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JCIT (OSD) , Circle 26 (1) , New Delhi Versus Shri Suresh Kumar Kukreja

2016 (1) TMI 492 - ITAT DELHI

Capital gains - measurement of distance of land from the end of the municipal limits - agriculture land - Held that:- As the capital gains worked out on transfer of lands was held justified as these lands, being non-agricultural lands, are capital assets in accordance with section 2(14) of the Act and second, that the Assessing Officer, in his remand report, rightly stated that Gunnor Town and Village Panchi Gujran have common boundary and distance measured for other lands (other than lands in q .....

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e issue to the file of the Assessing Officer for limited purposes of factual verification and we are unable to see any perversity or any other valid reason to interfere with the same. Before we part with the discussion on this issue, it is relevant to mention that the Assessing Officer will also take into consideration the binding Circular no. 17/2015 dated 6.10.2015 of the CBDT (supra) while verifying the facts and while applying the law in pursuance to the order of the first appellate authorit .....

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issue requires afresh adjudication at the end of the CIT(A) and hence, we restore this ground to the file of the CIT(A) for re-adjudication on this sole issue. Needless to say that the CIT(A) shall provide due opportunity of hearing to the assessee and shall decide the issue without being prejudiced from his earlier order and our observations in this order. Accordingly, ground of the revenue is deemed to be allowed for statistical purposes. - I.T.A.No.2322/Del/2011 - Dated:- 4-11-2015 - SHRI CH .....

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inst of ₹ 41,90,024/- made by the AO, without giving any justification for the same despite holding that the AO was justified in invoking the provision of section 145(3) of the I.T. Act in; rejecting the trading results of the assessee and that the assessee failed to justify the steep rise in various expenses and assessee s failure to produce any documentary evidence or proof of expenses to substantiate his claim that there was otherwise loss suffered. 2. Directing the AO to measure the sh .....

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Learned Departmental Representative submitted that the Assessing Officer noticed that the land falls within the category of capital assets as defined in section 2(14)(iii)(b) of the Income Tax Act, 1961 (for short the Act), therefore, the sale of agricultural land is considered for capital gain tax purpose and he rightly worked out long term capital gain and the same was correctly added to the income of the assessee. Learned Departmental Representative vehemently contended that the CIT(A) grant .....

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7/2015 dated 6.10.2015 the amended prescribed distance to be measured - aerially, applied prospectively in relation to assessment year 2014-15 and onwards. For the period prior to assessment year 2014-15, it was held that the distance between municipal limit and agriculture land is to be measured having regard to shortest road distance. Accepting the decision of Hon'ble Bombay High Court (Nagpur Bench) in I.T.A. No. 151/2013 in the case of Smt. Maltibai R. Kadu CBDT has issued said Circular .....

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lands at all. The facts mentioned in the AO's remand report in respect of these two khewats as extracted under were not controverted with any documentary evidences by the appellant: i) Khewat No. 1002/987, Khata No. 1229 is having the area of 3 Kanal & 4 Marla is vacant land in which the stones were lying to construct the road, is covered with Boundary Wall from which it is noticed that the road is being developed for plotting development in the land. Further, submitted no Agricultural .....

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Chaahi Bhoomi Darj Ha The land has not been in any use since 2006. Thus, it is held that the capital gains worked out on transfer of these lands (Khewat No. 1002/987, Khata No. 1229 and Khewat No. 898,Khata No. 1154, 1156, 1158) are held justified as these lands, being non-agricultural lands, are capital assets in accordance with the section 2(14) of the Act and thus the AO's findings in this regard are thus upheld. 4.1 The notification no. 9447 dated 06.01.1994 specifies the area upto a dis .....

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/987, Khata No. 1229 and Khewat No. 898, Khata No^ll54, 1156, 11581. from the office of the Tehsildar by vehicle, which may be more than 6 Kms. Therefore, the shortest possible aerial distance of lands other than lands mentioned in para 4 above, for the purpose of capital gains, has to be taken from the boundary of Municipal Limit of Gunnor. The AO is therefore, directed to measure the shortest possible aerial distance of lands other than lands mentioned in para 4 above along with the appellant .....

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veracity of action of the AO to invoke section 145(3) of the Act. The decision of the AO to invoke section 145(3) of the Act is based on his observations that the appellant has suppressed his gross profit (GP) to avoid the tax incidence on surrendered income during the survey operations, as normally; there is no loss in the export business. The AO further observed that the appellant has failed to produce export orders compelling him to sell goods at prenegotiated price. However, the AO has rejec .....

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ightly stated that Gunnor Town and Village Panchi Gujran have common boundary and distance measured for other lands (other than lands in question) from the office of the Tehsildar by vehicle was more than 6 kms. With these observations, the CIT(A) directed the Assessing Officer to measure the shortest possible distance of lands, other than mentioned in para 4 of the CIT(A) order, the CIT(A) in principle decided that the order of the Assessing Officer will remain upheld if the distance from munic .....

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10.2015 of the CBDT (supra) while verifying the facts and while applying the law in pursuance to the order of the first appellate authority. Accordingly, we uphold the conclusion of the CIT(A) with the direction to the Assessing Officer, as set out above. Therefore, ground no. 1 of the Revenue being devoid of merits is dismissed. Ground No.2 7. Apropos ground no. 2 of the revenue, we have heard the rival submissions and carefully perused the relevant material placed on record, inter alia, assess .....

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cepted this conclusion of first appellate authority as he has not filed any cross appeal or cross objection against these observations and conclusion of the authorities below. 8. Learned Departmental Representative further pointed out that the Assessing Officer was correct in making calculation of profit from business wherein the Assessing Officer has taken GP rate of 2.90% of the turnover on the basis of earlier year G.P. rate at ₹ 7,70,486 being 2.90% of the turnover of ₹ 2,65,68,4 .....

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ion and interest amount ₹ 6,73,538 and ₹ 6,24,638 and finally calculated the net business income at ₹ 79,82,620 and also gave reconciliation and adjustment of the amount of ₹ 37,92,596 as declared by the assessee as profit and gains from business. Learned Departmental Representative vehemently pointed out that the CIT(A) reduced the addition to ₹ 10,00,000 without any reasoning and hence the impugned order may be set aside by restoring that of the Assessing Officer. .....

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Learned counsel of the assessee supported the action of the CIT(A). 10. On careful consideration of above, at the outset, we observe that the assessee accepted the conclusion of the CIT(A) in regard to rejection of book results u/s 145(3) of the Act as admittedly there is no cross appeal by the assessee against said findings of the authorities below. Further, the assessee, in his ground no. 5 before the CIT(A), has agitated the issue of addition of ₹ 41,90,024 by simply alleging that the .....

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atement recorded during survey voluntarily surrendered said amount of ₹ 85,10,310 for taxation over and above normal profit for the financial year and on this basis and after rejecting the book results, the Assessing Officer proceeded to estimate the normal profit from business by adopting GP rate of 2.90% of total turnover amounting to ₹ 7,70,486 (being 2.90% of turnover of ₹ 2,65,68,488) and he added surrendered amount of ₹ 85,10,310 to this estimated profit and also al .....

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hich have been reproduced by the CIT(A) in para 3 of the impugned order. On careful perusal of the same, we clearly observe that the assessee has mainly challenged the conclusion of the Assessing Officer wherein he rejected books of accounts of the assessee u/s 145(3) of the Act. At the cost of repetition, we may again point out that the CIT(A) has upheld rejection of books of accounts and since the assessee has not challenged this issue by way of either cross appeal or objection, then this issu .....

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case, remand report of the Assessing Officer, submission & rejoinder of the appellant and perused the record. It is held that the Assessing Officer s observations as mentioned in the impugned order coupled with findings of survey were of consequence to jeopardize the correctness of the books of accounts, if maintained by the appellant though the same was neither produced before the AO or me. Books of accounts are thus held non-reliable, which is also buttressed by the fact that the excess st .....

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gone up to 30.48% in the relevant year only on account of disclosure of income of ₹ 85.10 lakhs during survey, otherwise it is in loss. It is noticed that this is not the first year in which the input cost has gone up substantially higher in last 7 years. However, the appellant demonstrated that goods exported in financial year (FY) 2008-09 was at lesser rate than the cost of purchases, which resulted loss of ₹ 69.53 lakhs. The appellant argued that the recurring loss forced him to g .....

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ome. Thus, the addition of ₹ 31,90,024/-/under the head business income is hereby deleted. Accordingly, the appellant gets relief. 13. From the above, it is apparent that the CIT(A) upheld the conclusion of the Assessing Officer in the adjudication part wherein he concluded that no documentary proof of expenses to substantiate the claim was produced before me to controvert findings of the Assessing Officer. We further observe that in the last two sentences, the CIT(A) reduced the addition .....

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