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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER D. KARUNAKARA RAO, AM :
These are the two appeals filed by the same assessee against the separate orders of CIT(Appeals), Central, Pune commonly dated 24.11.2011 for the assessment years 2006-07 & 2007-08.
2 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
ITA No.476/PUN/2012 A.Y.2006-07
Grounds raised by Assessee in ITA No.476/PUN/2012 for A.Y.2006-
07 reads as under:
“1) The learned CIT(A) erred in holding that the asst. made by the learned A.O. u/s.153A r.w.s. 143(3) was valid without appreciating that no notice u/s.143(2) was issued by the learned A.O. within the time limit prescribed and hence, the said asst. order passed by the learned A.D. was null and void. 1.1) The learned CIT(A) erred in holding that no notice u/s.143(2) was required to be served on the appellant for the purpose of completing the asst. u/s 153A and hence, just because the notice u/s.143(2) was not issued within the time limit prescribed did not mean that the asst. order passed by the A.O. was null and void. 1.2) The learned CIT(A) failed to appreciate that issue of notice u/s. 143(2) was the basic requirement for starting the asst. proceedings u/s.153A and once, the notice u/s.143(2) was not issued within the prescribed time limit, the asst. ought to have been held as null and void. 2) The learned CIT(A) erred in not appreciating that the asst. was barred by limitation and without jurisdiction since the asst. order was served on the appellant on 11.01.2010 which was beyond the limitation period prescribed u/s.153B and therefore, the asst. order ought to have been declared null and void. 3) The learned CIT(A) erred in not admitting the additional ground of appeal relating to the issue of warrant of authorization without appreciating that the 'issue raised was purely legal issue and since all the facts were on record, the same ought to have been admitted. 3.1) The learned CIT(A) further failed to appreciate that since the warrant of authorization was issued in the name of more than one person, the same was not valid and accordingly, the asst. completed u/s.153A was illegal and without jurisdiction and hence, the same should have been held null and void.
4) The learned CIT(A) erred in confirming the disallowance made u/s 40A(3) of Rs.3,33,866/- without appreciating that in the course of search, no incriminating evidence was found pertaining to this issue and hence, no addition could be made in the asst. order passed u/s 153A.
4.1) The learned CIT(A) failed to appreciate that the land purchased by the appellant was his capital asset and not a trading asset and therefore, the provisions of section 40A(3) were not applicable and hence, the disallowance made u/s 40A(3) ought to have been deleted.
5) The learned CIT(A) erred in confirming the addition of Rs.5,23,176/- by treating the gain on sale of agricultural land as business income as against the claim of the assessee that the said gain was exempt from tax and without appreciating that no such addition could be made in the asst. u/s 153A particularly because no incriminating evidence was found in the course of search pertaining to this issue.
3 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
5.1) The learned CIT(A) erred in holding that the gain arising on sale of land of Rs.5,23,176/- was taxable as business income on the ground that the assessee was engaged in the business of trading in lands and hence, the gain was taxable as business income.
5.2) The learned CIT(A) failed to appreciate that the assessee had held the lands as an investment and the assessee was not engaging in the business of trading in lands and therefore, the gain arising on sale of the lands was not taxable as business income of the assessee.
5.3) The learned CIT(A) erred in not appreciating that the lands sold by the assessee were agricultural lands and since those lands were held as an investment, the gain arising on sale of such lands was exempt from tax.
6) The learned CIT(A) erred in not deciding the ground relating to the addition of negative cash balance of Rs.1,63,474/-. 6.1) The learned CIT(A) failed to appreciate that the addition made on account of negative cash balance of Rs.1,63,474/- was not warranted and the same ought to have been deleted. 7) The learned CIT(A) erred in not appreciating that the learned A.O. had earned in charging interest u/s 234A, 234B & 234C and the same ought to be deleted. 8) The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Identical grounds have been raised by assessee in assessment year
2007-08. Considering identical grounds, both the appeals are heard
together and being adjudicated vide this common order. However, reference
is being made to the facts of ITA No.476/PUN/2012 for the purpose of
standard one.
Briefly stated relevant facts include that Assessee filed return of
income on 24.03.2008 declaring total income of Rs.3,33,090/- in response
to the notice u/s.153A of the Income Tax Act, 1961 (hereinafter referred to
as ‘the Act’). During assessment proceedings, Assessing Officer assessed
total income of assessee at Rs.13,03,600/- (rounded off) and made
following additions
i) Addition of Rs.3,33,866/- made u/s. 40A(3) of the Act.
4 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
ii) Addition of Rs.5,23,176/- on account of gain on sale of agricultural land.
Aggrieved with the assessment order, Assessee filed appeal before the
CIT(A). During First Appellate proceedings, the CIT(A) confirmed the
addition made by Assessing Officer by holding as under :
“3.1 The appellant has taken grounds of appeal which are identical in substance in his appeal for other assessment years including A.Y.2003-04. Factual and legal position of the appellant in the period relevant for current assessment year (2006-07) are substantively similar to the period relevant for A.Y.2003-04. Therefore, decision in the appeal order for A.Y.2003-04 in respect of these grounds of appeal is equally applicable for the present appeal. In view of the decision given in the appeal order for A.Y.2003-04, all grounds of appeal for the present appeal ( of A.Y.2006-07) are dismissed.”
Aggrieved with the order of CIT(A), Assessee filed appeal before the
Tribunal by raising grounds as extracted above.
BEFORE THE TRIBUNAL
Before us, Ld. Counsel for the assessee brought our attention to the
elaborate argumentative grounds and sub-grounds raised in appeal and
submitted that ground Nos.1, 1.1 and 1.2 relates to the requirement of
issuing notice u/s.143(2) of the Act in the matter of assessment made u/s.
153A of the Act. He further mentioned that the issue stands covered by
virtue of order of the Tribunal in assessee’s own case for the Assessment
Years 2002-03 to 2005-06 in ITA Nos.472 to 475/PUN/2012 dated
03.08.2018. Bringing our attention to the contents of Para 3 of the said
order, Ld. Counsel fairly submitted that the issue was decided against
assessee by relying on the Judgment of Hon'ble Delhi High Court in the
case of Ashok Chaddha Vs. ITO reported in 337 ITR 399 (Del.). The said
judgment is relevant for the proposition that the issue of notice u/s. 143(2)
of the Act is not mandatory in a case of the assessment made u/s.153A of
5 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
the Act. For the sake of completeness, the relevant para is extracted as
under:
“3. Referring to the above said grounds, Ld. AR for the assessee brought our attention to ground Nos.1, 1.1 and 1.2 and submitted that the said grounds have to be decided against the assessee in view of the binding High Court judgment in the case of Ashok Chaddha Vs. ITO reported in 337 ITR 399 (Del.) which is relevant for the proposition that the issue of notice u/s. 143(2) of the Act is not mandatory in a case of the assessment made u/s.153A of the Act. Ld. AR filed the written note relying on the said proposition.”
On hearing both the parties on this issue, we proceed to dismiss the
ground No.1, 1.1 and 1.2. Accordingly, ground Nos. 1, 1.1 and 1.2 raised
in appeal by Assessee are dismissed.
Further, Ld. Counsel for the assessee brought our attention to
ground Nos. 2, 3, 3.1, 6 and 6.1 and submitted the said grounds are not
being pressed. On hearing the parties, the ground No.2, 3, 3.1, 6 and 6.1
are dismissed as ‘not pressed’.
Further also, Ld. Counsel for the assessee submitted that ground
Nos. 7 and 8 are consequential and general in nature and hence, requires
no adjudication. Accordingly, ground No. 7 and 8 are dismissed as such.
Accordingly, we order. That leaves ground Nos. 4 and 5 and its sub
grounds for adjudication.
With regard to ground Nos. 4, 4.1, 5, 5.1, 5.2 and 5.3, Ld. Counsel
for the assessee submitted that these grounds relate to the nature of
business of the assessee in the matter of land transaction. Ld. Counsel
brought our attention to the page 15 of the Paper Book and submitted that
assessee has land at Pimpri Land, Deoghar Jambhulane, Aundhe Land and
6 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
Bhushi Plot and they were sold by assessee at different period and earned
profits. Land at Bhushi Plot was sold by assessee after holding the plot for
long years and other three lands were sold in a period lesser than three
years. Land at Aundhe was sold in the same month. It is a limited prayer of
Ld. Counsel for the assessee that transactions in the Bhushi land may be
considered as ‘Capital Asset’ having regard to period of holding. With
respect to other transactions, Ld. Counsel submitted that it is offered as
concession and they cannot be business transactions.
Ld. DR for the Revenue placed reliance on the orders of Assessing
Officer and CIT(A). Ld. DR further submitted that the assessee is engaged
in the business of purchase and sale of land and the same is undisputed
by the assessee. In such circumstances, profits earned on sale of land
must be considered as “Business Profit” taxable u/s. 52(8) of the Act.
We have heard both the parties and perused the order of CIT(A) in
general and contents of Para 3.1 in particular. The CIT(A) examined the
issue and status of the assessee as well as applicability of provisions to
section 40A(3) of the Act. The CIT(A) dismissed the appeal of assessee
relying on his earlier order relating to A.Y. 2003-04. Contents of Para 3.1 is
relevant and same is extracted above. Considering the factual matrix of the
case on one side and legal position on the other, we are of the opinion that
order of the CIT(A) is fair and reasonable and the same does not call for any
interference. Accordingly, ground Nos.4, 4.1, 5, 5.1, 5.2 and 5.3 are
dismissed.
In the result, appeal of the assessee in ITA No.476/PUN/2012 for
assessment year 2006-07 is dismissed.
7 ITA Nos.476 & 477/PUN/2012 A.Y.2006-07 & 2007-08
ITA No. 477/PUN/2012 A.Y.2007-08
The facts, issues, decision of Assessing Officer/CIT(A), arguments of both the parties are common as that of appeal for Assessment year 2006- 07. Therefore, following the same reasoning, we dismiss all the grounds raised by the assessee as not pressed/dismissed, as the case may be.
To sum up, both the appeals of the assessee for A.Y. 2006-07 and 2007-08 are dismissed.
Order pronounced on 05th day of October, 2018.
Sd/- Sd/- (�वकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 05th October, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeals), Central Pune. 4. The CIT, Central, Pune. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.