M/s G.K. Properties (P) Limited, Secunderabad V. ITO, Ward-2(2), Hyderabad

MA 104/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2297 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: I RAMA RAO
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MISC. APPLN. NO.104/HYHD/2014 (IN ITA NO.287/HYD/11 : ASSESSMENT YEAR 200 7 - 0 8 M/S. G.K. PROPERTIES PRIVATE LIMITED, SECUNDERABAD. ( PAN - AAACG 7448 K ) V/S. INCOME TAX OFFICER WARD 2(2), HYDERABAD (APPL IC ANT) (RESPONDENT) APPL IC ANT BY : SHRI I.RAMA RAO RESPONDENT BY : SHRI SOLGY JOSE T.KOTTARAM DR DATE OF HEARING 18 .07.2014 DATE OF PRONOUNCEMENT 27.08.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: BY THIS APPLICATION UNDER S.254(2) OF THE INCOME TAX ACT,1961 THE APPLICANT - ASSESSEE SEEKS RECTIFICATION/RECALL OF THE ORDER OF THIS TRIBUNAL DATED 31.8.2012 IN ITA N O.287/HYD/2011 FOR ASSESSMENT YEAR 2007 - 08, ON THE GROUND THAT CERTAIN MISTAKES APPARENT FROM RECORD HAVE CREPT INTO THE SAME. 2. LEARNED COUNSEL FOR THE ASSESSEE, REITERATING THE AVERMENTS MADE IN THE PRESENT APPLICATION, INVITED OUR SPECIFIC ATTENTION TO PARA 25 OF THE ORDER OF THE TRIBUNAL DATED 31.8.2012, WHEREIN IT WAS HELD THAT FACTS AND CIR CU MSTANCES BROUGHT ON RECORD CLEARLY DEMONSTRATE THAT THE ASSESSEE IS A DEALER IN REAL ESTATE AND CARRIED ON THE BUSINESS OF BUYING AND SELLING OF L A ND AND INCOME ARISING OUT OF THIS ACTIVITY IS NOTHING BUT BUSINESS IN C OM E , AND IT HAS TO B E TAXED A CCOR D IN G LY. FOR ARRIVING AT THE ABOVE CON C LU S ION, THE TRIBUNAL H A D MADE AN ERRONEOUS ASSUMPTION THAT THE ASSESSEE HAD NO T ACTUALLY CARRIED ON AGRICULTURAL ACTI V IT I ES ON TH E SAID LAND AND THE LAND WAS SOL D FOR NON - AGRICULTURAL PU R PO S E AT HEAVY PRICE. IT W AS ALSO SUBMITTED THAT THE ABOVE ASSUMPTIONS OF THE T RIBUNAL A RE CONTRARY TO THE EVI D ENCE ON RECORD BROUGHT BY MA NO.104/HYD/14 (IN ITA NO.287/ HYD/2011 ) M/S. G.K. PROPERTIES PRIVATE LIMITED, SECUNDERABAD. 2 TH E ASSESSING OFFICER HIMSELF IN EXERCISE OF POWER VESTED UNDER S.133(6) OF THE INCOME TAX ACT, 1961, I. E . CLARIFICATION FURNISHED BY THE TASHILDAR , SHMIRPET MANDAL, WHO, VIDE HIS LETTER DATED 24.12.2009, CLARIF I ED THAT THE SUBJECT LANDS WERE AGRICULTURAL LANDS ON WHICH THE AGRI C ULTURAL OPERATION S WER E ACTUALLY CARRIED ON AND THE PURCHASERS OF THE LANDS FROM TH E ASSESSEE - COMPANY ALSO CONTINU E D TO CARRY ON AG R I C ULTURAL OP E RATION S AND THEY WERE NOT THE PERSONS ENGAGED IN REAL ESTATE LINE OF BUSINESS. IT IS FU R TH E R SUBMI T TED THAT THE TRIBUNAL PROCEEDED ON TH E PREMISE THAT EVEN I F THE SUBJECT - LANDS ARE AGRICULTURAL L A ND SITUATED BEYOND 8 KM S FRO M ANY MUNICIPAL LIMITS, THE SAME IS TAXABLE AS ADVENTURE IN THE NATURE OF TRADE. THIS FINDING OF THE TRIBUNAL, IT IS SUBMITTED, GOES AGAINST THE SP I RIT OF ARTICLE 366 OF THE CON S TITUTION OF INDIA AND THE DECISION OF APEX COURT IN TH E CA S E OF SINGHAL RAK ESH K UMAR V/S. UNION OF I NDIA (247 ITR 150), WHICH STIPULATE THAT INCOME ARISING OUT OF SALE OF A GRICULTURAL LAN D S ALSO GIVES RISE ONLY TO AGRICULTURAL INCOME, WHICH IS EX E M PT FROM INCOME - TAX. FOR BOTH THESE REASONS, IT IS SUBMITTED THAT THE ORDER OF THE T RIBUNAL DATED 31.8.2012 CALLS FOR RECTIFICATION/RECALL. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE CON T RA R Y, OPPOSED THE ABOVE CON T ENTION S OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, IN THE LIGHT OF THE AVERMENTS MADE IN THE PRESENT APPLICATION AND THE ORDER OF THE TRIBUNAL DATED 31.8.2012. WE FIND NO MERIT IN THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE DISCUSSED ABOVE. A PLAIN READING OF THE ORDER OF THE TRIBUNAL DATED 31.8.2012 CLEARLY INDICATES THAT THE TRIBUNAL HAS CONSIDERED ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE AND THE E VIDENCE, HAVING A BEARING ON THE POINT IN DISPUTE, WITH REGARD TO ASSESSABILITY OF CAPITAL GAINS REALIZED BY TH E ASSESSEE ON THE SALE OF THE PROPERTY IN QUESTION. THE TRIBUNAL HAS TAKEN NOTE THAT THE ASSESSEE IS A P R IVATE LIMI TE D COMPANY HAVING THE M A IN OB JECT OF DEALING IN REAL ESTATE AND HAS NOT ACTUALLY CARRIED ON THE AGRICULTURAL OP E RATION S IN THE SAID LAND, AND EVEN IF IT IS ACCEPTED MA NO.104/HYD/14 (IN ITA NO.287/ HYD/2011 ) M/S. G.K. PROPERTIES PRIVATE LIMITED, SECUNDERABAD. 3 T H A T THE LAND WAS LEASED FOR AGRICULTURAL PURPOSE, IT WAS ONLY A STOP GAP ARRANGEMENT AND THE EVIDENCE BROUGHT ON RECORD WAS NOT ENOUGH TO SHOW THERE WERE ACTUAL AGRICULTURAL OPERATIONS. THE TRIBUNAL ALSO NOTED THAT THE LAND WAS SOLD FOR NON - AGRICULTURAL PURPOSES AT HEAVY PRICE. THE TRIBUNAL NOTED THAT THE LAND WAS SITUATED IN SURROUNDING URBAN AREAS. DEALING WITH THE CON TENTION OF THE ASSESSEE THAT THE AMOUNTS REALIZED ON THE SALE AGRICULTURAL LAND ALSO PARTAKES THE CHARACTER OF AGRICULTURAL INCOME, WHICH IS EXEMPT FROM TAX, THE TRIBUNAL O BSERV ED THAT IT IS THE ASSESSEES INTENTION WHICH HAS TO BE LOOKED INTO, AND IT IS O N RECORD THAT THE ASSESSEE HAS CARRIED ON THE ACTIVITY OF BUYING AND SELLIN G O F LANDS AND IN EACH CA S E THE LAND WAS NOT SUBJECTED TO CULTIVATION BY THE ASSESSEE, AND THERE IS A SERIES OF TRANS A CTION S BY WHICH THE ASSESSEE B R OU G HT THE LAND AND SOLD FOR PROF IT. THEREFORE, CONCLUDING THAT THE ASSESSEE IS ENGAGED IN REAL ESTATE BUSINESS, THE TRIBUNAL FOUND THE ABOVE CONTENTION OF THE ASSESSEE AS DEVOID OF MERIT. THUS, A PLAIN READING OF THE ORDER OF THE TRIBUNAL DATED 31.8.2012 MAKES IT CLEAR THAT THE TRIBUNA L HAS RENDERED ITS FINDINGS AFTER DUE CONSIDERATION OF THE MATERIAL ON RECORD AND THE CONTENTIONS OF THE PARTIES ON THE POINT AT ISSUE. THE TRIBUNAL, AS S U CH, HAS TAKEN A CONSCIOUS VIEW WITH REGARD TO THE NATURE OF THE ACTIVITIES OF THE ASSESSEE, AND EXI GIBILITY OF CAPITAL GAINS ON THE CAPITAL GAINS REALIZED BY THE ASSESSEE ON THE SALE OF LAND IN QUESTION. WE DO NOT FIND ANY MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL DATED 31.8.2012 AND ALL THAT THE ASSESSEE IS SEEKING BY THE ELABORATE CO NTENTIONS RAISED IN THE PRESENT APPLICATION IS TO SEEK A REAPPRAISAL OF THE EVIDENCE ON RECORD AND RECONSIDER THE CONTENTIONS OF THE ASSESSEE , AND A REVIEW OF THE ORDER OF THE TRIBUNAL DATED 31.8.2012, SINCE SUCH A REVIEW IS NOT POSSIBLE IN THESE PROCEED INGS UNDER S.254(2) OF THE ACT, AND IN THE ABSENCE OF ANY SPECIFIC MISTAKE APPARENT FROM RECORD BROUGHT OUT BY THE ASSESSEE IN THE PRESENT APPLICATION, WE FIND THAT THE PRESENT APPLICATION OF THE ASSESSEE IS DEVOID OF MERIT. WE ACCORDINGLY REJECT THE SAME . MA NO.104/HYD/14 (IN ITA NO.287/ HYD/2011 ) M/S. G.K. PROPERTIES PRIVATE LIMITED, SECUNDERABAD. 4 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS REJECTED . ORDER PRONOUNCED IN THE COURT ON 27.8.2014 SD/ - SD/ - (B.RAMAKOTAIAH) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 27 TH AUGUST, 2014 COPY FORWARDED TO: 1. M/S. G.K. PROPERTIES PRIVATE LIMITED, 101 GROUND FLOOR, PLOT NO.28 WELLINTON PLAZA, VIDYANAGAR COLONY, SECUNDERABAD. 2. INCOME TAX OFFICER WARD 2(2), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) III HYDERABAD 4. COMMISSIONER OF INCOME - TAX II , HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S