ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), PUNE, PUNE vs. ARUN SAMPATRAO PATIL, PUNE

Brief facts of the case are that the assessee is an individual and earned income from land dealing. Income of Rs.18,06,640/- declared in the return for A.Y. 2009-10 furnished on 31.10.2009. Regular assessment u/s.143(3) of the Act completed on 14.12.2011 assessing the income at Rs.30,53,320/-. Subsequently, the assessee was subjected to search u/s.132 of the Act carried out on 28.03.2.016. During search action, it was found that the assessee had sold land admeasuring 17 Hectare 88R and another area of 15 Hectare 06R to M/s. Kshitij Urban Development Private Limited (in short ‘KUDPL’). The assessee also entered into an MOU with KUDPL for acquiring the land measuring 56 Hectare during 2007-08 and agreed consideration of Rs.11.31 crore was received by the assessee but shown as advance. Based on the above information, notice u/s.148 of the Act was issued and re- assessment proceedings for A.Y. 2008-09 was carried out after valid notices issued and served upon the assessee. Ld. AO during the course of assessment proceedings after considering the available records made addition of Rs.2,47,05,000/- on account of the sale consideration of land sold during the year. Income assessed at Rs.2,77,58,320/-.

Aggrieved assessee preferred appeal before ld.CIT(A) and filed submissions and further details in support of its grounds of appeal. Based on these details, ld. CIT(A) deleted the impugned addition. However, ld. CIT(A) did not allow the set off of loss of Rs.19,64,063/- shown by the assessee during the appellate proceedings to be allowed against the income as it was not claimed in the return of income.

Now the Revenue is in appeal before this Tribunal by raising the following grounds of appeal :

Ld. Departmental Representative at the outset submitted that the assessee furnished additional evidences before ld.CIT(A) but no opportunity was provided to the AO under Rule 46A of the Income Tax Rules, 1962 to verify the documents in respect of the alleged cost of the land and other expenses claimed to have been incurred by the assessee and therefore requested for setting aside the issue to the file of CIT(A) and to give necessary direction for calling the remand report from the AO.

On the other hand, ld. Counsel for the assessee submitted that the documents pertaining to the cost of purchase of the land and the expenses incurred thereon prior to its sale were part of the seized records and the information was very much available with the AO. He further stated that ld. AO issued short notice giving unreasonably insufficient time to respond. He stated that such notice was served upon the assessee on 29.12.2016 requiring the information but before the assessee could respond, ld. AO concluded the assessment on 30.12.2016.

We have heard the rival contentions and perused the record placed before us. We notice that ld. AO made the addition for the total sale consideration of the land sold by the assessee during the year amounting to Rs.2,47,05,000/-. The assessee during the course of appeal proceedings furnished relevant details exhibiting the cost of the land purchased and the expenses incurred thereon. As per the details filed before the ld.CIT(A) it was claimed that in the said transaction of sale of land there was loss of Rs.19,64,063/-, however this loss was not claimed in the income tax return. It is claimed that the same contains the details of costs incurred by the assessee for purchase of the land. We also take note that ld. AO gave only one day time to furnish the details regarding the cost of purchase of land which is clearly a case of not providing sufficient opportunity to the assessee. It is also an admitted fact that ld. CIT(A) has not called for any remand report from the AO and there is no mention about the said remand report in the impugned order. It is claimed by the ld. Counsel for the assessee that all these documents were very well on record with the AO.

Considering these facts and circumstances of the case and also observing that AO did not get any opportunity to examine the additional evidences, we deem it to restore the issue on merits regarding the income arising from sale of agricultural land in question before us to the file of ld. Jurisdictional Assessing Officer before whom the assessee shall furnish the relevant details to the satisfaction of the Jurisdictional Assessing Officer and if the claim of the assessee is found to be correct then no addition will be called for. Thus, Grounds of appeal raised by the Revenue are allowed for statistical purposes.

In the result, the appeal of the Revenue is allowed for statistical purposes.