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Income Tax Appellate Tribunal, “G”, BENCH
Before: SHRI PAWAN SINGH, JM & SHRI M.BALAGANESH, AM
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2007-08 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-28, Mumbai in appeal No.CIT(A)-28/IT-332/ITO-17(3)(3)/2015-16 dated 17/07/2017 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2015 by the ld. Income Tax Officer 17(3)(3), Mumbai (hereinafter referred to as ld. AO).
The only issue involved in the appeal is as to whether the ld. CIT(A) was justified in upholding the action of the ld. AO in taxing a sum of Rs.3,18,53,500/- as short term capital gain on sale of plot at Khargar, in the facts and circumstances of the case.
The brief facts of this issue are that assessee is an individual engaged in business of buying and selling plots. Assessee purchased two plots of land from the agriculturist and subsequently vide agreement of assignment dated 20/01/2007 with Arihant Realtors Ltd., and on 27/02/2007 with M/s. Devisha Infrastructure Pvt.Ltd., sold the same to them. Later, the assessee found that there was some defect in the title of the said land bought from the agriculturist and on that account, a dispute arose between all the parties relating to the said transactions i.e., the original owner of the land (agriculturist), the assessee and the said purchasers. There was suit which was filed before the Hon’ble Court at Panvel under Suit No.434/2007 dated 07/07/2007 which was the dispute relating to the title of the said land. The said dispute was resolved in the A.Y.2008-09 and accordingly, the short term capital gains on sale of plot was offered by the assessee in the A.Y.2008-09. The ld. AO disregarded entire contentions of the assessee and proceeded to tax the short term capital gains on sale of plot at Khargar in the sum of Rs.3,18,53,500/-. Before proceeding to make this addition, the ld. AO asked for basic details from the assessee and did not enquire into the merits of the case. Before M/s. Shivyash Developers the ld. CIT(A) the assessee could not ensure the presence of the authorised representative and order of the ld. CIT(A) was also passed exparte upholding the action of the ld. AO.
Aggrieved, the assessee is in appeal before us.
We have heard rival submissions. The ld. AR prayed before us that the entire issue be remanded back to the file of the ld. AO for denovo adjudication to decide the same in the light of the outcome of the suit which has been filed on the title of the land which is very crucial for determination of the issue. Per contra, the ld. DR stated that since it was an exparte order by the ld. CIT(A), let the appeal go back to the file of the ld. CIT(A) for adjudication on merits. 5.1. We find that the fact of pendency of the suit vis-à-vis title of the said mentioned land is to be examined in the light of the suit proceedings and we are given to understand that the said suit has been disposed off and the title dispute has been resolved in A.Y.2008-09. The ld. AR also stated that assessee had duly offered the short term capital gains on sale of plot in A.Y.2008-09, which fact also requires to be verified by the ld. AO in order to avoid double taxation of the capital gains. The ld. AR also placed reliance on the decision of the Pune Tribunal in the case of Appasaheb Baburao Lonkar reported in 176 ITD 115 and decision of Hon’ble Supreme Court in the case of CIT vs. Balbir Singh Maini reported in 398 ITR 531 (SC) in support of his contentions of the issue on merits. We find that this is a factual issue and which has to be decided based on M/s. Shivyash Developers the given set of facts and circumstances vis-à-vis the orders passed by the Court with regard to the settlement of dispute on the title of the land which would be crucial for determination of the issue in hand before us. This would also be crucial for deciding the year in which the capital gains also would arise in the case of the assessee. We hold that the factual findings are to be given by the ld AO in the light of the aforesaid evidences before proceeding to tax the same in the year under appeal. Hence, in the interest of justice and fair play, we deem it fit and appropriate to remand this appeal to the file of the ld. AO for denovo adjudication of the issue on merits. The assessee is given liberty to file fresh evidences / additional evidences, if any, in support of its contentions by placing the entire facts on record together with the various legal disputes there on and the outcome of the same. Accordingly, the grounds raised
by the assessee are allowed for statistical purposes.
6. In the result, appeal of the assessee is allowed for statistical purposes.