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TMI Blog2018 (10) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... essee that al l the cases are inter-connected and give rise the similar grievance permeating over different assessment years and therefore, it will be convenient to hear al l the appeals together. We accordingly have heard all the appeals together and dispose of the same by this common order. 3. We shall first take appeal in IT(SS)A No. 188/Ahd/2016 for adjudication purposes. IT(SS)A No. 188/Ahd/2016 (Shri Dhiren B. Patel) (A.Y. 2009-10) 4. As per the grounds of appeal, the assessee has sought to challenge the action of CIT(A) in confirming the assessment framed under s.153A of the Act whereby the head of income for the purposes of assessment of gain arising on sale of plot of lands has been changed from 'capital gains' offered by the assessee to 'business income' assessed by the AO. 5. Apart from the challenge to the act ion of the Revenue Authorities on merits, the assessee has also raised additional grounds of appeal in terms of the Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 which reads as under: "1. Both the lower authorities erred in law and on facts in framing assessment under section 143(3) r.w.s. 153A ignoring the fact that no incriminating material wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o non agricultural land, done plotting and sold the same to various customers. The AO show caused the assessee to treat the aforesaid activity to be a 'business activity' spanning over various assessment years in appeal . After considering the detailed reply of the assessee to counter the show cause notice, the AO continued to believe that the activity of the assessee of dividing and sub-dividing the land after conversion into non-agricultural land and sale thereof to various customers is akin to business activity. The AO accordingly held that the income arising on sale of plotted land is required to be assessed under the head 'business income' instead of 'capital gains'. In this backdrop, the learned AR submitted that by virtue of the aforesaid action, the AO has changed the taxable head of income in the course of search assessment. The learned AR, at this juncture, vociferously submitted that while doing so and while assessing the income already offered under the different head of income, the AO has not made any reference to any incriminating material as evident from the show cause notice as well as the assessment order. The learned AR thus submitted that in the absence of any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cited. The scope of applicability of Sect ion 153A concerning search assessment is in question. It is the case on behalf of the assessee that re-alignment of taxability of income offered from one head to another are subject matter of regular assessment and do not resonate with the scheme of search assessment under s. 153A of the Act dehors reference to any incriminating material in this regard. Further emphasis is lead on behalf of the assessee that in the absence of any incriminating material , no adjustment of regular income offered in the returned income is permissible under s.153A of the Act . As noted above, i t is pointed out on behalf of the assessee that impugned return for AY 2009-10 of the assessee-Dhiren B. Patel were not pending for assessment at the time of search and consequently, the regular assessment /deemed assessment stand concluded at the time of search relating to the assessment year in question and thus survives and did not get abated. It is thus the case on behalf of the assessee that in these facts, it is not permissible for the AO to invoke authority vested under s.153A of the Act to indulge in making routine examination of various items of income and exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the legal ground raised by the assessee. In this view of the matter, we do not intend to adjudicate the merits of the adjustments / re-alignment . 13. In the result, the captioned appeal of the assessee in IT(SS)A No.188/Ahd/2016 [in case of Shri Dhiren Bholidas Patel] for AY 2009-10 is allowed. 14. In IT(SS)A Nos. 191 & 192/Ahd/2016 [in case of Shri Kiritkumar D. Patel] for AYs 2007-08 & 2008-09 also, the respective assessees have fi led additional ground challenging the jurisdiction of the AO to alter the head of income in respect of already included in the regular return and in the absent of any reference to any incriminating material . We find that the facts and issues involved in these appeals are identical in material respect to appeal in IT(SS)A No.188/Ahd/2016 (supra). Accordingly, in parity, the captioned appeals are also required to be allowed in favour of the assessee for similar reasonings. 15. In the result, IT(SS)A Nos. 191 & 192/Ahd/2016 [in case of Shri Kiri tkumar D. Patel] for AYs 2007-08 & 2008-09 are allowed. 16. We shall now advert to IT(SS)A Nos. 189 & 190/Ahd/2016 in respect of Shri Dhiren B. Patel for A.Ys. 2012-13 & 2013-14; respectively. 16.1 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. The learned AR further submitted that gain on sale of such plots has been offered as short term capital gains in the income tax return fi led where the tax rate is no different. Thus, there is advantage to assessee per se. The learned AR accordingly submitted that income offered under the head 'capital gains' has a rational basis and the act ion of AO is devoid of any satisfaction to assess i t under head 'business income'. 16.6 The learned AR thereafter relied upon the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Premji Gopalbhai 113 ITR 785 (Guj) and of the co-ordinate bench in Hiteshkumar Ashokkumar Vaswani vs. Jt.CIT (2017) 165 ITD 505 (Ahmedabad) to support it's the claim of taxability of gains under the head 'capital gains'. 16.7 The learned DR, on the other hand, relied upon the order of the AO and CIT(A). 17. We have carefully considered rival submissions and perused the case law cited. The substantive issue in the present appeal is whether gains arising on sale of plots by the assessee in the relevant assessment year in question is required to be taxed under the head 'capital gains' as offered by the assessee or is to be treated as 'business inc ..... 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