9911796707
TMI Blog2020 (7) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... 1972 (1) TMI 2 - SUPREME COURT ] held that the company dealing in real estate can be said to carry on business which develops a market- place, and lease out shops, sales plots. We note that in the assessee s case under consideration, the assessee is fulfilling the condition of section 28 of the Act, being a business, therefore, we direct the Assessing Officer to treat the transaction under the head income from business and compute the tax liability accordingly. The assessee is directed to submit necessary details to compute income from business from such transaction. Addition made on account of opening capital balance - assessee submitted before the Assessing Officer that the opening capital balance represents the capital which has been accumulated over years as per the returns of income filed with the Income tax Department - HELD THAT:- As assessee contends before us that in the income tax return there was no any requirement to file the figure of the proprietor s capital account and in fact there was no column in the income tax return to show the proprietor s capital account therefore, in the income tax return, the figure of ₹ 34,80,000/- is not getting reflected, this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as business income instead of capital gain, he is also not accepted request of assessee for valuation of land, this action is against the natural justice and against the law, so addition made by assessing officer should be deleted. 2. Addition made on account of opening capital balance amounting to ₹ 34, 38,000/- is against the natural justice because assessee produce previous years copy of returns and other relevant documents as a proof of opening capital. So addition made by assessing officer should be deleted. 3. That assessee has sold land for ₹ 15,00,000 and this amount was taken by assessee from purchaser through account transfer. This is not an unexplained cash deposit, so addition made by assessing officer not correct and against the law and natural justice, so should be deleted. 4. The case was selected for scrutiny under CASS on the basis of AIR/CIB information relating to sale of land. The scope of enquiry under CASS is defined by the board in CBDT circular no F.NO. 225/26/2006-ITAT-II(pt.) dated 08/09/2010, but assessing officer not follow the circular, so, assessment order should be quash. 3. Brief facts qua the issue are that the assessee is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. As regards to the first issue of addition, the Assessing Officer has given a finding in the assessment order that the impugned land and property was purchased on 09.05.2006 for a total cost of ₹ 11,05,585/-. It was sold on 17.11.2008 for total consideration of ₹ 15,00,000/- but the stamp value of land was ₹ 73,58,000/- as per provision of section 50C of the Act. Therefore, the Assessing Officer had adopted the value of land as per section 50C(1) of the Act at ₹ 73,58,000/-. We note that during the course of assessment proceedings, the assessee submitted before the Assessing Officer as well as before the ld. CIT(A) that section 50C of the Act is not applicable to him because of the reason that purpose to purchase the land was to convert into small pieces of plots and sale the same in the market therefore the assessee held the said land as a business stock. During the assessment stage, the assessee submitted that the sale of land is a business income instead of short term capital gain (vide PB-13 to 16). We note that the assessee submitted a letter to the ITO dated 21.03.2014 stating as follows: Assessee purchased land dated 9thMay, 2006 for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der that in the balance sheet in the current assessment year, the assessee has shown opening capital of ₹ 34,80,000/-. When the assessee was asked by the Assessing Officer to explain the basis of the opening capital, the assessee submitted before the Assessing Officer that the opening capital balance represents the capital which has been accumulated over years as per the returns of income filed with the Income tax Department. However, Assessing Officer after examination of income tax returns has given a finding that in the A.Y. 2008-09 just before the assessment year under consideration, the capital balance in the balance sheet was shown as NIL. We note that before us the assessee submitted the balance sheet and copy of return of income for A.Y. 2008- 09 to 2009-10 (vide PB-1 to 12). We note that in the balance sheet the assessee has shown proprietor s capital to the tune of ₹ 34,80,000/-. The assessee contends before us that in the income tax return there was no any requirement to file the figure of the proprietor s capital account and in fact there was no column in the income tax return to show the proprietor s capital account therefore, in the income tax return, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 271(1)(c) of the Act. Since we have adjudicated the appeal of the assessee on merits and deleted some additions and we also remitted some issues back to the file of Assessing Officer to adjudicate these issues afresh. Since the quantum has been deleted by us therefore the penalty should not survive. That is, since we have deleted the additions/ issues remitted back to the file of the AO for fresh adjudication therefore penalty u/s 271(1) (c) does not survive hence we cancel the penalty U/s 271(1) (c) of the Act. 14. Before parting, it is noted that the order is being pronounced after 90 days of hearing. However, taking note of the extraordinary situation in the light of the Covid-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs JCB Limited in ITA No 6264/Mum/2018 and ITA No. 6103/Mum/2018 for A.Y. 2013-14 order dated 14.05.2020. 15. In the result, the appeal of the assessee in ITA NO. 243/Ran/2016 ispartly allowed for statistical purposes and the appeal of the assessee in ITA NO. 207/Ran/2017 in respect of penalty u/s 271(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
