MANJU BANSAL,JAIPUR vs. ITO, JAIPUR

PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A)-2, Jaipur dated 23-09-2016 for the assessment year 2011-12 raising following grounds of appeal:- ‘’1. Under the facts and circumstances of the case, the ld. CIT(A) is not justified in rejecting the additional ground challenging the initiation of proceedings u/s 147/148 of I.T. Act, 1961.

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

(1) Sale of property 74,SMS Colony, Durgapura, Jaipur Rs. 71,28,702/-

(2) Sale of property 91,R.K. Puram Sanganer, Jaipur Rs. 7,05,720/-‘’

2.1 During the course of hearing, the ld.AR of the assessee has not

pressed the Ground No. 1. Hence, the same is dismissed being not

pressed.

3.1 Apropos Ground No. 2 & 3 of the assessee, the facts as emerges

from the order of the ld. CIT(A) are as under:-

‘’3.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The facts of the case are discussed in ground No. 1. In the return of income filed by the assessee subsequent to the notice issued by ITO, (Intelligence), the assessee filed a return declaring sale consideration of Rs. 20,21,000/- and declared stock in trade of Rs. 12,21,000/-. The Assessing Officer did not accept the declaration of sale consideration and the sale of plots as a business transaction and the claim of the assessee that they were held as stock in trade. The reasons discussed in the return of income for Assessment Year 2011-12 page 19 are reproduced below:- ‘’(A) The assessee admitted that no return of income for the A.Y. 2011-012 and earlier years had been filed.

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

(B) It has also been admitted that no business activity was there before A.Y. 2011-12. ( C) The assessee has also admitted that the return of income was filed after issuance of notice by the Department. (D) The assessee categorically admitted that no books of account have been maintained as required u/s 44AA and the income has been declared u/s 44AD of the I.T. Act, 1961. (E) The assessee stated that during the F.Y. 2009-10 one property situated at 74,SMS Colony, Durgapura, Jaipur was purchased which was her first business activity, however, no documentary evidence has been produced. (F) The lady assessee stated that she is carrying out business activity since 26- 03-2010 and started earning good since 21-07-2010,so it is correct that she was partially dependent on her husband before 26-03-2010. As regards the partially or fully dependency on her husband, the husband of the lady never intimated to his Govt. Department. (G) As regards the rejection of claim, the assessee stated that the property was purchased on 26-03-2010 and at that time it was a plain plot. The assessee is not correct to say that one room set and boundary wall constructed thereon. The assessee in her statement had categorically stated that no construction was carried out thereon. Further, on going through the Sale Deed of the property, it has clearly mentioned that only tin shed was thereon. (H) As regards the DLC value of Rs. 76,21,852/-, the assessee stated that they did not have knowledge otherwise the issue would have been challenged in the Revenue Court. Although, on the enhanced value of the property the Stamp Duty has to be paid by the purchaser, however, as per provisions of sec 50C, it was obligatory on the part of the assessee to pay Capital Gain Tax thereon. (I) In the conclusion the assessee stated that the transaction begins with one purchase and ends with one side is not decisive. It would be pertinent to mention that an isolated transaction or activity cannot be part of business. To consider the question of business, there must be regular activity of purchasing and selling..’’ Further, statement of Smt. Manju Bansal and her husband Mahesh Bansal were recorded and the extract is reproduced in the Assessing Officer’s order. After discussing the details filed by the assessee the Assessing Officer did not accept the contentions of the assessee and subjected the transactions to the provisions of section 50C and calculated the capital gains thereon.

In the present proceedings, the Authorized Representative reiterated the submissions made before the Assessing Officer in the assessment proceedings and also made an application for acceptance of additional evidence which consisted of a valuation report of a registered valuer for valuation of land sold by the

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

assessee. No reaons as prescribed in Rule 46A exist for admittance of such an evidence as enough opportunity before the Assessing Officer was available to the assessee and the same has not been denied. Further, the only ground relates to the assessment of the transaction as capital gains or business venture, no purpose is served by the valuers report for the above proposition. No further or additional or alternate grounds have been taken by the Authorized Representative. Hence, the additional evidence is not admitted for reasons as discussed above.

Now coming to the question of sale transaction as capital gain or business, it is seen that no return has been filed in the prescribed time as per the provisions of the Act and only after a specific notice under section 133(6) with the details of the transactions was issued to the assessee by the ITO, Intelligence (I&CI) the return was filed. At that stage after the department has already received the information regarding the transaction and on being questioned about it the assessee has claimed that the transaction reflect a business transaction and the plot was being held as stock in trade. No previous returns have been filed by the assessee from where it could be seen that the assessee was in the business of selling and purchasing land and plots. In the balance sheet filed four plots have been shown as capital assets and it is stated by the Authorized Representative that the plot sold are part of the closing stock of the previous year. All the balance sheets and accounts have been subsequent years the same are filed under section 44AD. In view of the above conspectus of facts one thing is clear that the assessee had not filed the relevant returns and hence cannot take the benefit that its previous conduct would point to the fact of carrying on business or not.

Further, when questioned regarding the transactions, both the assessee and her husband in their statements recorded on 25.11.2014 could not give satisfactory answers. The relevant questions which bring out this aspect are reproduced below:

Manju Bansal statement recorded on 25.11.2014

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

iz'u 5% o"kZ 2009 esa tc vkius viuk O;olk; 'kq: fd;k Fkk ml o"kZ esa vkids ikl D;k&D;k lEifr Fkh ftlds vk/kkj ij vkius O;olk; 'kq: fd;kA mÙrj 5%eq>s bl ckjs esa ;kn ugh gSA o"kZ 2009 ds O;olk; 'kq: djrs le; dkSu lh lEifr ls O;olk; 'kq: fd;k Fkk ,oa ml o"kZ esa D;k cspk Fkk ;g Hkh /;ku ugh gSA iz'u 6% blds ckn ds o"kZ 2010&11 vFkkZr fu-o"kZ 2011&12 esa vkius D;k [kjhn cspku fd;k FkkA mÙrj 6% o"kZ 2010&11 es eSus ,l-,e-,l- dkWyksuh okyk IykV [kjhnk Fkk ,oa cspk ,oa ,d IykV dkj ds iqje dkWyksuh esa [kjhnk Fkk ,oa mls cukdj dc cspk Fkk bldk eq>s /;ku ugh gSA ,l-,e-,l dkWyksuh okyk tSlk Fkk oSlh gh fLFkfr esa cspk FkkA iz'u 9% vkius tks edku cukdj csps gS ,oa muesa tks cukus esa [kpkZ yxk;k gS D;k vkids ikl ml [kpsZ ds fcy okmpj bR;kfn ekStwn gSA mÙrj 9% edku cukus esa tks [kpkZ fd;k x;k gS mls fcy okmpj izLrqr djus esa vleFkZ gwWaA iz'u11% u rks vkius o"kZ 2009&10 vFkkZr fu-o"kZ 2010&11 dh vk;dj fooj.kh Hkjh gS ,oa ugh dksbZ mldk lcwr bl ckcr fd vkidk 31-03-2010 dks D;k Dyksftax LVkWd Fkk ,oa 1-4-2010 dks D;k izkjfEHkd LVkad Fkk lcwr is'k djus esa vleFkZ jgs gS ,oa o"kZ 2010&11 vFkkZr fu- o"kZ 2011&12 dh vk;dj fooj.kh Hkh foHkkx }kjk bafxr fd;sA tkus ds ckn fd vkids }kjk tks lEifÙr csph xbZ ij ns; dj curk gS fu-o"kZ 2011&12 dh fooj.kh nkf[ky dh xbZ gS tks fd vkius O;olk; esa dksbZ yxkrkj O;olkf;d xfrfof/k ugh jgh gS u gh bl ckjs esa vki dksbZ lk{; izLrqr dj ik;s gS fd vkius O;olk; 'kq: fd;k FkkA vr% D;ksa ugh 72]61]852@& ij y/kq dkfyd iwaftxr ykHk dh x.kuk fu- o"kZ 2011&12 ds nkSjku dh tk;sA mÙrj% bl ckjs esa foLr`r :i esa esjs ifr Jh egs'k caly mÙrj nsus esa l{ke gksxk D;ksafd os gh O;olk; dk lkjk dk;Z ns[krs gSA

Mahesh Bansal Statement recorded on 25-11-2014

iz'u 8% vkidh iRuh Jherh eatw caly us vius c;kuksa esa iz'u la-11 esa crk;k gS fd esjs ifr esjs O;olk; dh ns[kjs[k dj jgs gS ,oa fofHkUu O;ogkj tks tehu [kjhn ,oa fcØh ds gq;s gS muds ckjs esa o t;knk vPNh rjg tkurs gS ,oa bl ckjs esa viuk Li’Vhdj.k nSA

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

mÙrj 8%esjh iruh }kjk fd;s tk jgs O;olk; dh tkudkjh ifr gksus ds ukrs bruh gh gS fd os tehu [kjhn QjksDr ,oa Hkou fuekZ.k dk O;olk; dj jgh gSA ifr gksus ds ukrs os eq>s vius O;olk; ds ckjs esa crkrh jgrh gS o"kZ 2009&10 esa Ø; fd;sa x;s IykV esa tks /ku O;; fd;k x;k Fkk og esjs firk }kjk e`R;q ls iwoZ o"kZ 2009 esa fn;k Fkk vU; dksbZ tkudkjh eq>s ugh gSA In the statement, Smt. Manju Bansal stated that her husband would know the details, the husband stated that he only knew about the business that she is indulging in sale and purchase of plots. Further, while the lady stated that on the plot at SMS Colony no construction had been done while in the proceedings it has been claimed that construction had been undertaken on the plot. Thus, there are discrepancies in the statement also.

The above clearly shows that the assessee has sold the plots and not filed the return of income, information for which was received by the department. On being questioned for the same, the assessee has come up with the plea of having sold the same as stock in trade. No evidence of the fact that the assessee was in the business of sale and purchase of land and the plots were held as stock in trade could be produced by the assessee. All books of accounts, balance sheet, profit and loss account are prepared subsequently, no returns of income had been filed prior to the year or for the year in question. Four other plots are appearing as capital assets in the balance sheet and the two plots sold are being claimed to be stock in trade based on the balance sheet of previous year which is again arrived at and submitted subsequent to the enquiry by the department. The returns for subsequent years are filed under section 44AD. The assessee is claiming that construction had been carried out on the plot before its sale to supplement its stand that it was the part of business, whereas the registered sale deed records only a 100 sq. ft. tin shade room on the plot at the time of sale. The onus for proving treating a particular asset as stock in trade or asset rests with the assessee especially in a case where no returns were filed and the return is filed after detection of the transaction by the department and notice thereon based on information received. Reliance is placed on the case of V.S. Chandra Shekhar vs. ACIT, Bangalore wherein it has

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

been held that since the assessee failed to bring any evidence on record to show that the amount was paid to the vendor for acquiring land as stock in trade for the purpose of business, addition made thereon by the authorities below was to be confirmed. (54 Taxmann. Com 185, Bangalore Tribunal). In view of the discussion and facts of the case, the addition made by the Assessing Officer under the head capital gain is confirmed. The ground of appeal is dismissed.’’

3.2 During the course of hearing, the ld.AR of the assessee prayed that

the ld. CIT(A) had erred in not admitting the admitting the additional

evidences submitted under rule 46A of IT Rules, 1962 and also erred in

confirming the addition of Rs. 78,34,422/- towards short term capital gain

as determined by the AO on sale of property 74, SMS Colony,

Durgapura, Jaipur for Rs. 71,28,702/- and on sale of property 91, R.K.

Puram, Sanganer, Jaipur for Rs. 7,05,720/- for which the ld.AR assessee

filed the following written submission.

‘’Ground No.2 &3 : 1.The assessee purchased a land 74, SMS Colony, Durgapura Jaipur, vide registered deed dated 26.03.2010 for Rs.400000/- (PB No.52) and within four months thereof after construction of one room and boundary wall thereon sold the same vide registered sale deed dated 21.07.2010 for Rs.1000000/-.DLC value was adopted as per registered sale deed Rs.2044872/-(PB No.60).

2.The assessee purchased another land 91, R.K.Puram, Sanganer, Jaipur vide registered deed dated 24.06.2010 for Rs.300000/- (PB No.66) and after construction of a residential house thereon sold the same vide registered sale deed dated 31.01.2011 for Rs.1021000/-.DLC value was adopted as per registered sale deed Rs.986873/-(PB No.71).

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

3.The assessee purchased another land B-6A, Devi Chiranjeevi Colony, Jaipur vide registered deed dated 25.11.2010 for Rs.4960000/- (PB No.81) and started construction thereon, during the relevant previous year which remained in hand at the end of the year. 4. The assessee in response to certain inquiries conducted by Intelligence wing of the department submitted her return of income filed after initiation of such inquiries, wherein the relevant transactions of purchase and sale of land and construction thereon, were claimed as business transactions and corresponding income of Rs.175491/- was shown as income from business & Profession. 5. The AO initiated the assessment proceedings u/s 148 of IT Act 1961, and during the course of assessment proceedings assessee vide letter dated 16.12.2013 (PB No.95) submitted the copy of return of income along with Trading and Profit & Loss Account and Balance Sheet showing Opening stock, purchases, Construction Exp. sales and closing stock, and Indirect Exp. etc. and declaring Net profit of Rs.175491/- against total sales of Rs.2021000/-.(PB No.28-31) 6. The assessee vide letter dated 11.07.2014 (PB No.100) submitted the copy of balance sheet for the preceding A.Y.2010-11, wherein the land (74, SMS Colony) purchased in preceding year on 26.03.2010, was shown as closing stock of Rs.493150/-.(PB No.27) 7. The assessee also claimed that the business of Real Estate was continued in succeeding years and submitted the return of Income along with Trading and Profit & Loss Account and Balance sheet for the succeeding A.Y.2012-13(PB No.32-34) 2013-14(PB No.35-39) and 2014-15 (PB No.40-42) r.w. PB No.108. 8. The asessee vide letter dated 11.08.2014 (PB No.102) further claimed that the return for the relevant previous year has been filed u/s 44AD of IT Act 1961, declaring Net profit higher than presumptive NP rate, therefore she has neither required nor maintained any books of accounts, however the Trading and P& L Account and balance Sheet have been prepared on the basis of bank statement and memorandum information. 9. As directed by the AO the assessee and her husband personally appeared before the AO whose statements were recorded on oath.(PB No.43-47/48-51) 10. The AO rejected the claim of the assessee and held that the assessee had no such business activity during the preceding A.Y.2010-11 or in earlier years and return of income for the relevant previous year has been filed after issuance of notice of the Intelligence Wing of the department, therefore land/house under consideration is a capital assets and not the stock in trade as claimed by the assessee. 11. The AO on the basis of information available in his possession observed that the DLC Value of one of the property (74, SMS Colony) of Rs.2044872/-adopted at the

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

time of execution of registered sale deed dated 21.04.2010 has been enhanced to Rs.7621852/- by the DIG, Stamps. 12. The assessee vide letter dated 19.12.2014 (PBNo.107) raised her objection before the AO towards such enhanced valuation of Rs.7621852/-just within four months from the date of purchase. 13.The AO in respect of said property (74, SMS Colony), ignoring the objection of the assessee determined short term Capital Gain in respect of said property of Rs.7128702/-by applying the Enhanced DLC Value of Rs.7621852/- and cost of acquisition of Rs.493150/- without allowing any cost of improvement towards construction of One room and Boundary wall thereon. 14.The AO in respect of another property (91, R. K. Puram) determined short term Capital Gain of Rs.705720/-by applying the sales consideration of Rs.1021000/- and cost of acquisition of Rs.315280/- without allowing any cost of improvement towards construction of complete residential house thereon. 15. The AO thus made addition of Short term Capital gain determined in respect of both the properties, to returned income. 16. The year wise activities of the assessee relating to purchase, construction and sale of land/house, beginning from preceding A.Y.2010-11 may kindly be considered as follows: A.Y.2010-11 Op. Purchase Construction sale Cl. stock stock Nil 400 sq. Yard land, 74, SMS Colony, Nil Nil Rs.493150/- Durgapura, Jaipur for Rs.400000/- vide Reg. Deed dated 26.03.2010 (PB No.52- 58) shown as stock in trade in the Balance Sheet submitted before the AO vide letter dated 11.07.2014(PB No.27/100) Registry Exp. Rs.93150/- Nil 493150/- Nil Nil 493150/-

A.Y.2011-12 Op. stock Purchase Construction sale Cl. stock

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74, SMS One Room and Boundary Wall Vide registered Nil Colony, as mentioned in registered sale deed dated Jaipur Deed dated 21.07.2010 and site 21.07.2010 for Rs.493150/- Plan (PB No.60/62/65) and Rs.100000/-(PB affirmed in the statements of the No.60-65) assessee, answer to Question No.10 (PB No.43/45-46) ) 126 sq. Yard land, 91, Construction of residential Vide registered Nil R.K.Puram, Sanganer, house, 1102 sq ft., as per site deed dated Jaipur for Rs.300000/-, vide plan annexed to Reg. Sale deed 31.01.2011 for Reg. Deed dated 24.06.2010 dated 31.01.2011 (PB No.71/80) Rs.1021000/- (PB No.66-70) Reg. (PB No.71-80) Expenses Rs.15280/- 91.66 sq.Yard land, B-6A, Construction of residential Nil B-6A, Devi Devi Chiranjeevi Colony, house, costing Rs.700000/- as Chiranjeevi Jaipur vide registered deed claimed before AO vide letter Colony, dated 25.11.2010 for dated 17.11.2014 (PB No.104) Jaipur Rs.496000/- (PB No.81-88) Rs.1221100/- Reg. Expenses Rs.25100/- 493150/- 836380/- 1630000/- 2021000/- 1221100/- Trading and Profit & Loss Account (PB No.31)

A.Y.2012-13 Op. stock Purchase Construction sale Cl. stock B-6A, Devi Nil Nil Nil 1221100/- Chiranjeevi Colony, Jaipur Rs.1221100/-

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During the succeding A.Y.2012-13 assessee undertaken contract work and opening stock remained in hand as closing stock, as per return of income & Balance sheet submitted before AO.(PB No.32-34). A.Y.2013-14 Op. stock Purchase Construction sale Cl. stock B-6A, Devi Nil Nil 1221100/- Chiranjeevi Colony, Jaipur Rs.1221100/- 121, R.K.Puram, Sanganer, Construction of residential Sold on Nil Jaipur, purchased on House for Rs.1175680/- 09.05.2012 for 02.04.2012 for Rs.316280/- Rs.1051000/- as claimed before AO vide letter dated 17.11.2014(PB No.104) House No.46, Prem Nagar, Nil Sold on Nil Vistar, Gopalpura, Jaipur 28.02.2013 for purchased on 19.11.2012 for Rs.533334/- Rs.474400/- Contract Work Nil of Rs.680000/- 1221100/- 790680/- 1175680/- 2264334/- 1221100/- Trading and Profit & Loss Account (PB No.39) A.Y.2014-15 Op. stock Purchase Construction sale Cl. stock B-6A, Devi Nil Nil 1221100/- Chiranjeevi Colony, Jaipur Rs.1221100/-

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

352A, Surya Nagar, Nil Nil 386567/- Gopalpura, Jaipur, purchased on 04.09.2013 for Rs.386567/- as claimed before AO vide letter dated 17.11.2014 (PB No.104/105) 1221100/- 386567/- Nil Nil 1607667/- Trading and Profit & Loss Account (PB No.42)

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ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

41.Therefore the assessee as advised, got valued the said property by an independent and registered valuer as on date of sale i.e. on 21.07.2010 for Rs.2341080/- and submitted the same before ld. CIT(A) as additional evidence along with application u/r 46A of IT Rules 1962.(PB No.13-26). 42.The ld. CIT(A) too has not dealt with the objection raised by the assessee towards excessive valuation adopted by DIG Stamps and without properly appreciating the contention of the assessee denied to admit the above said additional evidences submitted by the assessee.(Page No.13 of CIT(A) order.) 43. Where the assessee raised objection regarding the valuation adopted by stamp valuation authority the AO is duty bound to consider the same. Kindly refer to ITO v.Gita Roy 17 ITR (Trib.)431,(Kol), ITO v. Manju Rani Jain,24 SOT 24(Del), Trishla Jain v. ITO 11 ITR 579 (Del) Meghraj Baid vs. ITO 114 TTJ 841 (JD) and Rajendar Kumar Mankar v. SCIT (2015) 174 TTJ 409(JD). 44. The valuation report of the relevant property submitted by the assessee before ld. CIT (A), goes to the root of the issue and is quite essential to arrive at the fair market value of the property. 45.The AO neither decided nor required the assessee to submit any evidence or clarification in respect of her objection raised vide letter dated 19.12.2014 towards valuation adopted by stamp valuation authority, therefore the assessee was prevented by sufficient cause from producing the above said valuation report before the AO. 46.The the acse of the assessee falls within the scope of circumstances prescribed u/r 46A(c ) of IT Rules 1962, therefore ld. CIT(A) is not justified in holding that no reason as prescribed u/r 46A exist for admittance of such an evidence. 47.If the claim of the assessee that the relevant transaction of sale of the property is business transaction is rejected and the same is assessed as capital gain, the objections raised by the assessee towards higher and excessive valuation adopted by the stamp valuation authority is liable to be decided in the light of fair market value as per valuation report submitted by the assessee, therefore ld.CIT(A) is not justified in holding that no purpose is served by the valuation report. 48. Thus the ld. CIT(A) is not justified in not admitting the additional evidences submitted by the assessee and in not dealing with the objection raised by the assessee towards excessive and higher valuation of the property adopted by stamp valuation authority. Kindly refer to application filed before ld. CIT(A) u/r 46A of IT Rules 1962. (PB No.13-14). 49.The valuation report submitted by the assessee clearly support the contention of the assessee that the enhanced valuation of Rs.7621852/- adopted by stamp valuation authority is abnormally excessive and higher as compared to fair market value of the relevant property and such valuation has been made at imaginary figures.

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3.3 On the other hand, the supported the order of the ld. CIT(A)

3.4 We have heard the rival contentions and perused the materials

available on record. The assessee during the relevant previous has sold

two properties 74, SMS Colony, Durga Jaipur and 91, R.K. Puram,

Sanganer, Jaipur. The first property 74, SMS Colony, has been sold vide

Regd. Sale deed dated 21.07.2010 for sale consideration of

Rs.10,00,000/-, the stamp valuation authority for the purpose of

Registration adopted DLC Value of Rs.20,44,872/- which was later on

enhanced to Rs. 76,21,852/-by the DIG stamps. The second property 91,

R.K. Puram, Sanganer, Jaipur has been sold vide Regd. Sale deed dated

31.01.2011 for sale consideration of Rs.10,21,000/-which was more than

the DLC Value of Rs.9,86,873/- adopted by the stamp valuation

authority(PBP-71 backside). The registered sale deeds of both the

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properties are placed at Page No.60 and 71 of the Paper Book. The first

property 74, SMS Colony, was purchased by the assessee vide Regd.

Purchase deed dated 26.03.2010 for Rs.400000/- (PBP-52-59) and second

property 91, R.K. Puram was purchased vide Regd. Purchase deed dated

24.06.2010 for Rs.3,00,000/-(PBP 66-70), which after certain

construction thereon have been sold during the relevant previous year.

The registered purchase deeds of both the properties are placed at Page

No.52 and 66 of the Paper Book. The assessee also vide Regd. Deed

dated 25.11.2010 purchased another land B-6, Devi Chiranjeevi Colony,

Jaipur for Rs.4,96,000/- (PBP 81-88) which is lying in hand at the end of

relevant previous year. The assessee in response to certain inquiries

conducted by the revenue, filed belated return u/s 139(4) of the IT Act

1961, declaring net profit of Rs.1,75,491/- from the above said

transactions of purchase, construction and sale of properties. The relevant

return of income and Trading and Profit & Loss Account and Balance

Sheet are placed at Page No.28-31 of Paper Book. There is no dispute on

these facts of the case, the only dispute involved in the case is that

whether the relevant transactions of purchase, construction and sale of

properties falls within the nature of carrying on business assessable

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

under the heading “profit and gains of business or Profession” u/s 28 of

IT Act or falls within the nature of transfer of capital assets assessable as

Capital gain u/s 45 of IT Act. The assessee has claimed the relevant

transactions as business transactions assessable under the heading “profit

and gains of business or Profession” u/s 28 of IT Act, and thus without

taking into account the DLC Value adopted by stamp valuation authority,

declared net profit on the basis of face value of sale consideration,

whereas the AO has held the same as transfer of capital assets assessable

as Capital gain u/s 45 of IT Act, and thus applying the enhanced DLC

Value of Rs.76,21,852/-as provided u/s 50C of IT Act determined Short

Term Capital Gain of Rs.71,28,702/-in respect of First Property 74, SMS

Colony and of Rs.705720/- in respect of second property 91, R.K. Puram,

Jaipur. The ld. A.R. drew our attention to the Balance Sheet for the

preceding A.Y.2010-11, placed at page No.27 of the paper book where

in the closing stock of Rs.4,93,150/- has been shown. The ld. A.R.

explained the same pertaining to the property 74, SMS colony, Jaipur

purchased on 26.03.2010, comprising face value of Rs.4,00,000/-and

registry exp. of Rs.93,150/-.The ld. A.R. further in support of his

contention submitted that the assessee is regularly engaged in the

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

business of purchase, construction and sale of flats /houses and relied on

return of income, Trading and Profit & Loss Account and Balance Sheet

of the succeeding years placed at Page No.32-42 of paper Book, wherein

similar activities have been shown to be regularly carried on and claimed

as business activities. The ld.A/R also referred to statements of the

assessee and her husband recorded by the AO placed at page No.43-51

of paper book , where in both the assessee and her husband affirmed the

carrying of business of purchase, construction and sale of properties. The

ld A.R. submitted that in case of business transactions provisions of

section 50C are not applicable. It is evident that the property 74, SMS

colony was purchased on 26.03.2010 in the form of land and the same

was sold on 21.07.2010 after construction of boundary wall etc. as

mentioned in regd. Sale deed .The second property 91, R.K.Puram was

purchased on 24.06.2010 which after construction of complete residential

house has been sold on 31.01.2011. Both the properties have been sold

within short time interval of 4-7 months from the date of purchase. The

similar purchase, construction and sale activities of flats/house are

evident in succeeding years also. The assessee in her statements in

response to Q. No.10 (PB No.45), has categorically stated that both the

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

properties sold during the relevant previous year are included in her

business activities. The husband of the assessee in response to Q.No.3

(PB No.48) has also confirmed such business activities carried on by the

assessee. Thus cyclical, regular, and frequent activities of purchase,

construction and sales having short time interval of few months between

sale and purchase are evident from the documents available on record

which constitute business activities. Therefore we hold that the relevant

transactions of purchase, construction and sale of properties carried on

during the relevant previous year are falling within the nature of carrying

on business assessable under the heading “profit and gains of business or

Profession” u/s 28 of IT Act 1961.The assessee has already declared the

net profit of Rs.1,75,491/-u/s 44AD of the Act, and filed relevant details

before the AO which have been not doubted by the AO, therefore the

additions of Rs.71,28,702/- and 7,05,720/- made by the AO towards Short

term Capital Gain are deleted. Thus Ground No. 3 of the assessee is

allowed. It is also pertinent to mention that we have deleted the additions,

on the basis of evidences and material available on the record, therefore

Ground No.2 relating to admission of additional evidences and alternative

plea of the assessee do not require adjudication.

ITA No. 1088/JP/2016 Smt. Manju Bansal vs ITO, Ward- 6(4), Jaipur

4.0 In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 11-10-2017. Sd/- Sd/- ¼dqy Hkkjr½ ¼HkkxpUn½ (KUL BHARAT) (Bhagchand) U;kf;d lnL; /Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 11/10/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Manju Bansal, Jaipur 1. 2. izR;FkhZ@ The Respondent- The ITO, Ward- 6(4), Jaipur vk;dj vk;qDr¼vihy½@ CIT(A). 3. 4. vk;dj vk;qDr@ CIT, विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 1088/JP/2016) vkns'kkuqlkj@ By order, सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत