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06-11-2019, Hemant Popli, Section 33, 132, Tribunal Chandigarh

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5 days 11 hours ago #11341 by amit
Section - 33, 132
Order Date - 06-11-2019
Favouring - Assessee allowed for statistical purpose
Court - Tribunal Chandigarh
Appellant - Hemant Popli
Respondent - DCIT
Justice - N.K.SAINI, VP & RAJPAL YADAV, JM
Citation - 1119Taxpundit77
Appeal No. - ITA NO. 1069/CHD/2016
Asstt. Year - 2011-12

Order

PER : RAJPAL YADAV

Assessee is in appeal before the Tribunal against the order of ld.CIT(A)-3, Gurgaon dated 25.7.2016 passed for the Asstt.Year 2011-12.

2. The assessee has taken four grounds of appeal; out of which ground no.4 is general in nature, which does not call for recording of any specific finding, hence rejected.

3. In Ground no.1 and 2, the assessee has pleaded as under:

“1. That in the facts and circumstances of the case the ld.CIT(A) is not justified in upholding the treating if the income from sale of property as income from business and profession. The facts of the matter is that the same should have been assessed as capital gains.

2. That in the facts and circumstances of the case the ld.CIT(A) is not justified in assessing the profit from the sale of properties @ 21% of the sales value.”

4. The ld.counsel for the assessee at the very outset out submitted that identical issue was involved in the Asstt.Year 2008-09 and 2010-11. The dispute travelled upto the Tribunal in ITA No No.1163 and 1164/Chd/2013. The Tribunal has decided this issue against the assessee and appeal preferred by the assessee stands admitted by the Hon’ble High Court. Therefore, in view of the above development, he submitted that both these issues are covered by order of the Tribunal. However, he put a caveat and alleged that the Tribunal failed to adjudicate the issue whether the income on sale of property deserves to be assessed as “business income” or under the head “capital gain”. He took us through finding of the Tribuna recorded in para-12 of the order dated 11.3.2016. On the other hand, the ld.CIT-DR contended that since identical issue has been decided against the assessee, therefore, both these grounds be rejected.

5. We have duly considered rival submissions and gone through the record. We find that except variation in quantum, identical issues have been considered by the Tribunal. The discussion made by the Tribunal in these two assessment years read as under:

8. Ground Nos.2 and 3 of appeal raised by the assessee read as under:

"2. That in the facts and circumstances of the case the Ld Commissioner of Income Tax (Appeals) in not justified in upholding the treating of income from the sale of property as income from business and profession. The fact of the matter is that the same should have been assessed as capital gains as returned by the assessee .

3. That in the facts and circumstances of the case the Ld Commissioner of Income Tax ( Appeals) is not justified in upholding the estimating the profit on sale of flats @ 30% of the sales value of Rs 9,00,000/- and thereby upholding an addition of Rs 2,70,000/-."

9. The Assessing Officer made the addition of Rs.2,70 000/- on account of profit on sale of immovable properties. The Assessing Officer noted that the transactions made in land and building, amount spent on construction have not been routed through the trading and Profit & Loss Account. No profit was shown by the assessee on account of sale of property. No explanation was also tendered by the assessee in this regard. Since the transactions have not been routed through Profit & Loss Account, the trading account in respect of construction and sale of immovable property is cast below by the Assessing Officer and gross profit was taken @ 30%:-

F.Y. 2007-08 To By
Opening Stock: Rs 16,14,307/- Sale: Rs.9,00,000/-
Construction: Rs.5,01,860/- Closing Stock: Rs.14,86,167/-
Gross Profit: Rs.2,70,000/-
Rs.23,86,167/- Rs.23,86,167/-

10. The Assessing Officer asked the assessee as to why the profit of Rs.2,70,000/- on sale of immovable property should not be treated as business income for the year under consideration. In response to the above query, the assessee submitted that he is a civil contractor and he had invested in properties and also purchased a building for construction of his office godown, which was subsequently sold by him. He further submitted that the entire investment in the properties have been routed through the books of account and have been shown as a fixed asset under the head 'income from business and profession'.

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