SHRI KEYUR JITENDRA PATEL,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-6(1)(4), AHMEDABAD

MA 110/AHD/2023

AI Insights

The case revolves around the taxability of capital gains from the sale of land, which was initially purchased in the names of Shri Keyur Jitendra Patel and Shri Kiranbhai Ravjibhai Patel. The assessee argued that the gains should be taxed in the hands of KIDPL, the company involved, while the Revenue contended it was taxable in the hands of the individual assessee. The ITAT had previously ruled in favor of the Revenue. The assessee's application for recall of the ITAT's order was based on alleged factual inaccuracies regarding the ownership and financial transactions related to the land purchase. However, the ITAT found no merit in the application, stating that the facts had been correctly appreciated and applied in the original judgment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472480 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-10-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: K.C. THAKER
• Keywords: Capital Gains

Judgement Text

" आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘C’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MRS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER MA No. 110/Ahd/2023 (Arising out of ITA No. 1343/Ahd/2017) Assessment Year : 2012-13 Shri Keyur Jitendra Patel, 12, Amar Society, Opp: Balvatika, Maninagar, Ahmedabad-380008 PAN : AFIPP 8430 J Vs. ITO, Ward-6(1)(4), Ahmedabad (Applicant) (Applicant) (Applicant) (Applicant) (Respondent) (Respondent) (Respondent) (Respondent) Assessee by : Shri K.C. Thaker, AR Revenue by : Shri B.P. Srivastava, Sr DR सुनवाई की तारीख/Date of Hearing : 18.10.2024 घोषणा की तारीख /Date of Pronouncement: 25.10.2024 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: The present application filed by the assessee, points out mistakes in the order passed by the ITAT in its appeal in ITA No. 1343/Ahd/2017 for Assessment Year 2012-13 dated 02.08.2023 and accordingly seeks recall of the order for re-adjudication. 2. The issue in dispute in the said appeal, it was pointed out related to the taxability of capital gains earned on the sale of an immoveable property/land in the hands of the assessee. The assesses case was that it was taxable in the hands of a company, identified as KIDPL, while Revenue’s case was that it was taxable in the hands of the assessee, which the ITAT had confirmed. 3. During the course of hearing before us, ld. Counsel for the assessee contended that the recall of the order is being sought for the reason that it was passed without appreciating the facts as appearing on records before it. In this regard, he drew our attention to paragraph No.11(i) of the order of the ITAT, wherein the following was noted:- 2 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 “ 11….. i) Purchase of the impugned property was in the individual name of the assessee, and not on behalf of the company viz. “KIDPL”. The AO notes these facts at para-5 of its order as under: “5. ….. The land land has been purchased in the names of (1) Shri Keyurbhai Jitendrabhai Patel and (2) Shri Kiranbhai Ravjibhai Patel in their individual capacity and in the deed it is not stated anywhere that land has been purchased on behalf of Kunj Infra Development Pvt Ltd. on behalf of Kunj Infra Developemnt Pvt. Ltd. and signed on behalf of Kunj Infra DevelopmentP.Ltd. The said deed is also signed in their individual capacity. All these factors make it clear that the land is purchased by Shri KeyurbhaiJitendrabhai Patel and Shri KiranbhaiRavjibhai Patel. These facts have not been controverted by the assessee before us.” 4. Referring to the same, he pointed out that the ITAT took note of the fact, as noted in the assessment order, of the land being purchased in the name of two persons (i) Shri Keyur Jitendra Patel, the assessee before us and (ii) Shri Kiranbhai Ravjibhai Patel. The ld. Counsel for the assessee contended that, despite noting the fact of the purchase of land by two persons, the ITAT went on to hold that the capital gain on the sale of the impugned land accrued in the hands of the assessee alone. Thereafter, he drew our attention to paragraph No. 12 of the order of the ITAT which reads as under:- “12. The ld.CIT(A) also found from the perusal of the bank statement of “KIDPL” that cheque vide which payment was stated to be made for purchase of the land as mentioned in the sale deed were not reflected in the bank statement of the company. His findings in this regard are at para 4.8 of the order as under: “4.8 The appellant was asked to submit the details of the sources of the payment made for the purchase of the land by the Kunj Infra. However no such details have been filed. The appellant filed a copy of bank account of the company Kunj Infra Dev. Pvt. Ltd. in Gujarat Mercantile Co. Op. Bank Ltd. Ahmedabad. The first entry is of cash deposits of Rs. 5000/- on 2.12.2008 therefore it is apparent that the payment for land cannot be made from this account in April 2008. Another bank account in Bank of India no 18260200000584 was opened on 14.02.2008. However out of 10 cheque no. mentioned in the sale deed only 2 cheques 3 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 no. 791805 and 791804 were reflected in the debit side of the bank statement on 06.05.2008 issued to Mr. Bhavesh and Mr. B N Patel the seller. However the remaining other cheques have not been debited in the bank account of the company. It is further seen that on 02-04-2008 Rs. 24 lacs were deposited in the bank account no. 584 in Bank of Baroda by Sh. Keyur Patel and further seen that in the copy of account of Keyur Patel, payment of Rs. 1,25,4,400/- was made by Keyur Patel on behalf of the company. It is further seen that the other 8 cheque no. mentioned in sale deed dated 13-6- 2008 were never deposited in the Bank of Baroda account of the Kunj Infra for withdrawal thus it is presumed that the payment was made by some other account by Shri Keyur Patel only and not from the accounts ot the company. It is also noticed from the bank account that huge cash, DD and cheques were deposited in the above bank account of the company though there was no income during that period therefore it is duty of the appellant to justify the sources of the fund invested. However the appellant has merely filed the bank statement but not filed the details of the deposits in the bank account of the company. Thus, the contention of the appellant that payment was made out of the sources of the company is factually wrong hence not tenable. The onus of proving the sources of funds for investment was on the appellant and as seen from the record it miserably failed to do so.” The ld.counsel for the assessee was unable to controvert the above factual finding of the ld.CIT(A).” 5. Referring to the same, he pointed out that the ITAT took note of and appreciated the findings of the ld. CIT(A) that the cheques vide which the payment was stated to be made for purchase of land were not reflected in the bank statement of the company and taking note of the same, the ITAT held, therefore, that the purchase of land could not be attributed to the company. He stated that the findings of the ld. CIT(A) on which reliance was placed referred to an incorrect fact of the bank account of the company being opened on 22.09.2008. The ld. Counsel for the assessee pointed out that earlier also order had been passed by the ITAT in the said appeal dated 22.02.2021 which was recalled in a miscellaneous application filed by the assessee pointing out incorrect facts noted therein vide MA No. 133/Ahd/2021 dated 18.01.2023. That one of the errors pointed out was that of the bank account of the company being opened on 22.09.2008, noted by the ITAT in the said order. He pointed out that in the order passed by the ITAT in the Miscellaneous Application of the assessee, this incorrect 4 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 factual observation was found to be correct by the ITAT in its order passed in MA No. 133/Ahd/2021 dated 18.01.2023. Our attention was drawn to page No.3, paragraph Nos. 3 & 4 of the order pointing out this factual incorrectness and page No.5, paragraph No.4 of the order of the ITAT accepting the factual discrepancy as pointed out by the ld. Counsel for the assessee as under:- “iii. In paragraph 5, it is mentioned that the facts in the said (relied upon case dealt with by Jaipur Bench and Rajasthan High Court) case are totally different, based on observations like 1. \"the agricultural land was purchased on behalf of the company, GFFR Pvt. Ltd. in the name of director, was shown in the Balance Sheet of the Company\", 2. \"the company made the payments and the short-term capital gain was also shown by the company\" and, 3. \"But in the present case, no short-term capital gain was shown in the return of the company\". The last observation is factually not right. It was shown by referring to paper-book pages that the land did appear in the accounts of the Company and the payment was made/borne by the company (P/b-Vol- II/p.187-188) and that the sale transaction was duly accounted for and resultant gain/loss was reflected in the return of the Company(P/b-Vol- I/p.25-28). iv. In paragraph 8 it is observed that that payments for purchase of land were made from individual account and that company's bank account was opened on 22-09-2008, i. e. after the purchase of land. This factually incorrect observation has come to be made despite the fact that it was shown by referring to paper-book pages (P/b-Vol-I/p.77-96) that sale deed was executed on 23-06- 2008, the company was incorporated on 22-01-2008 (P/b-Vol II/p.158) and its bank account was opened on 14-02-2008 (P/bVol-I/p.132). Even two payments were shown from the company' s bank statement which is part of paper-book (P/b-Vol-II/p.224). Applicant submits that the first ground of appeal has been decided based on observations shown to be factually mistaken. Therefore, the order needs to be recalled in the interest of justice.” …… …… 4. We have heard both the parties and perused all the relevant material available on record. As regards the first contention of the Ld. AR that there is certain factual discrepancies mentioned in the 5 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 order dated 22.02.2021 appears to be correct. As regards ground no.2, the same was not considered at all by the Tribunal. The order passed by the Tribunal is beyond 90 days, therefore, there is a mistake apparent on record and hence order dated 22.02.2021 is hereby recalled and the Registry is directed to fix the ITA No.1343/Ahd/2017 for fresh hearing on 23.02.2023. Notices may be issued to both the parties.” 6. The ld. Counsel for the assessee was asked in open court if there were any other factual discrepancies/errors/mistakes in the order of the ITAT in which the present Miscellaneous Application has been filed before us, to which he replied in the negative and categorically stated that these were only two discrepancies which were present in the order passed by the ITAT. 7. Having taken note of the point made by the ld. Counsel for the assessee as above, the ld. DR was asked to make his submissions, who stated that there were no mistakes/discrepancies in the order of the ITAT and that all the facts had been duly considered and elaborated by the ITAT while passing the order. 8. We have duly considered the submissions made by the ld. Counsel for the assessee before us, have gone through the order of the ITAT in which the present Miscellaneous Application has been filed pointing out factual inaccuracies noted therein and we have also gone through the earlier order passed by the ITAT in MA No. 133/Ahd/2021 referred to by the ld. Counsel for the assessee before us. After considering all of the above, we do not find any factual inaccuracy or discrepancy as pointed out by the ld. Counsel for the assessee before us. 9. The first aspect pointed out by the ld. Counsel for the assessee that despite noting the fact that there were two purchasers of land, the ITAT had attributed the purchase of land entirely to the assessee alone. We find that there is no merit in this contention of the ld. Counsel for the assessee because the ITAT has further gone to record the fact that the entire purchase consideration for the purchase of land was made by the assessee alone. Therefore, there was no occasion for attributing purchase of land to the other 6 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 party mentioned in the purchase deed. Even otherwise, we find that no contention in this regard was raised before the ITAT during the course of hearing, nor was anything to this effect had pointed to us during the course of hearing in the present Miscellaneous Application. Therefore, we hold that there is no misappreciation of facts by the ITAT in its order passed vis-à-vis the purchase of land being attributed to only one party despite the facts regarding purchase to be made by two parties. 10. As for the other factual inaccuracy pointed out by the ld. Counsel for the assessee that the ITAT had, based its findings of transactions of purchase of land being attributed to the assessee, based on the factual finding that the company to which the assessee had attributed the purchase of land, had opened its bank account subsequent to the transactions taken place i.e. 22.09.2008. The ld. Counsel for the assessee in this respect drew our attention to paragraph No. 12 of the order which is reproduced above. We do not find any such fact noted in that paragraph. Therefore, this contention of the ld. Counsel for the assessee also before us of there being a mistake in the order of the ITAT is totally misplaced. In the light of the above, we find that no error or mistake worth its while has been pointed out by the ld. Counsel for the assessee in the order of the ITAT passed in ITA No.1343/Ahd/2017. The Miscellaneous Application filed by the assessee is, therefore, rejected. 11. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on 25/10/2024 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 25/10/2024 btk* 7 MA No. 110/Ahd/2023 Shri Keyur Jitendra Patel Vs. ITO AY : 2012-13 आदेश की \u0007ितिलिप अ\rेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0015 / The Appellant 2. \u0016\u0017थ\u0015 / The Respondent. 3. संबंिधत आयकर आयु\u001e / Concerned CIT 4. आयकर आयु\u001e(अपील) / The CIT(A) 5. िवभागीय \u0016ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड\" फाईल / Guard file. शानुसार/BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "