- (1.) THE above appeal has been preferred against the judgment and order dated 19th of August, 2002 passed by the Income Tax Appellate Tribunal, Agra Bench, Agra in two cross appeals being ITA No.1721/Del/1993 and ITA No.1739/Del/1993, for the assessment year 1988 -89.
(2.) THE present appeal has been admitted on the following substantial questions of law: - 1. "Whether the Hon'ble Tribunal was legally right in law on the facts and circumstances of the case in holding that the entire land introduced by the partners as their capital and later on withdrawn in the year 1986 was an agricultural land ignoring the facts on record. 2. Whether the Hon'ble ITAT was legally right in law and on facts in holding that only the profit on sale of building erected by the firm on the land of the partners introduced as their capital can be considered in the hands of the firm ignoring the fact the land appurtenant to the structure was also part and parcel of the business of the assessee firm and the land cannot be separated from the building after construction of structure as also the facts mentioned in the assessment order as well as in the order of the CIT (A)." Heard Sri Shambhu Chopra, learned counsel for the Department and Sri Ashok Trivedi, Advocate, for the respondents.
(3.) THE dispute relates to the Assessment Year 1988 -89. The assessee is a partnership firm and was carrying a poultry farm for the relevant assessment year. During the assessment proceedings, the Assessing Officer noticed that the assessee sold a building for a sum of Rs.8,23,317/ - which is included in the total profit of the assessee. It was noticed that the assessee had reflected a sum of Rs.1,26,650/ - as the value of land forming a part of fixed assets in the balance sheet as on 31st of March, 1986. The said land was not taken as a part of business asset for the assessment year 1987 -88. The matter was inquired into by the Assessing Officer. The explanation given by the assessee firm that the individual partners had brought the land as their contribution and the land continued to belong to the individual partners and was never firm's property, was not accepted by the Assessing Officer in the assessment order dated 27th March, 1992. In appeal, the CIT (A) gave a marginal relief and allowed the appeal in part. Both, the assessee and the department preferred further appeals before the Tribunal and the Tribunal by the order under appeal has allowed the appeal filed by the assessee firm and dismissed that of the department.;