SMT. M. MAGESWARI,, CHENNAI v. ITO, NCW - 10 (3),, CHENNAI

ITA 2201/CHNY/2019 | 2012-2013
Pronouncement Date: 19-03-2021 | Result: Allowed

Appeal Details

RSA Number 220121714 RSA 2019
Assessee PAN ANFPM5901L
Bench Chennai
Appeal Number ITA 2201/CHNY/2019
Duration Of Justice 1 year(s) 7 month(s) 23 day(s)
Appellant SMT. M. MAGESWARI,, CHENNAI
Respondent ITO, NCW - 10 (3),, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 19-03-2021
Last Hearing Date 23-01-2020
First Hearing Date 02-03-2021
Assessment Year 2012-2013
Appeal Filed On 26-07-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH CHENNAI . . $ BEFORE SHRI V.DURGA RAO JUDICIAL MEMBER AND SHRI G.MANJUNATHA ACCOUNTANT MEMBER ./ I.T.A.NO.2200 & 2201/CHNY/2019 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) MRS. MAGESWARI 1 M.T.H.ROAD PADI CHENNAI-600 050. VS INCOME TAX OFFICER NON-CORPORATE WARD-10(3) CHENNAI. PAN: ANFPM 5901L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.R.T.VIJAYARAGHAVAN C.A /RESPONDENT BY : MR. SURESH PERIASAMY JCIT /DATE OF HEARING : 02.03.2021 /DATE OF PRONOUNCEMENT : 19.03.2021 / O R D E R PER G.MANJUNATHA AM: THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST COMMON ORDER OF THE LEARNED CIT(A)-12 CHEN NAI DATED 26.04.2019 AND PERTAIN TO ASSESSMENT YEARS 2 011-12 & 2012-13. SINCE THE FACTS ARE IDENTICAL AND ISSUE S ARE COMMON FOR THE SAKE OF CONVENIENCE THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY THIS CONSOLI DATED ORDER. 2. THE ASSESSEE HAS MORE OR LESS RAISED COMMON GRO UNDS OF APPEAL FOR BOTH THE ASSESSMENT YEARS THEREFORE FOR THE SAKE OF BREVITY GROUNDS OF APPEAL FILED FOR ASSESSMEN T YEAR 2011- 12 IN ITA NO.2200/CHNY/2019 ARE REPRODUCED AS UNDER :- 2 ITA NOS. 2200 &2201/CHNY/2019 1. YOUR APPELLANT SUBMITS THAT THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS) IS AGAINST THE FACTS OF THE CA SE AND BAD IN LAW. 2. YOUR APPELLANT SUBMITS THAT THE AUTHORITIES BELO W HAD NOT FULLY CONSIDERED THE FACTS OF THE FACTS. 3. YOUR APPELLANT SUBMITS THAT THE LEARNED ASSESSIN G OFFICER HAD ERRED IN ADOPTING THE ASSESSMENT PROCEDURE FOLLOWED IN THE HANDS OF MR. P.S. MAN (FATHER OF THE APPELLANT) IN COMPUTING THE INCOME FOR THE PRESENT YEAR IN THE HANDS OF YOUR AP PELLANT. 4. YOUR APPELLANT SUBMITS THAT THE LEARNED ASSESSIN G OFFICER HAD NOT PROPERLY CONSIDERED THE REPLIES SUBMITTED AT T HE TIME OF ASSESSMENT PROCEEDINGS ABOUT THE NATURE OF THE TRAN SACTIONS HAPPENED IN THE HANDS OF YOUR APPELLANT THE VARIAN CE IN THE RELATIONSHIP AT YOUR APPELLANT WITH HER FATHERS BUS INESS. 5. YOUR APPELLANT SUBMITS THAT THE LEARNED ASSESSIN G OFFICER IS NOT CORRECT IN WHOLLY DEPENDING UPON THE STATEMENT MADE BY THE FATHER OF YOUR APPELLANT AT THE TIME OF SURVEY IN H IS OFFICE WHICH IS GENERALIZED STATEMENT. 6. YOUR APPELLANT SUBMITS THAT THE INCOME EARNED BY YOUR APPELLANT IS TO BE CONSIDERED AS INCOME FROM LONG TERM CAPITAL GAINS AND FURTHER THE SALES OF THE PLOTS WERE MADE AS POWER OF ATTORNEY HOLDER OF OTHER SELLERS AND NOT THE PROPER TY OF YOUR APPELLANT. 7. YOUR APPELLANT SUBMITS THAT EVEN ADMITTING FOR T HE SAKE OF ARGUMENT THAT THE INCOME IS TO BE COMPUTED AS INCOM E FROM BUSINESS INSTEAD OF INCOME FROM LONG TERM CAPITAL G AINS THE REASONABLE EXPENSES INCURRED FOR BUYING LANDS AND D EVELOPING AND OTHER INCIDENTAL EXPENSES ARE TO BE ALLOWED IN ARRIVING AT THE INCOME. 8. YOUR APPELLANT SUBMITS THAT THE AUTHORITIES BE LOW ARE NOT CORRECT IN ADOPTING THE FUNDS TRANSFERRED TO THE TR UST AS THE 3 ITA NOS. 2200 &2201/CHNY/2019 INCOME OF YOUR APPELLANT WITHOUT CONSIDERING THE EX PENSES INVOLVED. 9. YOUR APPELLANT SUBMITS THAT FUNDS TRANSFERRED ARE THE AMOUNTS RECEIVED FROM TRANSACTIONS AND WHILE CONSID ERING THE INCOME FROM BUSINESS THE NECESSARY EXPENSES LIKE CO ST OF PURCHASE DEVELOPMENTAL CHARGES PLAN PERMISSION EX PENSES AND INCIDENTAL EXPENSES ARE TO BE DEDUCTED TO ARRIV E AT THE CORRECT INCOME FROM THE BUSINESS. THE PRINCIPLE OF COMMERCIAL EXPEDIENCY HAS NOT BEEN FOLLOWED IN ARRI IM1G AT TH E INCOME FOR THE YEAR. 10. YOUR APPELLANT SUBMITS THAT THE AUTHORITIES BELOW HAD NOT CONSIDERED THIS POINT AND MADE THE ASSESSMENT ON TH E PREMISES THAT THE WHOLE AMOUNT RECEIVED WAS THE INCOME OF TH E YEAR WHICH YOUR APPELLANT SUBMITS THAT NOT CORRECT AND T HE INCOME OF RS. 34 07 600/- DETERMINED FOR THE YEAR IS TO BE RE -DETERMINED 11. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES YOUR APPELLANT PRAYS THAT THE HONOURABLE TRIBUNAL MAY BE PLEASED T O DIRECT THE ASSESSING OFFICER TO ALLOW THE EXPENSES CONNECTED W ITH THE BUSINESS TRANSACTIONS AND DETERMINE THE INCOME. 3. AT THE OUTSET WE FIND THAT APPEAL FILED BY ASSE SSEE IS BARRED BY LIMITATION OF 2 DAYS FOR WHICH NECESSAR Y PETITION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT EXPLAIN ING THE REASONS FOR DELAY HAS BEEN FILED. THE LEARNED C OUNSEL SUBMITTED THAT ASSESSEE COULD NOT FILE APPEAL WITH IN THE TIME ALLOWED UNDER THE ACT THEREFORE DELAY MAY BE CONDO NED. HAVING HEARD BOTH SIDES AND CONSIDERED THE PETITION FILED BY THE 4 ITA NOS. 2200 &2201/CHNY/2019 ASSESSEE FOR CONDONATION OF DELAY WE ARE OF THE CO NSIDERED VIEW THAT REASONS GIVEN BY ASSESSEE FOR NOT FILIN G THE APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT COMES UNDER REASONABLE CAUSE AS PROVIDED UNDER THE ACT FOR CONDONATION O F DELAY AND HENCE 2 DAYS DELAY IN FILING OF ABOVE APPEAL IS C ONDONED AND APPEAL FILED BY THE ASSESSEE IS ADMITTED FOR ADJUD ICATION. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD NOT FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 & 2012-13. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED ON 02.09. 2013 IN THE OFFICE PREMISES OF M/S .KUMARAN REAL ESTATE & BUILD ERS VELLORE ASSESSED AS APO. BASED ON THE SURVEY ASSESSMENT O F THE AOP AND MEMBERS HAVE BEEN REOPENED AND CONCLUDED U/S.143(3) R.W.S. 147 OF THE ACT AND ASSESSED IN COME DERIVED FROM PURCHASE AND SALE OF PROPERTIES UNDER THE HEA D INCOME FROM BUSINESS OR PROFESSION AS AGAINST INCOME ADMI TTED BY AOP AS WELL AS MEMBERS UNDER THE HEAD INCOME FRO M LONG TERM CAPITAL GAIN ON THE GROUND THAT AOP AS WELL AS MEMBERS WERE INVOLVED IN A SYSTEMATIC BUSINESS ACTIVITY OF PURCHASE AND SALE OF LANDS AND THUS PROFIT DERIVED FROM SUCH AC TIVITY IS 5 ITA NOS. 2200 &2201/CHNY/2019 ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. FURTHER THE CASE OF THE ASSESSEE WAS R EOPENED U/S. 147 OF THE ACT FOR BOTH ASSESSMENT YEARS ON TH E BASIS OF SURVEY REPORT RECEIVED FROM OFFICE OF THE INCOME TA X OFFICER VELLORE AS PER WHICH THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS ACTIVITY OF PURCHASE AND SALE OF LANDS AND FURTHER OFFERED CAPITAL GAIN FROM SALE OF LAND FOR ASSESSM ENT YEARS 2011-12 & 2012-13. BASED ON THE SURVEY REPORT ASSE SSMENT HAS BEEN REOPENED U/S. 147 OF THE ACT AND ACCORDI NGLY NOTICE U/S. 148 DATED 31.03.2017 WAS ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO NOTICE THE ASSESSEE HAS F ILED RETURN OF INCOME ON 16.08.2018 ADMITTING TOTAL INCOME OF ` 82 600/- FOR ASSESSMENT YEAR 2011-12 AND ` 99 400/- FOR ASSESSMENT YEAR 2012-13. THE CASE WAS TAKEN UP FOR SCRUTINY AN D DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER BASED ON SURVEY REPORT RECEIVED FROM OFFICE OF THE INCOME TAX OFFICER VELLORE AND UPON FURTHER ENQUIRY CAME TO THE CONCLUSION THAT ASSESSEE WAS ENGAGED IN THE BUSINES S ACTIVITY OF PURCHASE AND SALE OF LAND IN LINE WITH OTHER MEMBERS OF AOP M/S.KUMARAN REAL ESTATE & BUILDERS AND HENCE PROFIT 6 ITA NOS. 2200 &2201/CHNY/2019 DERIVED FROM PURCHASE AND SALE OF LANDS IS ASSESSAB LE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION . THE ASSESSING OFFICER TO ARRIVE AT SUCH CONCLUSION HAS TAKEN SU PPORT FROM FINDINGS RECORDED DURING THE COURSE OF SURVEY ADMI SSION OF MR. P.S.MANI ONE OF THE MEMBERS OF AOP. THEREFORE HE OPINED THAT THERE IS NO MERIT IN THE CONTENTION OF THE ASS ESSEE THAT SHE IS NOT ENGAGED IN THE ACTIVITY OF BUYING AND SELLIN G OF LANDS AND WHATEVER LANDS SOLD BY HER IS INVESTMENT ACTIVITY A ND PROFIT DERIVED FROM SUCH ACTIVITY IS ASSESSABLE UNDER THE HEAD CAPITAL GAINS. THE RELEVANT FINDINGS OF THE ASSESSING OFFI CER ARE AS UNDER:- 15. THE SUBMISSIONS SURVEY FOLDER AND ORDERS PASS ED ON OTHER MEMBERS OF THE TRUST ARE CAREFULLY PERUSED. THAT TH E ASSESSEE HAD BEEN INVOLVED IN THE AFFAIRS OF M/S. KUMARAN RE AL ESTATE HAS BEEN CLEARLY PUT OUT AS IN ALL THE SUBMISSIONS MADE BY SHRI P S MANI. THE FAMILY MEMBERS WERE CARRYING ON THE B USINESS AS A WHOLE WAS WELL BROUGHT OUT. THIS CLEARLY ESTAB LISHES THE NEXTS OF THE ASSESSEE IN ALL THE AND TRANSACTIONS UNDERTAKEN OVER THE YEARS BY SHRI PS MANI AND FAMILY MEMBERS. IT HAD BEEN CLEARLY STATED THAT PURCHASE OF PROPERTY ARE B EING DONE IN INDIVIDUAL NAMES ONLY. MOST OF THE REAL ESTATE TRAN SACTIONS ARE BEING DONE EXECUTED IN THE INDIVIDUAL NAMED AND ADM IT PARTLY IN THE NAME OF THE AOP FOR CONVENIENCE. THIS IS BROUGH T OUT ALSO IN THE ORDERS OF OTHER TRUSTEES. 7 ITA NOS. 2200 &2201/CHNY/2019 17. IT MAY NOT BE OUT OF PLACE TO POINT OUT THAT TH E ASSESSMENT IN VELLORE WERE COMPLETED BASED ON THE LETTER DATED 31.03.2016 SUBMITTED BY THE ASSESSEE. IN THE NOTE A NNEXED 8 ITA NOS. 2200 &2201/CHNY/2019 AND FORWARDED ALSO THE ASSESSING OFFICER HAD CATEGO RICALLY RECORDED AS UNDER. CONSIDERING THE DETAILS SUBMITTED BY THE ASSESSEE A ND THE REPRESENTATIVE IT IS APPEARED THAT THE ASSESEES C LAIM OF LTCG APPEARS TO REASONABLE. BUT ON FURTHER INVESTIG ATION IT IS CAME 10 LIGHT THE ASSESSES IS DOING THE REAL ESTATE ACTIVITY IN AND AROUND GUDIYATTAM TOWN FOR MORE THAN 15-20 YEAR S AND WHATEVER INVESTMENT HE HAS MADE OVER THE YEARS ONLY WITH THE INTENTION TO DO REAL ESTATE BUSINESS AND THIS HAS B EEN CONFIRMED BY THE LOCAL PERIOD AND THE VICINITY OF T HE ASSESSEES BUSINESS PREMISES AT GUDIYATTAM. HENCE ON THE ABOVE LINES FURTHER INVESTIGATION WAS CARRIED OUT AT KOLLATI N EAR MINJUR AND AT SANTHOSH NAGAR PLOTS WHEN ALL THE ABOVE DETAILS ARE BROUGHT TO THE KNOWLEDGE OF THE ASSESSEE THEY HAVE AGREED TO DECLARE THE INCOME UNDER THE HEAD REAL ESTATE BU SINESS INCOME. SINCE THE CASE WAS TAKEN FOR DEEP SCRUTINY WITH THE PERMISSION OF JCIT VELLORE RANGE A BREAKTHROUGH W AS HAPPENED AT THE END. CONSIDERING THE DISCREPANCIES POINTED OUT TO THE ASSESSES AND THE REPRESENTATIVE THEY CA ME FORWARD AND SUBMITTED A LETTER DATED 31.03.2016 WITH A REQU EST TO SOUGHT INSTALLMENTS TO PAY TAX DUE ARISEN ON THE BA SIS OF REVISED DECLARATION. I8. THUS SHRI P S MANI AND OTHERS HAVE ACCEPTED A ND THE ORDERS WERE PASSED CONSIDERING THE DISCLOSURE MADE AT SURVEY AS BUSINESS INCOME. THUS THE BUSINESS HAD BEEN A GO ING CONCERN AND THE SAME WAS ALSO ACCEPTED BY SHRI P S MANI. AS PER RECORDS THE ASSESSEE IS NOT A MEMBER OF THE AOP. HOWEVER SHE IS ONE OF THE CO-OPTED TRUSTEES. THE AS SESSMENT AS PROCEEDED BY THE ASSESSING OFFICER ITO WARD - 1 VELLORE HOLDS GOOD OR M. MAGESWARI TOO. THOUGH SHE IS NOT A MEMBER OF AOP THE FORMATION OF AOP IS ONLY AN ARRANGEMENT AND HER INVOLVEMENTS IN THE SALE OF LAND AND IN PARTICULAR WITH M/S. KUMARAN REAL ESTATE & BUILDERS HAVE BEEN PROVED BEY OND DOUBT DURING THE SCRUTINY PROCEEDINGS. SWORN STATEM ENTS ETC. AFTER HAVING RECORDED SO MANY STATEMENTS DEEP VER IFICATION CARRIED OUT AND ALSO AFTER A NUMBER OF HEARINGS TH E CONCLUSION WAS DRAWN BY THE ITO WARD -2 VELLORE. IN LINE WITH THE SAME 9 ITA NOS. 2200 &2201/CHNY/2019 THE ASSESSMENTS IN THE CASE OF M MAGESWARI IS ALSO COMPLETED BASED ON THE REPORTS AS UNDER: TOTAL INCOME RETURNED : RS.82 600/ INCOME FROM HOUSE PROPERTY (AS RETURNED) RS.82 60 0/- INCOME FROM BUSINESS RS.33 25 000/- =============== TOTAL INCOME ASSESSED : ` 34 07 600/- =============== 5. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASS ESSEE PREFERRED AN APPEAL BEFORE LEARNED CIT(A). BEFORE T HE LEARNED CIT(A) THE ASSESSEE SUBMITTED THAT THE ASSESSING O FFICER HAS ERRED IN ARRIVING AT A CONCLUSION THAT INCOME DERIV ED BY THE ASSESSEE FROM SALE OF LAND IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION AS AGAINST INCO ME ADMITTED UNDER THE HEAD LONG TERM CAPITAL GAIN WITH OUT APPRECIATING THE FACT THAT ASSESSEE IS NEITHER A ME MBER OF AOP NOR INVOLVED IN THE ACTIVITY OF BUYING AND SE LLING LANDS. THE ASSESSEE FURTHER CONTENDED THAT ASSESSING OFFIC ER ON WRONG ASSUMPTION OF FACTS HAS CONCLUDED THAT THE A SSESSEE IS ALSO A PART OF AOP AND FURTHER INVOLVED IN THE ACTI VITY OF BUYING & SELLING LANDS BUT FACTS REMAINS THAT ASSESSEE WA S NOT A MEMBER OF AOP AND THIS FACT HAS BEEN ADMITTED BY T HE ASSESSING OFFICER . THE ASSESSING OFFICER HAVING A CCEPTED THE FACT THAT ASSESSEE IS NOT A MEMBER OF AOP WRONGLY ASSESSED 10 ITA NOS. 2200 &2201/CHNY/2019 THE INCOME UNDER THE HEAD INCOME FROM BUSINESS OR P ROFESSION. EVEN THOUGH THE ASSESSEE HAS FURNISHED VARIOUS EVID ENCES TO PROVE THAT LANDS SOLD BY HER ARE DIFFERENT FROM THE LANDS SOLD BY AOP AND CONSEQUENTLY PROFIT DERIVED FROM SALE OF L AND IS ASSESSABLE UNDER THE HEAD INCOME FROM LONG TERM CAP ITAL GAINS. 6. THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE REJECTED THE CLAIM OF T HE ASSESSEE THAT INCOME DERIVED FROM SALE OF LAND IS ASSESSABLE UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN BY HOLDING THAT THE ROLE PLAYED BY THE ASSESSEE IN REAL ESTATE BUSINESS IS S AME AS THAT OF THE OTHER ASSOCIATES IN WHOSE HANDS INCOME WA S ASSESSED AS INCOME FROM BUSINESS OR PROFESSION. THE RECORDS RELATED TO SURVEY AND RELATED STATEMENT AND ALSO THE FACT THA T INCOME HAS BEEN ASSESSED AS BUSINESS INCOME IN THE HANDS OF OT HER ASSOCIATES CLEARLY PROVE THAT INCOME OF THE ASSESS EE IS LIABLE TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS . ACCORDINGLY REJECTED THE ARGUMENTS OF THE ASSESSEE AND CONFIRMED ADDITIONS MADE BY THE ASSESSING OFFICER T OWARDS PROFIT DERIVED FROM SALE OF LANDS UNDER THE HEAD IN COME FROM 11 ITA NOS. 2200 &2201/CHNY/2019 BUSINESS OR PROFESSION. AGGRIEVED BY THE LEARNED CI T(A) ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN FACT AND IN LAW TO CONF IRM THE FINDINGS OF THE ASSESSING OFFICER IN ASSESSING PROF IT DERIVED FROM SALE OF LANDS UNDER THE HEAD INCOME FROM BUSIN ESS OR PROFESSION AS AGAINST INCOME ADMITTED UNDER THE H EAD LONG TERM CAPITAL GAINS WITHOUT APPRECIATING THE FACT T HAT THE ASSESSEE WAS NEITHER A MEMBER OF AOP NOR INVOLVED IN ACTIVITY OF BUYING AND SELLING OF LANDS. THE AR FURTHER SUBM ITTED THAT THE ASSESSING OFFICER HAS TAKEN WRONG FACTS TO COME TO THE CONCLUSION THAT ASSESSEE IS ALSO INVOLVED IN ACTIVI TY OF SELLING LANDS ON THE BASIS OF ONE SETTLEMENT DEED EXECUTED BY THE ASSESSEE FOR A PIECE OF LAND IN FAVOUR OF M/S. SRI KUMARAN EDUCATIONAL & CHARITABLE TRUST MINJUR CHENNAI I GNORING THE FACT THAT SAID LAND WAS SETTLED IN FAVOUR OF THE CH ARITABLE TRUST FOR OBJECTIVE OF THE TRUST WHEREAS BUSINESS ACTIVITY W AS CARRIED OUT BY M/S. KUMARAN REAL ESTATE BUILDERS AS AN AOP AT V ELLORE. 12 ITA NOS. 2200 &2201/CHNY/2019 8. THE LEARNED DR ON THE OTHER HAND SUPPORTING TH E ORDER OF LEARNED CIT(A) SUBMITTED THAT FACTS BROUGHT OUT BY THE ASSESSING OFFICER AND LEARNED CIT(A) IN LIGHT OF FI NDINGS OF SURVEY AND FURTHER SURVEY REPORT CLEARLY INDICATE THAT THE ASSESSEE IS ALSO INVOLVED IN THE ACTIVITY OF BUYING AND SELLING OF LANDS LIKE OTHER MEMBERS OF AOP AND HENCE ONCE I NCOME FROM SALE OF LAND IS ASSESSED UNDER THE HEAD INCOME FROM BUSINESS IN CASE OF OTHER MEMBERS NO DIFFERENT V IEW CAN BE TAKEN IN THE CASE OF THE ASSESSEE UNLESS ASSESSEE DEMONSTRATES THAT LANDS SOLD BY HER ARE DIFFERENT F ROM LANDS SOLD BY AOP AND FURTHER SHE HAS SOLD LANDS AS INVE STMENT ACTIVITY. IN THIS CASE THE ASSESSEE HAS FAILED TO FILE ANY FURTHER EVIDENCES TO PROVE THAT ADMISSION DURING THE COURSE OF SURVEY IS INCORRECT TO ASSESS THE PROFIT UNDER THE HEAD IN COME FROM CAPITAL GAINS. 9. WE HAVE HEARD BOTH THE PARTIES PERUSED MATERIAL S AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAS ASSESSED PROFIT DE RIVED FROM SALE OF LAND UNDER THE HEAD INCOME FROM BUSINESS O R PROFESSION ON THE SOLE BASIS OF SURVEY REPORT RECEI VED FROM 13 ITA NOS. 2200 &2201/CHNY/2019 OFFICE OF THE INCOME TAX OFFICER VELLORE IN THE CASE OF M/S. KUMARAN REAL ESTATE & BUILDERS VELLORE AS AN AOP. TO ARRIVE AT SUCH CONCLUSION THE ASSESSING OFFICER HAS TAKEN SUPPORT FROM SURVEY REPORT COUPLED WITH STATEMENT RECORDE D FROM MEMBERS OF AOP DURING THE COURSEOF SURVEY WHERE TH EY HAVE ADMITTED THE FACT THAT THEY ARE INVOLVED IN THE ACT IVITY OF REAL ESTATE DEVELOPMENT AND PROFIT DERIVED FROM SALE OF LANDS IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS. TH E ASSESSING OFFICER HAS ALSO TAKEN SUPPORT FROM ASSES SMENT ORDERS OF AOP AND ITS MEMBERS WHERE THE ASSESSING OFFICER HAS ASSESSED PROFIT DERIVED FROM SALE OF LAND UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION AS AGAINST INCO ME ADMITTED UNDER THE HEAD LONG TERM CAPITAL GAINS. TH E ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT THE ASSESSE IS NOT A MEMBER OF AOP. IN FACT HE HAS CATEGORICALLY ADMIT TED THAT THE ASSESSEE IS NOT A MEMBER OF AOP BUT WENT ON TO ASS ESS INCOME UNDER THE HEAD INCOME FROM BUSINESS ONLY ON THE BASIS OF LETTER FILED BY ONE MR.P.S.MANI MEMBER OF AOP WHERE HE HAS ADMITTED CAPITAL GAINS FROM SALE OF LANDS IN TH E HANDS OF THE ASSESSEE. IT WAS THE CONTENTION OF THE ASSESSEE BEF ORE THE 14 ITA NOS. 2200 &2201/CHNY/2019 ASSESSING OFFICER AS WELL AS LEARNED CIT(A) THAT SH E IS NEITHER A MEMBER OF AOP NOR ENGAGED IN THE BUSINESS OF BUYIN G AND SELLING OF LANDS. SHE FURTHER CONTENDED THAT LANDS SOLD BY AOP ARE DIFFERENT FROM THE LANDS SOLD BY HER IN INDIVI DUAL CAPACITY. TO SUPPORT HER ARGUMENT SHE HAS FILED VARIOUS EVID ENCES INCLUDING SETTLEMENT DEED EXECUTED BY HER IN FAVOUR OF SRI KUMARAN EDUCATIONAL & CHARITABLE TRUST . WE FIND T HAT THE ASSESSING OFFICER HAS TAKEN SUPPORT FROM SETTLEMENT DEED EXECUTED BY THE ASSESSEE TO ARRIVE AT CONCLUSION TH AT THE ASSESSE ALSO ENGAGED IN REAL ESTATE DEVELOPMENT. B UT ON PERUSAL OF DETAILS FILED BY THE ASSESSEE INCLUDING SETTLEMENT DEED DATED 24.11.2008 EXECUTED IN FAVOUR OF SRI K UMARAN EDUCATIONAL & CHARITABLE TRUST WE FIND THAT THE SA ID LAND WAS SETTLED IN FAVOUR OF TRUST FOR THE PURPOSE OF PUBLI C CHARITY AND OTHER GOOD REASONS WITHOUT ANY CONSIDERATION. THE A SSESSEE FURTHER CLARIFIED THAT SHE HAS NOT DERIVED ANY INCO ME FROM PROPERTY SETTLED IN FAVOUR OF CHARITABLE TRUST WHE REAS INCOME DECLARED UNDER THE HEAD LONG TERM CAPITAL GAIN IS DERIVED FROM SOME OTHER LANDS WHICH WERE SOLD IN HER INDIVIDUAL CAPACITY AS AN INVESTMENT ACTIVITY . SHE FURTHER CLARIFIED THAT LANDS SOLD BY 15 ITA NOS. 2200 &2201/CHNY/2019 AOP AT VELLORE AND LANDS SOLD BY HER IN HER INDIVID UAL CAPACITY ARE DIFFERENT LANDS AND THERE IS NO CONNECTION BETW EEN THE ACTIVITIES CARRIED BY AOP AND HERSELF. 10. WE HAVE GONE THROUGH VARIOUS AVERMENTS MADE BY THE ASSESSEE IN LIGHT OF FACTS BROUGHT OUT BY THE ASSES SING OFFICER AS WELL AS LEARNED CIT(A) AND FIND THAT THE ASSESS ING OFFICER HAVING ACCEPTED THE FACT THAT ASSESSEE IS NOT A M EMBER OF AOP OUGHT TO HAVE VERIFIED THE INCOME DECLARED UND ER THE HEAD LONG TERM CAPITAL GAIN WITH REFERENCE TO LANDS SOLD BY HER IN HER INDIVIDUAL CAPACITY BY ASCERTAINING THE FAC T THAT WHETHER THE ASSESSEE HAS SOLD LANDS AS PART OF AOP OR NOT. IN CASE LANDS SOLD BY THE ASSESSEE ARE NOT PART OF ACTIVITY OF AOP BUT ARE INDEPENDENT LANDS THEN ASSESSABILITY OF PROFI T FROM SALE OF LANDS SHOULD BE INDEPENDENTLY EXAMINED WITHOUT ANY INFLUENCE FROM SURVEY REPORT IN THE CASE OF M/S. KUMARAN REAL ESTATE & BUILDERS VELLORE BECAUSE ASSESSMENT OF AOP AND I TS MEMBERS WERE MADE SOLELY BASED ON THE FINDINGS OF THE SURVEY AND STATEMENT RECORDED FROM THE MEMBERS DURI NG THE COURSE OF SURVEY. THEREFORE WE ARE OF THE CONSIDER ED VIEW THAT ASSESSING OFFICER HAS ARRIVED AT A CONCLUSION THAT INCOME 16 ITA NOS. 2200 &2201/CHNY/2019 DERIVED BY ASSESSEE FROM SALE OF LANDS IS ASSESSABL E UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION WITHOUT CA RRYING OUT AN INDEPENDENT ENQUIRY WITH REGARD TO LAND SOLD BY THE ASSESSEE. HENCE WE ARE OF THE CONSIDERED VIEW THA T THE ISSUE NEEDS TO GO BACK TO THE FILE OF ASSESSING OFFICER F OR BOTH ASSESSMENT YEARS TO ASCERTAIN THE FACT WITH REGARD TO THE LAND SOLD BY THE ASSESSEE IN HER INDIVIDUAL CAPACITY TO DETERMINE NATURE OF INCOME AND ASSESSABILITY OF SUCH INCOME U NDER THE HEAD INCOME FROM BUSINESS OR PROFESSION OR CAPITAL GAINS. HENCE WE SET ASIDE BOTH APPEALS TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO RECONSIDER THE ISSUE IN L IGHT OF VARIOUS EVIDENCES FILED BY THE ASSESSEE INCLUDING SETTLEMEN T DEED EXECUTED IN FAVOR OF M/S. SRI KUMARAN EDUCATIONAL & CHARITABLE TRUST AND TO ASCERTAIN NATURE OF INCOME DECLARED B Y THE ASSESSEE UNDER THE HEAD INCOME FROM LONG TERM CAPI TAL GAINS. 11. IN THE RESULT APPEAL OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH 2021 SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G.MANJUNATHA ) ' % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER 17 ITA NOS. 2200 &2201/CHNY/2019 ' /CHENNAI ( / DATED 19 TH MARCH 2021 DS *+ + /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .