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2019 (8) TMI 505

..... ed in detail by the Tribunal in SHRI KRISHNA KUMAR K. GOYAL VERSUS ACIT [2014 (11) TMI 258 - ITAT PUNE] and the Revenue has not brought in any evidence or materials on record to negate the assertions made by the assessee neither they have controverted any facts on record. Evidently, the assessee has shown in the Balance Sheet the land in question as a ‘Personal Asset’ as distinct from ‘Business Assets’. The agricultural lands held by the assessee are for a substantial period of time and assessee has been showing such assets as a part of his ‘Personal Assets’, being ‘investments’ and not as ‘Business Assets’ in the Balance Sheet filed along with the respective returns of income. We hold that the Sub-ordinate Authorities had erred in treating the income arising on the sale of such land at Village Dhamane as sale of stock in trade and in our view, income arising on sale of land at Village Dhamane was on account of sale of investment. Since, there is no dispute that the land in question carried the features prescribed in section 2(14)(iii) and moreover, being analyzed by the Tribunal in the earlier orders, it qualifies to be a .....

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..... referred to as the Act ) and at the same time, the assessee has preferred additional ground with respect to the issue that the Ld.CIT(Appeals) has not admitted the additional evidences in contravention to Rule 46A of the Income Tax Rule, 1962. 3. With regard to the first issue, at the time of hearing, the Ld. AR of the assessee reiterated the submissions as placed before the Assessing Officer and Ld. CIT(Appeals). The Ld. AR emphasized that the facts were already placed before the Revenue Authorities that the land at Village Dhamane is located beyond the distance of 8 kms from local limits and population is less than 10000 as per last census and therefore, these are the agricultural land and do not fall within the definition of Capital Asset as per Section 2(14)(iii) of the Act. It was further pointed out that even in the 7/12 extracts which is land revenue record, it was stated land was agricultural land. Further, the Ld. AR invited our attention to the decision of the Co-ordinate Bench of the Tribunal, Pune in ITA No.1299/PN/2012 and ITA No.1300/PUN/2012 for assessment year 2008-09 in the case of Shri Krishnakumar K Goyal and Shri Vinit K Goyal who are the father and brother of t .....

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..... an agricultural land , which is excludible from the expression capital asset as defined in clause (iii) of sub-section (14) of section 2 of the Act. It is emerging from the record that in support of above proposition, assessee furnished a communication from Talathi of Dhamane village demonstrating that the land was more than 25 kilometers away from the nearest Municipal limits. A certificate from the office of Tehsildar dated 07.09.2007 was also furnished before the lower authorities to show that the population of village Dhamane as per the last census was 780 which is below ten thousand. It is also an accepted position that the land in question was an agricultural land notified in the land revenue records. In support of the same, a certificate of Dy. Director, Town Planning certifying that the land has been classified as an agricultural land in land revenue record is forming part of the sale-deed, a copy of which has also been placed in the Paper Book filed before us. All the aforesaid features pertaining to the land are not in dispute. However, the stand of the Revenue is that assessee being an individual engaged in the business of purchase and sale of lands, the intention to pu .....

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..... d by the assessee and it is only the land at village Dhamane which has been sold during the year under consideration. Prima-facie, the aforesaid Tabulation does not show that assessee was a dealer in purchase and sale of agricultural lands because the period of holding in all cases except the land at village Dhamane is quite substantial. Pertinently, assessee has taken us through the Balance Sheets filed alongwith respective returns of income from the earlier assessment years of 2004-05, 2005-06, 2006-07 as well as 2007-08 to point out that the aforesaid lands have been shown in the Balance Sheet as Personal Assets and not as Business Assets . 11. At this stage, we may deal with one of the observations made by the Assessing Officer, and the same has also been affirmed by the CIT(A), which is to the effect that subsequent to purchase of the land in question assessee has done land consolidation and development activity so as to improve the quality of land. The discussion made by the Assessing Officer in this regard read as under :- 5. Whether there was any act subsequent to the purchase to improve quality of the commodity purchased? Though it is not known as to whether there was any .....

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..... ct that the land has been ultimately sold to an agriculturist for agricultural purposes only. It was also asserted that the purchasers are using it for agricultural purposes only. Before the CIT(A), assessee pointed out that the Assessing Officer had issued summons/notices to the purchasers, copies of which have been placed in the Paper Book at pages 371 to 375. The assertions of the appellant are that such persons appeared before the Assessing Officer and confirmed that they were carrying out agricultural operations on such lands. In this context, we find there is no discussion in the assessment order. However, it would not be out of place to mention here that there is no credible material brought on record by the Assessing Officer to negate assessee s plea that the land in question continued to be in the nature of agricultural land even after it sale. 14. In view of the aforesaid discussion, it is quite clear that the land in question has been disclosed by the assessee as Investment and not as stock-in-trade. It is also clear that no steps were undertaken by the assessee for development of property during the period it held the same. Of-course, in the case of other agricultural l .....

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..... n of the Assessing Officer of treating business advance received by the assessee from Kohinoor Shelter Private Limited and taxed ₹ 1,01,54,628/- as deemed dividend u/s.2(22)(e) of the Act as per discussion given at Para 16 to 20 of the assessment order. 9. Before the Ld. CIT(Appeals), the assessee has made detailed written submissions which are placed on record. Thereafter, the assessee filed additional evidences vide letter dated 15.03.2012 containing Memorandum of understanding between the assessee and M/s. Kohinoor Shelters Pvt. Ltd. which was subsequently cancelled along with confirmation of accounts from M/s. Kohinoor Shelters Pvt. Ltd. The assessee also filed affidavit from Shri L.R. Agarwal, stating that the same was presented before the Addl. CIT, Range-9, Pune on 29.12.2010 and the same was not accepted by him as the assessment order was already passed. The Ld. CIT(Appeals) while upholding the addition made by the Assessing Officer on this issue has mostly deliberated upon the timing within which these additional evidences were filed. The Ld. CIT(Appeals) has not adjudicated upon the admissibility or genuineness of these additional evidences. Rule 46A of the Income T .....

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