COMMISSIONER OF INCOME TAX Vs. RAJSHIBHAI MERAMANBHAI ODEDRA

JUDGEMENT

(1.) Present Tax Appeal has been preferred by the revenue challenging the the impugned judgement and order dtd. 11/1/2013 passed by the learned Income Tax Appellate Tribunal, Rajkot in ITA No.1024/Rjt/2010 with respect to A.Y. 2006-07 with the following substantial question of law :

(2.) That a search action under section 132(1) of the Income Tax Act (hereinafter referred to as "the Act") was carried out in one M/s.Radhe Group by issuing warrants of authorization on 4/8/2006. During the course of the search authorization, various documents/books of accounts and other valuable articles and other things were seized from the premises covered under section 132(1) and 132(1A) of the Act. On verification it was noticed that part of the said documents were pertaining to respondent herein assessee Rajshibhai Meramanbhai Odedara. That notice under section 153C of the Act was issued against the assessee on 3/2/2009. In response to the same, the assessee filed return of income for the year under consideration disclosing the income of Rs.18,750/- and agricultural income at Rs.2,81,680/-. The assessment proceedings were taken up and finalised under section 143(3) read with section 153C of the Act on 31/12/2009 and the total income was assessed at Rs.4,98,41,760/- for making various disallowance/addition. That while passing assessment order, the AO made addition of Rs.22,68,510/- on account of undisclosed sources and also made addition of Rs.18,70,749/- on account of long term capital gain, addition of Rs.4,56,83,750/- on account of short term capital gain. It appears that the AO made addition of Rs.18,70,749/- on account of long term capital gain and addition of Rs.4,56,83,750/- on account of short term capital gain, on the ground that the lands which was sold during the Assessment Year, more particularly in favour of M/s.Sahara India Commercial Corporation Ltd., was in favour of a non-agriculturist and as per the existing State law, the assessee cannot sell the agricultural land in favour of a non-agriculturist and therefore, the land which was sold was a capital asset its transfer is chargeable to tax under capital gain.

(3.) Heard Mr.Desai learned counsel appearing on behalf of the revenue on the proposed questions of law.