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TMI Blog2014 (12) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural to non-agricultural and thus the nature of the said lands too could not be different – relying upon Sarifabibi Mohammed Ibrahim & others Vs. CIT [1993 (9) TMI 10 - SUPREME Court] it has been rightly held that the lands, sold/transferred by the assesse to the private limited companies, were non-agricultural and outside the scope and meaning of Sec. 2(14)(iii) of the IT Act requires no consideration. – thus, no substantial question of law arises for consideration – decided against revenue. Rejection of books of accounts u/s 145(3) – Higher GP applied and trading accounts rejected – Held that:- Provisions of Sec. 145(3) are applicable and what should be a reasonable profit on account of the trading transactions, is a finding of fact - The assessee has introduced and recorded bogus purchases and verification of opening stock/closing stock were not open for verification in the books of accounts, thus the motive was to reduce its profits and thus the assessee/appellant has not been able to dispel this finding of fact recorded by all the three authorities who in consonance, have come to the conclusion - on non-genuine purchases, books of accounts can be rejected and provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Director resulting in huge difference/gain to the assessee, but the claim of the assessee was that although there was surplus of ₹ 5,15,43,996/- during the assessment year 2008-09 on sale of agricultural land situated at village Hingoniya, Basoda, Bukni, Nasnoda Mahela but all the subject lands were situated outside the municipal limits of JDA/ Jaipur Nigar Nigam etc. and the population of these villages, does not exceed 10000 and therefore, is not a capital asset within the meaning of Sec. 2(14) (iii) of the IT Act and hence, surplus on sale of agricultural land is not subject to tax. On a further query raised by the AO, it was noticed that all the aforesaid lands were purchased by the assessee in his own name and later on transferred/sold to the aforesaid limited companies where the assessee was a Director and there being a consistency and frequency of the transaction of sale and purchase, the AO was of the view that it is in the nature of business income and observed that the land claimed is not in the nature of agricultural land as no agricultural activities are carried on by the assessee. The AO also, on perusal of the recital in the sale deeds and admission by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom a party namely; Lotus Impex which was found to be non-genuine or the party used to issue bills rather than actual sale and purchase. The AO also found that despite the assessee being asked to furnish day to day details of all types of stocks in terms of opening and closing stock with quantity wise categorization etc., the assessee failed to furnish such details and even the AO has noticed that the assessee is not maintaining stock register at all and the entire valuation of the opening as well as closing of the stock is on mere estimation and thus, prima-facie, came to the conclusion that the books of accounts are to be rejected and a higher GP rate is to be applied. 7. The assessee responded by placing confirmation and photo copy of bills of the party, permanent account number (PAN) as also TIN number under sales tax and also submitted that payment is by account payee cheques. It further requested for issuing summons u/s 131 for production of the party. However, the AO noticed that despite of summons u/s 131 of the Act having been issued on different dates at the address given by the assessee himself, the summons returned unserved and even the Inspector was deputed to get t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of natural justice and the matter deserves to be remitted to ITAT to decide the questions afresh in accordance with law. 11. Ld. counsel for the appellant on the other issues submitted that the ITAT has grossly erred in reversing the finding reached by the CIT(A) and came to the conclusion that the agricultural lands, sold/transferred by the assessee to the limited companies, are in the nature of agricultural lands and a finding of fact reached by the CIT (A), has been reversed by the ITAT, in absence of any evidence to the contrary being produced in rebuttal and even if two views were possible, still it was not open to reverse the finding recorded by CIT (A) and being perverse, deserves considerations. He further contended that evidence was led that the lands in question were agricultural lands as per revenue record, were out of purview of the Municipal limits/limits of JDA and thus the gain/surplus, if any, was not liable to be taxed as capital asset. He further contended that the AO as well as ITAT have gone wrong in disbelieving the version of the assessee without adequate material being there that the lands continued to be agriculture on record, unless converted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by ld. Counsel for the assessee that the members of the association being on strike still passing order behind the back of the assessee's representative is in violation of principles of natural justice. The Hon'ble Apex Court, in the case of Ex. Captain Harish Uppal Vs. Union of India (UOI) and Anr.: (2003)2 SCC 45, deprecated the strike call/ boycott call by the Lawyers and held it to be illegal and unjustified. It expressed in strong terms that Lawyers have no right to go on strike or give a call for boycott, not even on a token strike. It further observed that lawyers holding Vakalats on behalf of their clients are under legal duty to attend the Courts/Tribunals irrespective of strike or boycott. Lawyers must boldly refuse to abide by any call for strike or boycott. No lawyer can be visited with any adverse consequence by the Association or the Council and no threat or coercion of any nature including that of expulsion can be held out. Strike or boycott cannot be countenanced in the present day situation and real sufferer is the society- public at large. 17. In the light of the judgment (supra), we are not convinced with the argument advanced by counsel for the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred with a gain/surplus of ₹ 24,04,245/-. 19.4. The other instances are similar in nature. These are all admitted facts by the assessee as the chart has been provided by the assessee himself to the AO during the course of the assessment proceedings and by registered sale deeds duly registered with the Sub-Registrar and such sale deeds were provided by the assessee to the AO. 20. On perusal of the said chart, it is again noticed that in some of the cases, the land was transferred by unregistered instrument within a short span of time resulting into huge surplus/ difference/ gain by the assessee. With this, what we as well as the ITAT and AO, have noticed is that the claim of the assessee itself is apparently wrong that the transaction did not take place within a short span of time. Admittedly, even as per the chart, lands in question were transferred/sold even within a day of purchase as noticed earlier. Therefore, the contention of counsel for the appellant on the very face of the chart seems to be incorrect and therefore, the conclusion of the ITAT as well as AO appears to be correct that there was regularity of transaction with intention to make income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Shri Deenanath Hereinafter referred to as the Khatedar. WHEREAS after having purchased the above mentioned converted area in lands of Khasra no.426/1 admeasuring 11 bigha 13 biswa in which converted area is 10 bigha 17.17 biswa (i.e. 27464 sqm), khasra no.426/2 admeasuring 2 bigha 14 biswas in which converted area is 0 bigha 16 biswa (2023 sqm), khasra no. 427/2 admeasuring 11 bighas 2 biswas in which converted area is 3 bigha 4 biswa (i.e. 8093 sqm), khasra no.432/2 admeasuring 11 bigha 14 biswas fully converted (i.e. 29594 sqm) situated at village Nasnota, the Khatedar herein got the land use converted of the above mentioned entire land being sold to the seller in these presents for the purposed development and that all expenses, duties, government charges on the said land including the expenses incurred on Conversion Charges, Fees has been deposited to the appropriate authorities by the Khatedar and an appropriate order under section 90A of the Rajasthan Land Revenue Act, 1956 read with Rajasthan Land Revenue (Conversion of Agricultural Land for Non Agricultural Purposes in Rural Areas) Rules, 1992 has been issued by concerned au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural to non-agricultural and thus the nature of the said lands too could not be different. Ordinarily, the question, whether the land is an agricultural land or a non-agricultural land is a question of fact and the finding on the question of fact recorded by the ITAT is final, unless perverse, is not open for us to interfere in the finding of fact recorded by the ITAT. 24. Therefore, in our view and in the light of the law laid down by the Hon'ble Apex Court in the case of Sarifabibi Mohammed Ibrahim others Vs. CIT (1993) 204 ITR 631 (SC) the conclusion arrived at by ITAT that the lands, sold/transferred by the assesse to the private limited companies, were non-agricultural and outside the scope and meaning of Sec. 2(14)(iii) of the IT Act requires no consideration. 25. Accordingly, no question of law, much less substantial question of law can be said to emerge out of the order of the ITAT with regard to the first issue. 26. In so far as the issue on trading additon is concerned, we notice that all the three authorities i.e. the ITAT, CIT(A) as well as AO, have categorically arrived to a conclusion that provisions of Sec. 145(3) are applicable and what should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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