TMI Blog2015 (8) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... see of having agriculture income in view of the agriculture land shown at ₹ 1.25 Crore in the balance sheet. During the course of hearing the ld. A.R. Has asked specific question about the total land holding of the assessee, the type of crops grown and what were the irrigation facilities available to which neither the ld. A.R. or ld. D.R. Could furnish any reply. We are therefore of the view that the details like the land holding under agriculture, nature of irrigation facility on the land, the crops gown on the land in the relevant period, record of crops grown in revenue records needs to be verified and therefore, the matter is restored to the file of A.O. for him to examine the aforesaid facts and thereafter decide the issue as per law. When now the matter is remitted to the file of learned A.O. to examine the aforesaid issue afresh in accordance with law, we see no reason to interfere with the same. No error has been committed by the learned tribunal in remitting the issue to the file of learned A.O. - TAX APPEAL NO. 64 of 2015 With TAX APPEAL NO. 65 of 2015 TO TAX APPEAL NO. 70 of 2015 - - - Dated:- 28-4-2015 - MR. M.R. SHAH AND MR. S.H.VORA, JJ. FOR THE APP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant assessee has preferred Tax Appeal No.66 of 2015 with the following proposed substantial questions of law :- (a). Whether on the facts and in the circumstances of the case, the Tribunal was right in law in reversing the well reasoned order of C.I.T. (Appeals) and in sending the matter back to the Assessing Officer when in the earlier years, agricultural income from the same land was accepted by the Department from the lower figure of ₹ 8,11,167/- to the higher figure of ₹ 14,21,873/- and this year s income was ₹ 7,24,132/- only? (b). Whether on the facts and in the circumstances of the case, the tribunal was right in holding the sale of Plot No.91 yielded business income and not capital gain and thus reversing the well reasoned order of C.I.T. (Appeals)? (c). Whether on the facts and in the circumstances of the case, the tribunal was right in law in reversing the well reasoned order of C.I.T. (Appeals) on section 41(1) and sending the matter back to the Assessing Officer?. 2.03. Feeling aggrieved and dissatisfied with the impugned judgement and order passed by the learned tribunal in ITA No.2704/Ahd/2010 for A.Y. 2007-2008, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the learned tribunal has allowed the said appeal preferred by the revenue, the appellant assessee has preferred Tax Appeal No.70 of 2015 with the following proposed substantial questions of law :- (a). Whether on the facts and in the circumstances of the case, the Tribunal was right in law in reversing the well reasoned order of C.I.T. (Appeals) and in sending the matter back to the Assessing Officer when in the earlier years, agricultural income from the same land was accepted from the lower figure of ₹ 11,81,544/-to the higher figure of ₹ 15,06,134/- and this year s income was ₹ 4,50,000/- only? (b). Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sale of Plot yielded business income and not capital gain and thus reversing the well reasoned order of C.I.T. (Appeals)? 3.00. For the sake of convenience, facts of Tax Appeal No. 64 of 2015, arising out of the impugned judgement and order passed by the learned tribunal in ITA No.2657/Ahd/2010 for A.Y. 2007-2008, are narrated. 3.01. That the assessee - Mr.Ramesh C. Prajapati filed return of income for A.Y. 2007-2008 declaring total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers came to be passed by the learned CIT(A) with respect to sale of the land bearing Revenue Survey Nos.91 and 287 and both, the revenue as well as the respective assessee preferred appeals before the learned tribunal being ITA No.2658/Ahd/2010 and ITA No.2770/Ahd/2010 in case of assessee Mr.Hasmukhbhai R. Prajapati and appeals being ITA No.2659/Ahd/2010 and ITA No.2670/Ahd/2010 in case of Assessees Rajesh D. Prajati and Mr.Raman C. Prajapati, respectively. 3.06. The assessee preferred appeal before the learned tribunal being ITA Nos.238/Ahd/2011. That by the impugned judgement and order, the learned tribunal has quashed and set aside the orders passed by the learned CIT(A) and restored the respective assessment orders and has treated the income from sale of Revenue Survey Nos.91 and 287 as business income and has confirmed the addition made by the A.O. into the income treating the said income as business income in the hands of the respective assessee. 3.07. With respect to agriculture income, the learned tribunal has remanded the matter back to the A.O. to reconsider the said issue / claim afresh. 3.08. Now, in the case of the assessee Mr.Hasmukh Prajapati, in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in (1986) 160 ITR 67. 4.02. Mr.J.P. Shah, learned advocate appearing on behalf of the respective assessees original appellants has further submitted that, as such for 20 years, land bearing Survey No.91, which was acquired by the respective assessee under the sale was kept as it is and therefore, the same cannot be held as Stock-in-trade in the hands of the respective assessees and is / was required to be treated as Capital Assets in the hands of the respective assessees. Making above submissions and relying upon the above submission, it is vehemently submitted by Mr.Shah, learned advocate appearing on behalf of the respective assessees that the learned tribunal has materially erred in confirming the addition made by the A.O. in the income of the respective assessees treating the income of sale of Revenue Survey No.91 as business income. 4.03. Now, so far as the order passed by the learned CIT(A) as well as the learned tribunal holding that the parcel of land of Revenue Survey No.287 was the property of Partnership Firm named M/s.Satyanarayan Traders, is concerned, it is vehemently submitted by Mr.J.P. Shah, learned advocate appearing on behalf of the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sees original appellants has further submitted that even the learned tribunal has materially erred in reversing the order of the learned CIT(A) on Section 41(1) of the Act and sending the matter back to the learned CIT(A). Making above submissions, it is requested to admit/allow these appeals. 5.00. Heard Mr.J.P. Shah, learned advocate appearing on behalf of the respective assessees original appellants at length. 6.00. Now, so far as the proposed question No.(a) in Tax Appeal Nos.64, 66, 68 and 70 is concerned, it is required to be noted that the learned tribunal has as such remitted the issue to the file of learned A.O. and has directed to decide the issue afresh as per law. That while remanding the issue to the file of the A.O., the learned tribunal has observed in para 8 as under :- 8. We have heard the rival submissions and perused the material on record. In the present case the controversy is that assessee has shown income of ₹ 12,12,220/- being income from agriculture activities but A.O. has considered income of ₹ 7,50,000/- to be as business income. We find that it is the assessee s contention that he has stated to have earned agriculture income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. Hence Tax Appeal Nos.64, 66, 68 and 70 with respect to the proposed question (a) are hereby dismissed. 7.00. Similarly, so far as proposed question No.(c) in Tax Appeal No.66 of 2015 arising out of ITA No.2658/Ahd/2010 in the case of assessee Mr.Hasmukhbhai Prajapati is concerned, the learned tribunal has remitted the issue to the file of learned CIT(A) and has directed the learned CIT(A) to decide the said issue afresh after considering the submissions of the assessee and after obtaining the Remand Report from the A.O. While remanding the issue to the file of learned CIT(A), the learned tribunal in para 22 has observed as under :- 22. We have heard the rival submissions and perused the material on record. We find that CIT(A) while deciding the issue in favour of the assessee has held that the assessee would have received the balance amount from Janpriya Trust on sale of land and such amount has been offered to tax. Before us, nothing has been placed on record to demonstrate that the said amount was received by the assessee and was offered to tax in earlier years or in the year under consideration and therefore, provision of section 41(1) of the Act was not applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings recorded by the A.O. that profit from sale of land bearing Survey No.91 as business income, the learned tribunal in para 13 has observed and held as under :- 13. We have heard the rival submissions and perused the material on record. The issue in the present ground is the treatment of treat of tax of the profit earned on sale of land. According to the A.O., the profit to be treated as business income whereas according to the A.O., it is to be treated as capital gains. With respect to the land bearing Survey No.91, it is stated that assessee had acquired the land in the year 1986 under Will made by Shree Maganbhai Ambalal Patel who is stated to have expired on 5/6/1997. It is therefore stated by the assessee that the land was acquired through Will more than 20 years back and therefore, on its sale, the profit arising cannot be considered as capital income. From the copy of the Will placed at page 132 of the Paper Book, it is seen that the Will is only notarized by Notary and it is not registered nor it was probated. On a query by the Bench as to whether the assessee was related to Shri Manganbhai Patel, it is submitted that Shri Maganbhai Patel was not related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in holding the income derived from sale of land bearing Survey No.91 as business income. Under the circumstances, present appeal qua proposed question No.(b) in respect of Tax Appeal Nos.64, 66, 68 and 70 arising out of ITA Nos.2657/Ahd/2010, 2658/Ahd/2010, 2659/Ahd/2010 and 238/Ahd/2011, are hereby dismissed. 9.00. Now, so far proposed question No.(a) in remaining Tax Appeals i.e. Tax Appeal Nos.65, 66 and 69 of 2015 with respect to land bearing Revenue Survey Nos.287 and 485 is concerned, at the outset it is required to be noted that the aforesaid parcels of land were held as Stock-in-trade by M/s.Satyanarayan Traders and even the same were also shown in the Balancesheet of M/s.Satyanarayan Traders. It is a fact that the said parcels of land were not recorded / mentioned in the individual Balancesheet of the assessee. It was the case on behalf of the assessee that due to mistake in maintaining accounts, the same were not mentioned in the individual Balancesheet of the assessee. However, as rightly observed by the learned CIT(A) as well as the learned tribunal, the assessee did not demonstrate as to how the said mistake continued for so many years, more so when accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at business stock has been divided into individual ownership and then sold. Hence the Assessing Officer s conclusion that the income derived from the sale of this plot of land is income from business is correct and the addition of ₹ 32,55,053/- is confirmed. 9.01. The aforesaid finding has been confirmed by the learned tribunal by observing in para 14 as under :- With respect to the land at Revenue Survey Nos.287 and 485, it was submitted before CIT(A) that the land was purchased by M/s.Satyanarayan Traders where the assessee was a partner along with others and during the year, it was sold after being held for a period of 8 years. Before CIT(A), it was also submitted that the lands shown in the hands of M/s.Satyanarayan Traders and not included in the individual Balancesheet of the assessee was due to the mistake. These submissions have not been found to be acceptable by CIT(A). Before us, nothing has been brought on record to demonstrate that the consideration for the purchase of the land was paid by the assessee and not by M/s.Satyanarayan Traders, the firm. The submission of assessee that the non-recording of the land in the individual Balancesheets was on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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