Shri Anilbhai Bholabhai Patel, Baroda v. The ACIT, Central Circle-1, Baroda

ITA 371/AHD/2016 | 2012-2013
Pronouncement Date: 27-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 37120514 RSA 2016
Assessee PAN ACTPP2509G
Bench Ahmedabad
Appeal Number ITA 371/AHD/2016
Duration Of Justice 8 month(s) 11 day(s)
Appellant Shri Anilbhai Bholabhai Patel, Baroda
Respondent The ACIT, Central Circle-1, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 27-10-2016
Date Of Final Hearing 15-09-2016
Next Hearing Date 15-09-2016
Assessment Year 2012-2013
Appeal Filed On 15-02-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER SL. NO(S) IT(SS)A NO(S) / ITA NOS /SP NOS. ASSESSMENT YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. IT(SS)A NO. 70/AHD/2016 2007-08 ANIL BHOLABHAI PATEL 6 DARSHAN PARK SOCIETY VIP ROAD KARELIBAUG BARODA PAN: ACTPP 2509 G THE ASST.CIT CENTRAL CIRCLE-1 BARODA-390 007 2. 71/AHD/2016 2009-10 -DO- -DO- 3. 72/AHD/2016 2010-11 -DO- -DO- 4. 73/AHD/2016 2011-12 -DO- -DO- 5. ITA NO. 371/AHD/2016 2012-13 -DO- -DO- 6. 29/AHD/2012 2008-09 -DO- -DO- 7. SP NOS. 103/AHD/2016 (IN IT(SS)A NO.70/AHD/16) 2007-08 -DO- -DO- 8. 104/AHD/2016 (IN IT(SS)A NO.71/AHD/16) 2009-10 -DO- -DO- 9. 105/AHD/2016 (IN IT(SS)A NO.73/AHD/16) 2011-12 -DO- -DO- 10. 106/AHD/2016 (IN ITA NO.371/AHD/16) 2012-13 -DO- -DO- ASSESSEE BY : SHRI M.G.PATEL & MS.ARTI N.SHAH ARS REVENUE BY : SHRI JAGDISH CIT & SHRI JAMES KURIA N SR.DRS IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 2 - !' / DATE OF HEARING 15/09/2016 #$%& !' / DATE OF PRONOUNCEMENT 27/10/2016 / O R D E R PER PRADIP KUMAR KEDIA ACCOUNTANT MEMBER : AT THE BEGINNING OF THE HEARING WE WERE INFORMED B Y THE REVENUE THAT FIVE APPEALS PERTAINING TO THE ASSESSMENT YEAR S (AYS) 2007-08 2009-10 2010-11 2011-2 & 2012-13 EMANATES FROM TH E COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A) IN SHORT) AND APPEAL PERTAINING TO AY 2008-09 ARISES FROM SEPARAT E ORDER OF THE CIT(A). WE WERE ALSO INFORMED IN THE COURSE OF HE ARING THAT THE FACTS IN ALL THESE ASSESSMENT YEARS UNDER APPEALS ARE SIMILA R AND THEREFORE AY 2012-13 MAY BE TAKEN AS A LEAD YEAR FOR THE PURPOSE OF ADJUDICATION OF COMMON ISSUE IN ALL THESE APPEALS. WE HAVE PROCEED ED ACCORDINGLY AS PER SUGGESTIONS MADE. 2. THUS WE SHALL TAKE UP THE APPEAL IN ITA NO.371/ AHD/2016 FOR ASST.YEAR 2012-13 FIRST. THE GROUNDS OF APPEAL RAI SED BY THE ASSESSEE READ AS UNDER:- 3. THE ASSESSEE IN THE COURSE OF HEARING HAS NOT PR ESSED GROUND NO.3 OF THE APPEAL CHALLENGING DISALLOWANCE OF EXPENDITU RE U/S.14A OF THE ACT. ACCORDINGLY GROUND NO.3 OF THE ASSESSEES APPEAL I S DISMISSED AS NOT IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 3 - PRESSED. THIS LEAVES US WITH GROUND NOS.1 & 2 WHE REBY THE ASSESSEE HAS ASSAILED THE ACTION OF THE AO IN TREATING THE CAPIT AL GAINS ARISING ON SALE OF PROPERTY AS BUSINESS INCOME. 4. FACTS IN BRIEF AS EMANATING FROM THE RECORDS A RE THAT A SEARCH ACTION U/S.132 OF THE INCOME TAX ACT 1961 (HEREINAFTER RE FERRED TO AS 'THE ACT') WAS CARRIED OUT IN THE CASE OF ASSESSEE ALONG WITH OTHER GROUP CASES ON 09/08/2011. THE ASSESSEE FILED HIS RETURN OF INC OME FOR AY 2012-13 DISCLOSING TOTAL INCOME OF RS.7 21 15 120/- AND AGR ICULTURAL INCOME OF RS.2 50 319/-. NOTICE U/S.143(2) AND 142(1) OF THE ACT WERE ISSUED AND ASSESSMENT WAS CARRIED OUT. 4.1. THE AO NOTICED THAT THE ASSESSEE HAS SOLD VARI OUS PROPERTIES DURING THE YEAR AND INCOME OF RS.4 46 66 530/- EARN ED OUT OF THESE SALES WERE DECLARED AS INCOME FROM LONG TERM CAPITAL GAIN S (LTCG) AND SHORT TERM CAPITAL GAIN (STCG). THE AO QUESTIONED THE IMPUGNED ACTION OF THE ASSESSEE IN TREATING THE GAIN ARISING FROM SALE OF PROPERTY AS CAPITAL GAINS WHICH ACCORDING TO HIM IS CHARGEABL E TO TAX UNDER THE HEAD BUSINESS INCOME. THE ASSESSEE FILED A DETAI LED REPLY IN THE COURSE OF ASSESSMENT PROCEEDINGS WHICH ARE REPRODUCED IN PARA-4 OF THE ASSESSMENT ORDER. HOWEVER THE AO WAS NOT SATISFI ED WITH THE EXPLANATIONS OFFERED BY THE ASSESSEE. HE ACCORDING LY CONCLUDED THAT THE INTENTION OF THE ASSESSEE WAS TO DEAL IN THE LAND A ND CONSTRUCTED IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 4 - PROPERTIES WITH A PROFIT MOTIVE AND ARE THUS IN T HE NATURE OF TRADE. AS A COROLLARY IT IS THE CASE OF AO THAT INCOME ARISING ON SALE OF LAND IS CHARGEABLE TO TAX AS BUSINESS INCOME AND NOT SUSC EPTIBLE TO CHARGE UNDER THE HEAD CAPITAL GAINS. 4.2. WHILE FORMING THE AFORESAID OPINION THE AO C ITED FOLLOWING REASONS FOR HOLDING THAT THE INCOME ARISING ON SALE OF LAND/PROPERTY ETC. ARE IN THE NATURE OF BUSINESS INCOME:- 5 REBUTTAL OF ASSESSEE' S CONTENTION; I HAVE GONE THROUGH THE REPLY FILED BY THE ASSESSEE BUT SAME IS NOT FOUND ACCEPTABLE FOR THE FOLLOWING REASONS: I. FROM THE DETAILS FILED BY THE ASSESSEE T HE SEQUENCE OF EVENTS OF LAND CAN BE SUMMARIZED AS UNDER: (A) THESE LANDS/PROPERTIES WERE PURCHASED BY THE AS SESSEE IN THE FINANCIAL YEARS 2000-01 2003-04 2004-05 2005-06 2006-07 2007- 08 2008-09 2010- 11. (B) ALL THESE LANDS WERE AGRICULTURAL LANDS. (C) DEVELOPMENT AGREEMENTS WERE ENTERED INTO WITH V ARIOUS PERSONS. THE AGRICULTURAL LAND PURCHASED WAS CONVERTED INTO NON- AGRICULTURAL LAND BY APPROPRIATE AUTHORITY. (D) THE ASSESSEE HAS GIVEN THE LAND FOR DEVELO PMENT WITH A PROVISION THAT THE ASSESSEE EXECUTES SALES DEEDS AND LEGAL POSSESS ION OF THE PROPERTY IS GIVEN TO THE MEMBERS WHERE THE DEVELOPERS ARE CONFIRMING PARTY. (E)THE NUMBER OF PROPERTIES SOLD BY THE ASSESSEE FO R THE YEAR UNDER CONSIDERATION WAS FIFTEEN. IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 5 - II. EVENTS AS NARRATED IN THE PRECEDING PARAS VIVID LY BRINGS OUT THE FACTS THAT THE OWNERS OF THE LAND HAVE DEALT WITH THE LAND IN SAME WAY AS A DEALER IN IT WOULD ORDINARILY DO LIKE PURCHASING THE LAND CONVE RTING IT INTO NON- AGRICULTURAL DEVELOPING IT AND THEN SELLING IT IN SMALL PIECES. IT IS WORTHWHILE TO MENTION HERE THAT SHRI ANIL BHOLABHAI R PATEL IS A WELL KNOWN BUILDER AND IS ALSO A PARTNER IN M/S. SAI DEVELOPERS AND M/S. S IDDHARTH DEVELOPERS AND OTHER RELATED DEVELOPERS WITH WHOM THE DEVELOPMENT AGREEMENT WAS ENTERED INTO. IN THE LIGHT OF ABOVE FACT THE PURPOSE OF TRA NSACTION OF PURCHASE AND SALE IS CLEARLY DISCERNIBLE. III. HERE IT IS MORE THAN APPARENT THAT THE OPERATI ONS INVOLVED IN THE TRANSACTION ARE OF THE SAME KIND AND CARRIED ON IN THE SAME WAY AS THOSE WHICH ARE CHARACTERISTIC OF ORDINARY TRADING IN THE LINE OF BUSINESS IN WHICH THE TRANSACTION WAS MADE. IV. HERE THE AGRICULTURAL LAND IS IN THE CLOS E VICINITY OF CITY AND WAS PURCHASED SOLELY WITH THE INTENTION TO RESELL AT TH E PROFIT AND PURCHASER HAD NO INTENTION TO USE IT FOR AGRICULTURE OTHERWISE HE WOULD NOT HAVE CONVERTED IT INTO NON-AGRICULTURAL LAND. THE LAND WAS BOUGHT AND THEREAFTER DONE CERTAIN OPERATIONS ON IT SO AS TO BRING GREATER PROFIT AND SOLD THE LAND. THIS ACTIVITY IS CERTAINLY A BUSINESS ACTIVITY FOR THE ESSENCE OF THE TRADE BUYING AND SELLING FOR PROFIT IS PRESENT IN THIS ACTIVITY. V. IMPROVEMENT COST; AS ASTUTE BUSINESSMAN WOULD INCUR THESE COSTS TO AD D VALUE TO HIS BUSINESS ASSETS IN ORDER TO MAKE IT MARKETABLE. IN THE INSTA NT CASE THE ASSESSEE HAS INCURRED IMPROVEMENT COSTS TO ADD VALUE ON THE LAND PURCHASED BY HIM IN THE FORM OF CONVERSION OF THE AGRICULTURE LAND INTO NON -AGRICULTURE LAND BY PAYING NECESSARY FEES TO THE GOVT. GOT TITLE CLEARANCE CE RTIFICATE FROM APPROPRIATED AUTHORITY PAYING MEASUREMENT FEES PAYING AMOUNT T O THE CONFIRMING PARTY GET APPROVAL OF LAY-OUT PLANS AND MAPS FROM LOCAL A UTHORITY CONSTRUCTION OF COMPOUND WALL AND BRIDGE. THESE EXPENSES ARE INCURR ED WITH A CLEAR MOTIVE OF SELLING AT HUGE PROFIT. VI. LOANS; IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 6 - TO PURCHASE LAND IN HUGE VOLUME THE ASSESSEE HAS B EEN TAKING LOANS. IT CAN BE EVIDENT FROM THE BALANCE SHEET THAT LOANS HAVE B EEN SUBSTANTIALLY INCREASED. HENCE THE WHOLE TRANSACTION HAS TO BE S EEN AS A CONGLOMERATE OF EVENTS WHERE LAND IS PURCHASED OR POSSESSED BY THE ASSESSES SOLD TO THE DEVELOPERS IN WHICH HE IS PARTNER OR HAS SUBSTANTIA L INTEREST THROUGH DEVELOPMENT AGREEMENT AND ULTIMATELY SOLD TO THE CU STOMERS WITH ADDITIONS MADE TO THE EXISTING LAND. VII. MOREOVER ASSESSEE'S CLAIM THAT PRIOR TO THIS TRANSACTION HE HAS NEVER ENTERED INTO ANY SUCH TRANSACTION OF PURCHASE & SAL E OF LAND IS PATENTLY ERRONEOUS AND MISLEADING. IT IS NOT THE FIRST INSTA NCE THAT ASSESSEE IS SELLING THE LAND RATHER ASSESSEE IS CONTINUOUSLY INVOLVED I N THE ACTIVITY OF PURCHASING AND SELLING OF LAND. THE SAME CAN BE SEEN FROM THE ASSESSEE'S EARLIER YEAR'S RETURNS. IF WE SEE THE BALANCE SHEET OF THE ASSESSE E THEN WE FIND THAT HE HAD PURCHASED A NUMBER OF BIG CHUNKS OF LANDS AT VARIOU S PLACES THE OTHER FAMILY CONCERNS OF THE ASSESSEE ARE ALSO INVOLVED IN VARIO US BUSINESS ACTIVITIES. THE ASSESSEE HAS SUBSTANTIAL LAND HOLDING BOTH ON ACCOU NT TOTAL ANCESTRAL LAND AS WELL AS ON ACCOUNT OF REGULAR PURCHASE OF LAND. HEN CE IT CAN VERY SAFELY BE HELD THAT THE PURCHASE OF LAND AND ITS AND ITS SUBS EQUENTLY SELLING BY THE ASSESSEE IS NOTHING BUT THE BUSINESS ACTIVITY. VIII. THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS DHABLE BOBDE PAROSE KALE LUTE AND CHOUDHARI (202 ITR 98) . HERE THE F ACTS OF THE CASE WITH THAT OF CASE CITED BY THE ASSESSEE ARE EASILY DISTINGUIS HABLE. IN THE CASE CITED SUPRA THE TRANSACTION WAS AN ISOLATED TRANSACTION OF PURCHASE AND SALE OF AGRICULTURAL LAND BY THE ASSESSEE. WHILE HERE THE ASSESSEE IS ACTIVELY ENGAGED IN THE PURCHASE OF LAND AND THIS IS NOT AN ISOLATED INSTANT. MOREOVER ASSESSEE IN ITS BALANCE SHEET HAS SHOWN 'ADVANCES R ECEIVED AGAINST LAND'. THIS SHOWS THE MAGNITUDE OF THE TRADING IN LAND. IT IS WELL SETTLED LAW THAT IF THE COMMODITY PURCHASED IS GENERALLY THE SUBJECT IN ANER OF TRADE AND IF IT IS PURCHASED IN VERY LARGE QUANTITIES IT WOULD TEND T O ELIMINATE THE POSSIBILITY OF INVESTMENT OF PERSONAL USE POSSESSION OR ENJOYMENT . IX. ASSESSEE'S OTHER CONTENTION THAT HE IS NOT HOLD ING LAND AS STOCK-IN-TRADE AND HAS SHOWN THE SAME AS FIXED ASSETS DOES NOT HAV E ANY FORCE. THE CONSISTENT METHODS FOLLOWED BY THE ASSESSEE HAVE NO THING TO DO WITH THE CHARGEABILITY OF THE CORRECT INCOME. MOREOVER INCO ME-TAX AUTHORITIES ARE NOT REQUIRED TO PUT BLINKERS WHILE LOOKING AT THE DOCUM ENTS PRODUCED BEFORE THEM IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 7 - THEY ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRC UMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THE DOCUMENTS. X. THE ASSESSEE'S CLAIM THAT ITS MAIN SOURCE OF INC OME IS SHARE OF PROFIT FROM PARTNERSHIP FILM AND INCOME FROM OTHER SOURCES IS F ACTUALLY INCORRECT. FROM THE RETURN OF INCOME IT CAN BE SEEN THAT ASSESSEE'S MAIN SOURCE IS FROM TRANSACTION OF LAND SHOWN UNDER THE HEAD 'CAPITAL G AINS'. XI THE FACT THAT HE DOES NOT DO ANY OTHER BUSINESS BUT ONLY DEALING IN LAND I.E. PURCHASE AND SALE OF LAND WITH SOLE MOTTO OF E ARNING PROFIT. 4.3. THE AO ACCORDINGLY BROUGHT THE INCOME ARISIN G ON SALE OF LAND AND PROPERTIES TO CHARGE UNDER THE HEAD BUSINESS INCOM E WHICH IS CHARGEABLE TO TAX AT HIGHER RATE OF TAXATION. 4.4. THE AO ALSO DENIED THE EXEMPTION U/S.54B OF T HE ACT AS CLAIMED IN THE RESPECTIVE YEARS BY THE ASSESSEE. 5. IN FIRST APPEAL BEFORE THE CIT(A) THE ASSESSEE REITERATED ITS SUBMISSION AND SOUGHT REVERSAL OF THE ORDER OF THE AO. THE CIT(A) HOWEVER DID NOT ACCEPT THE PLEA OF THE ASSESSEE THA T SALE OF LAND AND OTHER PROPERTIES WERE RIGHTLY OFFERED FOR TAXATION UNDER THE HEAD CAPITAL GAINS AND COULD NOT BE TREATED AS BUSINESS ACTIVI TIES. HE ACCORDINGLY CONFIRMED THE ACTION OF THE AO. 5.1. THE RELEVANT FINDINGS OF THE CIT(A) IS EXTR ACTED HEREUNDER: IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 8 - 7. I HAVE GIVEN A CAREFUL CONSIDERATION TO THE OB SERVATIONS OF THE LD.AO IN THE ASSESSMENT ORDER AND THE SUBMISSION MADE ON BEH ALF OF THE APPELLANT. TO A QUERY RAISED BY ME WITH RESPECT TO EARLIER YEARS THE LD.AR HAS SUBMITTED THE STAGE OF LITIGATION INVOLVING THE SAME ISSUE OF CAP ITAL GAIN V. BUSINESS INCOME WITH RESPECT TO EARLIER A.YRS.2004-05 2005- 06 2006-07 2007-08 AND 2008-09 AS UNDER: SR. NO. A.Y. AGRICULTU RE INCOME NO. OF LANDS SOLD LONG TERM CAPITAL GAIN ALLOWED BY DISALLOWE D BY CURRENT STATUS 1 2004-05 405781 4 5569429 ITAT --- NO APPEAL BY DEPT. IN HIGH COURT 2 2005-06 88373 2 1979044 AO --- NO APPEAL PENDING 3 2006-07 --- 6 6602026 --- ITAT APPEAL ADMITTED BY HON. HIGH COURT 4 2007-08 128952 6 1519732 --- AO CIT(A) PENDING APPEAL 5 2008-09 8 5459715 . --- CIT(A) PRESENT APPEAL (ITAT) 8. THE ID. AR HAS ALSO SUBMITTED THE COPY OF ITAT O RDER FOR A.Y.2006-07 WHEREIN THE ISSUE HAS BEEN DECIDED AGAINST THE APPELLANT AFTER CONSIDERING THE EARLIER DECISION OF ITAT FOR A.Y.2004-05 WHEREI N THE ISSUE WAS DECIDED IN FAVOUR OF THE APPELLANT AND AFTER DISTINGUISHING TH E SAME. THE RELEVANT PORTION OF THE ORDER OF THE ITAT IS REPRODUCED AS UNDER: IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 9 - '6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE PAST HISTORY OF THE CASE SHOWS THAT THE APPELL ANT IN EVERY YEAR IS DISCLOSING THE CAPITAL GAIN ON SALE OF THE LAND H OWEVER FAMILY MEMBERS AS WELL AS HUF ALSO CLAIMING CAPITAL GAIN ON SALE OF L AND. BUT THE INTENTION OF THE ASSESSEE TO EARN PROFIT BY MAKING INVESTMENT IN LAND REPEATEDLY BY PURCHASING THE LAND. AT THE OUTSCRIPT OF THE MUNICI PAL AREA ANY OF THE LAND MAY BE AGRICULTURE TO EARN THE PROFIT. THESE LANDS WERE NOT PURCHASED FOR THE PURPOSES OF INVESTMENT. THE AGRICULTURAL USE AS CLA IMED BY THE ASSESSEE WAS MADE UP TO 2003 WHEREAS PLOT OF LAND; WERE SOLD IN A Y. 2006-07. THEREFORE THE INTENTION OF THE ASSESSEE WAS TO EARN MUCH PROF IT IN THE TRADING OF THE LAND. IN PAST THE CO-ORDINATE 'C' BENCH HAD DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN A.Y.04-05 WHICH WAS DECIDED ON THE BAS IS OF SHRI BHOLABHAI R. PATEL HUF FOR A. Y.01 -02 FOR A.Y.03-04 & 04-05 WH ICH IS SQUARELY DISTINGUISHABLE AS THAT YEAR THERE WAS AN AGRICULTU RE INCOME DISCLOSED BY THE ASSESSEE. THE IMPUGNED LAND RELEVANT IN A. Y. 04-05 WAS PARTLY SOLD DURING THE YEAR. THE NUMBER OF PLOT WAS ONLY ONE. HOWEVER DURING THE YEAR THE ASSESSEE HAS SOLD 12 PLOTS AFTER DEVELOPING THE AR EA BY THE PARTNERSHIP CONCERN TO GET MORE BENEFIT. THE CASE LAWS CITED BY THE REVENUE ARE SQUARELY APPLICABLE PARTICULARLY G. VENKATASWAMI NAIDU & C O. VS. C/T 35 !TR 594 (SC) 42 ITR 743 (SC) FOR INTENTION 25 ITR 4-19 (S C) FOR ACTIVITIES NEED NOT BE CONCERNED WITH SEVERAL INDIVIDUAL/CONCERNS 105 ITR 633 SINGLE/ISOLATED VENTURE ARE NOT EXCLUDED AND WHERE THE INITIAL INT ENTION IS TO MAKE PROFIT BY RESALE TRANSACTION IS A BUSINESS VENTURE EVEN SIN GLE TRANSACTION CAN BE HELD TRANSACTION AND ADVENTURE IN NATURE OF TRADE CIT T /S SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. [100 ITR 706 (SC)]. THE APPELLAN T HAD SHOWN SUBSTANTIAL INVESTMENT IN LAND AS THE INVESTMENT BUT THE NATURE OF INVESTMENT IS TO BE DECIDED ON THE BASIS OF INTENTION AND FREQUENCY. IN BALANCE SHEET THE ASSESSEE HAD SHOWN ADVANCE TOWARDS THE LAND AS RS.3.24 CRORE WHICH SHOWS THE INTENTION OF THE ASSESSES TO TRADE THE LAND. THEREF ORE WE HAVE CONSIDERED VIEW THAT THE ASSESSEE WAS IN TRADING OF LAND AND ACTIV ITY OF THE ASSESSES HELD ADVENTURE IN NATURE OF TRADE. THUS WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A). ACCORDINGLY THE ASSESSEE' S APPEAL IS DISMISSED.' 9. THUS THE CONTROVERSY IS DIVERGENTLY COVERED BY ITAT'S DECISION IN APPELLANT'S OWN CASE IN PRE-SEARCH REGULAR ASSESSME NTS U/S 143(3). WHILE AY 04-05 IS CONCLUSIVELY COVERED IN FAVOUR OF THE APPE LLANT AY 06-07 IS DECIDED IN FAVOUR OF THE DEPARTMENT. IN VIEW OF THE FACTS N OTED AS ABOVE THAT A LATER DECISION OF THE HON. ITAT ON THE ISSUE IN CONTROVERSY IS AGA INST THE APPELLANT WHICH HAS BEEN RENDERED AFTER CONSIDERING AND DISTI NGUISHING THE EARLIER IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 10 - DECISION OF THE SAME BENCH IN APPELLANT'S OWN CASE I WOULD RESPECTFULLY NEED TO FOLLOW THE LATER DECISION. THE LD. AR DURING TH E COURSE OF APPEAL PROCEEDINGS COULD NOT POINT OUT THE REASON OR BASI S UPON WHICH I CAN AND I SHOULD NOT FOLLOW THE LATER JUDGMENT (SUPRA) IN APP ELLANT'S OWN CASE COVERING THE CONTROVERSY IN FAVOUR OF THE DEPARTMENT EXCEPT POINTING OUT THAT THE HC HAS ADMITTED THE APPEAL OF THE APPELLANT AGAINST TH E ITAT ORDER BEING RELIED UPON BY ME. IN VIEW OF THE DUTY AND NEED TO FOLLOW LATER ITAT DECISION DISCUSSION ON THE RIVAL CONTENTIONS AVAILABLE BEFOR E ME IS BOTH ACADEMIC AND MEANINGLESS. MOREOVER I FIND 'THAT THE NUMBER OF T RANSACTIONS OF DEALING IN LAND/IMMOVABLE PROPERTIES HAVE BEEN GENERALLY INCRE ASING FROM YEAR TO YEAR. ACCORDINGLY RESPECTFULLY FOLLOWING THE ITAT DECISI ON AS ABOVE IT IS HELD THAT THERE IS NO INFIRMITY IN THE ID. AO'S CONCLUSION WI TH REGARD TO THE NATURE OF THE TRANSACTIONS AND THE HEAD UNDER WHICH THE INCOME NE EDS TO BE BROUGHT TO TAX. THUS IT IS HELD THAT THE AO HAS RIGHTLY BROUGHT TH E RESPECTIVE AMOUNTS TO TAX UNDER THE HEAD 'BUSINESS' AS AGAINST THE HEAD O F 'CAPITAL GAINS' AS DISCLOSED BY THE APPELLANT AND THAT NO INTERFEREN CE IN AOS DECISION IS CALLED FOR. 10. IN VIEW OF THE ABOVE THE RELATED GROUNDS RAISED BY THE APPELLANT FOR ALL THE FIVE YEARS UNDER REFERENCE ARE DISMISSED. 11. WITH RESPECT TO THE SECOND ISSUE ON DISALLOWANC E U/S 14A THE APPELLANT THROUGH THE ID. AR'S COMMUNICATION DATED 5/10/2015 HAS WITHDRAWN THE RELATED GROUND. SUCH WITHDRAWAL BEING ALLOWED THE GROUND STANDS DISMISSED FOR ALL THE FIVE YEARS UNDER REFERENCE. 12. IN VIEW OF THE ABOVE THE APPEALS UNDER REFERENCE S TAND DISMISSED. 5.2. THE APPEAL OF THE ASSESSEE BEFORE CIT(A) WAS T HUS DECLINED IN TERMS OF FINDINGS NOTED ABOVE. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL. IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 11 - 7. THE LD.AR MR. M.G.PATEL & MS.ARTI N.SHAH APPEAR ED FOR THE ASSESSEE. THE LD.AR AT THE OUTSET ADVERTED OUR ATTENTION TO THE WRITTEN SUBMISSIONS MADE ON THE CONTROVERSY INVOLVED BEFORE THE AO NOTED AT PAGE NOS.2 TO 6 OF THE ASSESSMENT ORDER AND SUBMITT ED THAT THE ASSESSEE HAS SOLD CERTAIN PARCEL OF LAND HELD ALONG WITH CO- OWNERS AND ALSO SOLD SOME PROPERTIES DURING THE YEAR. THE LD.AR CONTEND ED THAT THE INCOME ARISING ON IMPUGNED SALE OF THE LAND ARE CHARGEABLE UNDER THE HEAD CAPITAL GAINS AS OFFERED IN THE INCOME TAX RETURN FILED. HE SUBMITTED THAT THE REVENUE COMMITTED ERROR IN NOT APPRECIATIN G THE FACTS AND THE CIRCUMSTANCES IN PERSPECTIVE WHILE HOLDING THAT THE INCOME SO GENERATED ON SALE OF LAND AND PROPERTIES AS CHARGEABLE TO TAX UNDER THE HEAD BUSINESS INCOME WHICH IS EXIGIBLE TO TAX AT HIGHE R RATE. THE LD.AR FOR THE ASSESSEE MADE MULTI-FOLD SUBMISSIONS TO PROP UP ITS CASE THAT THE PROFITS ARISING ON SALE OF LAND AND PROPERTIES DUR ING THE YEAR IS CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAIN AS CLAIMED IN THE RETURN OF INCOME. FIRSTLY THE LAND ACQUIRED WERE GENERALLY HELD FOR CONSIDERABLE PERIOD OF TIME BEFORE ITS SALE AS POINTED OUT IN TH E WRITTEN SUBMISSIONS BEFORE LOWER AUTHORITIES. THE LAND/PROPERTIES SO A CQUIRED WERE DECLARED AS CAPITAL ASSET IN BALANCE-SHEET PREPARED. THUS THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE AND CONTINUED INTE NTION TO HOLD THE IMPUGNED LAND AND PROPERTIES AS CAPITAL ASSET IS LO UD AND CLEAR IN THE GIVEN FACTS. IT WAS CONTENDED THAT MERELY BECAUSE THE ULTIMATE SALE OF THE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 12 - IMPUGNED LAND AND PROPERTIES HAVE GIVEN RISE TO SUB STANTIAL PROFITS OWING TO ACCRETION IN VALUE NO ADVERSE INFERENCE AGAINST THE ASSESSEE IS CALLED FOR. SECONDLY THE PARCEL OF LAND WHICH WERE NON A GRICULTURE IN NATURE WERE REPORTED IN THE WEALTH-TAX RETURN OF THE ASSES SEE BEING CAPITAL ASSET. THE LD.AR IN THE SAME VAIN POINTED OUT THAT THE LA ND BEING CAPITAL ASSETS WERE CHARGEABLE TO WEALTH-TAX IN CONTRAST T O THE TRADING ASSETS WHICH ARE NOT CHARGEABLE TO WEALTH-TAX AT ALL. THU S THE ACTION OF ASSESSEE TO HOLD THE LAND AS CAPITAL ASSET WAS DETR IMENTAL TO IT IN SO FAR AS WEALTH TAX STATUTE IS CONCERNED. THIRDLY THE LD.A R POINTED OUT WITH REFERENCE TO THE WRITTEN SUBMISSIONS PLACED BEFORE THE AO AS WELL AS BEFORE THE CIT(A) THAT THE ASSESSEE WAS A CO-OWNER IN MOST OF THESE LAND AND PROPERTIES GIVING RISE TO THE IMPUGNED GAINS. HE POINTED OUT THAT SIMILAR GAINS HAVE ALSO ACCRUED IN THE HANDS OF OTH ER CO-OWNERS WHICH WERE OFFERED BY THE CO-OWNERS AS CAPITAL GAINS AND DULY ACCEPTED BY THE REVENUE IN THEIR ASSESSMENT FRAMED U/S.143(3) OF TH E ACT. TO LEND SUPPORT TO SUCH CONTENTION THE LD.AR REFERRED TO P APER-BOOK NO.2 WHEREIN THE ASSESSMENT ORDERS OF CO-OWNERS WERE PLA CED ON RECORDS. HE THUS CONTENDED THAT THERE IS NO JUSTIFIABLE REASON TO TAKE A DIFFERENT STAND IN THE CASE OF THE ASSESSEE HEREIN IN DEPARTURE WIT H THE STAND OF THE OTHER CO-OWNERS DULY ACCEPTED BY THE REVENUE. FOURTHLY THE LD.AR ADVERTED OUR ATTENTION TO PAGE NOS.12 TO 26 OF THE PAPER-BOO K NO.I WHEREIN THE BALANCE-SHEET CAPITAL ACCOUNT DETAILS OF FIXED AS SETS INCLUDING LAND AND IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 13 - PROPERTIES ARE AVAILABLE. THE LD.AR POINTED OUT WI TH REFERENCE TO THE FIXED ASSETS SCHEDULE AT PAGE NO.18 OF THE PAPER-BO OK AND SUBMITTED THAT THE IMMOVABLE PROPERTIES OTHER THAN LAND UNDER SALE WERE PUT ON RENT PRIOR TO ITS SALE AND INCOME ARISING TOWARDS RENT W ERE OFFERED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THIS PROVIDES Y ET ANOTHER INDICATOR THAT THE PROPERTIES ACQUIRED WERE INTENDED TO BE HE LD AS SOURCE OF INCOME IN THE NATURE OF CAPITAL ASSET AND CONSEQUENTIAL GAIN ARISING ON SALE THEREOF IS CHARGEABLE TO TAX UNDER THE HEAD CAPITA L GAIN AS REPORTED BY THE ASSESSEE. THE LD.AR FURTHER ADVERTED OUR ATTEN TION TO THE BALANCE- SHEET AS ON 31/03/2012 RELEVANT TO AY 2012-13 UNDER APPEAL AND POINTED OUT THAT THE ASSESSEE HAS HUGE RESOURCES OF ITS OWN AT ITS DISPOSAL WHICH FURTHER PROVIDES IMPETUS TO THE CASE OF THE ASSESSE E THAT THE ASSESSEE WAS IN NO HURRY TO DISPOSE OF THE LAND AND PROPERTIES S O ACQUIRED WITH A PROFIT MOTIVE. HE POINTED OUT ON FACTS THAT THE ACCUMULAT ED OWN CAPITAL OF THE ASSESSEE AS ON 31/03/2012 STOOD AT RS.44.53 CORES WHEREAS AGGREGATE COSTS OF ACQUISITION OF MOVABLE AND IMMOVABLE ASSET STANDS AT RS.23.58 CRORES WHICH IS FAR LOWER THAN THE FINANCIAL RESOUR CES AVAILABLE WITH THE ASSESSEE. HE ACCORDINGLY CONTENDED THAT OBSERVATIO N OF AO THAT THE ASSESSEE HAS TAKEN LOANS TO PURCHASE LAND IN HUGE V OLUME IS DEVOID OF ANY MERITS. HE EXTENDED HIS ARGUMENT TO SAY THAT B ORROWED FUNDS AT THE END OF THE YEAR IS ONLY RS.12.66 CRORES WHICH WERE DEPLOYED IN THE CURRENT ASSETS PEGGED IT RS.46.89 CRORES OUTSTANDIN G AT THE END OF THE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 14 - YEAR. FIFTHLY HE POINTED OUT THAT MANY OF THE LAN D GIVING RISE TO THE CAPITAL GAIN WERE AGRICULTURAL LAND AS ADMITTED BY THE AO. THE AGRICULTURAL LAND AS PER THE LOCAL LAWS COULD BE SO LD TO OTHER AGRICULTURISTS ONLY AND THEREFORE NOT AVAILABLE FOR FREE TRADE. T HUS THE SALE OF AGRICULTURAL LAND ACQUIRED AND HELD FOR LONG TIME O UT OF ITS OWN CAPITAL RESOURCES CANNOT BE TERMED AS TRADING ASSET. THE LD.AR THEREAFTER REFERRED TO THE OBJECTIONS OF THE REVENUE AND SUBMI TTED THAT THE NUMBER OF PROPERTIES SOLD BY THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION WAS MERE 15 IN NUMBER WHICH INCLUDES AGRICULTURAL LAND AND HOUSE PROPERTIES THE RENT GENERATED WHEREFROM HAS BEEN CHARGED TO TA X UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN THE EARLIER YEARS. THE LD.AR THEREAFTER CONTENDED THAT OTHER OBJECTION OF THE AO; NAMELY TH AT DEVELOPMENT AGREEMENTS HAVE BEEN ENTERED INTO WITH VARIOUS PERS ONS BY THE ASSESSEE AND AGRICULTURAL LAND PURCHASED WAS CONVERTED INTO NON-AGRICULTURAL LAND BY THE APPROPRIATE AUTHORITY AS A REASON TO DENY T HE BENEFIT OF CHARGEABILITY UNDER THE HEAD CAPITAL GAIN IS ALSO A DAMP SQUIB. THE LD.AR CONTENDED THAT AS POINTED OUT EARLIER THE L AND WERE ORDINARILY HELD FOR NUMBER OF YEARS PRIOR TO ITS SALE. THE I NTENTION AT THE TIME OF ACQUISITION OR PURCHASE IS A RELEVANT CRITERIA FOR DETERMINATION OF TAXABILITY UNDER THE HEAD CAPITAL GAIN OR OTHERWI SE. HE SUBMITTED THAT MERELY BECAUSE SOME DEVELOPMENT HAS BEEN ENTERED IN TO AFTER PASSAGE OF SEVERAL YEARS AND CONVERSATION OF AGRICULTURAL LAND INTO NON-AGRICULTURAL IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 15 - LAND AFTER A GAP OF SEVERAL YEARS WILL NOT CHANGE T HE COLOUR OF THE CAPITAL ASSET TO A TRADING ASSET IN RETROSPECT. HE THEREAF TER CONTENDED THAT HAVING REGARD TO NET WORTH OF THE ASSESSEE THE NUMBER OF TRANSACTION OF SALE CANNOT BE TERMED AS HIGH TO ENABLE THE AO TO DRAW A DVERSE INFERENCE AGAINST THE ASSESSEE. ALSO THE ASSESSEE CONTINUES TO HOLD MANY OTHER PARCEL OF LAND APART FROM THE LAND WHICH HAVE BEEN SOLD. HE ACCORDINGLY CONTENDED THAT THERE IS NO WARRANT FOR THE REVENUE TO TREAT THE CAPITAL GAINS OFFERED OF THESE FACTS AS BUSINESS INCOME. THE LD.AR FURTHER ADVERTED OUR ATTENTION TO THE DECISION OF THE COORD INATE BENCH OF THIS TRIBUNAL (ITAT C BENCH AHMEDABAD) IN ITS OWN CAS E RELEVANT TO AY 2004-05 IN ITA NO.3288/AHD/2008 FOR AY 2004-05 ORDE R DATED 10/06/2011 AND SUBMITTED THAT IN THE SIMILAR FACTS THE TRIBUNAL HAS DRAWN INFERENCE IN FAVOUR OF ASSESSEE FOR THE ISSUE INVOLVED. HE THEREAFTER FAIRLY POINTED OUT THAT IN AY 2006-07 H OWEVER THE TRIBUNAL HAS TAKEN A DIFFERENT STAND IN ASSESSEES OWN CASE IN ITA NO.238/AHD/2010 FOR AY 2006-07 ORDER DATED 30/04/20 13 AND HELD THAT ACTIVITY OF SALE OF LAND AND PROPERTIES ARE ADVENTU RE IN THE NATURE OF TRADE AND ACCORDINGLY CHARGEABLE TO TAX IN THE HEAD BUSI NESS INCOME. THE LD.AR ON THE SAME VAIN POINTED OUT THAT THE APPEAL FILED UNDER SECTION 260A OF THE ACT AGAINST THE APPELLATE ORDER OF THE TRIBUNAL IN AY 2006- 07 HAS BEEN ADMITTED FOR CONSIDERATION OF THE HONB LE GUJARAT HIGH COURT IN TAX APPEAL NO.834 OF 2013 ORDER DATED 13/0 2/2014. ON FACTS IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 16 - THE LD.AR SUBMITTED THAT THE TRIBUNAL ORDER FOR AY 2004-05 WHICH WAS DECIDED IN FAVOUR OF ASSESSEE WAS NOT FOLLOWED BY T HE COORDINATE BENCH FOR AY 2006-07 PRIMARILY BECAUSE THERE WAS NO AGRIC ULTURAL INCOME IN AY 2006-07 WHEREAS THERE WAS AGRICULTURAL INCOME I N AY 2004-05. IN THIS CONTEXT LD.AR SUBMITTED THAT AY 2006-07 IS O NLY THE ASSESSMENT YEAR IN WHICH NO AGRICULTURAL INCOME COULD BE EARNE D DUE TO HEAVY FLOODS IN THE CITY. HE THUS POINTED OUT THAT IN ALL THE AS SESSMENT YEARS IN APPEALS THE AGRICULTURAL INCOME HAS DULY BEEN SHOWN AND THE REFORE LATER DECISION OF ITAT AT ANY RATE IS DISTINGUISHABLE ON FACTS. TO DEMONSTRATE THE FACTS OF AGRICULTURE INCOME CONSISTENTLY EARNED BY THE AS SESSEE THE ASSESSEE REFERRED TO A STATEMENT SHOWING AGRICULTURAL INCOME FROM AYS 2003-04 TO 2016-17. HE THUS SUBMITTED THAT THE TRIBUNAL OR DER RELEVANT TO AY 2006-07 LOSES ITS PRECEDENCE VALUE ON FACTS AND CAN NOT BE APPLIED. THE LD.AR THEREAFTER SUBMITTED THAT THE ASSESSEE HELD AROUND 86 PARCELS OF LANDS IN AY 2006-07 OUT OF WHICH ONLY 12 PLOTS WERE SOLD IN THAT YEAR AND THEREFORE THE FREQUENCY AND VOLUME OF SALE OF L AND WAS QUITE LOW AS COMPARED TO THE INVESTMENTS HELD. THIS CRUCIAL FA CT HAS GONE UNNOTICED BY THE HONBLE TRIBUNAL IN AY 2006-07 WHILE HOLDING AGAINST THE ASSESSEE. THE LD.AR ALSO POINTED OUT THAT THE LAND WERE ACCEPTED BY THE TRIBUNAL IN AY 2004-05 TO BE INVESTMENT AND THE FACT THAT THE WEALTH- TAX WAS PAID IN ACCORDANCE WITH LAW HAS NOT BEEN T AKEN COGNIZANCE IN THE LATER DECISION OF THE TRIBUNAL RELEVANT TO AY 2 006-07. THE LD.AR IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 17 - FURTHER OBSERVED THAT THE STATUS OF THE LAND HAS TO BE SEEN WITH REFERENCE TO THE DATE OF PURCHASE AND NOT WHEN IT WAS CONVERT ED INTO NON- AGRICULTURAL LAND OR WHEN IT PURPORTEDLY BECAME STO CK-IN-TRADE AT A LATER POINT OF TIME. HE SUBMITTED THAT IT IS AN ADMITTED FACT ON RECORD THAT THE LAND PURCHASE WERE HELD AS INVESTMENT SINCE INCEPT ION AND CONSEQUENTLY CAPITAL GAIN ON SALE OF INVESTMENT I.E. CAPITAL ASS ET CAN BE TAXED ONLY UNDER THE HEAD CAPITAL GAINS. HE FURTHER POINTED OUT THAT THE TRIBUNAL IN SUBSEQUENT DECISION IN AY 2006-07 FAILED TO TAKE NOTE OF THE CRUCIAL FACT THAT THE ASSESSEE WAS HOLDING THE LAND FOR LON G PERIOD RANGING BETWEEN SIX TO THIRTEEN YEARS BEFORE ITS SALE AND T HEREFORE THE INTENTION OF THE ASSESSEE TO HOLD THE LAND/PROPERTIES AS CAPITAL ASSET IS MANIFEST. HE THEREFORE SUBMITTED THAT THE DECISION RENDERED BY T HE TRIBUNAL IN AY 2006-07 CANNOT BE APPLIED IN VIEW OF THE CLEAR FACT S IN FAVOUR OF THE ASSESSEE. 8. THE LD.AR THEREAFTER SUBMITTED THAT APART FROM THE DISTINGUISHABLE FEATURES BETWEEN FACTS PERTAINING TO AYS 2004-05 QUA 2006-07 AS POINTED OUT ABOVE THE TRIBUNAL OUGHT NOT TO HAVE T AKEN A CONTRARY STAND IN THE SUBSEQUENT YEAR IN VIEW OF THE DECISION OF T HE HONBLE GUJARAT HIGH COURT IN THE CASE (S) OF AFFECTION INVESTMENT S LTD. VS. ACIT REPORTED AT (2010) 326 ITR 255 (GUJ.) AND SAYAJI I RON & ENGG. CO. VS. CIT REPORTED AT (2002) 253 ITR 749 (GUJ.). THE LD .AR FOR THE ASSESSEE ALSO POINTED OUT THAT THE ISSUE INVOLVED ON MERITS (IN ALL THE ASSESSMENT IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 18 - YEARS UNDER APPEALS) PERTAINS TO TAXABILITY OF INCO ME ARISING ON SALE OF LAND AND PROPERTIES UNDER THE HEAD CAPITAL GAINS OR BUSINESS INCOME AS REPRESENTED HEREINABOVE. HOWEVER WITH REFERENC E TO ASSESSMENT YEAR 2007-08 THE ASSESSEE HAS ALSO RAISED LEGAL GROUND THAT THE IMPUGNED QUESTION OF TAXABILITY OF INCOME ON SALE OF LAND UN DER ONE HEAD OR OTHER HAS NO RELATION TO INCRIMINATING DOCUMENT IF ANY FOUND IN THE COURSE OF SEARCH CARRIED OUT ON THE ASSESSEE TOGETHER WITH OT HER GROUP CASES ON 09/08/2011. THE LD.AR FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSMENT FOR AY 2007-08 IS DEEMED TO BE COMPLETED U/S.143(1) OF THE ACT ON COMPLETION OF LIMITATION PERIOD OF ONE YEAR IN VIEW OF THE FACT THAT ORIGINAL RETURN OF INCOME FOR AY 2007-08 WAS FILED ON 26/07/2008 DECLARING TOTAL INCOME OF RS.33 01 190/- AND NO NOT ICE U/S.143(2) WAS ISSUED IN RESPECT OF THE RETURN FILED. HENCE THE ASSESSMENT ACHIEVED FINALALITY AND THERE IS NO ABATEMENT OF THE SAID PR OCEEDINGS. THEREFORE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH TOWARDS ANY UNDISCLOSED INCOME THE ASSESSMENT U/S. 153A OF THE ACT IS NOT JUSTIFIED. THE LD.AR SUBMITTED THAT IN THE RET URN FILED IN PURSUANCE OF NOTICE U/S.153A OF THE ACT THE AO HAS MERELY AP PLIED HIS MIND TO THE TAXABILITY OF PROFIT ARISING ON SALE OF LAND FOR CH ARGEABILITY UNDER ONE HEAD OR ANOTHER HEAD. THE IMPUGNED INCOME WAS ALRE ADY DECLARED IN THE RETURN OF INCOME FILED PRIOR TO SEARCH. THUS THE RE IS NO NEXUS BETWEEN THE ACTION OF THE AO WITH THAT OF SEARCH ACTION. H ENCE IN THE GARB OF IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 19 - PROCEEDINGS U/S.153A OF THE ACT THE AO HAS REOPENE D THE ASSESSMENT AND SOUGHT TO DETERMINE THE PURPORTED CORRECT HEAD FOR CHARGEABILITY OF DECLARED INCOME IN SECTION 153A PROCEEDINGS WHICH I S NOT PERMISSIBLE IN LAW. TO SUPPORT HIS CONTENTION THE LD.AR RELIED UPON THE DECISION OF HONBLE HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR ARORA REPORTED IN (2014) 52 TAXMANN.COM 172 (ALLAHABAD) AND ALSO ADVE RTED OUR ATTENTION TO THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL IN THE CASE OF RAWAL DAS JASWANI VS. ACIT REPORTED IN (2015) 169 TTJ (RA IPUR) (UO) COPY OF WHICH HAS BEEN PLACED IN FILE. THE LD.AR POINT ED OUT THAT THE AFORESAID LEGAL GROUND WAS RAISED BEFORE THE CIT(A) WHICH REMAINED TO BE DISPOSED OF. THE LD.AR FINALLY SUBMITTED THAT T HE ACTION OF THE ASSESSEE IN TREATING THE GAIN IN ARISING ON SALE OF LAND AND OTHER PROPERTIES UNDER THE HEAD CAPITAL GAINS CANNOT BE FAULTED IN THE CIRCUMSTANCES NARRATED ABOVE. 9. THE LD.AR THEREAFTER SUBMITTED THAT THE RELIE F CLAIMED U/S.54B OF THE ACT ALSO REQUIRES TO BE GRANTED AS CLAIMED UNDER TH E RETURN OF INCOME IN ACCORDANCE WITH LAW. SIMILARLY THE ASSESSMENT MA DE HOLDING THE CAPITAL GAINS AS BUSINESS INCOME BY THE AO IN AY 2007-08 IS NOT SUSTAINABLE IN LAW AND THEREFORE THE ORDER OF THE AO IS REQUIRED TO BE SET ASIDE AND SUITABLE RELIEF BE GRANTED TO THE ASSESSEE AS PER T HE GROUNDS OF APPEAL. IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 20 - 10. THE LD.DR ON THE OTHER HAND HEAVILY RELIED UP ON THE ORDER OF THE AUTHORITIES BELOW AND ALSO THE ORDER OF THE CO-ORDI NATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE RELEVANT TO ASSTT.Y EAR 2006-07. THE LD.DR FOR THE REVENUE SUBMITTED THAT THE ACTION OF THE REVENUE IS IN TUNE WITH THE IMPUGNED ORDER OF THE ITAT RELEVANT T O ASSTT.YEAR 2006-07 AND THEREFORE NO INTERFERENCE IS CALLED FOR. AS REGARDS THE LEGAL GROUND RAISED BY THE ASSESSEE RELEVANT TO AY 2007-08 TOWAR DS NON-ABATEMENT PROCEEDINGS ALREADY COMPLETED THE LD.DR SUBMITTED THAT NO FORMAL ASSESSMENT U/S.143(3) WAS CARRIED OUT FOR THE AY 20 07-08 AND DEEMED ASSESSMENT WAS ONLY FINALIZED U/S.143(1) OF THE ACT AND THEREFORE THE AO WAS JUSTIFIED IN DETERMINING THE TRUE INCOME OF THE ASSESSEE AND CHARGEABILITY OF THE INCOME UNDER THE CORRECT HEAD OF INCOME AS PER THE PROVISIONS OF THE ACT. THE LD.AR THUS SUBMITTED TH AT NO INTERFERENCE WITH THE ORDER OF THE CIT(A) IS CALLED FOR. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT(A) APPEALED AGAINST AND ALSO VARIOUS DOCUMENTS AND REFERRED TO AT THE TIME OF HEARING AND CASE- LAWS CITED. THE COMMON ISSUE THAT TRANSCENDS IN A LL THE PRESENT APPEALS IS WHETHER GAINS ARISING ON SALE OF LAND AND OTHER PROPERTIES BY THE ASSESSEE IN THE RELEVANT ASSESSMENT YEARS IS REQUIR ED TO BE TAXED UNDER THE HEAD CAPITAL GAINS AS OFFERED BY THE ASSESSEE OR IS TO BE TREATED AS IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 21 - BUSINESS INCOME OF THE ASSESSEE. THE ISSUE INVOL VED IS ESSENTIALLY FACTUAL IN NATURE. IT IS THE CASE OF THE ASSESSEE THAT THE LAND AND OTHER PROPERTIES WERE NO CORRECTION AND ACQUIRED/PURCHASE D OVER SEVERAL YEARS AND HELD AS CAPITAL ASSET IN THE NATURE OF INVEST MENT. FROM THE WRITTEN SUBMISSIONS OF THE ASSESSEE AS EXTRACTED BY THE CIT (A) IN HIS ORDER WE NOTE THAT THERE A CONSIDERABLE TIME LAG BETWEEN THE PURCHASE AND THE SALE OF LAND AND OTHER PROPERTIES. SIMULTANEOUSLY THE LAND/PROPERTIES HAVE BEEN DECLARED AS CAPITAL INVESTMENT BY THE ASSES SEE ALL ALONG. WE ALSO TAKE NOTE OF THE FACT THAT SOME OF THE PROPERTIES W ERE LET OUT AND RENT THEREON WAS EARNED AS A YIELD ON SUCH INVESTMENTS. AGRICULTURAL INCOME HAS BEEN CONSISTENTLY DECLARED YEAR-AFTER-YEAR ON A GRICULTURAL LAND SO HELD BEFORE ITS SALE. THE NON-AGRICULTURAL LAND SO HELD WERE SHOWN AS INVESTMENT AND SUBJECTED TO WEALTH TAX BEING CAPITA L ASSET. ON PERUSAL OF THE WRITTEN SUBMISSIONS AS REPRODUCED BY THE CIT(A) IN PARA-6 OF HIS ORDER WE NOTE THAT THE LAND/PROPERTIES WERE PURCHA SED AND HELD FOR SEVERAL YEARS IN MANY CASES BEFORE ITS SALE. COUPL ED WITH THIS WE ALSO TAKE NOTE OF THE FACT THAT ASSESSEE HAS LARGE CAPIT AL OF ITS OWN AT ITS DISPOSAL WHICH IS FAR IN EXCESS OF THE CORRESPONDIN G INVESTMENTS MADE IN LAND/PROPERTIES OVER YEARS. ON CUMULATIVE READING OF THESE GLARING FACTS WE FAIL TO COMPREHEND THE ACTION OF THE REVENUE IN HOLDING CAPITAL GAINS EARNED ON SALE AS DECLARED TO BE A BUSINESS VENTURE . IT IS MANIFEST THAT THE AO AS WELL AS CIT(A) MISDIRECTED THEMSELVES IN LAW AND ON FACTS IN IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 22 - HOLDING THE LAND/PROPERTIES TO BE IN THE NATURE OF TRADING ASSET MERELY ON THE GROUND THAT SOME OF THE AGRICULTURAL LAND WERE CONVERTED INTO NON- AGRICULTURAL LAND AND SOME AGREEMENTS WERE ENTERED FOR THE DEVELOPMENT OF THE LAND IN THE YEAR UNDER APPEAL ACQUIRED AND H ELD FOR DECADES IN MANY CASES. WE FIND CONSIDERABLE WEIGHT IN THE PLE A OF THE ASSESSEE THAT INTENTION AT THE TIME OF PURCHASE TO HOLD IMPUGNED LAND/PROPERTIES AS A CAPITAL ASSET IS MANIFEST ON RECORDS. THE BALANCE- SHEET FILED BY THE ASSESSEE OVER YEARS WEALTH-TAX RETURNS FILED BY TH E ASSESSEE ADEQUACY OF ITS OWN CAPITAL CLEARLY UNDERSCORE THE INTENTION OF THE ASSESSEE TO HOLD LAND/PROPERTIES AS CAPITAL ASSET AS CLAIMED. INEXT RICABLY WE ALSO TAKE NOTE OF THE PLEA OF THE ASSESSEE THAT HE IS A CO-OW NER OF IMPUGNED LAND/PROPERTIES HOLDING CERTAIN PERCENTAGE OF OWNER SHIP-RIGHTS THEREIN AND THE CLAIM OF THE LAND/PROPERTIES AS CAPITAL ASS ET HAS BEEN ACCEPTED BY THE REVENUE IN THE HANDS OF OTHER CO-OWNERS IN THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT. THIS FACT HAS RE MAINED UNCONTROVERTED. WE ALSO NOTE THAT HAVING REGARD TO THE FACTS NOTED ABOVE THE COORDINATE BENCH OF THE TRIBUNAL IN ASSE SSEES OWN CASE RELEVANT TO AY 2004-05 HAS DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE. THUS WE FIND THAT THE ACTION OF THE AO WAS SIMPLY GUIDED BY THE CONSIDERATIONS OF REVENUE ALONE OUTSIDE THE BOUNDS OF RATIONALITY. AT THIS JUNCTURE WE HAVE ALSO CAREFULLY PERUSED THE ORDER OF THE COORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR AY 200 6-07 WHERE ADVERSE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 23 - VIEW HAS BEEN TAKEN. HOWEVER WE TAKE NOTE OF THE F ACT THAT THE COORDINATE BENCH OF THE TRIBUNAL IN THE MATTER FOR AY 2006-07 HAS TAKEN A DIFFERENT VIEW IN DEPARTURE WITH THE EARLIER ORDE R OF THE COORDINATE BENCH RELEVANT TO ASSTT.YEAR 2004-05 MAINLY ON THE PREMISE THAT THE AGRICULTURAL INCOME HAS NOT BEEN DECLARED ON THE AG RICULTURAL LAND HELD IN THAT YEAR. AS POINTED OUT ON BEHALF OF THE ASSESSE E AGRICULTURAL INCOME HAS BEEN DULY REPORTED IN ALL ASSESSMENT YEARS EXCE PT AY 2006-07. THEREFORE THE FACTS PREVAILING IN THE CAPTIONED AP PEALS ARE PROXIMATE WITH AY 2004-05 WHERE THE FACTS ARE FOUND TO BE ON SAME PEDESTAL AND DISTINGUISHABLE QUA AY 2006-07. THUS THE FACTS P REVAILING IN AY 2007- 08 ARE SOMEWHAT DIFFERENT. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN AY 2004- 05 AND HAVING REGARD TO THE TOTALITY OF THE FACTS AND CIRCUMSTANC ES NOTED ABOVE WE FIND CONSIDERABLE MERIT IN THE PLEA OF THE ASSESSEE. WE ACCORDINGLY HOLD THAT LAND/PROPERTIES WERE HELD BY THE ASSESSEE AS CAPITA L ASSET BEFORE ITS SALE AND CONSEQUENTIAL GAINS ARISING ON SALE THERETO IS CHARGEABLE UNDER THE HEAD OF CAPITAL GAINS. ACCORDINGLY THE AO IS DI RECTED TO CONSIDER THE GAINS ARISING ON SALE OF LAND/PROPERTIES UNDER THE HEAD CAPITAL GAINS. IN THE LIGHT OF THE FACTS NOTED ABOVE THE AO IS FU RTHER DIRECTED TO DE NOVO CONSIDER THE RELIEF AS AND WHERE CLAIMED BY THE ASS ESSEE U/S.54B RELEVANT TO ASSESSMENT YEARS UNDER APPEALS IN ACCOR DANCE WITH LAW AFTER AFFORDING REQUISITE OPPORTUNITY TO THE ASSESSEE. WE ACCORDINGLY SET ASIDE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 24 - THE ISSUE TOWARDS ELIGIBILITY OF RELIEF CLAIMED U/S.54B OF THE ACT BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONS IDERATION. 12. THUS THE APPEAL OF THE ASSESSEE IN ITA NO.371/ AHD/2016 RELEVANT TO A.Y. 2012-13 IS PARTLY ALLOWED IN TERMS OF DIRE CTIONS NOTED ABOVE. 13. FOR PARITY OF REASONING OUR DECISION AS NOTED ABOVE RELEVANT TO AY 2012-13 IN ITA NO.371/AHD/2016 SHALL APPLY MUTATIS MUTANTIS TO ALL THE REMAINING APPEALS CAPTIONED ABOVE. 14. NOW WE SHALL ADDRESS OURSELVES TO THE LEGAL ISS UE RAISED RELEVANT TO AY 2007-08 IN IT(SS)A NO.70/AHD/2016 WHEREIN THE A SSESSEE HAS QUESTIONED THE ACTION OF THE REVENUE IN HOLDING THE CAPITAL GAINS DECLARED ON SALE OF LAND/PROPERTIES AS BUSINESS I NCOME IN PROCEEDINGS U/S.153A OF THE ACT WITHOUR REFERENCE TO ANY INCRIM INATING MATERIAL. 14.1. RELEVANT LEGAL GROUND RAISED BY THE ASSESSEE IN THIS REGARD READS AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1 2 AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT CONSIDERING GROUND NO.1 RAISED BEFORE THE ASSESSING OFFICER REGARDING NON ABATEMENT OF ORIGINAL ASSESSMENT. 2. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS)-12 AHMEDABAD HAS ERRED IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNT OF SALE OF AGRICULTURAL LAND AS INCOME FROM BUSINESS A ND THEREBY MAKING ADDITION OF RS.12 01 695/- TO THE TOTAL INCO ME. IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 25 - 14.2. THE AFORESAID GROUND OF THE ASSESSEE IS ESSEN TIALLY A LEGAL ISSUE EMANATING FROM FACTS ON RECORD OF THE REVENUE AND THEREFORE WE DEEM IT FIT AND PROPER TO ADJUDICATE THE ISSUE STRAIGHTW AY EVEN WHILE THE CIT(A) HAS OMITTED TO ADJUDICATE THE SAME. THE AFO RESAID GROUND OF THE ASSESSEE HINGES ONLY ON ONE PERTINENT POINT AS TO W HETHER OR NOT WHILE FRAMING ORDER U/S.153A OF THE ACT THE REVENUE IS E NTITLED TO INTERFERE WITH THE ASSESSMENT COMPLETED U/S.143(1) OF THE ACT AND NOT PENDING AT THE TIME OF SEARCH IN THE ABSENCE OF ANY INCRIMINAT ING MATERIAL/DOCUMENTS UNEARTHED AS A RESULT OF SEARCH. 14.3. ON FACTS WE TAKE NOTE OF THE UNDISPUTED FA CT THAT THE RETURN OF INCOME WAS FILED FOR AY 2007-08 STOOD FINALIZED PRI OR TO SEARCH OWING THE EXPIRY OF TIME LIMIT FOR REGULAR ASSESSMENT UND ER SECTION 143(3) OF THE ACT. WE ALSO NOTE THE AVERMENT MADE ON BEHALF OF THE ASSESSEE THAT NO INCRIMINATING MATERIAL/DOCUMENT HAS BEEN FOUND I N THE COURSE OF THE SEARCH PROCEEDINGS WHICH EXHIBITS INTENTION CONTRAR Y TO WHAT IS DECLARED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE . WE NOTE THAT THE ASSERTIONS MADE BY THE ASSESSEE TO THE EFFECT THAT INCOME ARISING ON SALE OF CAPITAL ASSET HAS BEEN TREATED AS BUSINESS INCOM E WITHOUT REFERENCE TO ANY INCRIMINATING MATERIAL HAS REMAINED UNREBUTTED. AS A COROLLARY ITS MANIFEST THAT IMPUGNED REALIGNMENT OF INCOME FROM O NE HEAD TO ANOTHER HAS BEEN MADE WITHOUT REFERENCE TO ANY INCRIMINATIN G MATERIAL/DOCUMENT IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 26 - FOUND AS A RESULT OF SEARCH AND SEIZURE U/S.132 OF THE ACT. WE ALSO TAKE COGNIZANCE OF THE FACT THAT THE INCOME TAX RETURN R ELEVANT TO ASSESSMENT WAS FILED PRIOR TO THE SEARCH IN THE NORMAL COURSE SUO MOTU DISCLOSING THE IMPUGNED CAPITAL GAIN ON SALE OF LAND/PROPERTIES IN QUESTION. THE RETURN SO FILED IN THE ORDINARY COURSE WERE ACCEPTED U/S.1 43(1) OF THE ACT AND AS SUCH NO ASSESSMENT WAS PENDING ON THE DATE OF INITI ATION OF SEARCH WHICH WOULD ABATE IN CONSEQUENCE OF SEARCH. IN THE LIG HT OF THESE FACTS WE ARE OF THE VIEW THAT MERE REALIGNMENT OF INCOME FROM ON E HEAD TO ANOTHER MADE BY THE AO IS CLEARLY BEYOND THE SCOPE OF AUTHO RITY VESTED U/S.153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL OR EVIDENCE DETECTED AS A RESULT OF SEARCH. PERTINENT TO NOTE THAT NO REFERENCE TO SUCH INCRIMINATING MATERIAL IS FOUND IN THE ORDERS OF TH E AUTHORITIES BELOW FOR THE PURPOSE OF IMPUGNED REALIGNMENT. THIS LEGAL IS SUE EMANATING IN THE PRESENT CASE THAT IN THE ABSENCE OF INCRIMINATING DOCUMENT/MATERIAL NO ADDITION CAN BE SUSTAINED U/S.153A OF THE ACT IS NO LONGER RES INTEGRA IN VIEW OF THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJKUMAR ARORA(SUPRA) AND ALSO THE COORDINA TE BENCH OF RAIPUR IN THE CASE OF RAWAL DAS JASWANI VS. ACIT(SUPRA). IT WILL BE APPROPRIATE TO MENTION THAT THE AFORESAID VIEW IS ALSO SUPPORTED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA REPORTED IN (2015) 61 TAXMANN.COM 412(DELHI) ALSO R ELIED UPON BY THE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 27 - ASSESSEE. THE RELEVANT FINDINGS OF THE HONBLE DEL HI HIGH COURT ARE REPRODUCED HEREUNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT READ WITH THE PROVISOS THERETO AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS THE LEGAL POSITION THAT E MERGES IS AS UNDER:- I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWER S IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDI TIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE A O WHICH CAN BE RELATED TO THE EVIDENCE FOUND IT DOES NOT MEAN THAT THE ASSES SMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. THE IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 28 - WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSE SS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED THE JURISDICTION TO MAKE THE ORIGINAL ! ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPA RATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS 2002-03 2005-0 6 AND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STO OD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 40. THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN THE CIRCUMSTANCES NO ORDERS AS TO COSTS. 14.3. THE JUDICIAL PRECEDENCE NOTED ABOVE HAS UNDE RSCORED NEED FOR REVENUE TO UNEARTH THE MATERIAL AS A RESULT OF SEAR CH TO JUSTIFY THE ASSESSMENT SOUGHT TO BE MADE. RESPECTFULLY FOLLOWI NG THE JUDICIAL PRECEDENCE TOUCHING THE CONTROVERSY THE LEGAL ISSU E STANDS ADJUDICATED IN FAVOR OF THE ASSESSEE. THUS IN OUR CONSIDERED VI EW THE REALIGNMENT OF IT(SS)A NOS.70 TO 73/AHD/2016 & ITA NOS.371/AHD/16 & 29/AHD/12 AND SP NOS.103 TO 106/AHD/16 ANIL BHOLABHAI PATEL VS. ACIT ASST.YEARS 2007-08 TO 2012-13 - 29 - INCOME FROM ONE HEAD OF INCOME TO ANOTHER WITHOUT R EFERENCE TO ANY INCRIMINATING MATERIAL IS NOT SUSTAINABLE IN LAW IN THE FACTS OF THE PRESENT CASE. 14.4. ACCORDINGLY WE ALLOW THE AFORESAID LEGAL GR OUND RAISED BY THE ASSESSEE RELEVANT TO AY 2007-08. 15. IN THE COMBINED RESULT APPEAL OF THE ASSESSEE IN IT(SS)A NO.70/AD/206 FOR AY 2007-08 IS ALLOWED REMAINING A PPEALS OF THE ASSESSEE I.E. IT(SS)A NO.71/AHD/2016 TO 73/AHD/201 6 FOR AYS 2009-10 TO 2011-12 ITA NOS.29/AHD/12 AND 371/AHD/2016 FOR AYS 2008-09 & 2012-13 RESPECTIVELY ARE PARTLY ALLOWED. CONSEQUEN TLY STAY PETITIONS FILED BY THE ASSESSEE FOR PENDING DISPOSAL ARE DISM ISSED AS INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/10/2016 SD/- SD/- ( ) () ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/ 10 /2016 .. .../ T.C. NAIR SR. PS