TaxTMI 
TaxTMI 
2018 (7) TMI 1091
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..../s 24(b) of Act, 1961. 3. Further ld. A.O. also initiated the penalty provision u/s 271(1) (c) of the Act, the said penalty shall he dropped. 4. The Appellant craves leave to add, amend, alter, substitute and/or modify, withdraw in any manner what so ever all or any of foregoing grounds of appeal at or before the hearing of appeal." 2. Briefly stated, the assessee had e-filed her return of income for A.Y 2011-12 on 06.02.2012 declaring Nil income. The case of the assessee was thereafter selected for scrutiny assessment under Sec. 143(2) of the Act. The A.O assessed the income of the assessee at Rs. 96,78,070/- after making certain additions/disallowances, as under: Sr. No. Particular Amount 1. Addition on account of undisclosed short term capital gain on sale of land Rs.90,19,000/- 2. Disallowance of interest expenditure claimed by the assessee under Sec.24(b) of the Act Rs. 6,59,066/- Total Rs.96,78,070/- 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) being of the view that the A.O had rightly assessed the profit arising from the sale of land as Short Term Capital Gain (for sh....
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....f 1470 persons. The ld. A.R further submitted that the case laws relied upon by the A.O viz. (i) Smt. Sarifa Bibi Mohammad Ibrahim Vs. CIT (1993) 204 ITR 631 (SC); and (ii) CIT Vs. V.A. Trivedi (1988) 172 ITR 95 (Bom) having been rendered in context of the preamended definition of capital asset under Sec. 2(14) of the Act, therefore, the same were distinguishable and had wrongly been followed for drawing of adverse inferences in the hands of the assessee. The ld. A.R in support of his aforesaid contention submitted that as both of the said case laws were rendered under the old provisions, thus the same were not applicable to the case of the assessee which was covered by the post-amended Sec. 2(14)(iii). The ld. A.R further in order to buttress his contention that the case laws relied upon by the A.O having been rendered under the old statutory provisions were distinguishable and not relevant to the case of the assessee, took us through the written submissions which were filed by the assessee before the CIT(A). The ld. A.R further took support of the judgment of the Hon'ble High Court of Bombay in the case of Manubhai A. Sheth & Ors. Vs. N.D. Nirgudkar, ITO & Anr. (1981) 128 ITR 87 ....
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....ugh the relevant observations of the lower authorities. As regards the issue pertaining to the entitlement of the assessee towards claim of deduction under Sec. 24(b) the ld. D.R relied on the order passed by the CIT(A). 5. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We shall first take up the issue as to whether the CIT(A) was right in concluding that the profit arising on the sale of land under consideration was liable to be brought to tax under the head capital gains. We find that Sec.2(14)(iii) of the Act contemplates that agricultural land except for those which are comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board having a population of not less than ten thousand or within a notified distance, not being more than 8 kilometres from the local limits of any such notified municipality or cantonment board, was to be construed as a capital asset. We shall in the backdrop of the aforesaid position of law deliberate ....
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....assessee had purchased agricultural land for a consideration of Rs. 5,00,000/- on 29.01.2010. Rather, a perusal of the stamp duty valuation carried out at the time of purchase of the land under consideration reveals that the same was an agricultural land. Further, on a perusal of the 7/12 extracts it emerges that grass was grown on the said land. Prior to the purchase, the government of Maharashtra had vide a notification dated 05.08.2009 accorded permission to a company, viz. M/s Prakhyat Infra Projects Pvt. Ltd to purchase this agricultural land. The permission was granted to the aforesaid company to establish an industrial estate for service industry and warehousing. Admittedly, the husband of the assessee viz. Sh. Sandeep Bagla was a director in the said company viz. M/s Prakhyat Infra Projects Pvt. Ltd. We find that in the backdrop of the aforesaid facts, it was observed by the CIT(A) that the company viz. M/s Prakhyat Infra Projects Pvt. Ltd. instead of purchasing the land directly in its name, had rather routed the purchase of the same through the assessee. The said land was thereafter within a short span of one year purchased by the aforementioned company viz. M/s Prakhyat ....
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.... permission to M/s Prakhyat Infra Projects Pvt. Ltd (in which company the spouse of the assessee was a director) to purchase the said land for establishing an industrial estate for service industry and warehousing; (ii). that a perusal of the 7/12 extracts revealed that grass was grown on the said land; and (iii). the transfer of land by the assessee to M/s Prakhyat Infra Projects Pvt. Ltd within a short span of one year, clearly reveals that the land under consideration was never intended by the assessee to be exploited for agricultural operations, but was intended from the date of its purchase for setting up of an industry. Be that as it may, we are of the considered view that as the assessee had sold a non-agricultural industrial land, therefore, the A.O had rightly brought the profit arising from the transfer of the same to tax as STCG in the hands of the assessee. We thus, not finding any infirmity in the order of the CIT(A) in context of the issue under consideration, thus uphold the same. The Ground of appeal No. 1 is dismissed. 8. We shall now advert to the claim of the assessee that the CIT(A) had erred in restricting her entitlement towards deduction under Sec. 24(b) o....