The Nagpur Bench of High court of Judicature at Bombay directs Income Tax Appellate Tribunal to reconsider its order treating sale transaction as business income, where the same pertaining to the co-owner was granted benefit under Sec.50C of the Income Tax Act.
The Appellant,Mr.Amjad Ahmedbhai Sheikh had moved the Nagpur Bench of the High court of Judicature at Bombay , under Sec. 250A of the Income Tax Act. The appellant intended to challenge the validity of the order passed by the Income Tax Appellate Tribunal whereby it was held that the income received during the assessment year 2010-11, by virtue of sale of different plots of lands shall be treated as business income, as the intention behind such transaction was to exploit the commercial value of land.
The contention of the appellant was that the sale transaction was made jointly by him and one Mr. Narendra Kanhaiyalal Parikh, who were the joint owners of the land involved in the sale transaction and that the latter was given the benefit of capital gains on the impugned sale of land, by the Deputy Commissioner of Income Tax and the same was confirmed by the department. Thus, the question under consideration was whether the Tribunal was justified in considering the sale transaction as business income as for the appellant, where the Revenue had on the other hand accepted the same as capital gain as for his co-owner.
Adjudicating upon the propriety of the order passed by the Tribunal, the Division bench held that “Prima-facie we find that as the co-owner has been granted benefit of capital gains with regard to the same transaction which assessment order has been accepted by the Revenue, said aspect deserves to be taken into consideration while adjudicating the claim of the assessee for seeking benefit of capital gains.”
Consequently, the impugned order of the Tribunal was set aside. The court by order remanded the proceedings to the Tribunal to re-consider the appeal, preferably within a period of three months, with a liberty to the assessee to raise additional grounds in support thereof. The Cour also permitted the assessee to submit before the Tribunal the assessment order passed in case of co-owner, which was not submitted earlier due to bonafide ignorance about the same.
On perusal of the records, the Division Bench found that the assessment order of the Co-owner, whereby he was granted the benefit of capital gains was not submitted before the Tribunal, due to bonafide ignorance on the part of assessee, as regards existence of such order.
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