TaxTMI 
TaxTMI 
1994 (11) TMI 150
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....arly the records for the asst. yr. 1984-85 to 1986-87. According to the learned CIT the facts on record clearly showed that the profit on sale of plots of land should have been taxed as venture in the nature of trade. He accordingly invoked his revisional jurisdiction under s. 263 of the IT Act, 1961. 3. The assessee argued before the learned CIT that real estate was never his activity; that he resided at Ahmedabad whereas the lands sold in three years under appeal was far away in Nanded; that this land was purchased more than 16 years back; and even when at one time he was a partner in a firm viz. Nanded Development Syndicate formed to deal in real estate, no work was actually done and he was merely a sleeping partner and that the land ....
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.... their family and his uncle's family purchased, and how these lands were disposed of over years, it would leave no doubt as to the intention of the assessee, and of other members of the family. Moreover, the extent of assessee's purchase, his regular sales through the years for more than 15 years, his being a partner in a real estate firm for long years, and plotting of these lands before sale, all show the intention of the assessee to exploit the lands as a business venture. Thus, the facts of assessee's case are properly covered by Supreme Court decision in the case of Janki Ram Bahadur Ram vs. CIT (1965) 57 ITR 21 (SC) and Kerala High Court decision in Michael A. Kalliviyalil vs. CIT reported at (1976) 102 ITR 202 (Ker). The learned C....
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....pon the judgment of the Madhya Pradesh High Court in the case of CIT vs. Ratlam Coal Ash Co. (1987) 65 CTR (MP) 305 : (1988) 171 ITR 141 (MP) and the judgment of the Tribunal in the case of G.L. Rexroth Maneklal Industries Ltd. vs. Dy. CIT (1994) 49 TTJ (Ahd) 8. 5. The learned Departmental Representative strongly supported the orders of the CIT. He submitted that the assessee was engaged in large scale sale of lands; the lands were purchased as agricultural lands; the user was later on got changed to non-agriculture nature, the lands were divided into small plots and sold and this clearly established that the assessee was a dealer in real estate. The ITO while making the assessments did not make enquiries about the intention/motive of th....
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.... not lead to an automatic conclusion that the assessee had no intention to enter into real estate business when he had purchased the lands on an extensive basis and got their user changed from agricultural to non-agricultural. From the perusal of the assessment orders passed by the ITO it is noted that the assessee showed profit on sale of lands as capital gains and the ITO accepted the same without making any enquiries about the nature of lands; the intention with which the same were purchased; change of user from agriculture to non-agriculture and the magnitude of activity carried on by the assessee though spread over a number of years. In our opinion, it is beyond dispute that under s. 263, the CIT does have power to set aside the assess....
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....the assessee was a dealer in real estate or an investor in lands. A reading of the assessment orders of the ITO clearly revealed that he did not make any inquiry whatsoever and accordingly we hold that the CIT was justified in setting aside his orders. 7. Now coming to the arguments of the learned counsel for the assessee, we do not find any merit in them. His first contention is that in the case of other two co-owners no revisional orders have been passed by the respective CIT's. This issue, in our opinion, is immaterial because it is the satisfaction of the CIT which matters while invoking his jurisdiction under s. 263 and in those two cases either the respective CIT might have not found the case fit for revision or such matter would n....
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....the order of the CIT under s. 263 and restoring that of the ITO. In the case of the assessee the ITO passed the stereotyped orders without making any necessary order as indicated above. Even in the case relied upon by the learned counsel the High Court has further had at page 143 that "it is well settled that where the ITO made the assessment in undue hurry, accepting what the assessee stated in the return without making any enquiries, in the circumstances of the case, the CIT would be justified in holding the order of the ITO to be erroneous." Reliance placed on the decision of Tribunal in the case of G.L. Rexroth Industries is of no assistance to the assessee because in that case the dispute related to deduction of a provision made under ....