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Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
Before: SHRI R.K. PANDA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC’: NEW DELHI (Through Video Conferencing) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
ITA No.184/DEL/2020 [Assessment Year: 2015-16]
Turner Builders & Promoters ITO, Pvt. Ltd. Ward-25(4), 38/75, West Punjabi Bagh, New Delhi-110001 New Delhi-110026 PAN-AACCT2121N Assessee Revenue
Assessee by Sh. R.M. Mehta, Adv. Revenue by Sh. Om Prakash, Sr. DR
Date of Hearing 01.12.2021 Date of Pronouncement 13.12.2021
ORDER This appeal filed by the assessee is directed against the
order dated 15.07.2019 of the learned CIT(A)-9, New Delhi,
relating to Assessment Year 2015-16.
Facts of the case, in brief, are that the assessee is a
company and is engaged in the business of dealing in property
and is also having agricultural income as in the past. During
the course of assessment proceedings, the Assessing Officer
noted that the assessee has shown sale of land as agricultural
income and claimed the same as exempt. From the perusal of
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the record, he noted that the assessee in his balance sheet for
2009-10 i.e. Financial Year 2008-09 has shown land as stock
in trade as per schedule 7 of balance sheet, which is as under:-
Other current 2009-10 2008-09 assets Stock in hand Rs.60,72,125/- Rs.1,62,39,850/-
Similarly, he noted that schedule 14 of balance sheet
is as under:-
Increase in stock 2009-10 2008-09 Closing stock Rs.60,72,125/- Rs.60,72,125/- Opening Stock Rs.60,72,125/- Rs.63,81,745/-
Since, the assessee company was showing land as
stock in trade from F.Y. 2008-09 till the year under assessment
i.e. 2015-16 under the head ‘current assets’ in its balance
sheet, the Assessing Officer inferred that the intention of the
assessee was to treat it as trading assets. He, therefore,
rejected the claim of exemption of Rs.26,09,000/-by treating
the same as income from ‘business or profession’. Similarly, the
Assessing Officer noted that the assessee has not shown
3 ITA No.184/Del/2020
income from use of land which is shown as stock in trade,
situated at Kalanor, Haryana which was as per agreement
dated 04.03.2012 and which was exchanged with land at
Nellore, Andhra Pradesh (7.5 acres approx) for cultivation and
looked after by Sh. Saudagar Chand Sikka, relative of one of
the director. Since, the company has neither shown income
from land at Nellore nor at Kalanor, the Assessing Officer made
addition of Rs. 3,75,000/- being lease rent @50000 per acre for
7.5 acre. Thus, the Assessing Officer determined the total
income of the assessee at Rs.29,84,000/-.
In appeal, the ld. CIT(A) upheld the action of the
Assessing Officer.
Aggrieved with such order of the Ld. CIT(A), the
assessee is in appeal before the Tribunal by raising the
following grounds:-
That the Ld. CIT(A) erred both on facts and in law in subjecting to tax the sale proceeds of agricultural land to the tune of Rs.26,09,000/- treating the same to be income from business.
That the Ld. CIT(A) failed to appreciate that the land in question was situated well beyond a distance of 40 KM. from the municipal limits and any capital gain arising from its sale was exempt within the meaning of Section 2(14)(b)(iii) of the Income Tax Act 1961 (“the Act”).
4 ITA No.184/Del/2020
That the Ld. CIT(A) further erred in law in confirming the action of the AO in subjecting to tax a sum of Rs.3,75,000/- as deemed lease rent from land of Kalanor, whereas no such income was earned or accrued to the assessee. The said addition having been made entirely on surmises and conjectures was liable to be deleted.
That the Ld. CIT(A) further erred in law in confirming the action of the AO in converting the limited scrutiny into a complete scrutiny assessment contrary to the Instructions of the CBDT and without seeking the approval of the Pr.CIT/CIT. The assessment order consequent there to being bad in law is liable to be quashed.
Without prejudice to Gr.4 the rejection of the Addl. Ground by the Ld. CIT(A) was bad in law, the same being a purely legal ground which went to the root of the matter and could be raised at any point of time.
The ld. Counsel for the assessee strongly challenged
the order of the Ld. CIT(A) in sustaining the addition made by
the Assessing Officer. The ld. Counsel for the assessee
referring to the following letters addressed to the Assessing
Officer, the copies of which are placed at pages 31 to 106 of the
paper book, submitted that none of these letters have been
considered by the Assessing Officer.
Sl. Particulars Pages No. 5 Letter to the AO dated 13th June 2017 31-33 6 Letter to the AO dated 19th July 2017 33-41 7 Letter to the AO dated 03rd August 2017 41-43 8 Letter to the AO dated 10th August 2017 44-91 9 Letter to the AO dated 18th August 2017 92-104 Letter to the AO dated 05th Sept. 2017 10 105-106
5 ITA No.184/Del/2020
He submitted that although the assessee has given
detailed submissions before the Ld. CIT(A), however, he has
also not considered the same. He submitted that since the
facts are required to be verified by the Assessing Officer from
the books of account and other details already filed, he has no
objection if the matter is restored back to the file of the
Assessing Officer for fresh adjudication.
The Ld. DR, on the other hand, while supporting the
order of the Ld. CIT(A), has no objection if the order is set-
aside to the file of the Assessing Officer for denovo assessment.
I have considered the rival arguments made by both
the sides and perused the record. I find the Assessing Officer in
the instant case rejected the claim of agricultural income of
Rs.26,09,000/- and treated the same as “income from business
and profession”. Similarly, he made addition of Rs.3,75,000/-
on estimated basis being lease rent @ 50,000 per acre from 7.5
acres of land situated at Nellore, Andhra Pradesh. I find the ld.
CIT(A) upheld the action of the Assessing Officer. It is the
submission of the ld. Counsel for the assessee that none of the
submissions filed by the assessee on various dates has been
considered by the lower authorities and without considering the
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same, orders have been passed by making huge addition.
Considering the totality of the facts of the case and in the
interest of justice, I deem it proper to restore this issue to the
file of the Assessing Officer with a direction to give one final
opportunity to the assessee to substantiate its case and decide
the issue as per fact and law. I hold and direct accordingly. The
grounds raised by the assessee are allowed for statistical
purpose.
In the result, the appeal of the assessee is allowed for
statistical purpose.
Order was pronounced in the open court on13th December,
2021.
Sd/- Sd/- [KUL BHARAT] [R.K.PANDA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 13/12/2021 f{x~{tÜ? f{x~{tÜ? f{x~{tÜ? f{x~{tÜ? Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi