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2013 (6) TMI 401 - ITAT JODHPURProfit from sale of agriculture land - benami property - notice u/s 153A - whether the finding of the AO treating the assessee as benamidar of Sh. Rama Gameti can be justified and whether the transactions of sale and purchase of land should be treated as of capital gain nature or of business nature - It may be noted that the above mentioned agriculture land were shown to be purchased by Sh. Rama Gameti who is a domestic employee of the appellant - Held that:- It is noticed that that Shri Rama Gameti, an employee of the assessee raised the loans amounting to Rs. 22.85 lacs from various parties utilized for purchase of agriculture land admeasuring 3,30,872.8 sq ft. The genuineness of the loan was not doubted by the AO. The said land purchased by Shri Rama Gameti was sold to M/s. S.S. Education Trust for a consideration of Rs. 23.87 lacs and after that the loans raised for purchase of the land were repaid by Shri Rama Gameti. AO's view that the assessee used the name of his domestic servant namely Shri Rama Gameti and Smt. Laxmi Bai to purchase the land belonging to Schedule Tribe and converted the same to the residential nature from agriculture nature is not acceptable as the land in question was purchased by Shri Rama Gameti and the purchased deed was not doubted. The conversion of land for non-agriculture purpose was got done by Shri Rama Gameti who sold this land to M/s. S.S. Education Trust which is a separate entity registered with Assistant Commisioner, Devasansthan Vibhag, Udaipur. The said trust also enjoy the benefit of registration u/s 12AA and 80G and is a separate entity from the assessee. So it cannot be said that the assessee got any benefit by purchasing the land in the name of M/s. S.S. Education Trust, a public charitable organisation. Although AO mentioned that Shri Rama Gameti was a benamidar of the assessee and had it been so then the transaction of the land which should have been purchased by a Schedule Tribe only, could easily be cancelled by the administrative authorities but no such action has been taken. Therefore, AO only presumed that Shri Rama Gameti was a benamidar of the assessee and the land purchased was actually benami property of the assessee. Shri Rama Gameti deposited the amounts received by raising the loan in his bank account and by withdrawing the amounts from the bank account, he purchased the land which was sold on profit to M/s. S.S. Education Trust after converting it into non-agriculture land and the assessee did not get any benefit from the land sold to M/s. S.S. Education Trust, a public charitable organisation. Therefore, AO was not justified in holding that the land in question was a benami asset of the assessee and capital gain., if any, was to be assessed in the hands of the assessee. No reason to discuss as to whether the profit on sale of land should be treated as business profit in the hands of the assessee or provisions of Section 50C were applicable because the said facts are to be considered in the hands of the original owner of the land i.e. Shri Rama Gameti who purchased the land by raising the loans and sold the land to M/s. S.S. Education Trust and earned profit - appeal filed by the assessee allowed.
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