SHREEYANS KUMAR GODHA,JAIPUR vs. ITO, WARD 6(4), JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No.698/JP/2023 fu/kZkj.k o"kZ@Assessment Years :2011-12 cuke Shri Shreeyans Kumar Godha, ITO, Vs. 16, Lal Niwas, Narain Singh Ward 6(4), Jaipur Circle, Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:ABUPG 9706 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. Rajeev Sogani, CA & Sh. Miss Ruchika Sogani, Adv. jktLo dh vksj ls@Revenue by: Sh. Anoop Singh (Addl. CIT) lquokbZ dh rkjh[k@Date of Hearing : 08/07/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 08/08/2024 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM

Because of an order of the National Faceless Appeal Centre, Delhi dated 21/09/2023 [ for short “ld. CIT(A)” ] for assessment year 2011-12 the present appeal is filed by the assessee. That order of ld. CIT(A) passed because the assessee challenged the finding of the Income Tax Officer, Ward 6(4), Jaipur [ for short “ld. AO” ] vide order dated 22.03.2014 passed under section 143(3) of the Income Tax Act.

“1. The learned Commissioner of Income-tax (Appeals) at NFAC, Delhi has erred in law and on facts in sustaining the learned Assessing Officer's action of taxing the transactions of sale of land in the Assessment Year 2011-12 on the basis of selective reading of the unconfronted statements of three persons (with whom the assessee had no transactions) taken in the case of another assessee, overlooking the actual transactions which were held in the previous year 2009-10 relevant to Assessment Year 2010-11. [ this is modified?]

2. The learned Commissioner of Income-tax (Appeals) at NFAC, Delhi has further erred in law and on facts in upholding the learned Assessing Officer's action of rejecting the conversion of capital asset i.e. the land at Bharatpur, into stock in trade by the assessee presuming it as a sham and colourable device to defraud the revenue by (i) overlooking the statutory provisions of section 45(2) of the Income Tax Act, 1961, (ii) not rebutting the judicial decisions having similar facts, relied upon by the assessee (iii) overlooking the fact that the assessee was carrying on business activities in previous years and (iv) without rejecting the books of accounts u/s 145(3).

3. Without prejudice to ground number 2, The learned Commissioner ofIncome- tax (Appeals) at NFAC, Delhi has further erred in law and onfacts in upholding the learned Assessing Officer's action of ignoring thestatutory provisions in treating the Land at Bharatpur as a "CapitalAsset" for purpose of invoking section 50C and also impliedly, theprovisions of section 43CA of the Income Tax Act, which had been madeeffective only from the A.Y.2014-15 and further denying opportunityu/s 50C (2) and (3).

4. The learned Commissioner of Income-tax (Appeals) at NFAC, Delhi has further erred in law and on facts in upholding the learned Assessing Officer's action of taxing the whole sale consideration in the hands of the assessee alone as against fact evidenced by assessment orders that assessee had only 1/6 share in the land at Bharatpur under reference.

6. The assessee appellant craves leave to add, amend/modify or withdraw any ground or grounds of appeal on or before the date of hearing.”

modifying the ground no. 1 already filed by the assessee. The application of the assessee reads as under:

“The Appellant most humbly begs for modification of Ground No.1 of the appeal: Following Ground No. 1 as taken in Form No. 36 is reproduced below:

"The learned Commissioner of Income Tax (Appeals) at NFAC, Delhi has erred in law and on facts in sustaining the learned Assessing Officer's action of taxing the transactions of sale of land in the Assessment Year 2011-12 on the basis of selective reading of the unconfronted statements of three persons (with whom the assessee had no transactions) taken in the case of another assessee, overlooking the actual transactions which were held in the previous year 2009-10 relevant to Assessment Year 2010-11".

The above Ground No. 1 is proposed to be modified and be replaced by the following Ground No.1, which is reproduced below:

"The learned Commissioner of Income Tax (Appeals) at NFAC, Delhi has erred in law and on facts in sustaining the learned Assessing Officer's action of taxing the transactions of sale of land in the Assessment Year 2011-12 on the basis of selective reading of the unconfronted statements of three persons, overlooking the actual transactions which were held in the previous year 2009-10 relevant to Assessment Year 2010-11.” The above modification is required on account of inadvertent inclusion of certain words in the original Ground. The modified Ground may please be accepted and taken on record.”

3.1 During the year under consideration the assessee has declared Pension Income of Rs. 1,17,011/-, Business Income by way of (i) interest income from financing money and (ii) shares transactions including F & O etc., of Rs.4,56,835/-, Capital Gain from sale of shares and Income from other source of Rs.18,432/ and after claiming deduction Under Chapter VIA declared total Income of Rs.4,92,300/-.

3.2 As per A.I.R. information, it is gathered that during the year under consideration the assessee deposited cash amounting to Rs.92,70,000/- in his savings Bank Account. Further he also bought Rural Electrification Bond amounting to Rs. 25 Lacs. During the year he also dealt in share F & source of the cash deposited in his bank account as well as the investment made in the Shares and Bonds. Initially, the assessee stated that cash deposit in the bank represents amount received from a debtor (balance b/f from last year) for assessee himself and his family members whose accounts were settled through bank cheques drawn on the City Bank NA.

3.3 Further, as regards the investment in bonds and shares during the year were made from balance lying in the account maintained with the Citi Bank NA. The assessee was asked to file a copy of debtor's A/c. The assessee filed a copy of Ledger account of Shri Kamal Kumar Godha, (the brother of the assessee) in his books of account. According to the said Account an amount of Rs.30,09,000/- was shown as remain to be received from Shri Kamal Kumar Godha as on 01.04.2010. Out of this an amount of Rs.30,00,000/- received by the assessee in cash on 05.04.2010. Further, according to the Ledger Account, an amount of Rs.45,00,000/- has been received in cash by the assessee on 15.04.2010 and similarly, an amount of Rs. 17,70,000/- received in cash on 20.04.2010. In the said Ledger Account, the assessee passed a Journal entry stating that Rs.62,61,000/- received as sale consideration on behalf of Co-owners of the property to Sale/transfer of the property. The assessee vide submission dated 06.01.2014 submitted that the immediate source of the cash deposits in the bank account was amount of sale proceeds of property situated at Bharatpur (Rajasthan) sold in the month of March, 2010 and the resultant profit was duly shown in the return for the assessment year 2010-11. The amount of sale consideration was lying with Mr. Kamal Kumar Godha and his account was debited and was appearing the balance sheet as at 31.03.2010. The amount was deposited in the bank account as and when received from Mr. Kamal Kumar Godha. While depositing the details of the cash to the bank, the assessee explained that the source of deposit of cash resulted from the sale deeds executed by the assessee and necessary deed were provided to the bank. The assessee also vide submission filed on 16.01.2014 requested to the Ld. AO to seek relevant details from the Citi Bank N.A, Jaipur by exercising judicial powers available with him, Ld. AO may ask the office of the Sub-Registrar, Bharatpur in this regard. As regards the copy of Power of attorney given to Mr. Kamal Kumar Godha is verifiable with the copies of sale deeds when received. noted that the assessee submission are evasive and he do not want to disclose facts of the case fully and truly. The intention of the assessee goes to prove that he was not ready to provide copy of sale deeds but trying to kill / consume time in furnishing information. Even, it was suggested by the assessee that the copy of sale deeds may be obtained from the Citi Bank or from the Registering Authority at Bharatpur. Meanwhile the copy of bank account obtained from the Citi Bank NA. On going through the Bank account of the assessee it is revealed that the assessee deposited cash amount of Rs.92,70,000/- on the following dates:

Date 06.04.2010 Rs.30,00,000/- Date 16.04.2010 Rs.45,00,000/- Date 21.04.2010 Rs. 17,70,000/-

Total Rs.92,70,000/- 3.5 The assessee filed photocopies of sale deeds on 04.02.2014. The assessee stated that the sale deeds executed in the F.Y. 2009-10 by Mr. Kamal Kumar Godha as Power of attorney holder of the assessee and the sale consideration of which was handed over to the assessee during the year under consideration i.e. during the F.Y. 2010-11 relevant to A.Y. 2011-

12. Ld. AO upon examination on these deed noted as under :

8 Shreeyans Kumar Godha vs. ITO (i) The property was sold to 21 persons. (ii All the sale deeds have been executed on 05.04.2010. (iii) Amount of the sale proceeds paid to the seller at the time of registering the documents before the Registering Authority i.e. on 05.04.2010. (iv) There was a vast difference of Rs.50,33,000/- in the sale consideration and the value of the property taken by the Registering Authority. The Registering Authority taken the value of the property at Rs. 1,43,03,000/- whereas the sale consideration shown at Rs.92,70,000/-. (v) As per Sale deeds / documents the said property was acquired by the assessee on 27.01.2001.

3.6 He further on going through the Profit and Loss Account and Capital Account of the assessee, for the F.Y. 2009-10 relevant to Assessment Year 2010-11, filed during the course of assessment proceedings, noticed that the assessee converted the fixed asset ( the property in question ) into Stock in trade on 01.04.2009 for a consideration of Rs.30,09,000/- and credited an amount of Rs.28,16,920/- into the Capital Account on account of conversion of fixed asset. As such, the facts of the case were different as reported by the assessee during assessment proceedings and emerging as a result of sale deeds and other documents, therefore, a show cause letter along with notice U/s. 142(1) was issued to the assessee on 07.02.2014 to file his explanation on the issues. The assessee was asked to file his explanation by 13.02.2014, however, the assessee filed his written submission on 17.02.2014. contention of the assessee is not acceptable for the following reasons:

Sale to be considered in assessment year 2011-12:

(1) The entire sale transaction took place in the month of April, 2010 i.e. on 05.04.2010. (2) The entire amount of sale consideration has been deposited in the bank account of the assessee in the month of April, 2010. (3) Three purchasers have also admitted that the sale proceeds took place in the month of April, 2010. (4) There is no mention of date while execution of sale deeds in the documents. In fact there should be mentioned the when, what place the deeds have been executed. (5) Merely mentioning of date by the deed writer does not mean that deed executed on that date. (6) No documentary evidence has been produced. (7) Even, the Power of attorney holder, who sold the property on behalf of the assessee has not been produced for cross verification. (8) As per documentary evidence produced i.e. in the form of sale deeds, it is established that the amount of sale proceeds was paid before the Sub Registrar, Bharatpur. (9) YEAR OF TAXABILITY: Date of execution of registered deed is relevant In order to attract section 45, it should be established that, by the transfer, the title to the property stands passed to the purchaser. If what was sold immovable property, it should further be established that the same was conveyed by a registered deed. It is the date of execution of the registered deed and not the date of delivery of possession, that will be relevant in such circumstances, for on that date alone the title to property passes CIT Vs. F.X.Periera & Sons (Travancore) (P) Ltd., (1990 184 ITR 461(ker.) (10) ENTRIES IN ACCOUNT BOOKS ARE NOT RELEVANT: The date of sale or transfer is the date when the sale or transfer takes place, and for the purpose of determining that date, entries in the account books are irrelevant Alapti Venkataramian V. CIT (1965) 57 ITR 185 (SC). (11) As regards the Affidavit filed by Shri Kamal Kumar Godha, the power of attorney holder, reliance is placed on the decision delivered by Allahabad High Court in holding that Affidavit need not always be accepted as correct. Sri Krishna Vs. CIT (All) 142 ITR 618. is considered during the financial year 2010-11 relevant to Assessment Year 2011-12.

3.8 So far as the question of Conversion of Land as Stock in Trade, the ld. AO noted as under :

(1) As per Provisions of Section 45(2) of the I.T. Act, 1961, the assessee should have carry business in which he converted his assets into stock in trade. Neither in the previous year(s) nor in the subsequent year(s) the assessee engaged in the business activities of sale purchase of land. (2) As a documentary evidence with regard to conversion of stock in trade the assessee relied upon Books of accounts, Ledger Account of Property, Audited Profit & Loss Account and Tax Audit Report, these have prepared on the basis of records prepared by the assessee and all are self serving documents, nothing else. (3) As per Return of Income filed for the previous year, the assesse declared his business as "Financial Service Sector and not engaged in the business of Real Estate. (4) Only one single isolated transaction cannot be treated as regular business activities of the assessee. (5) Conversion of Capital asset into stock in trade is nothing but a sham and colourable device to defraud revenue. (6) As regards the making of entry in the books of accounts of the assessee reliance is placed on the decision of the Hon'ble Supreme Court that a mere book keeping entry cannot be income unless income has actually resulted - CIT V. Shoorji Vallabhdas & Co. (1962) 46 ITR 495(SC) -. (7) It is well settled that the way in which entries are made by the assessee in his books of accounts is not determinative of the question whether the assessee has earned any profit or suffered any loss - State Bank of India V. CIT (1986) 157 ITR 67 (SC) (8) The Hon'ble MP High Court has observed in this regard as under: 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. Where there was nothing on record to show that the land was purchased for the purpose of selling into plot and basically, it was a gifted land the land was developed and was sold after converting into the plots with a view to secure a better price, such an isolated activity could not come within the purview of adventure in the nature of trade and business. Thus, earning from the sale of 3.9 Observations of the ld. AO regarding allowability of Cost of Acquisition of the Property [ 1/6th share in the property ] :

1. As per copy of sale deed provided by the assessee it is gathered that the property known as Khasra No.2 has been acquired by the assessee on 14.05.1990. Subsequently, the same land was converted into Industrial/commercial land and allotted 989.77 Sq. Yds out of the same Khasra No.2. Therefore, claiming of only 1/6th share in the property is not acceptable.

2. As per Govt. records the entire 989.77 Sq. Yds was allotted to the / assessee and the same has been sold by the assessee. Even, the entire sale consideration has been deposited in the bank account of the assessee, therefore, taking of only 1/6th share for calculation of capital gain tax in the said property does not arise. 3. The contention of the assessee that the family members decided to club all the purchases and have 1/6th undivided share therein has been recorded in the books of accounts is not acceptable in view of the decision of the Hon'ble Supreme Court delivered as under: ENTRIES IN ACCOUNT BOOKS ARE NOT RELEVANT: The date of sale or transfer is the date when the sale or transfer takes place, and for the purpose of determining that date, entries in the account books are irrelevant Alapti Venkataramian V. CIT (1965) 57 ITR 185 (SC).

3.10 Considering that aspect of the matter ld. AO made following conclusions:

1. The land under consideration belongs to the assessee solely and exclusively and not to any other family member as claimed by the assessee.

assessee is the only beneficiary, the entire capital gain assessed in the hands of the assessee on substantive basis and according the total income of the assessee was computed as under :

Salary Income as declared by the assessee : 1,17,011 Income from Business of Finance Sector as declared : 4,56,855 Long term capital Gain: Sale consideration received by the assessee As per Section 50-C of the I.T. Act, 1961 : 1,43,03,000 Less: Indexed cost of the property: Land purchased and Stamp duty paid in 1990-91 2,97,650+44,565=3,42,215 3,42,215*711/182 13,36,894 Payments made to UIT, Bharatpur Duing 2000-01: 65,935*711/406 1,15,467 88,595/711/406 1,55,150 16,07,511 1,26,95,489 Less: Deduction u/s 54EC 25,00,000 Net taxable long term capital gain 1,01,95,489 Income from other sources as declared 18,432 Gross total income 1,07,87,787 Deduction u/s 80-C as claimed by the assessee 1,00,000 Total income 1,06,87,787 1,06,87,790 Total income rounded off

4. Feeling aggrieved from the order of the assessment, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised before the ld. CIT(A), the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:

“4.1 Grounds of Appeal No. 1 and 7 are general and no specific findings are required. 4.2 Grounds of Appeal No. 2 to 6 are related to the capital gains on account of sale consideration received by the appellant as per section 50C of the Act. The Ld. AO in his order has mentioned the brief facts regarding the transaction, the relevant portion is reproduced as under:-

"Application of Section 50C

As per AIR information, it is gathered that during the year under consideration the assessee deposited case amounting to Rs. Rs.92,70,000/- in his savings Bank Account. Further he also bought Rural Electrification Bond for amounting to Rs 25 Lacs. During the year he also dealt in share F & O transactions of Rs.5,35,82,847/-. The assessee was asked to explain the source of cash deposit in his bank account as well as investment made in the Shares and Bonds. Initially, the assessee stated that cash deposit in the bank represents amount received from a debtor (balance b/f from last year) for assessee himself and his family members whose accounts were settled through bank cheques drawn on the City Bank NA. Further, as regards the investment in bonds and shares during the year were out of balance lying in the account maintained with the Citi Bank NA. The assessee was asked to file copy of debtor's A/c. The assessee filed copy of Ledger account of Shri Kamal Kumar Godha, (the brother of the assessee) in his books of account. According to the said Account an amount of Rs.30,09,000/- was shown as remain to be received from Shri Kamal Kumar Godha as on 01.04.2010. Out of this an amount of Rs.30,00,000/- received by the assessee in cash on 05.04.2010. Further, according to the Ledger Account, an amount of Rs.45,00,000/- has been received in cash by the assessee on 15.04.2010 and similarly, an amount of Rs. 17,70,000/- received in cash on 20.04.2010. In the said Ledger Account the assessee passed a Journal entry stating that Rs.62,61,000/- received as sale consideration on behalf of Co-owners of the property being transfer. The assessee was asked to file copy of papers property)"

4.2.1 As per the A.O. the assessee has submitted before him that the source of cash was on account of sale of certain property in which the registered value was at Rs. 1,43,03,000/- but the sale consideration was shown at Rs. 92,70,000/-. The Ld. A.O. also treated this transaction in the relevant assessment year, for which he has also made discussion in his order by this sale is consider in the relevant year. The Ld. A.O. further noticed that the appellant is the sole owner on the said property but now claiming 1/6th share. The Ld. A.O. made elaborate discussion in his order after considering the reply of the appellant. During the appellant proceedings the appellant has also raised the issue of the year of taxability and the ownership the detail of thesaid property. The appellant also mentioned few case laws. The appellant furthersubmitted that the land in question was not a capital asset but a business asset asthe same was converted to the business asset in the F.Y. 2009-10, With reference tothe year of taxability the A.O. noted that the registration of the said property wasmade on 05.04.2010, which shows

14 Shreeyans Kumar Godha vs. ITO that the transaction pertaining to the Assessment Year 2011-12 relevant to the financial year 2010-11 hence this ground (Ground No. 2) of the appellant is dismissed.

4.2.3 On the issue of conversion of this land the Ld. A.O. noticed that this conversion was made with a purpose to reduce the amount of capital gain. I rely upon the findings of the A.O. and this ground (Ground No. 3) of the assessee is also dismissed.

4.2.4 The forth ground of appeal of the appellant that the Ld. A.O, as invoke the section 43CA is not tenable as the Ld. A.O. invoke section 50C of the Act, 1961, hence this ground of assessee is also rejected. The Ld. A.O. has also discussed the issue of the ownership, where the Ld. A.O. noted that the division of the land was made of the purpose of stamp duty and the appellant is sole owner of the property as It was registered in his name on 27.03.2001, Hence, the ground of appeal no. 5 filed by the appellant is dismissed.

Hence, all the grounds of appeal filed by the appellant are dismissed.

5. In the result, the appeal filed by the appellant is dismissed.”

5. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A)/NFAC, the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the assessee, ld. AR of the assessee has filed the written submissions in respect of the various grounds. The written submission filed is reproduced for the sake of convenience :

“Assessee Appellant, an individual, filed his Return of Income on 30/09/2011 declaring Total Income of Rs.4,92,300. The Assessment was completed vide order u/s 143(3) dated 22/03/2014 at a Total Income of Rs.1,06,87,790. The Assessee, along with his other five family members, bought certain parcels of land under registered Sale Deeds having unequal area at Bharatpur in F.Y. 1990-91. The 15 Shreeyans Kumar Godha vs. ITO land purchase documents were executed in the names of different family members. However, all the six family members were joint owners to the extent of 1/6th portion in such lands irrespective of disproportionate registration in the names of different family members. After getting changed the use of such land parcels from the competent government authority, certain sale transactions were held also prior to sale transactions held in the F.Y. 2009-10. The remaining balance of said joint lands, in all, were sold in the F.Y. 2009-10 pertaining to A.Y.2010-11. The Sale Deeds were executed in March 2010 but the said Sale Deeds were registered in the month of April 2010 falling in A.Y.2011-12. The portion of the joint land registered in the name of the Assessee Shri Shreeyans Kumar Godha was sold by the joint owners wherein, obviously, Sale Deeds were executed by the registered owner i.e., the Assessee Shri Shreeyans Kumar Godha. All the lands, jointly owned by all the six family members. Hence, each joint owner offered for tax, 1/6th portion of the aggregate sale proceeds in A.Y.2010-11. The details are as under: - The said land was converted into Stock In Trade on 01/04/2009. The said fact is duly reflected in the Books of Accounts maintained by the Assessee Shri Shreeyans Kumar Godha PB 182 as well as other family members. ASSESSING OFFICER

16 Shreeyans Kumar Godha vs. ITO Ld. AO, for the following reasons, taxed the transaction in A.Y. 2011-12: A. In all the Sale Deeds, the seller was Shri Shreeyans Kumar Godha and, according to ld. AO, Shreeyans Kumar Godha alone was the owner of the land. Ld. AO added the entire gains in the hands of Shri Shreeyans Kumar Godha (Appellant) instead of his real ownership of 1/6th only. B. The sale, according to ld. AO, took place in the previous year relevant to A.Y. 2011- 12 as the Sale Deeds were registered on 05/04/2010. C. Ld. AO disregarded the fact of converting the land into Stock In Trade on 01/04/2009 and he taxed the entire sum as Long Term Capital Gain falling in the previous year relevant to A.Y. 2011-12 and also invoked the provisions of section 50C. D. Ld. AO also did not allow the proper cost of acquisition and improvement for computing the capital gains on account of sale of such land. Accordingly, ld. AO completed the assessment by computing the capital gain at Rs.1,26,95,489 and after giving the benefit of deduction under section 54EC of Rs.25,00,000, net taxable Long Term Capital Gain was calculated at Rs.1,01,95,489. COMMISSIONER OF INCOME TAX (APPEALS) Ld. CIT(A) dismissed the appeal of the Assessee without appropriately dealing with the submissions of the Assessee before him and also by ignoring the material which was placed on record during the course of assessment proceedings as well as appellate proceedings. SUBMISSIONS A. 1/6th Ownership A1. The Assessee, along with his following five other family members, had purchased agriculture land at Bharatpur in the F.Y. 1990-91: RELATION WITH FAMILY MEMBERS ASSESSEE Smt. Kunti Devi Godha Wife Shri Abhay Kumar Godha Son Shri Vinay Kumar Godha Son Smt. Champa Devi Godha Son’s Wife Smt. Sunita Devi Godha Son's Wife A2. Details of land purchased by all the six family members at Bharatpur are as under A2. Details of land purchased by all the six family members at Bharatpur are as under A2. Details of land purchased by all the six family members at Bharatpur are as under which find mention at AO Order page 11. Order page 11.

A3. The above three lands were adjacent to each other. All the three lands were A3. The above three lands were adjacent to each other. All the three lands were A3. The above three lands were adjacent to each other. All the three lands were purchased on the same date purchased on the same date i.e.,14/05/1990. Since beginning, the intention was to own 14/05/1990. Since beginning, the intention was to own these lands jointly by all the six family members. The intention these lands jointly by all the six family members. The intention these lands jointly by all the six family members. The intention of purchasing and owning the property jointly is also evident from the very fact that the land at Khasra No.1 owning the property jointly is also evident from the very fact that the land at Khasra No.1 owning the property jointly is also evident from the very fact that the land at Khasra No.1 vide purchase deed dated 14/05/1990 was purchased by four of the family members purchase deed dated 14/05/1990 was purchased by four of the family members purchase deed dated 14/05/1990 was purchased by four of the family members jointly. A4. However, the portion of each member was unequal and, However, the portion of each member was unequal and, However, the portion of each member was unequal and, therefore, vide Memorandum of Understanding amongst the family members, the said land was pooled Memorandum of Understanding amongst the family members, the said land was pooled Memorandum of Understanding amongst the family members, the said land was pooled and divided equally amongst the family members. The amount which was required to be and divided equally amongst the family members. The amount which was required to be and divided equally amongst the family members. The amount which was required to be paid or received on account of equalising the share of each family member paid or received on account of equalising the share of each family member paid or received on account of equalising the share of each family member was paid or received by the family members from each other PB 85 received by the family members from each other PB 85-86. Thus, all the six family 86. Thus, all the six family members became joint owners of the above agriculture land having 1/6th undivided members became joint owners of the above agriculture land having 1/6 members became joint owners of the above agriculture land having 1/6 share. A5. It was agreed upon by the famil It was agreed upon by the family members to continue the registered o registered ownership in the revenue records as per the registered ownership documents. in the revenue records as per the registered ownership documents. The Joint ownership of all the six family members, having 1/6th undivided A6. The Joint ownership of all the six family members, having 1/6 The Joint ownership of all the six family members, having 1/6 ownershipin the above agriculture land has been reflected in the respective in the above agriculture land has been reflected in the respective in the above agriculture land has been reflected in the respective Income Tax and Wealth Tax Income Tax and Wealth Tax Returns of all the six family members in the past eturns of all the six family members in the past years up to A.Y. 2010 2010-11. Following details of Returns of eturns of Income filed, Assessments completed under ssessments completed under section 143(3), Wealth Tax returns filed as well ection 143(3), Wealth Tax returns filed as well as Wealth Tax Assessments completed would unequivocally co ssessments completed would unequivocally co ssessments completed would unequivocally confirm that the said fact was not only declared by the family members but was also accepted by said fact was not only declared by the family members but was also accepted by said fact was not only declared by the family members but was also accepted by the Department in as many as at least past 10 years: the Department in as many as at least past 10 years:

A7. Attention is drawn towards PB 151-154 which contains Assessment Order u/s 143(3) for A.Y. 2003-04 in respect of one of the joint owners Shrimati Kunti Devi Godha wherein at PB 154, ld. AO has computed the capital gains being assessee’s 1/6th share. A8. Attention is drawn towards PB 244 which contains details of Returns filed for all the six joint owners from A.Y. 2004-05 to A.Y. 2011-12. Perusal of the said chart would reveal that LTCG-BHARATPUR PROPERTY is shown by all the six joint owners in equal proportions in the following years when part of the joint property was sold: A.Y. AMOUNT 2004-05 Rs.(-)56,033 2005-06 Rs.(-)25,153 2010-11 Rs. 24,86,804

19 Shreeyans Kumar Godha vs. ITO A9. Attention is also drawn towards PB 210 which is Computation of Total Income of one of the joint owners Shri Shreeyans Kumar Godha for A.Y. 2005-06, wherein, explicitely Bharatpur land gain/loss is computed by dividing it by 6 (to arrive at 1/6th share) and the amount comes to Rs.(-)25,153 which is so reflected at chart on [PB 244]. A10. Since the land was jointly owned by all the six family members, for every yard of joint land sold, the sale consideration was equally divided amongst the family members. Any gain arising thereon was also accordingly reflected in the respective six returns of the family members. Ld. AO without disputing and disproving the above evidences and also disregarding the consistent approach accepted and adopted by the Department, erroneously held that the Assessee was the sole owner of the said land sold by the Assessee for and on behalf of all the six family members of his family. A11. The present transaction of sale was also equally offered for tax by all the six family members in their ITRs filed for A.Y. 2010-11 and accepted by Department. A12. Ld. AO was expected to follow the principle of consistency while framing the assessment order. Reliance is placed on the judgement of the Hon’ble Supreme Court in the case of Radhasoami Satsang v. CIT, [1992] 193 ITR 321 (SC): “13. We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.” In view of the above, the joint ownership of land is established and, therefore, the action of ld. Lower Authorities in treating the same to be of the Assessee solely deserves to be quashed. B. Year of Sale B1. During the previous year relevant to A.Y. 2010-11 (i.e., immediately preceding year), certain portion of jointly owned land, which was registered in the name of one of the family members Shri Shreeyans Kumar Godha, (being above Khasra No. 2) was sold. The Sale Deeds on behalf of all the six joint owners was executed by the Assessee Shri Shreeyans Kumar Godha. The Sale Deeds between the Seller Assessee and different Buyers were entered into and executed on 31/03/2010 on a requisite value of stamp paper purchased prior to the date of executing the said Sale Deeds. The payment from the Buyers to the Seller was received on that date i.e.; 31/03/2010. Possession by the Seller was also handed over to the Buyer on 31/03/2010 itself.

20 Shreeyans Kumar Godha vs. ITO However, the said Sale Deeds could be registered in the office of Sub Registrar on 05/04/2010. All the six family members being owners to the extent of undivided 1/6th portion of the land so sold (although registered in the name of one of the family members that is the present appellant Shri Shreeyans Kumar Godha) declared the relevant capital gains for tax in A.Y. 2010-11 itself. B2. Income Tax Act, 1961 contains its own definition of transfer in Section 2(47) of the Income Tax Act, 1961. Ld. AO erroneously has referred to the provisions of Transfer of Properties Act, 1882 for deciding the point of time of sale. B3. Provisions of section 2(47) defining transfer are reproduced below: “(47) "transfer", in relation to a capital asset, includes, — (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment; or (iva) the maturity or redemption of a zero coupon bond; or (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation 1.—For the purposes of sub-clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA. Explanation 2.—For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India.”

21 Shreeyans Kumar Godha vs. ITO B4. It is submitted that the definition of transfer is different from the definition of transfer contained in Transfer of Properties Act,1882. Under the provisions of the Income Tax Act, 1961 for any capital asset, when a binding agreement is executed, money is received and possession is handed over that results into transfer. It is at this point of time that the liability to capital gains would arise. It has nothing to do with the date of the registration. Even if the said document remains unregistered, the provisions of the Income Tax Act would treat the said transaction as transfer and impose the tax. B5. Reliance is pleased on the following judicial pronouncements, wherein the legal proposition that date of transfer is to be decided in accordance with the provisions contained in Section 2(47) of the Income Tax Act, 1961 is emphasised: B5.i. In the case of Shri Sanjeev Lal v. CIT, [2014] 365 ITR 389 (SC), before the Hon’ble Supreme Court, the important relevant dates were as under (CLC 1- 8): Agreement to Sell: 27/12/2002 Sale Deed registered: 24/09/2004 The Hon’ble Supreme Court, for the purpose of deciding compliance w.r.t. Section 54 of the Income Tax Act, 1961, held that transfer took place on 27/12/2002. Legal proposition laid down by the Hon’ble Supreme Court in this regard is contained in Para 20 of the order which is reproduced below: “20. The question to be considered by this Court is whether the Agreement to Sell which had been executed on 27th December, 2002 can be considered as a date on which the property i.e.; the residential house had been transferred. In normal circumstances by executing an Agreement to Sell in respect of an immoveable property, a right in personam is created in favour of the transferee/vendee. When such a right is created in favour of the vendee, the vendor is restrained from Selling the said property to someone else because the vendee, in whose favour the right in personam is created, has a legitimate right to enforce specific performance of the agreement, if the vendor, for some reason is not executing the Sale Deed. Thus, by virtue of the Agreement to Sell some right is given by the vendor to the vendee. The question is whether the entire property can be said to have been sold at the time when an Agreement to Sell is entered into. In normal circumstances, the aforestated question has to be answered in the negative. However, looking at the provisions of Section 2(47) of the Act, which defines the word “transfer” in relation to a capital asset, one can say that if a right in the property is extinguished by execution of an Agreement to Sell, the capital asset can be deemed to have been transferred. Relevant portion of Section 2(47), defining the word “transfer” is as under: “2(47) “transfer”, in relation to a capital asset, includes, -

22 Shreeyans Kumar Godha vs. ITO (i)……………. (ii) the extinguishment of any rights therein; or ………………………………” (CLC 5, 6) It is submitted that present Appellant’s case is even better than the case before the Hon’ble Supreme Court. In the present appeal, Sale Deed and not merely Agreement to Sell was executed. Entire sale consideration was received whereas in the case before the Hon’ble Supreme Court only Rs.15 lakhs were received at the time of entering into the Agreement to Sell out of total sale consideration of Rs. 1.32 crores. B5.ii. Reliance is also placed on the decision of the Hon’ble ITAT, Jaipur Bench, in the case of M/s Rajasthan Agencies Pvt. Ltd. v. ITO in ITA No. 680& 681/JP/2017 wherein following the judgement of the Hon’ble Supreme Court in Sanjeev Lal case (supra) it was held at Para 6 of the order that (CLC 13- 37): “6. Even otherwise the term transfer as per section 2(47) r.w.s. 48 of the of the Income Tax Act is wider than the term sale and it includes all rights and privileges in the property either in praesenti or accruing in future as vested in vendor. Once these rights vested in the vendor were subject matter of the transfer, the vendor retains no right in the property to be re-conveyed in the subsequent Sale Deed except the obligation to get the property converted for non-agricultural use and execution of the Sale Deed.” (CLC 22) B5.iii. Section 2(47) – Harbour View v. CIT [2023] 295 Taxman 405 (SC) SLP dismissed against impugned order of High Court that where pursuant to agreement to sell, possession of land was handed over by assesse and sale consideration was received, provisions of section 2(47) would apply. B6. Attention is drawn towards the provisions of section 47 of the Registration Act,1908, which is reproduced below for ready reference: Section 47 of the Registration Act, 1908- “47. Time from which registered document operates- A registered document shall operate from the time which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration.” B7. Thus, the Sale Deeds which were executed between the seller and buyers on 31.03.2010 and were subsequently registered on 05/04/2010 would relate back to the date of execution i.e., 31/03/2010 therefore, looked at from this angle also, the transaction of sale would fall in financial year 2009-10. Reliance in this regard is placed

23 Shreeyans Kumar Godha vs. ITO on the decision of the Hon’ble Supreme Court in the case Kanwar Raj Singh (D) th. L.Rs. v. Gejo (D) th. L.Rs. and Ors, AIR 2024 SC 238, wherein at para 11, the Hon’ble Apex Court held as under (CLC 9- 12): “11. Now, coming to the facts of this case, the consideration was entirely paid on the date of the execution of the sale deed. The sale deed was registered with the interpolation made about the description/area of the property sold. The first defendant admittedly made the said interpolation after it was executed but before it was registered. In terms of Section 47 of the Registration Act, a registered sale deed where entire consideration is paid would operate from the date of its execution. Thus, the sale deed as originally executed will operate. The corrections unilaterally made by the first defendant after the execution of the sale deed without the knowledge and consent of the purchaser will have to be ignored. Only if such changes would have been made with the consent of the original plaintiff, the same could relate back to the date of the execution. It is not even the first defendant's case that the subsequent correction or interpolation was made before its registration with the consent of the original plaintiff. Therefore, in this case, what will operate is the sale deed as it existed when it was executed.” (CLC 12) B8. Ld. AO issued notices to some of the Buyers and recorded their statements at the back of the Assessee. No opportunity of cross examination of the Buyers was afforded to the Assessee. the Assessee came to know through the assessment order only about the fact of the statements being recorded of some of the Buyers. Assessee till today has not been served with the copies of statements so recorded. During the course of appellate proceedings, attention was drawn of ld. CIT(A) towards the judgement of the Hon’ble Supreme Court in the case of Andaman Timber Industries v. Commissioner of C. Ex., Kolkata-II, MANU/SC/1250/2015, wherein the Hon’ble Supreme Court has held that unless opportunity of cross examination is given, the statements cannot be used against the assessee. Ld. CIT(A) dismissed the appeal without distinguishing the judgement of the Hon’ble Supreme Court [PB 157]. B9. Without prejudice to above, it is submitted that even with reference to statements so recorded by the ld. AO, no inference can be drawn that sale took place in F.Y. 2010- 11 (A.Y.2011-12): Shri Mahesh Babu Bansal: (AO page 9) The said buyer allegedly recorded the purchase, in his books, in F.Y. 2010-11. No such evidence was ever confronted to the Assessee. The said date of recording the transaction in the books of the buyer cannot lead to the conclusion that “transfer” as per the provisions of the Income Tax Act, 1961 took place in F.Y. 2010-11. The buyer, in his own wisdom, can record the transaction of purchase in his books with reference to the date of registry. That act, in itself,

24 Shreeyans Kumar Godha vs. ITO cannotoverride the provisions of section 2(47) of the Income Tax Act, 1961. Otherwise also, it is a settled legal position that entries in the books of other party have no bearing. Shrimati Krishna Sharma: (AO page 9) Ld. AO did not examine Shrimati Krishna Sharma, rather her husband Shri Nathilal Sharma was examined. Whatever is conveyed by Shri Nathilal Sharma cannot be treated as statement of Shrimati Krishna Sharma. Without prejudice to this, it is submitted that the document signed by Shrimati Krishna Sharma clearly speaks that the sum was handed over by her on the date of executing the said Sale Deed i.e.; 31/03/2010 itself. It is also submitted that the details of the money paid/received before the Sub Registrar is blank in the said Registered Document which confirms that the amount was not paid/received before the Sub Registrar on the date of registration of the document. Relevant portion is reproduced below:

Ld.AO, at page 10 of the Order, has mentioned that Smt. Krishna Sharma took the possession of land after 15 days from the date of registering the documents. Whereas, as per registered Sale Deed, the possession is taken before the date of registry. All this proves that statements so recorded, on the face of it, are not reliable and have no evidentiary value. Otherwise, also, no prudent buyer would ever delay taking the possession after making the payment [PB 247]. Shrimati Rajeshwari: Again, Shrimati Rajeshwari Devi was not examined, but her husband Shri Lakshmikant Chaturvedi attended on her behalf and it emerges from the Assessment Order that his statements were recorded. As per ld. AO, the amount is allegedly withdrawn from the bank account on 05/04/2010. No such evidence was ever confronted to the assessee. Accordingly, ld.AO has concluded that the amount was paid only after withdrawing it from the bank. It is submitted that the document executed by Shrimati Rajeshwari Devi clearly mentions that amount was paid by her to the assessee on 31/03/2010.The possibility of her temporarily borrowing the said money from any of her sources cannot be ruled out and it is possible that on 05/04/2010, by withdrawing the amount from the bank, she might have repaid the money to the said person. B10. It is submitted that, neither ld. AO nor the three Buyers allegedly examined by ld. AO have made out a case that, Sale Deed was not executed on 31stMarch, 2010. Once

25 Shreeyans Kumar Godha vs. ITO the execution of the document between the seller and the buyer is undisputedly executed on 31stMarch, 2010, then, in terms of the Hon’ble Supreme Court judgement in the case of Shri Sanjeev Lal (supra), the transfer by way of extinguishment stands completed on 31st March, 2010 itself. B11. Oral evidences not acceptable Section 91 and 92 of Indian Evidence Act, 1872 It is submitted that no oral evidence is acceptable contrary to the written evidence. The principle is that “man may lie but document cannot lie”. The action of ld.AO is contrary to the provisions of Section 91 and 92 of The Indian Evidence Act, 1872, reproduced below for ready reference: Section 91 of Indian Evidence Act, 1872 provides that “When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions here in before contained.”

Section 92 of Indian Evidence Act, 1872 provides that “When the terms of any such contract, grant or other disposition of property, or any matter required to the form of a document, have been proved according to the Sec. 91, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying adding to or subtracting from, its terms.”

Reliance is placed on the following judicial pronouncements in this regard: The Lahore High Court in Divansingh v. Gurbachan Singh and others, AIR 1932 Lahore 276, held that in case of a sale, other evidence of the transaction, than the deed itself is barred by the provisions of Section 91 of the Evidence Act.

The Mysore High Court in Doddamallappa v. Gangappa, AIR 1962 Mysore 44, held "When a sale deed has been executed and registered in respect of certain immovable properties, in a suit for possession by the vendee it is not open to the vendor to let in oral evidence to show that the terms of the contract between the parties were different or were at variance with the terms contained in the registered document."

The Kerala High Court in LeelammaAmbikakumari and another v. Narayanan Ramakrishnan, AIR 1992 Kerala 115, at 119 held that "Section 91 and 92 of the evidenceact is a complete bar for any party to set up a case that the consideration for 26 Shreeyans Kumar Godha vs. ITO sale is more than what is mentioned in the conveyance or in the contract. In the present case the plaintiff has no case that the consideration mentioned in the document was not paid, or that there was any failure of consideration or that the consideration agreed to between the parties was of a different kind than what was mentioned in the document. The definite case of the plaintiff is that the real consideration for the sale was Rs.16,000/- where as the conveyance shows the consideration to be Rs.10,000/-. In view of the provisions contained in sec.91 and 92 of the Evidence Act, the plaintiff is not entitled to plead such a case, nor he is entitled to adduce evidence in support of the same."

The Hon'ble Supreme Court in M/s. FebrilGasosa v. Labour Commissioner and others, AIR 1997 (S.C.) 954, at 958 has held that “..A written settlement arrived at between the parties could not, therefore, be varied or modified except by a written settlement or by a written memorandum duly signed by the parties incorporating the terms of the so- called understanding. Sec.92 of the Indian Evidence Act, 1872 also lays down that when the terms of any contract, grant or settlement, as are required by law to be reduced to the form of a document, have been proved as per the provisions of sec.91 of the Evidence Act, no evidence of any oral agreement or settlement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting varying adding to or subtracting from its terms..."

Hyderabad Bench of ITAT in Smt. K.Narasamma v. ITO, (1990) 32 ITD 494, held that "any evidence stood precluded by virtue of provisions of sections 91 and 92 of the Indian Evidence Act, 1872, according to which, when the terms of any disposition of property, etc., have been reduced to the form of a document, no evidence shall be given in proof of the terms of such disposition of property except the document itself. This being the position, on facts and in law, no weight could be given to the statement of B to prove that an amount of Rs. 3.5 lakhs and not Rs. 3 lakhs passed on from B to the assessee as sale consideration.”

Hon’ble Jaipur Bench was seized of the legal issue of impact ofsections 91 and 92 of the Indian Evidence Act, 1872 in the case of Sunita Dhadda v. DCIT, (2012) 148 TTJ (JP) 719), and Shri Ghanshyam Das Agarwal v. ITO in ITA No. 1161/JP/2010. The Hon`ble Jaipur bench, following the Punjab & Haryana High Court judgement in Paramjit Singh v. ITO, 323 ITR 588, in the said case, held that no other/ oral evidence is admissible against the registered sale deed. Order of the Hon’ble Jaipur Bench in the case of Sunita Dhadda (supra) has been upheld by the Hon’ble Rajasthan High Court, vide order dated 31.07.2017, in and thereafter by the Hon’ble Supreme Court in in SPECIAL LEAVE PETITION (403 ITR 183). B12. No opportunity of cross examination

27 Shreeyans Kumar Godha vs. ITO In all the three cases above, since no opportunity of cross examination was granted the real facts could not be established. Moreover, even the copies of statements allegedly recorded were not confronted to the Assessee. Cross examination is one of the most efficacious methods of establishing truth and exposing falsehood. The Assessee should have been provided with an opportunity of cross examination. Principles of Natural Justice have an ancient ancestry.

Reliance is placed on the following judicial pronouncements: In the case of Ashwani Gupta, [2010] 322 ITR 396 (Delhi), addition was made on the basis of the statement of a third party and seized documents. Neither the seized documents were provided to the assessee nor was any opportunity of cross- examination of the adverse party given. Hon’ble Delhi High Court, following its own judgment in the case of SMC Share Brokers Ltd., [2007] 288 ITR 345 (Delhi), deleted the addition on the ground that there was violation of the principles of natural justice.

Hon’ble Supreme Court in the case of Andaman Timber Industries (CIVIL APPEAL NO. 4228 OF 2006)held that “…not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected”

Hon’ble Supreme Court in the case of Sunita Dhadda, vide its order dated 28.03.2018, in SPECIAL LEAVE PETITION (403 ITR 183) upheld the ratio laid down by Hon’ble Rajasthan High Court and also Hon’ble ITAT, Jaipur Bench as below – “Their Lordships ADARSH KUMAR GOEL and ROHINTON FALL NARIMAN Ji.- dismissed the Department's special leave petition against judgment dated July 31, 2017, of the Jaipur Bench of the Rajasthan High Court in D.-B,L_TA. No. 197 of 2012 whereby the High Court held that the Tribunal was justified in deleting the addition of Rs. 4,07,00,000 of "on money" said to have been received with respect to subject land of the assessee holding that the question what was the price of the land at the rel-evant time, was a pure question of fact and that unless it was established on record by the Department, that as a matter of fact, the consideration did pass to the seller from the purchaser, the Department had no right to make any additions, especially since none of the witnesses were examined before the Assessing Officer, and the assessee did not have any opportunity to cross-examine them” [Emphasis Supplied] Ram Dhan Yadav, Chomu Jaipur v. Ito, Wd 7(3), Jaipur on 20 February, 2024 & 369/JPR/2023. On being consistent with the finding so recorded here in above

28 Shreeyans Kumar Godha vs. ITO judicial pronouncements and the non-disputed fact that the assessee was never allowed to cross examination of Shri Dudi whose statement was relied upon by the revenue we are of the considered view that the addition made by the lower authority is against the principles of nature justice and is required to be quashed. Based on these findings the ground no. 3 & 4 raised by the assessee is allowed. It is also settled law that it is mandatory for the AO to confront the assessee with any material collected by the AO at the back of the assessee, and in case of statement of third party recorded at the back of the assessee, opportunity of cross examination has to be offered to the assessee, failing which the said material/statement etc. will be rendered on unreliable and additions made on the basis of such material/statement etc. shall be rendered illegal.Reference in this regard can be made to the decisions in the case of R. B. Shreeram Durga Prasad 176 ITR 169 (SC). B13. It is submitted that no prudent seller will sign any document (Sale Deed) without receiving the money and create adverse evidence against himself. Test of “Human Probability” will have to be applied here. B14. It is submitted that the Assessee has in fact reported the transaction in a prior year and, therefore, there should not be any grudge to the tax authorities because Assessee has preponed his tax liability rather than postponing the tax liability. In view of the above, action of ld. Lower Authorities in treating the transfer to be in the F.Y. 2010-11 is contrary to law and facts on record and, therefore deserves to be quashed. C. Conversion into Stock in Trade on 01/04/2009 C1. The Assessee, along with his other family members, decided to carry on the business of Real Estate as the family had an inherent advantage of holding large chunk of land at Bharatpur. Accordingly, necessary accounting entries for converting the Capital Asset into Stock in Trade was passed in the Books of all the six family members on 01/04/2009. Resultant gain, in terms of section 45(2), was accounted for [PB 96-97].

C2. The fact of conversion into Stock In Trade is also reported by the tax auditor of Shri Shreeyans Kumar Godha for A.Y. 2010-11 [PB 104]. C3. During the course of assessment proceedings, these accounting entries were examined by ld. AO and were found to be in accordance with the requirements of section 45(2). C4. It is submitted that holding an asset as an investment or as Stock in Trade is a matter of intention of the holder. The said intention can be best reflected by the C5. Ld. AO at page 7 last para of his order, while disregarding the conversion into Stock In Trade, gave following reasoning:

However, on going through the facts of the case it is found that purchase and sale of property is not a regular activity in the immediately preceding years, therefore, due to sale of land/property capital gain would arise as the land is not a part of stock in trade in the immediately preceding year or earlier year, but it was a capital asset.

C6. It is submitted that there is no such pre-condition prescribed under the law. There is no necessity of a business already in existence to enable the assessee to convert his capital asset into stock in trade. Reliance in this regard is placed on the decision of the Hon’ble ITAT, Mumbai Bench in the case of Mrs. Rajni D Jain v. DCIT in (CLC 38-46):

10. From the facts described above as well as legal propositions put forwarded by both the parties we find that the assessee is in the process of regularizing her tax returns from the assessment year 2001-02. The copies of the balance sheet and the profit and loss accounts enclosed to the return although filed belatedly, suggest the conversion of the jewelry into stock-in-trade and the same appears to be very much in order. In view of the fact that the AO has not brought any incriminating information to suggest that the returns are incorrect or invalid. To support the same, assessee also filed a notarized affidavit dated 30.3.1998 on the stamp purchased on 12th March, 1998. Nothing adverse was brought by the Revenue against this piece of evidence. Simply describing the same as self serving document is not acceptable. Therefore, the date of 30.3.1998 should be accepted as a date of conversion of the stock. On the requirement of the assessee to be carrying on the business at the time or point of conversion, we find, as discussed above, the decision of the ITAT, Mumbai Bench in the case of Jahangir T. Nagree (supra) helps the assessee. Relevant paras from the said order of the Tribunal are already reproduced above in para 7 of this order.

C7. In the above decision of the Hon’ble ITAT, Mumbai Bench, the Hon’ble Bench has, at para 7, followed the judgment of the Co-ordinate Bench in the case of ACIT v. Jahangir T. Nagree, [2008] 23 SOT 512 (Mumbai). Para 7 is reproduced below:

“7…….To support the above assertion, Ld Counsel relied on the decision of the Mumbai Bench of the Tribunal in the case of ACIT v. Jahangir T. Nagree (23 SOT 512). Relevant written submissions given by the assessee in this regard are narrated in para 3.14 to 3.16 which read as under:

30 Shreeyans Kumar Godha vs. ITO “3.14 As regard contention of the C.I. T. (A). that the phrase business carried on by him� as stated in sec. 45(2) indicates present activity and not present intention for future activity, it is submitted that the Hon�ble Mumbai Bench of Income-tax Appellate Tribunal held in the case of A.C.I.T. V. Jehangir T. Nagree (23 SOT 512) that „The words „business carried on by him� do not mean that before conversion of investment or capital asset in to stock-in-trade the assessee must carry on business of share transaction or such a business must be in existence. If the assessee would have started the business by converting the investment into stock-in-trade instead of purchasing it from the market could it not be called that he was in the business of trading in shares enabling the assessee to avail of the benefit of section 45(2). The restrictive meaning as suggested by the revenue should not be given to the words „business carried on by him� in the light of the use of the words in other sections like section 28(1,). From any angle, jf the facts of the case were viewed the conversion of investment in shares and securities in stock-in-trade was valid and the assessee was entitled to benefit of section 45(2) in the light of huge volume of transactions in shares. Thus, conversion of investment in shares and securities into stock-in-trade would be valid under section 45(2) even if business of trading of shares is not carried on by an assessee before such conversion.” (CLC 42, 43)

C8. Without prejudice to above, it is submitted that the large chunk of joint land was sold in smaller portions. The Assessee Shri Shreeyans Kumar Godha sold the land, registered in his name, in smaller portions to as many as 21 buyers. This, in itself, isa sufficient proof of Assessee’s intention of carrying business. C9. Ld. Lower Authorities have erred in rejecting the conversion into Stock in Trade alleging the same to be a colourable device. It is submitted that DLC value of April, 2009 of same year has been considered by the Assessee for computing capital gain u/s 45(2) as on the date of conversion. The same DLC value continues as at year end. Therefore, the allegations of colourabledevice is baseless. C10. Invoking of provisions of section 50C is patently illegal because, in view of the above, whatever was sold was Stock in Trade. The provisions of section 43CA came into force with effect from 01/04/2014 by Finance Act, 2013. In view of the above, the action of lower authorities denying the conversion into Stock in Trade deserves to be quashed and alsoinvoking of the provisions of Section 50C. D. Not allowing proper cost of acquisition and improvement Ld. Lower authorities have not allowed the proper cost of acquisition and improvement for computing Long Term Capital Gain. Following cost of improvement has been ignored by ld. AO. Which may please be allowed [PB 90]:

S. PARTICULARS PAGE CONTENTS No. NOS. 1 Acknowledgement for 1-5 a) SYNOPSIS with petty modifications, Papers submitted to NFAC detailing facts about acquisition of electronically on plots of land in the FY 1990-91by the 26.08.2023 indicating the members of the family (asessee, his particulars of documents wife and two sons and their wives), submitted. subsequent act of sharing the ownership of plots of land in equal 6 ratioof 1/6 and past assessment history wherein said act of sharing the plot in equal ratio was accepted in the assessment of family members. 7-72 b) Chart showing computation of Capital Gain on sale of part of land in various years and as included in the ITR’s of each of the six family members. c) Copies of Acknowledgement of ITR’s, Computation of Total Income and Intimation Orders u/s 143(1) for the AY 2010-11 and 2011-12 of all the six family members. 2 Acknowledgement for 73-79 a) SYNOPSISdetailing Facts in Brief of the Papers submitted to NFAC case electronically on 19.06.2023 indicating the particulars of document submitted 3. Acknowledgement for 80-81 a) Copy of Acknowledgement. Papers submitted to NFAC electronically on 82 b) Copy of Submissions (during manual 19.06.2023 indicating the hearing)given to CIT(A) by hand on particulars of documents 06.12.2019along with the following submitted 83-86 documents mentioned therein:- 87 i) Summary of Facts about Property under consideration.

88-93 ii) Chart showing figures of incomes under various heads shown in the 94-95 ITRs of all the six family member. 96-97 iii) Copies of Computation of Total Income for the AY 2009-10 to 98-101 2011-12. 102-112 iv) Copies of Balance Sheet as on 113 31.03.2009. v) Copy of Profit & Loss Account, 114-117 Summary of Capital Account for the FY 2009-10 118-134 vi) Copies of Balance Sheet as on 31.03.2010 and 31.03.2011. vii) Copy of Tax Audit Report for the AY 2010-11 c) Copy of Submissions (during manual hearing) given to CIT(A) by hand on 135-150 29.02.2016along with thefollowing documents mentioned therein. 151-154 i) Chart showing details of Purchase of 155

Plots at Bharatpur and sharing of ownership and cost in equal ratio by 156-158 the six family member.

159 ii) Copies of Assessment Orders of the following family members whose cases were selected for scrutiny wherein 1/6 share was acceptedunder the Wealth 160-165 Tax Act:- 166-168 ii) Smt. SunitaGodha (AY 92-93 & 94-95; 169-178 iii) Shreeyans Kumar Godha (AY 1994-95); iv) Smt. ChampaGodha (AY 179-180 1991-92, 1992-93, 181 1993-94, 1994-95

182 iii) Re-Allotment letters and “Pattas” after change of Use of Land 183 iv) Copy of Asst. Order u/s 143(3) in the case of Smt. Kunti Devi Godha for the AY 2003-04 accepting 1/6 184-185 share in plot of land. v) Chart showing figures of incomes 186-209 under various heads shown in the ITRs of all the six family member 210 (co- owners). 211-212 d) Copy of Submissions (during manual hearing) given to CIT(A) by hand on 04.11.2015 along with the following documents mentioned therein:- 213-222 i) Chart showing details of Purchase of Plots at Bharatpur and sharing of 223 ownership and cost in equal ratio by the six family member (co-owners). 224 ii) Copy of Collectors Order under the 225 Land Revenue Act. 226 iii) Copy of SC decision in the case of M/S ANDAMAN TIMBER INDUSTRIES 227-231 e) Submissions made to the ITO vide letter dated 17.02.2014along with the following documents mentioned 232 therein:- i) Copy of Balance Sheet as on 233 31.03.2009. 234-235 ii) Copy of Trading and Profit & Loss Account for the year ending 236-240 31.03.2009. 241-242 iii) Copy of relevant page of Journal Register evidencing conversion of 4. 243 capital asset into stock in trade on Letter dated 09.12.2015 244 01.04.2009. addressed to the CIT (Appeals) iv) Copy of Ledger Account of ‘Property 245-274 at Bharatpur” for the FY 2009-10. v) Affidavit of PA Holder about receipt of Sale Consideration and submission of Deeds for registration. vi) Copies of original purchase deeds along with copies of “Pattas” after change in use of Land. vii) Statement showing computation of capital gains for the AY 2005-06 viii) Copy of Assessment Order u/s 143(3) for the AY 2008-09 mentioning the sources of income of the appellant assesseeindicating trading in real estate. f) Submissions made to the ITO vide letter dated 12.03.2014in response to Show Cause Notice along with the following documents mentioned therein:- i) Copy of relevant page of Journal Register evidencing conversion of capital asset into stock in trade on 01.04.2009. ii) Copy of ledger account “Property at Bharatpur”. iii) Copy of Profit & Loss Account for the year ending 31.03.2010. iv) Copy of relevant page of Form No.3CD (Tax Audit Report) indicating capital asset converted into stock in trade. v) Copy of Acknowledgement of ITR, ITR-V and Computation Statement of Total Income of one of the co- owner. g) Submissions made to the ITO vide letter dated 03.03.2014 along with the following documents mentioned therein:- i) Chart showing year wisefigure of cost of sale of land. ii) Brief Note explaining non applicability of Section 50C. iii) Copy of ITAT, Mumbai decision in the case of ACIT Vs. Jehangir T. Nagree iv) Relevant extract of Finance Bill, 2013 regarding applicability of section 43C w.e.f. 01.04.2014 a) Letter with following documents mentioned therein:- i) Chart showing figures of incomes under various heads shown in the ITRs of all the six family member. ii) Photocopies of few Sale Deeds.

B. Compilation of case laws :

S.No. Particulars Pg. No.

S. No. Pg. No. Particulars

1. Copy of order of Hon'ble Supreme Court in case of 1- 8 Sanjeev Lal v. CIT [AIR 2014 SC 3589] 2. Copy of order of Hon'ble Supreme Court in case of Kanwar Raj Singh (D) th. L.Rs. v. Gejo (D) th. L.Rs. and Ors. [AIR 9- 12 2024 SC 238]

3. Copy of order of Hon'ble ITAT, Jaipur Bench, in case of M/S Rajasthan Agencies Pvt. Ltd. v. ITO in & 681/JP/2017 13- 37

S No. Details of the Name of the purchaser Date of Purchase % Stamp property purchase duty amount 1. Khasra No. 1 Smt. Kunti Devi Godha 14.05.1990 8,37,100+1,34,280 Smt. Champa Devi Godha Smt. Sunita Devi Godha Shri Abhay Godha 2. Khasra No. 2 Shri Shreeyans Kr. Godha 14.05.1990 Rs. 2,97,650/-+ Rs. 44,565/- 3. Khasra No. 3 Shri Vinay Kr. Godha 14.05.1990 Rs. 3,16,500/-+Rs. 45,710/- Expenses 2311+147825 Total 18,25,941 As is evident from the above table that the impugned three parcel of land purchased by the family members and they have upon purchase of that property agreed amongst themselves that the share of land above mentioned property would be equal i.e. 1/6 share of each family member.[ recorded the property at Rs. 3,04,423/- in their Income Tax records as well as while filling the wealth tax returns the same was duly considered as 1/6th share of each one. Thus, when the revenue has accepted the fact that each family member holding the land as 1/6th share owners and that fact has been accepted by the revenue since 1991 now the revenue cannot ignore those records accepted by the since then. In that aspect of the matter, the ld. AR of the assessee filed copy of Wealth Tax Return and balance sheet of the family members wherein this asset consistently shown as 1/6th holding of each family member. The ld. AR of the assessee drawn our attention of disclosure of these shares consistently and for that he relied upon the Income Tax Return filed in the assessment year 2010-11 the intimation issued u/s 143(1) of the Act and wealth tax details were placed on record from page 7 to 62 of the paper book and wealth tax record from page 127 to 133 of the paper book all these records consistently accepted by the Revenue that the land in question sold by the assessee is jointly 1/6 cost of these family members of land is of by each family members since year of purchase. The ld. AR of the assessee to support the view of the consistency to be followed by the Revenue has relied on the decision of ITR 321 (SC).

7.1 The capital assets was converted into stock in trade by passing the necessary entries in the books of accounts and that aspect of the matter has also been disclosed, by the assessee while filing the return of income.

7.2 As regards the year of sale, the ld. AR of the assessee stated that the sale deed was duly executed on 31.03.2010 relevant to assessment year 2010-11 and therefore, the income should be taxed in the assessment year 2010-11 merely that deed of sale executed between the parties is registered on 05.04.2010 it cannot be taxed in the assessment year 2011-

12. To support this contention the ld. AR of the assessee invited our attention to sale deed page 245 and that page back side shows that the stamps were purchased on 31.03.2010. Attention was also invited to page 248 of the paper book wherein while signing the document the parties put their date of deed as on 31.03.2010 this factual aspect of the matter has not been disputed. Considering that factual aspect of the matter and considering the provisions of Section 2(47) of the Income Tax Act read with the provisions of Transfer of Property Act, the agreement executed on 31.03.2010 is binding to the parties and the registration of that document is assessee has relied upon the decision of Hon’ble Apex Court in case of Shri Sanjeev Lal vs. CIT (2014) 365 ITR 389 (SC). The ld. AR of the assessee relying on the provisions of Section 47 of the Registration Act, 1908 stated that a registered document shall operate from the time which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. Based on that aspect of the matter the transaction was completed in the Financial Year 2009-10 and the registration of the same on 05.04.2010 would relate back to the date of execution i.e. on 31.03.2010. To derive whom to this contention, ld. AR of the assessee has relied upon the decision of the Hon’ble Apex Court in case of Kanwar Raj Singh (D) th. L. Rs. V. Gejo (D) th. L. Rs. And Ors, AIR 2024 SC 238.

7.3 As regards the receipt of the consideration the ld. AR of the assessee submitted that when the assessee has executed deed of sale and signed the same, they received the consideration by passing the possession of the property to the buyers the same is chargeable to tax in the financial year 2009-10 i.e. assessment year 2010-11.

Officer, which are recorded behind the back of the assessee. Copies of the statement has never been provided to the assessee. Even the opportunity to cross examination of the parties, whose statement relied upon by the ld. AO has also not been provided. The statement recorded in the isolation without providing cross examination of the same to the assessee, cannot be relied upon as held by the apex court in the case of Andaman Timber Industries vs. Commission of C. Ex., Kolkata-II Manu/SC/1250/2015. The ld. AR of the assessee without prejudice to that aspect of the matter, stated that the statement of Shri Mahesh Babu Bansal deal with recording of the purchase made by him in his books of account will not decide the chargeability of the capital gain in the hands of the assessee and the entries passed in the books of account will not determine the chargeability of capital gain in the hands of the assessee. As regards the sale made to Shri Krishna Sharma the statement of her husband Shri Nathi Lal Sharma was recorded, as contention recorded are contrary to the sale deed signed by that the assessee (assessee’s paper book No. 247 to 248). It is well known fact that no seller of a property without receipt of money does not sign any sale document and does not give possession. It is customary practice that the parties of any sale purchase transactions, complete the registration thereafter. As regard the statement of Smt. Rajeshwari Devi again statement of her husband is relied and recorded is not binding to the assessee when the said purchaser i.e. Smt. Rajeshwari Devi fixed her signature on 31.03.2010 the source of paying the money to the assessee can be verified by him merely that buyer has withdrawn the money in the subsequent year the sale consideration received by the assessee cannot be disputed and that is contrary to the sale deed. He also stated that written evidence is to be considered not the oral evidence stated by a person.

7.5 The issue of conservation of capital assets converted into stock in trade, the assessee filed copy of capital accounts at page No. 97 of the paper book which is clearly established that the assessee has converted the capital asset into stack in trade. The ld. AR of the assessee also drawn our attention to the copy of tax audit report duly obtained from independent Chartered Accountant in form no. 3CD wherein the column No. 12A, the details of the capital asset converted into stock in trade was duly recorded.

All these records were available on record and the ld. AO cannot put a side all these records filed. To further support this contention the assessee has sold the property to 21 separate buyer itself suggest that the transactions are of trade. Therefore, the conversion of capital assets into stock in trade on these arguments, ld. AR of the assessee supported the grounds raised before us.

Secondly, conversion of the capital asset into stock in trade thereby applicability of provisions of Section 50C of the Income Tax Act and;

Third issue to determine the cost of acquisition claimed by the assessee.

So, far as the issue of year of chargeability transaction to tax same is to be looked into based on the registered document which is made on 05.04.2010 and the assessee given the possession and received the consideration when the document get registered. Thus, capital gain is to be charged in the assessment year 2011-12. The assessee and the respective 21 buyers have categorically before Sub-registrar that they have exchanged consideration and possession of the property before them. Therefore, the year of chargeability of capital gain in the case of the assessee is the 31.03.2010 on the same very day, considering and possession of the property cannot be considered to have been passed on the same day. To further support the contention ld. DR relied upon the statement of the buyers, recorded as per provisions of Section 131 of the Act. Even the buyer of the property has confirmed the fact that they have recorded entries in their books of accounts in 10-11 relevant to A. Y. 11-12. Even consideration have been passed on 05.04.2010 entries were passed by each buyer thereof when the documents is registered and therefore, contention of the assessee is incorrect. The ld. DR stated that if the assessee has received the consideration on 31.03.2010 then why the cash has not been deposited on 31.03.2010 and the deposited in the bank account on 06.04.2010, 16.04.2010 and 20.04.2010. The ld. Assessing Officer categorically called, presence of Shri Kamal Kumar Godha so as to confirm the contention raised by the assessee. The ld. DR drawing our attention to page No. 262 and 263 of the paper book wherein the assessee while transferring the land in the document stated that there is no co- ownership of the land the assessee is the sole owner so the contention of the assessee that he has owing the property as 1/6 share is not correct.

The ld. DR vehemently stated that though the assessee between the family mention of the ownership as 1/6 share in the sale deed produced by the assessee. Therefore, this contentions raised by the assessee is not correct and is contrary to the sale deed executed by the assessee. As regards the date of transfer as on 31.03.2010 merely writing the date in the sale deed will not make the transfer of the property when that property is required to be registered which is made on 05.04.2010. Since the same is executed on 0504.2010 the gain is chargeable to tax in the A.Y. 2011-12 and not 2010-

11. The person who signed that all the documents being the brother of the assessee acted has the power of attorney has not been produced. Even the sale deed so produced by the assessee in their paper book at page back side of 247 shows that the assessee has confirmed before the Sub-registrar that they have received the sale consideration and giving possession of the property before him. This aspect of the matter decides the issue and that is done by the ld. AO, making charge to tax the transaction in the assessment year 2011-12 and not 2010-11. He also submitted that the assessee is the sole owner of the property as is evident from the sale deed and the asset being capital nature the provisions of section 50C clearly applicable. He also submitted based on the reasoning given at page 16 in the assessment order, the records in the form of wealth tax and subsequent year, balance and therefore, the same cannot be considered. The ld. AO while passing the order has discussed all the aspects of the matter and thus he relied upon the orders of the lower authority.

As regards the year of sale the same is to be considered as on 31.03.2010 based on the argument placed in the written submission filed because the registration Act prescribes the formality and in support of the chargeability of the capital gain, he relied on the decision of Hon’ble Supreme Court in case of Shri Sanjeev La v. CIT (supra). As regards the statement recorded and relied upon by the revenue or all the behind the back of the assessee and no copies were made available, that submission has no evidential value. As regards the contention of money given by the brother in the subsequent year, the ld. AR of the assessee submitted that the land was transferred on 31.03.2010 in Bharatpur and the assessee regularly resides the same thereby recorded in the subsequent year as per deposit made in the bank account. The payment deposited in three installments is based on the possession of an account of transfer of cash and cash has not been deposited in one stretch cannot decide the chargeability of the capital gain.

Therefore, based on the decision of Hon’ble Supreme Court in case of Mehta Parikh vs. CIT (1956) 30 ITR 181(SC) that the fact stated in the affidavit sworn by the brother Kamal Godha cannot be brushed a side. As regards conversion of land into stock in trade the law permit such conversion of capital assets into stock in trade and the assessee followed procedure as prescribed in law. Therefore, the same should be considered.

The assessee vide submission dated 06.01.2014 submitted that the immediate source of the cash deposits in the bank account was amount of month of March, 2010 and the resultant profit was duly shown in the return for the assessment year 2010-11. As the amount of sale consideration was lying with Mr. Kamal Kumar Godha [ power of attorney holder and brother of the assessee ] and his account was debited and was appearing the balance sheet as at 31.03.2010. The amount was deposited in the bank account as and when received from Mr. Kamal Kumar Godha. While depositing the details of the cash to the bank, the assessee explained that the source of deposit of cash resulted from the sale deeds executed by the assessee and necessary deeds were provided to the bank also. The assessee also vide submission filed on 16.01.2014 requested to the Ld. AO to seek relevant details from the Citi Bank N.A, Jaipur by exercising judicial powers available with him, Ld. AO may ask the office of the Sub-Registrar, Bharatpur in this regard if so required.

12. (3) As the asset transferred is a Capital Asset as per above conclusion, so the provisions of Section 50-C of the I.T. Act, 1961 are clearly applicable in the case of the assessee.

18. The bench noted that all the grounds raised by the assessee are related to the property sold by the assessee situated at Bharatpur. The 2 & 3 at Bharatpur on 14.05.1990. All these land were adjacent land and as discussed and decided amongst family members that though the land purchase documents were executed in the names of different family members, all the six family members were joint owners to the extent of 1/6th portion in such lands irrespective of disproportionate registration in the names of different family members. After getting changed the use of such land parcels from the competent government authority, certain sale transactions were held also prior to sale transactions held in the F.Y. 2009- 10 which is noted disputed before us. The remaining balance of said joint lands, in all, were sold in the F.Y. 2009-10 pertaining to A.Y.2010-11. The Sale Deeds were executed in March 2010 but the said Sale Deeds were registered in the month of April 2010 falling in A.Y.2011-12. The portion of the joint land registered in the name of the Assessee Shri Shreeyans Kumar Godha was sold by the joint owners wherein, obviously, Sale Deeds were executed by the registered owner i.e., the Assessee Shri Shreeyans Kumar Godha as originally, he was the purchaser of that property. As is accepted for the other part of the land by the revenue and the assessee continue to hold the same as 1/6th owner the same was follows;

We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. On these reasonings, in the absence of any material change justifying the Revenue to take a different view of the matter and, if there was no change, it was in support of the assessee-we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of Income-tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under sections 11 and 12 of the Income-tax Act of 1961. Thus, in the case of the assessee when it is over a period since 1990 revenue continue to assess the assessee in income tax as well as in the wealth tax proceedings as co-owner of the property as 1/6th holder, merely in the sale deed the name of the other co-owners did not appear, it cannot negate the stands the assessee and consequently the cost of acquisition of the property is also required to be given in the same fashion.

Possession by the Seller was also handed over to the Buyer on 31/03/2010 itself. Merely the registration of the sale deed for all these were presented before the office of Sub Registrar on 05/04/2010 for registration of sale, same cannot taxed on 05.04.2010. All the six family members being owners to the extent of undivided 1/6th portion of the land so sold declared the relevant gains arising out of that part, for tax in A.Y. 2010-11 itself by all the other members of the family. signature wherein recording the consideration of the property on 31.03.2010 the property stands transferred. On this aspect of the year of chargeability of the gain on property the apex court in the case of CITv. Balbir Singh Maini [2017] 86 taxmann.com 94/251 Taxman 202/398 ITR 531 adverted to the provisions of this sub-Section in the following terms:

25. The object of Section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression "enabling the enjoyment of" takes color from the earlier expression "transferring", so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof. The idea is to bring within the tax net, transactions, where, though title may not be transferred in law, there is, in substance, a transfer of title in fact.

Respectfully following the ratio of that finding that when the assessee entered into a transaction which has the effect of transferring or enabling the enjoyment of any immovable property would come within its purview of transfer within the meaning of section 2(47) of the Income Tax Act, 1961 event referring to the other Act provision has no meaning while charging the gain arising out of the property sold and here as is evident that the deed is signed on 31.03.2010 executed on a stamp paper duly signed by the parties the gain is to be chargeable to tax in the assessment year 2010-11 and not in the year 2011-12. Even the statement relied were recorded behind back and were not provided are oral evidence has no more value than that of the written evidence available on record. Based on this observation the ground on this aspect is allowed.

The ld. AO disregard this conversion by noted that “However, on going through the facts of the case it is found that purchase and sale of property is not a regular activity in the immediately preceding years, therefore, due to sale of land/property capital gain would arise as the land is not a part of stock in trade in the immediately preceding year or earlier year, but it was a capital asset.” Thus, merely there is no business in the year of conversion the assessee cannot be stopped to convert his capital asset into stock in trade. Reliance in this regard is placed on the decision of the Hon’ble ITAT, Mumbai Bench in the case of Mrs. Rajni D Jain v. DCIT in (CLC 38-46):

61 Shreeyans Kumar Godha vs. ITO “10. From the facts described above as well as legal propositions put forwarded by both the parties we find that the assessee is in the process of regularizing her tax returns from the assessment year 2001-02. The copies of the balance sheet and the profit and loss accounts enclosed to the return although filed belatedly, suggest the conversion of the jewelry into stock-in-trade and the same appears to be very much in order. In view of the fact that the AO has not brought any incriminating information to suggest that the returns are incorrect or invalid. To support the same, assessee also filed a notarized affidavit dated 30.3.1998 on the stamp purchased on 12th March, 1998. Nothing adverse was brought by the Revenue against this piece of evidence. Simply describing the same as self serving document is not acceptable. Therefore, the date of 30.3.1998 should be accepted as a date of conversion of the stock. On the requirement of the assessee to be carrying on the business at the time or point of conversion, we find, as discussed above, the decision of the ITAT, Mumbai Bench in the case of Jahangir T. Nagree (supra) helps the assessee. Relevant paras from the said order of the Tribunal are already reproduced above in para 7 of this order.” (CLC 45)

Based on the discussion so recorded herein above all the grounds raised by the assessee is allowed.

In the result, the appeal of the assessee is allowed.

Sd/- Sd/- ¼Mk0 ,l- lhrky{eh½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/08/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shreeyans Kumar Godha, Jaipur izR;FkhZ@ The Respondent- ITO, Ward 6(4), Jaipur 2. vk;djvk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZQkbZy@ Guard File (ITA No. 698/JP/2023) vkns'kkuqlkj@ By order,

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