The ITO, Ward-3,, Bharuch v. Shri Nitinkumar H. Modi, Ankleshwar

ITA 1930/AHD/2012 | 2009-2010
Pronouncement Date: 27-10-2016 | Result: Dismissed

Appeal Details

RSA Number 193020514 RSA 2012
Assessee PAN ADFPM4365E
Bench Ahmedabad
Appeal Number ITA 1930/AHD/2012
Duration Of Justice 4 year(s) 1 month(s) 26 day(s)
Appellant The ITO, Ward-3,, Bharuch
Respondent Shri Nitinkumar H. Modi, Ankleshwar
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 27-10-2016
Date Of Final Hearing 25-10-2016
Next Hearing Date 25-10-2016
Assessment Year 2009-2010
Appeal Filed On 31-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER ./ ITA NO. 1930/AHD/2012 / ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER WARD-3 BHARUCH VS SHRI NITINKUMAR H MODI 2 SHAKTI MODI NAGAR ANKLESHWAR-393001 PAN: ADFPM 4365 E / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI SAMIR VAKIL SR DR ASSESSEE BY : SHRI KETAN H. SHAH AR / DATE OF HEARING : 25/10/2016 / DATE OF PRONOUNCEMENT: 27/10/2016 / O R D E R PER R.P. TOLANI JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-VI BA RODA DATED 27.06.2012 FOR ASSESSMENT YEAR 2009-10. 2. THE SOLITARY GROUND RAISED IS AS UNDER:- THE LEARNED CIT(A) ERRED IN LAW AND FACTS OF THE CA SE IN DIRECTING THE AO TO CONSIDER THE INCOME OF THE ASSESSEE AS LONG TERM CA PITAL GAIN INSTEAD OF BUSINESS INCOME DISREGARDING THE FACT THE ASSESSEE HAD CONVERTED THE AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND FOR CO MMERCIAL PURPOSE ON THE GROUND THAT HE IS BOUND TO FOLLOW HIS PREDECESSOR. 3. BRIEF FACTS ARE THE LAND IN QUESTION IS NON-AG RICULTURAL NATURE WHICH WAS PURCHASED BY THE ASSESSEES FATHER ON 15.05.197 6 AND WAS CONVERTED BY HIM INTO NON-AGRICULTURAL LAND. THEREAFTER ON 20. 09.1987 THE IMPUGNED PIECES OF NON-AGRICULTURAL LAND WERE TRANSFERRED BY ASSESSEES FATHER SHRI HIRALAL MODI IN FAVOUR OF ASSESSEE AND HIS TWO BROT HERS VIZ. SHRI ITA NO. 1930/AHD/2012 ITO VS. SHRI NITINKUMAR H MODI AY : 2009-10 2 HARESHKUMAR AND SHRI CHANDRESHKUMAR. THUS THIS NO N-AGRICULTURAL LAND CAME TO ASSESSEE FROM HIS FATHER AND WAS HELD AS CA PITAL ASSET. ON REQUIREMENT OF MONEY THE PIECES OF LAND WERE SOLD FROM TIME TO TIME WHICH WERE OFFERED AS CAPITAL GAINS AND UPTO AY 2006-07 T HE PROFITS FROM THE LAND WAS ACCEPTED BY THE DEPARTMENT AS CAPITAL GAINS. T HE MODE OF ACQUISITION AND THE NATURE OF LAND REMAINED SAME IN AY 2007-08. THE ASSESSING OFFICER TOOK A U-TURN AND HELD IT TO BE BUSINESS INCOME. I N FIRST APPEAL LD. CIT(A) HELD THAT THE TRANSACTIONS IN QUESTION WERE LIABLE TO BE TREATED AS CAPITAL GAINS WHICH IS FOLLOWED BY THE LD. CIT(A) IN THIS Y EAR. 3.1 REVENUE CAME IN APPEAL FOR AY 2007-08; HOWEVER ITAT DISMISSED THE SAME FOR THE FINDING THAT THE TAX EFFECT WAS BE LOW RS.10 LAKHS. 4. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DER OF THE ASSESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ASSESSEE IS NOT INTO ANY BUSINESS; EXCEPT SELLING THE LAND TRANSFERRED B Y HIS FATHER NO OTHER LAND WAS EVER PURCHASED OR SOLD. BESIDES THE PROFITS FR OM THE SALE OF IMPUGNED LAND HAS BEEN INVESTED IN THE GOVERNMENT BONDS LIKE RURAL ELECTRIFICATION BOND WHICH CLEARLY DEMONSTRATES THAT THE ASSESSEE NEITHER HAD ANY INTENTION OR DESIRE TO CARRY ON ANY ADVENTURE IN TH E NATURE OF TRADE. THUS LD. CIT(A) LOOKING AT THE PAST HISTORY SOURCE OF A CQUISITION AND NATURE OF LAND REMAINING THE SAME ON MERITS HELD THAT THERE IS NO JUSTIFICATION IN TREATING THE CAPITAL ASSET AS A BUSINESS ASSET. 6. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. FACTS HAVE BEEN NARRATED ABOVE. THE REVENUE HAS FAILED TO DEM ONSTRATE THAT THE ASSESSEE WAS IN ANY WAY INTO THE BUSINESS OF LAND D EALING OR ADVENTURE IN THE NATURE OF DEALING IN THE LAND. THE LAND SOLD W AS ACQUIRED FROM ITA NO. 1930/AHD/2012 ITO VS. SHRI NITINKUMAR H MODI AY : 2009-10 3 ASSESSEES FATHER AND HELD AS CAPITAL ASSETS AND TH E PROCEEDS HAVE BEEN INVESTED IN RURAL ELECTRIFICATION BOND AND NOT IN T RADING OF LAND. THE DEPARTMENT ITSELF FOR AY 2006-07 TREATED THE SAME A S CAPITAL GAIN BY WAY OF ASSESSMENT U/S 143(3). THE NATURE OF LAND BEING SA ME IN ALL RESPECTS A DIFFERENT VIEW CANNOT BE ADOPTED ON THE SAME SET OF FACTS. IN VIEW THEREOF WE UPHOLD THE ORDER OF THE LD. CIT(A) AND THE REVEN UES APPEAL IS ACCORDINGLY DISMISSED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 27 TH OCTOBER 2016 AT AHMEDABAD. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER AHMEDABAD; DATED 27/10/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. / DR ITAT AHMEDABAD 6. / GUARD FILE . / BY ORDER TRUE COPY / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD