SMT. BHAVNABEN MAHESHBHAI PATEL,,AHMEDABAD vs. THE DY. CIT., CENTRAL CIRCLE-1(2),, AHMEDABAD

The assessee in the memo of appeal has raised as many as 11 grounds of appeal. However the learned AR at the time of hearing submitted that he has been instructed by the assessee not to press ground Nos. 1, 2, 7, 8 & 9, raised in the grounds of appeals. Accordingly we dismiss the same as not pressed.

Likewise the issues raised by the assessee in ground Nos. 10 and 11 are either consequential or premature to decide. Therefore we dismiss the same as infructuous.

Thus the effective issues, remaining for adjudication are stated in ground Nos. 3, 4, 5 and 6 which are reproduced as under:

The interconnected issue raised by the assessee in ground No. 3 and 4 is that the learned CIT (A) erred in confirming the addition made by the AO for �6,46,790/- under the head capital gain.

At the outset the learned AR before us submitted as under:

On the other the learned DR fairly agreed that the appeals filed by the assessee do not require any separate adjudication in the circumstances narrated by the learned AR for the assessee.

We have heard the rival contentions of both the parties and perused the materials available. From the preceding discussion, we note that there is no dispute qua the amount of capital gain earned by the assessee along with other parties. As per the assessee the amount of capital gain was taxable in the assessment year 2007-08 and 2008-09 whereas the revenue had taxed the entire

The interconnected issue raised by the assessee in ground Nos. 5 & 6 is that the learned CIT (A) erred in confirming the addition made by the AO for � 1.50 lakhs representing the share of profit from the undisclosed sources of income of the partnership firm.

Briefly stated facts are that the assessee in the present case is an individual and deriving his income from house property, share of profit from the firm, capital gain and income from other sources. There was a search u/s 132 of the Act carried out in the case of Savvy Group, a partnership firm dated 27.04.2011 and on subsequent dates including the assessee. The assessee along with other family members was a partnerin the firm. As a result of search proceedings, various documents were found which were incriminating in nature. A statement of Shri Mahesh Shantilal Patel was also recorded u/s 131 of the Act dated 29th of July 2011. In the statement it was admitted by Shri Mahesh Shantilal Patel that a sum of Rs.69 lakhs was received from the firm by the partners which was not disclosed in the income-tax return. This undisclosed income was pertaining to the Assessment Years 2007-08 & 2008-09. The allocation of such undisclosed income has been tabulated by the AO on page No.4 of his order. The AO accordingly

Aggrieved assessee preferred an appeal to the Ld. CIT(A) who confirmed the order of the AO.

Being aggrieved by the order of the Ld. CIT(A), the assessee is in second appeal before us.

The Ld.AR at the outset before us submitted that a similar kind of addition was made by the AO in the hands of other partners of the firm which was subsequently confirmed by the Ld.CIT(A). However, on further appeal to the Hon’ble ITAT, the matter was remanded back to the file of ld. CIT(A) for fresh adjudication. The Ld.AR in support of his claim, filed a copy of the order of the Hon’ble ITAT in the case of other partner bearing ITA No.3447/Ahd/2016 for AY 2008-09 & Ors. which is placed on record. Accordingly, the Ld.AR prayed to the Bench to restore the issue to the file of ld. CIT(A) for fresh adjudication as per the provisions of law.

On the other hand, the Ld. DR raised no objection if the matter is referred back to the file of Ld. CIT(A) for fresh adjudication as per the provisions of law.

We have heard the rival contentions and perused the materials available on record. At the outset, we note that the ITAT in the identical facts and circumstances in the case of other partners has remanded back the matter to the file of Ld. CIT(A) for fresh adjudication in accordance with the provisions of law. The relevant extract of the order in ITA No.3447/Ahd/2016 for AY 2008-09 &Ors. Is reproduced below:-

Respectfully following the same, we are inclined to remand this matter to the file of Ld. CIT(A) for fresh adjudication in accordance with the provisions of law. Hence, the ground raised by the assessee is allowed for statistical purposes.

In the result, Assessee’s appeal is partly allowed for statistical purposes.

Coming to following appeals filed by the different assessee.

At the outset we note that similar grounds were raised by the Assessee in ITA No.1370/Ahd/2016 (Bhavnaben M. Patel) corresponding to the A.Y. 2007-08 which has been partly allowed for statistical purposes vide paragraph no. 2 to 12 of this order. For detailed discussion please refer the above mentioned paragraph number of this order. Accordingly we hold that finding given in above paragraphs with regard to ITA No.1370/Ahd/2016 will mutatis mutandis apply in the above mentioned appeals also.

In the results, the above six appeals filed by the different Assessee are partly allowed for statistical purposes.

The assessee in the memo of appeal has raised as many as 6 grounds of appeal. However the learned AR at the time of hearing submitted that he has been instructed by the assessee not to press ground No. 1, 2 & 3 raised in the grounds of appeals. Accordingly we dismiss the same as not pressed.

Likewise the issues raised by the assessee in ground No. 5 and 6 are either consequential or premature to decide. Therefore we dismiss the same as infructuous.

Thus the effective issue, remaining for adjudication is stated in ground No. 4which isreproduced as under:

The issue raised by the assessee is that the learned CIT (A) erred in not adjudicating the alternate contention for allowing the exemption under section 54B of the Act as the investment in the agricultural land purchased stands at � 1,38,22,000.00 which is more than the capital gain even if the benefit of cost of improvement is ignored.

The facts in brief are that the assessee in the present case is an individual and deriving income under the head house property, business & profession, capital gain and income from other sources. The assessee along with other co- owners, in the year under consideration, has sold an agricultural land and received his part of consideration amounting to � 1 crores. The assessee against such sale of agricultural land computed the long-term capital gain of � 76,00,166.00 after claiming index cost of acquisition and index cost of improvement. The assessee in the computation of income further claimed exemption under section 54B of the Act on account of investment made in another agricultural land amounting to � 1,38,22,000.00. However, the AO made the observations during the assessment proceedings as detailed under:

Aggrieved assessee preferred an appeal to the learned CIT (A) who allowed the exemption to the assessee under section 54B of the Act but denied the benefit for the index cost of improvement claimed by the assessee.

Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.

The learned AR before us contended that the assessee has made investment in the agricultural land for an amount of � 1,38,22,000 against the sale proceeds received by him from the sale of agricultural land amounting to �1 crores only. Accordingly, it was contended before the learned CIT (A) that the entire amount of capital gain is eligible for exemption under section 54B of the Act even if the benefit of index cost of improvement is denied. However the learned CIT (A) has not considered the contention raised by the assessee before him. The learned AR in support of his contention filed a paper book running from pages 1 to 16 and drew our attention on page 16 where the contention was raised before the learned CIT (A) for allowing the exemption under section 54B of the Act for the full amount of capital gain earned by the assessee after ignoring the index cost of improvement.

On the other hand, the learned DR contended that the contention raised by the assessee before the learned CIT (A) has not been adjudicated on merit. Therefore the same should be restored back to the file of the learned CIT (A) for fresh adjudication as per the provisions of law.

We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the assessee in his computation of income placed on page 5 of the paper book has shown investment in the agricultural land amounting to � 1,38,22,000.00 which is much more than the capital gain earned by the assessee after ignoring the index cost of improvement. Accordingly, in principle we find force in the contention of the learned AR for the assessee as the investment in the agricultural land exceeds the amount of capital gain. However, this aspect has not been verified by the authorities below. Accordingly we are inclined to set aside the issue to the file of the AO for the limited purpose to verify whether the assessee has made investments in another agricultural land amounting to � 1,38,22,000.00 only. If the contention of the assessee is found correct, then the assessee should be allowed the benefit of exemption under section 54B of the Act as discussed above. Hence the ground of appeal of the assessee is allowed for the statistical purposes.

In the result the appeal of the assessee is party allowed for the statistical purposes.

In the combined result, the appeals filed by the different assessees are partly allowed for statistical purposes.