWNER OF ANY MO NEY, BULLIO N, JEWELLERY OR OTHER VALUABLE ARTICLES WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THUS, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION U/S.69A OF THE I.T. ACT, 1961. THE AMOUNT OF RS. 1,1 8,13,560/ - ALLEGEDLY RECEIVED FROM SHRI KHODIDA S J. PATEL ON BEHALF OF SHRI CHIMANLAL BHATEJA HAS BEEN HELD TO BE FOR SALE OF AGRICULTURAL LAND. THE ASSESSING OFFICER HAS ALSO ACCEPTED THE FACT THAT THE AMOUNT PAID BY SHRI CHIMANLAL BHATEJA WAS UNACCOUNTED CONSIDERATION PAID THROUGH SHRI KHODIDAS J. PA TEL FOR THE PURCHASE OF THESE LANDS. THUS, THE SAME SHOULD HAVE BEEN TAXED AS A PART OF CAPITAL GAIN ON ARISING ON SALE OF LANDS. AS ALREADY DISCUSSED EARLIER IN I.T (SS) .A NO. 123 /AHD /20 14 A.Y. 2011 - 12 PAGE NO ACIT VS. SHRI BACHUBHAI B. DODIYA 3 THE ORDER, SINCE THE LAND IN QUESTION WAS AGRICULTURAL LAND WHICH IS EVIDENT FROM A COPY OF TH E SALE DEED, THERE WAS NO QUESTION OF THE CAPITAL GAIN BEING TAXED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 1,18,13,560/ - IS NOT JUSTIFIED. THE ADDITIONS MADE IS DELETED. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BE FORE US, THE LD. DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ON THE OTHER HAND, LD. COUNSEL HAS SUPPORTED THE ORDER OF CIT(A) AND FURTHER SUBMITTED THAT CO - ORDINATE BENCH OF THE ITAT ON THE IDENTICAL FACT AND IDENTIC AL ISSUE IN THE C ASE OF ACIT VS. SMT. JYOTIBEN G . VAGHELA IN IT(SS)A NO. 122/AHD/2014 DATED 16 - 11 - 2017 HAS DECIDED IN FAVOUR OF THE ASSESSEE . RELEVANT PAR T OF THE DECISION OF CO - ORDINATE BENCH IS REPRODUCED AS UNDER: - 7. WE HAVE HEARD THE RIVAL CONTENTI ONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER OBSERVED THAT DURING THE COURSE OF SEARCH A STATEMENT UNDER SECTION 131 OF THE ACT WAS RECORDED. IN THE STATEMENT ONE SHRI S. CHIMANLAL BHATEJA ADMITTED TO HAVE PAID ON BEHALF OF SHRI KHODIDAS J PATEL, TOTAL SALE CONSIDERATION FOR SURVEY NOS.191, 192, 197, 200/1 & 200/2 OF VITHLAPARA LAND AT RS.2,88,96,820/ - . OUT OF WHICH RS. 11,90,000/ - WAS PAID BY CHEQUE AND REMAINING PART OF RS.2,77,06,820/ - WA S PAID BY CASH. THE ASSESSING OFFICER INVOKED PROVISIONS OF SECTION 69A OF THE ACT, MADE AN ADDITION OF RS.1,30,99,900/ - AND ALSO MADE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN OF RS.5,70,000/ - . AGGRIEVED BY THIS, ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) WHO AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY GIVING FINDING AS UNDER : - '6.2 FURTHER, THE ASSESSING OFFICER, IN THIS CASE, HAS HELD THAT THE INCOME OF RS.1,30,99,900/ - IS TAXABLE U/S.69A OF THE I.T. ACT, 1961 BEI NG THE UNDISCLOSED INCOME OF THE APPELLANT. IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT FOUND THE APPELLANT TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THUS, THE ASSESSING O FFICER IS NOT JUSTIFIED IN MAKING THE ADDITION U/S.69A OF THE I.T. ACT, 1961. THE MOUNT OF RS.1,30,99,900/ - ALLEGEDLY RECEIVED FROM SHI KHODIDAS J PATEL ON BEHALF OF SHRI CHIMANLAL BHATEJA HAS BEEN HELD TO BE FOR SALE OF AGRICULTURAL LAND. THE ASSESSING OF FICER HAS A/SO ACCEPTED THE FACT THAT THE AMOUNT PAID BY SHRI CHIMANLAL BHATEJA WAS UNACCOUNTED CONSIDERATION PAID THOUGH SHRI KHODIDAS J, PATEL FOR THE PURCHASE OF THESE LANDS. THUS, THE SAME SHOULD HAVE BEEN TAXED AS A PART OF CAPITAL GAIN ON ARISING ON SALE OF LANDS. AS ALREADY DISCUSSED EARLIER IN THE ORDER, SINCE THE LAND IN QUESTION WAS AGRICULTURAL LAND WHICH IS EVIDENT FROM A COPY OF THE SALE DEED, THERE WAS NO QUESTION OF THE CAPITAL GAIN BEING TAXED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 1,30,99,990/ - AND RS.5,70,000/ - ARE NOT JUSTIFIED. THE ADDITIONS MADE ARE DELETED' 8. THE ABOVE FINDING ON FACTS IS NOT CONTROVERTED BY THE REVENUE. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE FINDING OF THE ID. CIT(A). ADMITTEDLY THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTING THAT THE PROPERTY SOLD BY THE ASSESSEE FELL UNDER DEFINITION OF OF CAPITAL ASSET. WE, THEREFORE, DO NOT SEE ANY REASON TO INTERFERE IN THE FINDING OF LEARNED CIT(A). I.T (SS) .A NO. 123 /AHD /20 14 A.Y. 2011 - 12 PAGE NO ACIT VS. SHRI BACHUBHAI B. DODIYA 4 RESPECTFULLY F OLLOWING THE DECISION OF C O - ORDINATE BENCH OF THE ITAT ON IDENTICAL FACT AND SIMILAR ISSUE AS SUPRA , WE DO NOT FIND ANY MERIT IN T H E APPEAL O F T H E REVENUE THEREFORE THE SAME IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 3 1 - 10 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 31 /10 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,