TaxTMI 
TaxTMI 
2014 (12) TMI 71
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....has erred in holding that the land in question was 'stock-in-trade' and hence provisions of Section 50C of the Income tax Act are not applicable overlooking the fact that the assessee was not in the business of land dealing and hence the land cannot be considered as 'stockin- trade. 3. While holding the above, the CIT(A) erred in relying upon the decision of CIT(A), Nashik in the case of Bharat V. Shah (one of the coowners) overlooking the fact that the said decision has already been setaside by the ITAT, Pune to the file of the CIT(A), Nashik for re-adjudication." 3. In brief, the relevant facts are that the respondent-assessee is an individual and the dispute revolves around long term capital gain of Rs. 26,02,681/- assessed in the hands of the assessee with respect to a property situated at Survey No.21/1B & 23/1B Deolali, District- Nashik. As per the Assessing Officer a development agreement dated 30.12.2013 was executed by assessee and two other persons with Shri Rajesh Patharkar with respect to the aforesaid property for a consideration of Rs. 38,00,000/-. The said agreement has formed the basis for the Assessing Officer to infer that assessee earned long te....
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....MOU. Subsequently, a Development Agreement dated 30.12.2003 was executed by assessee and two others, namely, S/Shri Sampurnanad Keshav Gavande and Shri Bharat V. Shah with Shri Rajesh Patharkar for a consideration of Rs. 38,00,000/-. The Assessing Officer has held that capital gain on execution of the said Development Agreement dated 30.12.2003, has arisen in the hands of the assessee and two other persons. 6. The Assessing Officer did not accept the plea of the assessee that he was only a nominee of VEPL. The payments reflected in the Development Agreement were received by VEPL and that even the purchase consideration for the property was paid by VEPL. As per the Assessing Officer, payments made by VEPL can, at best, be understood to have been made on behalf of the assessee and two others but the ownership of the property vested with assessee and two other co-owners. It was, thus, the case of the Assessing Officer that by way of sale-deeds dated 06.09.2000 and 16.12.000, assessee and two other co-owners had acquired the property and the subsequent Development Agreement dated 30.12.2003 executed by assessee and two others with Shri Rajesh Patharkar for a consideration of Rs. 38,....
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....ord and the submission of the appellant and I find that the land in question was acquired by M/s. Viraj Estate Pvt. Ltd. (formerly Mahavir Land Developers) vide two Agreements to Sale dt. 05.01.1993 and then an MOV dt. 21.08.2000 was entered into between M/s. Viraj Estate Pvt. Ltd. and Shri. S.K. Gavande, Shri. Bharat W. Shah and Shri. Manohar Shridhar Patil (the appellant) for development of the land. Accordingly, the Sale Deeds dated 16.09.2000 and 16.12.2000 were entered into between the original land owners and these three co-owners. On perusal of the sale deeds, it is noticed that the payment of Rs. 18,00,000/- has been made by cheques from bank account with Godavari Co-operative Bank Ltd., Nashik between May 1999 to July 2000 and the same has been recorded in the books of M/s. Viraj Estate Pvt. Ltd. The A.O. has also accepted these facts in his remand report that the purchase consideration had been paid by M/s. Viraj Estate Pvt. Ltd. 4.1 On further perusal of the sale deeds, it is noticed that the M/s. Viraj Estate Pvt. Ltd. was a confirming party and two clauses of the Agreement as mentioned at para 4 thereof clearly established that the appellant and two other co-owners ....
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....r consideration and the same has been included in the business profit of 2.36 crores of M/s. Viraj Estate Pvt. Ltd. 4.3 In view of the above facts, circumstances and documentary evidences, I am of the considered view that land in question has been purchased and sold for and on behalf of M/s. Viraj Estate Pvt. Ltd. Further, since the land in question was a stock-in-trade, the profit thereon is liable to be assessed as business income and not as Long Term Capital Gain. Therefore, I hold that the provisions of section 50C are not applicable and no addition on account of capital gain is called for in the case of appellant. This view also gets support from the order of Id. CIT(A)-II, Nashik in the case of Shri. Bharat W. Shah (supra). Thus, the A.O is directed to delete the addition." 11. As per the aforesaid discussion, it is evident that the CIT(A) noticed that the land in question was indeed acquired by VEPL vide two agreements to sale dated 05.01.1993; and, on 21.08.2000 VEPL entered into a Development Agreement with S/Shri Sampurnanad Keshav Gavande and Shri Bharat V. Shah and assessee before us i.e. Shri Manohar Shridhar Patil for development of land. Accordingly, the sale-d....
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....the Revenue, which would require us to infer to the contrary. Thus, the ultimate conclusion of the CIT(A) is hereby affirmed. 15. One argument raised by the Revenue is that the CIT(A) has referred to an order of his predecessor in the case of co-owner Shri Bharat V. Shah for assessment year 2004-05, which has since been set-aside and remanded back for adjudication afresh by the Tribunal. In this context, the learned Representative for the assessee furnished a copy of order of the Tribunal dated 30.01.2012 vide ITA No.1022/PN/2009 whereby the order of the CIT(A)- II, Nashik dated 08.06.2009 relating to Shri Bharat V. Shah for assessment year 2004-05 has been set-aside to the file of the CIT(A) for adjudication afresh. 16. We have perused the said decision and find that the same does not turn much with regard to the present controversy before us. In ITA No.1022/PN/209 (supra), the Tribunal dealt with an appeal of the Revenue whereby similar addition on account of long term capital gain based on the Development Agreement dated 30.12.2003 was deleted by the CIT(A) in the hands of another co-owner. The Tribunal noted that the CIT(A) had allowed relief on the ground that the proper....