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2014 (12) TMI 66
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.... 'AO'), with reference to the sale of lands, came to the conclusion that it is business income while the claim of the assessee was that it being sale/transfer of agricultural land, is not a capital asset within the meaning of Section 2(14)(iii) of the Act and thus is not liable to tax under the Income Tax Act (for short, 'IT Act'). The second issue, which has been raised in the appeal, relates to rejection of the books of accounts by invoking provisions of Sec. 145 (3) of the IT Act and in applying a higher gross profit rate after rejecting the trading accounts. 3. During the course of hearing in assessment proceedings before the AO, information was gathered by the AO on the basis of information conveyed by the assessee that he had sold certain lands from 1st April, 2007 to 31st March, 2008 falling within the previous year relating to the assessment year 2008-09 for a sale consideration of Rs. 8,36,93,154/-. 4. Simultaneously, the assessee also gave purchase value including registration cost at Rs. 3,21,29,158/- and resulting into a difference/gain/surplus of Rs. 5,15,43,996/-. It was noticed by the AO that in some of the cases, the lands were sold/transferred....
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....the contrary, the real intention of the assessee was to sell the land to the companies where the assessee himself was a Director which used it for development and plotting. Thus on the one hand, the assessee gained substantially by not showing surplus by way of capital gains but on the contrary claimed the properties to be converted, in the sale deed itself. The AO was also further of the view that no agricultural operations had been carried on as no evidence was placed on record by the assessee about the agricultural income or activity having been carried on the said lands. It was also noticed by the AO that in some cases, the land has been allegedly transferred to the limited companies through unregistered sale deeds and that no evidence further thereto was provided to the AO. After analyzing the evidence on record, the AO, held that the entire surplus of Rs. 5,15,43,996/- is in the nature of business income and further held that the modus-operandi adopted by the assessee was a colourable device to evade tax and accordingly made the aforesaid addition. 6. In so far the addition relating to rejection of books of accounts u/s 145(3) of the business relating to precious and semi-....
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....hile the AO ought to have gone on the basis by applying proper GP rate. 9. The matter was carried in appeal by the Revenue before the ITAT. The assessee filed cross-objection. The ITAT allowed appeal of the Revenue and partly allowed cross-objections of the assessee. 10. Counsel for the appellant at the outset during the course of arguments contended that the appeal has been decided ex-parte, though admitted that notice was received by the appellant but on account of boycott call given by the Associations namely; the Rajasthan Tax Consultants Association;Tax Consultants Association and Jaipur Tax Tribunal Bar Association with an allegation against member of the Income Tax Appellate Tribunal who is the author of the order of the ITAT in impugned order, a resolution was passed unanimously by all the Associations to boycott the Jaipur Bench of the ITAT on account of said member and the arguing counsel in the instant case also happened to be a signatory of the resolution being Secretary of Jaipur Tax Tribunal Bar Association, the Hon'ble Bench of ITAT was aware of the boycott call given and therefore, it ought not to have proceeded to decide the said appeal ex-parte. Thus the....
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.... that as far as the assessee is concerned, it was proved by the tangible evidence that the purchase made by the assessee is genuine but the conclusion reached by the authorities that the sale/purchase by the assessee is not genuine, is without any evidence or material on record and contended that provisions of Sec. 145(3) are inapplicable and no addition could be made either trading or otherwise and substantial question of law arise out of the finding on record for consideration of this Court. 15. We have considered the arguments advanced by the ld. counsel for the appellant and perused all the orders minutely. We notice that the appeal was listed for hearing on 21/05/2013 before ITAT when the counsel moved an application seeking adjournment for preparing the case and request was carried out. Again on 29/08/2013 (the date of hearing) Judicial Member was deputed to constitute the Division Bench alongwith the Accountant Member posted at Jaipur but when the case was called for hearing, no one appeared on behalf of the assessee nor any application was filed for adjournment and the department was represented by its authorized representative who was heard and the order dt. 26/09/2013 ....
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....1. In item/serial No.4, the date of purchase has been shown to be 31st May, 2007 against a consideration of Rs. 2,14,16,200/- while the same has been sold/transferred to one of the companies, where the assessee himself was Director, on 01/06/2007 against a consideration of Rs. 3,21,35,785/- with surplus/difference of Rs. 1,07,19,585/- and therefore, it is apparent that within a day of purchase, the said property was transferred with again/surplus of Rs. 1,07,19,585/-. 19.2. In item/serial No.6, the date of purchase has been shown to be 31st May, 2007 against a consideration of Rs. 5,88,860/- while the same has been sold/transferred on 13/06/2007 against a consideration of Rs. 61,23,450/- with surplus/gain of Rs. 55,34,590/- and therefore, it is apparent that within less than 15 days of purchase, the said property was transferred with a gain/surplus of Rs. 55,34,590/-. 19.3. In item/serial No.7, the date of purchase has been shown to be 11th April, 2007 against a consideration of Rs. 2,31,725/- while the same has been sold/transferred on 18/08/2007 against a consideration of Rs. 26,35,9....
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....ncluding the expenses incurred on conversion charges and even paid amount to Appropriate Authorities prior to sale of his land to the assessee and even an order u/s 90A of the Rajasthan Land Revenue Act, 1956 read with Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 1992 stood issued by the concerned authorities in respect of the said land. Thus by an order u/s 90 A the nature of the land stood converted from agricultural to non-agricultural. 21. Thus, when the assessee in the conveyance deed himself has recited about the land having been converted u/s 90A of the Act, the nature of the land never remained agricultural any more. The recital of the sale deed executed by the assessee/consignee is reproduced hereunder:- "WHEREAS the seller own and possess in converted area of the lands bearing in khasra no.426/1 admeasuring 11 bigha 13 biswa in which converted area is 10 bigha 17.17 biswa (i.e. 27464 sqm), khasra no.426/2 admeasuring 2 bighas 14 biswas in which converted area is 0 bigha 16 biswa (i.e. 2023 sqm), khasra no.427/2 ad....
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....3 Total 26.11.17 i.e. Twenty Six Bigha Eleven Point seventeen biswa. 22. On perusal of the above, it is apparent that even the order passed under the Land Revenue Act has also been indicated in the sale deed. In this very sale deed, admittedly, the assessee himself has stated "Thus, the seller herein became an absolute owner of the residential land as mentioned above having converted from agricultural to residential use of the land.". 23. The ITAT has recorded a finding of fact that no documentary evidence was led by the assessee herein to substantiate his claim of doing any agricultural operations therein as the AO in the assessment order has clearly and repeatedly asked the assessee to substantiate the claim about the exact agricultural operations having been carried on by the assessee, but no satisfactory material was placed by the assessee. The ITAT also observed that the other lands, though not converted from agricultural to non-agricultural use, were in the same/near vicinity of the lands which were converted from agricultural to non-agricultural and thus the nature of the said lands too could not be different. Ordinarily, the question, whether the land is an agri....