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TMI Blog2025 (1) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... of Attorney Agent and registered the immovable properties then the contention of the assessee may hold it good but that legal proceeding has not been done in this case. The Conveyance Deeds makes it clear that the properties were purchased by Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad in their individual capacities and sale of the same will certainly attract Capital Gains. There were no evidences placed by the assessee before any of the Lower Authorities regarding the expenses incurred by the assessee in converting the agricultural lands into Non-Agricultural lands. Thus the additional documents are without necessary evidences and invalid in the eyes of law. Thus the registered Sale Deeds makes it abundantly clear that the properties belongs to the two assessees here in. The assessees failed to produce expenses relating to the land as well as non-agricultural conversion expense and payments made to the farmers. In the absence of the same, we do not find any infirmity in the orders passed by the Lower Authorities in treating the sale as Short Term Capital Gain. Thus we do not find any merits in the submissions of the assessee. We are also in concurrence in the findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than, Karjan Taluka for a consideration of Rs. 44,82,000/- to M/s.Contrans Logistics Pvt. Ltd. (herein after referred as CLPL). The assessee was requested to explain the details of sales. The assessee filed a letter dated 13-12-2011 stating that his father Shri Mansukhbhai Dobariya works for CLPL as Broker and receiving Rs. 5000/- per acre on sale of land. Shri Mansukhbhai Dobariya purchased lands from agriculturists in the name of the assessees and subsequently sold it through Sale Deeds to CLPL. Therefore, the assessee requested the AO to consider the commission income in the hands of the assessee and complete the assessment. 4.1. The AO not agreed with the above submissions of the assessee, but on verification of records and evidences not satisfied with the claim of the assessee and thereby determined the Short Term Capital Gain at Rs. 36,50,000/- and demanded tax thereon. 5. Aggrieved against the same, assessee filed an appeal before Ld. CIT(A). During appellate proceedings, the assessee filed Paper Book which included copies of Memorandum of Understandings, Ledger Account of Mr. Mansukhbhai Dobariya in the books of M/s.Altair Infrastructure Pvt. Ltd. (AIPL) from 2007-08 to 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that the land in question was agricultural land situated beyond 10 km from notified area, not a capital asset to attract Capital gains provision. The appellant's contention was forwarded to the AO and the AO submitted the report as supra. First of all the AO objected the admission of additional evidences. Further it was also reported that the land as per deeds, land without Irrigation and agricultural land was converted to non-agricultural and sold to CLPL. The Talati certificate produced by the appellant was also silent about nature of land. As there is no response from the appellant reported that the land is a capital asset relying on certain decisions. In the rejoinder to the remand report of the AO, the appellant reiterated the submission filed earlier and no further submission made rebutting the findings of AO. 5.1. Ld CIT [A] during appellate proceedings, asked the Ld.AR to submit English translation of Sale Deed, which was filed. The Ld.AR also filed copy of letter dated 10.12.2011 given by CLPL before the AO, and also filed English translation of Purchase Deeds. After considering the same the Ld CIT[A] held that there is no iota of evidence in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to, cannot lay ground to say that purchases were made for or on behalf of Shri Mansukhbhai Dobariya. The sale deed dated 30.01.2009 clearly mentioned that the appellant was absolute owner of the land. It was also mentioned that the said land was sold to the purchaser company after obtaining the non agriculture permission. The land was in the possession of appellant, the same can be seen from the recital as mentioned below. 4) The aforesaid land in possession of the seller and he is absolute owner of the land, none else has any rights therein. The purchaser company paid entire consideration of Rs. 44,82,000/-, this is also narrated in the deed as under. 8) The Seller is executed this sale deed in favour of Purchaser and the Seller here confirms that the Purchaser has paid the entire sale consideration of Rs. 44,82,000/- as under:- The Purchaser company has made payment in the bank account of Shri Dobariya Mansukhbhai Karshanbhai for making payment to the various farmers for purchase of aforesaid land. The said amount to be considered as consideration paid against the purchase of aforesaid land. Simply because the purchase consideration paid to farmers for purchasing the lands, were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minence over observation, opinion as claimed by the appellant. Hence considering the above, the contention of the appellant is rejected. 5.2. Ld CIT [A] further considered the lands in question are capital assets but that there is no evidence to prove that the lands were purchased by the father of the assessee in the name of the assessee as claimed. Hence the action of the AO in charging the transactions to capital gains is well within the provisions of Law and also rejected the claim the sale of agricultural land is exempt from tax by observing as follows: All the contentions of the appellant are that the lands are only agricultural lands and beyond 10 K.ms of notified area do not stand to the test considering the following facts. The agricultural lands, were purchased and converted into non-agricultural and sold hence the land after conversion, take the character of Capital asset, liable for capital gain. In view of the above discussion, the following facts emerge. 1. The appellant purchased agricultural lands and converted into non-agricultural purpose thereby capital asset came into being. 2. Such capital assets are conveyed by sale deed effecting transfer of capital asset 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above decision, it is held that the transaction made by the appellant is in the nature of adventure in the nature of trade and liable for tax on profit. The appellant submitted a letter from CLPL wherein it was stated that AIPL engaged the services of the appellant for identifying, consolidating and execution of conveyance deeds in favour of the appellant. Though there was no evidence in the form of agreement between the appellant and AIPL, presuming for a while but not conceding, the land was purchased on behalf of the company then the intention of the appellant at the time of purchase of lands was only to sell after conversion. In view of this, the transaction of the appellant in procuring the land, convert the same for non-agricultural purpose and selling the same to the company tantamount to doing business, thereby resulting business Income in the form of profit on sale of land. To see whether a single transaction is in the nature of adventure in the nature of trade at of are not the prime condition is the intention of the person at the time of purchase of the asset. In this case, in case of accepting the contention of the appellant that the lands were purchased for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Without prejudice to the above, the Ld. CIT(A)-1, Vadodara has erred in law and in facts in not allowing the deduction of the expenses incurred in the purchase of the lands allegedly transferred by the appellant. 6.1. Ld Senior Counsel Mr. Thushar Himani appearing for the assessee submitted that Mansukbhai Dobariya acquired agricultural lands in the names of the assessee and Ajaybhai Bharwad during the financial years 2007-08 and 2008-09. Mansukbhai was paid commission of Rs. 5,000/- per acre on behalf of the company CLPL. The amount of sale consideration mentioned in the Conveyance Deeds are at Jantri rates and was not been paid either by the company CLPL or by Mansukhbhai. The Assessee herein and Ajaybhai Bharwad have no personal right or share in the funds received in the bank account of Mansukbhai and it shall also not be payable in future as well. Whereas Mansukbhai Dobariya, the assessee and Ajaybhai Bharwad were only the aggregators for purchase of agricultural lands for which, commission of Rs. 5,000/- per acre was paid by the company and they didn't have any ownership or interest in the impugned transactions. 6.2. Ld Senior Counsel further submitted that the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the case, the same were considered in its entirety and then observed that the assessee has not produced any materials in support of the expenses claimed towards conversion into non-agricultural purpose and payments made to farmers. Thus the findings arrived by the Ld. CIT(A) does not require any interference and requested to uphold the orders of the Lower Authorities. 8. We have given our careful consideration and perused the materials available on record including the Paper Books filed by the assessee. The contention of the assessee that the Ld. CIT(A) has not considered the additional evidences namely letter dated 12-02- 2012 and affidavit of Shri Mansukbhai Dobariya are mere statements without any corroborative evidences. As per the statement of Shri Mansukbhai Dobariya, he was operating as a Real Estate Agent for the company CLPL in procuring lands and purchased the properties in the name of his son Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad are not within the provisions of law. As per the Indian Registration Act, if Shri Mansukbhai Dobariya purchases the land he could have engaged his son Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad as his Pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and possession for more than a year. Accordingly, assessee is liable to pay Capital Gain tax on the gain arisen on the said transfer. 3.3 Regarding cost of acquisition, the assessee has purchased the land through two purchase deeds, first one is for a purchase consideration of Rs. 4,32,000/- dated 27.12.2007 ( Block No.115 127) and second one is for a purchase consideration of Rs. 400,000/- dated 11.01.2008 (Block No.76). 3.3.1 The first land was purchased by the assessee from Shri Aiyub Mohammad Gani, Add: Valan, Baroda. The assessee has also submitted receipts of cash claiming that he has paid cash in excess to the payments mentioned in the purchase deeds to Shri Aiyub Mohammad Gani. The assessee was requested to produce Shri Aiyub Mohammad Gani, to whom he claimed to have paid cash in excess to the consideration mentioned in purchase deed or submit his confirmation. The assessee expressed his inability to produce the person. Regarding complete addresses of said person, assessee submitted that it is written in the purchase deed. However, the addresses written in the deed were incomplete; hence independent enquiries could not be done in this regard. The authenticity of cash rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alternative view of treating the transactions in the nature of adventure in trade. Therefore the Grounds raised by the assessee are devoid of merits and liable to be dismissed. 9. In the result, the appeal filed by the Assessee in ITA No. 595/Ahd/2020 is hereby dismissed. 10. The Grounds of Appeal raised by the assessee Sri. Ajay Reghubhai Bharwad in ITA No. 596/ Ahd/2020 for Asst. Year 2009-10 reads as under: 1. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming the action of the Ld. A.O. in assessing the income at Rs. 4,56,70,092/- against a returned income of Rs. 2,07,392/-as declared in the return of income. 2. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming an addition of Rs. 4,54,62,700/- as short term capital gain on the lands transferred to M/s, Contrans Logistics Pvt. Ltd. (CLPL) in the hands of the appellant, ignoring the fact - (a) that the appellant had undertaken the transaction on behalf of Shri Mansukh Dobariya and the same is confirmed by him in the proceedings before the Ld. A.O. and the first appellate authority through an affidavit by rejecting the admission of such evidences and holding the same to be additional evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st appellate authority through an affidavit by rejecting the admission of such evidences and holding the same to be additional evidences. (b) the consideration for purchase and the sale thereof is also received in the account of Shri Mansukh Dobariya. (c) the purchaser too has confirmed to have had the transactions with Shri Mansukh Dobariya. (d) the various documents submitted including the purchase deed, sale deed, MoUs, etc. also indicate the transaction being carried out by Shri Mansukh Dobariya. It is thus prayed that it may please be held that the transaction of purchase and sale of the lands transferred to CLPL actually belongs to Shri Mansukh Dobariya and any income arising from such transaction cannot be taxed in the hands of the appellant and the same is to be deleted. 4. The Ld. CIT(A)-5, Vadodara has failed to appreciate the contention of the appellant that the transaction of sale of the impugned land, under no circumstances, could be subjected to tax, not being a capital asset. The income subjected to taxation as short term capital gain is thus prayed to be deleted. 5. Without prejudice to the above, the Ld. CIT(A)-5, Vadodara has erred in law and in facts in not allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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