TaxTMI 
TaxTMI 
2015 (8) TMI 1218
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....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 Rs. 11,47,486/- to the higher figure of Rs. 16,01,261/- and this year's income was Rs. 12,12,220/- 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 No.91 yielded business income and not capital gain and thus reversing the well reasoned order of C.I.T. (Appeals)?" 2.01. Feeling aggrieved and dissatisfied with the impugned judgement and order passed by the learned tribunal in ITA No.2702/Ahd/2010 for A.Y. 2007-2008, the appellant - assessee has preferred Tax Appeal No.65 of 2015 with the following proposed substantial questions of law :- "(a). Whether on the facts and in the circumstances of the case, the assessee was the owner of the land at Survey Nos.287 and 458? (b). If the reply to the above question is in the affirmative, whether on the facts and in the circumstances of the case, the Tribunal was ....
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....n 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 Rs. 10,82,809/- to the higher figure of Rs. 14,36,108/- and this year's income was Rs. 9,16,424/- 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 No.91 yielded business income and not capital gain and thus reversing the well reasoned order of C.I.T. (Appeals)?" 2.05. Feeling aggrieved and dissatisfied with the impugned judgement and order passed by the learned tribunal in ITA No.2703/Ahd/2010 for A.Y. 2007-2008, the appellant - assessee has preferred Tax Appeal No.69 of 2015 with the following proposed substantial questions of law :- "(a). Whether on the facts and in the circumstances of the case, assessee was the owner of land at Survey Nos.287 and 1280? (b). If the reply to the above question is in the affirmative, whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sale of land at Survey Nos.287 and 1280 ....
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.... as well as Long Term Capital Gain with respect to income from land transactions. Thus, while finalizing the assessment, the A.O. held income from land transaction as business income and not Capital Gain, as claimed by the assessee and therefore made addition of Rs. 1,42,97,628/- to the total income of the assessee, disallowing the Long Term Capital Gain being business income. 3.04. That feeling aggrieved and dissatisfied with the above, addition made by the A.O. while passing order of assessment for A.Y. 2007-2008, the assessee preferred appeal before the learned CIT(A) and the learned CIT(A) partly allowed the said appeal and deleted the addition made by the A.O. with respect to the sale of Revenue Survey No.91 treating it as Capital Gain. The learned CIT(A), however, confirmed the addition of Rs. 32,55,053/- made by the A.O. on sale of property bearing Revenue Survey No.287 by treating the income derived from the sale of Revenue Survey No.287 as income from business. 3.05. Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A) both, the revenue as well as the assessee preferred appeals being ITA No.2657/Ahd/2010 and ITA No.2702/Ahd/2010 before the learn....
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....has vehemently submitted that the learned tribunal has materially erred in treating / considering the income from sale of Survey No.91 as business income and not Capital Gain. It is submitted by Mr.Shah, learned advocate appearing on behalf of the respective assessees that Survey No.91 was acquired by the respective assessee by way of Will and therefore, it was "Capital" in nature. It is submitted that therefore, the income from the sale of the aforesaid property which was acquired by sale ought to have been treated as Capital Gain Income and not business income. 4.01. Mr.J.P. Shah, learned advocate appearing on behalf of the respective assessees - original appellants has further submitted that at the time when the respective assessees acquired the land under the sale, it was not acquired as "Stock-in-trade" and it was "Capital" in nature. It is submitted that therefore consequently it is held that the income derived shall be treated as "Capital Gain" and not "Business Income. In support of his above submissions, he has heavily relied upon section 45(2) of the Act as well as decisions of the Division Bench of this Court in the case of Ramjibhai Dahyabhai Versus Commissioner of Inc....
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.... the income from sale of Survey Nos.287 and 484 as business income in the hands of the respective assessees. It is submitted that if the Partnership Firm - M/s.Satyanarayan Traders was the owner of the land in question, the came cannot be passed over to the assessee as a partner without a valid and properly stamped and registered conveyance deed and merely passing the entries in the Books of Partnership Firm. It is submitted that therefore the learned A.O., learned CIT(A) as well as the learned tribunal have materially erred in making addition int eh income received by sale of the aforesaid parcels of land as business income in the hands of the respective assessees. 4.04. Mr.J.P. Shah, learned advocate appearing on behalf of the respective assessees - original appellants has further submitted that the learned tribunal has materially erred in remanding the matter to the A.O. with respect to the agricultural income. It is submitted that as such the agricultural income was accepted in the previous years ranging from Rs. 11,17,486 to Rs. 16,01,261/- and in the year under consideration it was only Rs. 12,12,220/-. It is submitted that therefore, the learned tribunal ought not to have r....
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....t 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. Needless to state that A.O. shall grant adequate opportunity of hearing to the assessee. We also direct the assessee to co-operate by promptly furnishing the necessary details called for by the A.O. to decide the issue. Assessee is also free to produce additional evidence, if any, in support of his contention. In result, this round of Revenue is allowed for statistical purposes." 6.01. In view of the above facts that 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 t....
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....se. Hence, Tax Appeal No.66 of 2015 with respect to question No.(c) is dismissed. 8.00. Now, so far as impugned judgement and order passed by the learned tribunal inholding the sale of Revenue Survey No.91 yielded business income and not capital gain in respect of Tax Appeal Nos.64, 66, 68 and 70 of 2015 is concerned, the assessee treated the income received on sale of Revenue Survey No.91 as capital gain. It was the case on behalf of the assessee that he along with others acquired the said land by way of Will executed by the original owner - Mr.Maganbhai Ambalal Patel. Therefore, it was the case on behalf of the respective assessee that the land was acquired through Will more than 20 years back and therefore, on its sale, the income derived therefrom is to be treated as capital gain. On appreciation of evidence and the material on record, the learned tribunal has not accepted the case on behalf of the assessee that the said land was acquired by the assessee by way of Will. The learned tribunal also noted that the assessee has claimed deduction under section 80IB of the Act for the development of Housing Project, meaning thereby he was engaged in the business of development of Hou....
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....ission from Municipal Corporation, Zoning Certificate from Vadodara Urban Development Authority getting the lay out plans approved, developed the land and divided the land into 206 plots. From the assessment orders for A.Y. 2005-06 and 2006-07, which has been placed in the Paper Book, it is seen that the assessee has claimed deduction under section 80IB of the Act for the development of housing projects, meaning thereby that the assessee was engaged in the business of development of housing projects in those years. In view of the aforesaid facts, we find that A.O. has rightly treated the profit from the sale of land bearing Plot No.91 as "Business Income"." We are in complete agreement with the view taken by the learned tribunal holding the income from sale of land bearing Survey No.91 as business income and not as capital gain as claimed by the assessee. As observed by the learned tribunal, the assessee was not related to said Mr.Maganbhai Patel. Considering the aforesaid facts and circumstances of the case, the decisions of the Division Bench of this Court in the case of Ramjibhai Dahyabhai (supra) and in the case of H. Holck Larsen (supra), shall not be applicable to the facts ....
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..../s.Satyanarayan Traders was declared in the hands of individual members. The reason forwarded by the learned authorized representative was that all the lands were shown in the hands of M/s.Satyanarayan Traders by mistake. M/s.Satyanarayan Traders are in the business of real estate development. The appellant claimed that the plots were not included in the individual Balancesheet by mistake. Why and how such a mistake consistently occurred has not been explained. It is difficult to accept the appellant's contention that the mistake of including in the accounts property worth crores would occur year to year. When the property was purchased, it was purchased for business and reflected in the Balancesheet of the Partnership Firm. The claim of the appellant that profit from the sale of property Survey No. 287 is nothing more than capital gain cannot be accepted. The appellant has shown this amount as an investment in the Balancesheet of the Firm, wherein he is a partner. Relying on the fact that the department has accepted earlier transaction as capital gains does not help the appellant. In fact it was only after recasting of the Balancesheet of M/s.Satyanarayan Traders and the partners,....