S.Balasundaram, Coimbatore V. DCIT Corp. Circle 2, Coimbatore

CO 105/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2552 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G BASKAR
• Assessee Lawyers: R CLEMENT RAMESH KUMAR
• Keywords: Reopening of assessment
• Section: 143(3); 54B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1208/CHNY/2018 & C.O. NO.105/CHNY/2018 (IN I.T.A. NO.1208/CHNY/2018) & '& / ASSESSMENT YEAR : 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 2, COIMBATORE. V. SHRI S. BALASUNDARAM, 79, BHARATHI COLONY, PEELAMEDU, COIMBATORE 641 004. PAN : ACQPB 7361 R ()*/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) )* + , / APPELLANT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL .CIT -.)* + , / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE / + 0' / DATE OF HEARING : 18.09.2018 12' + 0' / DATE OF PRONOUNCEMENT : 01.11.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, COIMBA TORE, DATED 10.01.2018 AND PERTAINING TO ASSESSMENT YEAR 2009-1 0. THE ASSESSEE HAS FILED A CROSS-OBJECTION AGAINST THE VE RY SAME ORDER OF THE CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APP EAL OF THE 2 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 REVENUE AND CROSS-OBJECTION OF THE ASSESSEE TOGETHE R AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI R. CLEMENT RAMESH KUMAR, THE LD. DEPARTMENT AL REPRESENTATIVE, SUBMITTED THAT ORIGINALLY THE ASSES SMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961 (IN SHORT 'THE ACT'). REFERRING TO COPY OF THE ASSESSM ENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT DATED 28.12.2011, A COPY OF WHICH IS AVAILABLE AT PAGES 22-28 OF THE ASSESSEES PAPER -BOOK, THE LD. D.R. SUBMITTED THAT THE LAND IN QUESTION WAS USED F OR AGRICULTURAL PURPOSE AND THE ASSESSEE HAD PRODUCED MATERIAL IN R ESPECT OF THE CLAIM. ACCORDINGLY, THE INVESTMENT MADE BY THE ASS ESSEE IN THE AGRICULTURAL LAND WAS ALLOWED UNDER SECTION 54B OF THE ACT. WHEN THE MATTER TRAVELLED BEFORE THIS TRIBUNAL, ACCORDIN G TO THE LD. D.R., THIS TRIBUNAL SPECIFICALLY FOUND THAT THE ASSESSEE SOLD THE AGRICULTURAL LAND AND PURCHASED AGRICULTURAL LAND, WHICH IS NOT IN DISPUTE. ACCORDING TO THE LD. D.R., THE TRIBUNAL H AD NO OCCASION TO EXAMINE THE MATERIALS THAT WERE COLLECTED BY THE AS SESSING OFFICER AFTER REOPENING OF ASSESSMENT. THE ASSESSING OFFIC ER REOPENED THE ASSESSMENT AND EXAMINED THE VILLAGE ADMINISTRAT IVE OFFICER AND TEHSILDAR, COIMBATORE NORTH TALUK, WHO CLARIFIE D THAT THE LAND IN 3 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 QUESTION WAS NOT USED FOR AGRICULTURAL PURPOSE AND THE SAME WAS USED AS CYCLE STAND FOR THE LAST 15 YEARS. 3. SHRI R. CLEMENT RAMESH KUMAR, THE LD. D.R. FURTH ER SUBMITTED THAT THE VILLAGE ADMINISTRATIVE OFFICER A ND TEHSILDAR CLARIFIED THAT THE ADANGAL EXTRACT AND OTHER COPIES OF REVENUE RECORDS FILED BY THE ASSESSEE EARLIER WERE NOT CORR ECT. THE LD. D.R. CLARIFIED THAT THE ADANGAL EXTRACT AND OTHER REVENU E RECORDS WERE ISSUED BY THE VILLAGE ADMINISTRATIVE OFFICER. THE VILLAGE ADMINISTRATIVE OFFICER, ON ENQUIRY, FOUND THAT NO C ROP WAS CULTIVATED FOR THE LAST 15 YEARS. THEREFORE, ACCORDING TO THE LD. D.R., THESE FACTS WERE NOT AVAILABLE BEFORE THE TRIBUNAL WHEN T HE APPEAL WAS DISPOSED OF. HENCE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE . SINCE THE ASSESSEE HAS NOT CULTIVATED THE LAND AND IT WAS USE D AS CYCLE STAND, ACCORDING TO THE LD. D.R., THE ASSESSEE IS N OT ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. MOREOVER, ACCORDING TO THE LD. D.R., THE PROFIT ARISING OUT OF SALE CANNOT BE CONSIDERED AS AGRICULTURAL INCOME. 4. ON THE CONTRARY, SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER IN T HE FIRST ROUND OF 4 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 LITIGATION, FOUND THAT THE LAND IN QUESTION WAS AGR ICULTURAL LAND AND WHEN THE ASSESSEE HAD PRODUCED SUBSTANTIAL EVIDENCE , HE ALLOWED EXEMPTION UNDER SECTION 54B OF THE ACT. THE ONLY D ISPUTE BEFORE THE TRIBUNAL IN THE FIRST ROUND OF LITIGATION WAS, ACCORDING TO THE LD. COUNSEL, WHETHER THE ASSESSEE HAS INVESTED IN THE N EW PROPERTY WITHIN THE SPECIFIED TIME FRAME. THE TRIBUNAL FOUN D THAT SINCE THE LAND SOLD BY THE ASSESSEE AND PURCHASED BY THE ASSE SSEE ARE NOT IN DISPUTE AND BOTH THE PARTIES AGREED THAT THE LAN DS SOLD BY THE ASSESSEE AND PURCHASED BY THE ASSESSEE ARE AGRICULT URAL LANDS, IT CONCLUDED THAT THE ASSESSEE PURCHASED THE PROPERTY WITHIN THE SPECIFIED PERIOD AND ENTITLED FOR EXEMPTION UNDER S ECTION 54B OF THE ACT. THE LD.COUNSEL PLACED HIS RELIANCE ON THE JUD GMENT OF BOMBAY HIGH COURT IN BANK OF BARODA V. H.C. SHRIVASTAVA (2 002) 256 ITR 385 AND ALSO ON THE JUDGMENT OF MADRAS HIGH COURT I N SESHASAYEE PAPER & BOARDS LTD. V. INSPECTING ASSISTANT COMMISS IONER (1986) 157 ITR 342. ACCORDING TO THE LD. COUNSEL, SINCE T HE ISSUE WHETHER THE LAND SOLD BY THE ASSESSEE AND PURCHASED BY THE ASSESSEE ARE AGRICULTURAL LANDS WAS CONCLUDED BY THE ORDER OF TH IS TRIBUNAL DATED 27.05.2013, THE ASSESSING OFFICER CANNOT RE-EXAMINE THE ISSUE AFTER REOPENING. 5 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, IN THE FIRST ROUND OF LITIGATION, THE ASSESSING OFFICER BY AN ORDER DATED 28.12.2011 PASSED UNDER SECTION 143(3) OF THE ACT, FOUND THAT THE ASSESSEE SOLD AGRICULTURAL LAND AND PURCHASED AGRIC ULTURAL LAND AND ALLOWED DEDUCTION UNDER SECTION 54B OF THE ACT. WH EN THE MATTER TRAVELLED BEFORE THIS TRIBUNAL WITH REGARD TO PERIO D OF INVESTMENT IN THE NEW PROPERTY, THIS TRIBUNAL FOUND THAT THERE WA S NO DISPUTE WITH REGARD TO SALE OF AGRICULTURAL LAND AND PURCHASE OF AGRICULTURAL LAND. THE ONLY DISPUTE WAS WITH REGARD TO PURCHASE OF AGR ICULTURAL LAND WITHIN THE SPECIFIED TIME. THIS TRIBUNAL FOUND THA T THE AGRICULTURAL LAND WAS PURCHASED WITHIN THE SPECIFIED TIME, THERE FORE, GRANTED DEDUCTION UNDER SECTION 54B OF THE ACT. 6. NOW, AFTER THE ORDER OF THIS TRIBUNAL, THE ASSES SING OFFICER REOPENED THE ASSESSMENT AND SUMMONED THE VILLAGE AD MINISTRATIVE OFFICER AND TEHSILDAR FOR EXAMINATION. EVEN THOUGH THE ADANGAL EXTRACT AND OTHER REVENUE RECORDS REVEAL THAT THE A SSESSEE CULTIVATED MAZE IN THE SUBJECT LAND, THE VILLAGE AD MINISTRATIVE OFFICER CLAIMS THAT ON ENQUIRY, THE LAND IN QUESTIO N WAS NOT USED FOR CULTIVATION AND IT WAS USED AS CYCLE STAND. IT IS A COMMON 6 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 KNOWLEDGE THAT THE FUNCTION OF THE VILLAGE ADMINIST RATIVE OFFICER IS TO TAKE CULTIVATION ACCOUNT IN EVERY SIX MONTHS AND WH ICH WILL BE RECORDED IN THE ADANGAL. THE ADANGAL IS NOTHING BU T VILLAGE ACCOUNT NO.2 MAINTAINED FOR THE PURPOSE OF RECORDIN G THE CULTIVATION ACCOUNT IN THE VILLAGE. A SENIOR OFFICER AT THE LE VEL OF DEPUTY TEHSILDRA AND TEHSILDAR WILL RE-VERIFY THE ACCOUNTS TAKEN BY THE VILLAGE ADMINISTRATIVE OFFICER. SUBSEQUENTLY, THE CULTIVATION ACCOUNT WILL BE PRODUCED BEFORE THE TALUK STATISTICAL COMMI TTEE FOR THE PURPOSE OF ESTIMATING THE FOOD PRODUCTION OF TALUK. THE REPORT OF THE STATISTICAL COMMITTEE AT TALUK LEVEL WILL BE FO RWARDED TO THE DISTRICT COLLECTOR SO THAT THE DISTRICT STATISTICAL COMMITTEE COULD ESTIMATE THE FOOD PRODUCTION OF THE ENTIRE DISTRICT . 7. THIS IS THE STATE OF AFFAIRS EXISTING IN STATE G OVERNMENT. IT IS NOT KNOWN HOW THE VILLAGE ADMINISTRATIVE OFFICER MA DE STATEMENT BEFORE THE ASSESSING OFFICER THAT ON ENQUIRY HE FOU ND THAT NO CULTIVATION WAS MADE, EVEN THOUGH IT WAS RECORDED I N THE ADANGAL EXTRACT THAT THE ASSESSEE WAS CULTIVATING MAZE. TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADANGAL EXTRACT WAS MAINTAINED BY THE VILLAGE ADMINISTRATIVE OFFICER IN THE COURSE OF PERFORMING HIS OFFICIAL DUTY. THEREFORE, WHEN THERE WAS CONFLICT BETWEEN THE ORAL 7 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 STATEMENT MADE BY THE VILLAGE ADMINISTRATIVE OFFICE R AND THE RECORD THAT WAS MAINTAINED BY THE VILLAGE ADMINISTRATIVE O FFICER IN THE COURSE OF HIS OFFICIAL DUTY, THE RECORD MAINTAINED BY THE VILLAGE ADMINISTRATIVE OFFICER, WHICH WAS VERIFIED BY THE T EHSILDAR OR DEPUTY TEHSILDAR, WOULD PREVAIL OVER THE ORAL STATEMENT. MOREOVER, IT IS NOT KNOWN WHETHER THE VILLAGE ADMINISTRATIVE OFFICER, W HO MADE THE STATEMENT BEFORE THE ASSESSING OFFICER, WAS WORKING AS VILLAGE ADMINISTRATIVE OFFICER FOR THE LAST 15 YEARS. THER EFORE, THE STATEMENT MADE BY THE VILLAGE ADMINISTRATIVE OFFICE R CONTRARY TO THE REVENUE RECORD, NAMELY, ADANGAL EXTRACT WERE NOT BE LIEVABLE ONE. MOREOVER, THIS TRIBUNAL IN THE FIRST ROUND OF LITIG ATION IN RESPECT OF VERY SAME PROPERTY, FOUND THAT ADMITTEDLY THE LAND SOLD BY THE ASSESSEE AND PURCHASED BY THE ASSESSEE ARE AGRICULT URAL LANDS. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE OBSERVATION MADE BY THIS TRIBUNAL IN ITS ORDER DATE D 27.05.2013 AS FOLLOWS:- ..THE INTENTION OF THE LEGISLATURE IS THAT THE AS SESSEE HAS TO USE THE SALE CONSIDERATION RECEIVED FOR THE PURP OSE OF BUYING AGRICULTURAL LAND. IN THE PRESENT CASE, THE ASSESSEE SOLD AGRICULTURAL LAND IS NOT DISPUTED BY THE ASSES SING OFFICER AND ALSO PURCHASED AGRICULTURAL LAND. THE LD. CIT(APPEALS) IN HIS ORDER HAS GIVEN A CATEGORICAL F INDING THAT THOUGH THE SALE DEED WAS EXECUTED ON 30.12.2008, BUT THE POSSESSION WAS GIVEN ON 10.09.2008. HE HAS ALSO OBSERVED 8 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 THAT THE SALE DEED HAS TO BE EXECUTED ON OR BEFORE F OUR MONTHS FROM THE DATE OF AGREEMENT. THERE ARE CERT AIN DISPUTE BETWEEN THE ASSESSEE AND THE PURCHASER. TH EREFORE, THE EXECUTION OF SALE DEED WAS DELAYED AND THE SALE DEED WAS EXECUTED IN DECEMBER, 2008. SO FAR AS THE FIRST OBJECTI ON RAISED BY THE LD. D.R. IS CONCERNED, THE PROPERTY W AS ONLY TRANSFERRED IN DECEMBER, 2008, THEREFORE, THE PROPERTY PURCHASED BEFORE THAT DATE IS NOT ELIGIBLE FOR CLAI MING DEDUCTION UNDER SECTION 54B. IN OUR OPINION, THIS IS ONLY A HYPER TECHNICAL OBJECTION RAISED BY THE LD. D.R., B ECAUSE, THE ASSESSEE HAS RECEIVED SUBSTANTIAL AMOUNT FROM THE P URCHASER BEFORE EXECUTING SALE DEED. SO FAR AS THE REGISTRAT ION OF SALE AGREEMENT IS CONCERNED, IF BOTH THE PARTIES PR OCEEDED TO CARRY THE EXECUTION OF THE SALE AS PER THE AGREE MENT WHETHER IT IS REGISTERED AGREEMENT OR NOT, THERE IS NO FFECT SO FAR AS TRANSFER IS CONCERNED. THEREFORE, THE CA SE LAW RELIED ON BY THE LD. D.R. IS ALTOGETHER ON A DIFFER ENT CONTEXT AND HAVE NO APPLICATION TO THE FACT OF THE PRESENT CASE. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDE R PASSED BY THE CIT(APPEALS) AND THE GROUND RAISED BY THE REVEN UE IS DISMISSED. 8. SINCE THIS TRIBUNAL FOUND THAT THE LAND IN QUEST ION IS AGRICULTURAL LAND AND WHAT WAS PURCHASED BY THE ASS ESSEE IS ALSO AGRICULTURAL LAND, THE ASSESSING OFFICER CANNOT DIS TURB THE ORDER OF THIS TRIBUNAL. IF THE ASSESSING OFFICER FINDS THAT THE OBSERVATION MADE BY THIS TRIBUNAL IS CONTRARY TO THE FACT AND I S NOT CORRECT, THEN IT IS OPEN TO HIM TO TAKE UP THE MATTER BEFORE THE HIGH COURT OR HIGHER FORUM IN A MANNER KNOWN TO LAW. THE ASSESSI NG OFFICER CANNOT TAKE THE LAW IN HIS OWN HAND AND DISTURB THE ORDER OF A HIGHER FORUM IN THE GUISE OF COLLECTING MATERIAL AF TER REOPENING OF 9 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 ASSESSMENT. THE AUTHORITY TO ADJUDICATE THE DISPUT E EVEN THOUGH TECHNICALLY FLOWS FROM THE INCOME-TAX ACT, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT IN FACT, SUCH AN AUTHORITY FLOWS FROM CONFIDENCE REPOSED BY THE PEOPLE OF THIS COUNTRY ON JUDICIAL SYSTEM. IF THE ASSESSING OFFICER IS ALLOWED TO REOPEN THE A SSESSMENT AFTER THE ORDER OF THIS TRIBUNAL WHEREIN IT WAS CONCLUDED THAT WHAT WAS SOLD BY THE ASSESSEE AND PURCHASED BY THE ASSESSEE ARE AGRICULTURAL LANDS, THEN THE PEOPLE OF THIS COUNTRY MAY LOSE CONFIDENCE ON THE SYSTEM. 9. THIS TRIBUNAL TIME AND AGAIN POINTS OUT THAT WHE N SUCH CASE HAPPENS, IT IS OPEN TO THE DEPARTMENT TO MOVE THE H IGHER FORUM IN A MANNER KNOWN TO LAW. IN THIS CASE, THE ASSESSING O FFICER OR COMMISSIONER WOULD HAVE MOVED THIS TRIBUNAL FOR REC ALL OF THE ORDER BY PLACING ALL THESE MATERIALS. SINCE SUCH A N EXERCISE WAS NOT DONE, IT IS CLEAR THAT THE ASSESSING OFFICER HA S TAKEN THE LAW IN HIS OWN HAND AND FOUND THAT THE LAND IN QUESTION IS NOT AN AGRICULTURAL LAND. THIS FINDING OF THE ASSESSING O FFICER, IN FACT, OVERTURNS THE ORDER OF THIS TRIBUNAL WHICH CANNOT B E ALLOWED TO HAPPEN. THE ORDER OF THIS TRIBUNAL IS BINDING ON T HE AUTHORITIES, MORE PARTICULARLY, THE ASSESSING OFFICER WHO IS PAR TY TO THE 10 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 PROCEEDING BEFORE THIS TRIBUNAL. HAVING KNOWN THAT THIS TRIBUNAL FOUND THAT THE LAND IN QUESTION IS AGRICULTURAL LAN D, THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT. THIS ACT OF A SSESSING OFFICER IS CONTRARY TO THE ESTABLISHED JUDICIAL DIS CIPLINE. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY SET ASIDE THE ORDER OF THE ASSESSING OFFICER. ACCORDINGLY, THE SAME IS CONFIRMED. 10. THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ON LY TO SUPPORT THE ORDER OF THE CIT(APPEALS). THEREFORE, THE SAME IS DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE A ND THE CROSS- OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 1 ST NOVEMBER, 2018. KRI. 11 I.T.A. NO.1208/CHNY/18 C.O. NO.105/CHNY/18 + -056 76'0 /COPY TO: 1. )*/ APPELLANT 2. -.)*/ RESPONDENT 3. / 80 () /CIT(A)-2, COIMBATORE 4. PRINCIPAL CIT- 1, COIMBATORE 5. 69 -0 /DR 6. :& ; /GF.