PR. COMMISSIONER OF INCOME TAX CENTRAL vs. GAUTAM SHARMA

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ITA/113/2017HC RajasthanRJHC01042044201717 April 2018Author: GOPAL KRISHAN VYAS,RAMCHANDRA SINGH JHALA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court was of the opinion that no interference was warranted as the CIT(A) and the ITAT had thoroughly discussed the entire matter. Specifically, the High Court noted that the controversy regarding the deletion of the addition of Rs. 37,57,650/- made on account of disallowance of land development expenses was correctly decided by both the lower authorities. The Court found that the controversy was decided on the exact grounds of appeal taken by the assessee. Consequently, the High Court concluded that no substantial question of law emerged for consideration. The operative direction was the dismissal of the appeal. No issue was expressly left undecided.

What were the facts?

The assessee, Shri Gautam Sharma, is engaged in the real estate business, purchasing agricultural land, developing it into plots, and selling them. For Assessment Year 2011-12, the Assessing Officer (AO) completed the assessment under Section 143(3) on March 29, 2014, determining a total income of Rs. 1,05,19,690/-, significantly higher than the returned income of Rs. 17,40,647/-. The AO made several additions, including Rs. 37,57,650/- (50% of land development expenses), Rs. 10,00,000/- as unexplained cash credit under Section 68, Rs. 38,01,500/- as unexplained advance for plots, Rs. 81,471/- from miscellaneous expenses, and Rs. 1,38,420/- for excess interest paid on a loan. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who partly deleted these additions. The Revenue then appealed to the Income Tax Appellate Tribunal (ITAT), which affirmed the CIT(A)'s order. The present appeal is filed by the Principal Commissioner of Income Tax-Central, Jaipur, challenging the ITAT's judgment dated July 12, 2017.

What were the issues?

1. Whether the High Court should interfere with the ITAT's decision regarding the deletion of Rs. 37,57,650/- made on account of disallowance of land development expenses, which involves a question of law or mixed law and fact, turning on the interpretation of relevant provisions of the Income Tax Act, 1961. Assessee's Contention: The judgment does not record specific arguments made by the assessee before the High Court. However, the fact that the CIT(A) and ITAT partly deleted the addition implies the assessee successfully argued against the AO's disallowance of land development expenses. Revenue's Contention: The appellant-Revenue contended that the ITAT's order warrants interference. The judgment does not explicitly detail the Revenue's specific arguments before the High Court, but it is implied that they sought to challenge the deletion of the addition made by the AO regarding land development expenses. The Revenue's appeal to the High Court was based on the grievance against the ITAT affirming the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 113 / 2017 Pr. Commissioner of Income Tax-Central, Jaipur. ----Appellant Versus Shri Gautam Sharma, R/o 101, 1st Street, Babu Rajendra Marg, Pal Link Road, Masuria. Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.K. Bissa. _____________________________________________________ HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS HON'BLE MR. JUSTICE RAMCHANDRA SINGH JHALA

J U D G M E N T 17/04/2018

In this Income Tax Appeal filed under Section 230A of the Income Tax Act, 1961 (Act of 1961), the judgment dated 12.07.2017 passed by learned Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in ITA No.232/Jodh/2017 for the Assessment Year 2011-12 is under challenge.

As per facts of the case, the respondent/assessee is engaged in the business of real estate. It purchases agricultural land and after developing and converting into small plots, sells the same to its customers. The assessment under Section 143 (3) of the Act of 1961 was completed on 29.03.2014 for the A.Y. 2011-12 at a total income of Rs.1,05,19,690/- as against returned income of Rs.17,40,647/- by making addition of Rs.37,57,650/- i.e. 50% out of land development expenses claimed at Rs.75,15,300/-, addition

(2 of 2) [ITA-113/2017]

of Rs.10,00,000/- as unexplained cash credit under Section 68 of the Act of 1961, addition f Rs.38,01,500/- as unexplained advance for plot and addition of Rs.81,471/- out of misc. expenses claimed and Rs.1,38,420/- on account of excess interest paid on loan.

Being aggrieved and dissatisfied with the assessment order dated 29.03.2014, the respondent/assessee filed appeal before the learned C.I.T. (A) and the learned C.I.T. (A) partly deleted the additions so made by the A.O vide its order dated 23.02.2017. Being aggrieved with the said order dated 23.02.2017 (received on 08.03.2017), the Revenue preferred appeal before the learned ITAT and the learned ITAT affirmed the order passed by the learned C.I.T. (A) who has partly deleted the addition made by the Assessing Officer.

After hearing the learned counsel for the appellant-Revenue, we are of the opinion that no interference is warranted in this appeal because the learned C.I.T. (A) and learned ITAT have thoroughly discussed the entire matter and decided the controversy with regard to deleting the addition of Rs.37,57,650/- made on account of disallowance of land development expenses. In our opinion, both the authorities below have correctly decided the controversy on the exact ground of appeal taken by the assessee. No question of law emerges for consideration.

Accordingly, and in view of above, the instant income tax appeal is hereby dismissed.

(RAMCHANDRA SINGH JHALA) J. (GOPAL KRISHAN VYAS) J. DJ/- 66

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