Shirdi Estates, CHENNAI V. ACIT, Tambaram

CO 56/CHNY/2017

• Counselvise Citation: [2017] 119 COUNSELVISE.COM (IT) 3427 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K N RAGHAVAN
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! . , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.395/MDS/2017 /ASSESSMENT YEAR: 2007-08 THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-22, TAMBARAM, CHENNAI-45 VS. M/S.SHIRIDI ESTATES, NEW NO.32, OLD NO.28, RAMACHANDRA ROAD, NEHRU NAGAR, CHROMEPET, CHENNAI-44. [PAN: AAAHS 8731 E] ( & /APPELLANT) ( '(& /RESPONDENT) CO NO.56/MDS/2017 /ASSESSMENT YEAR: 2007-08 M/S.SHIRIDI ESTATES, NEW NO.32, OLD NO.28, RAMACHANDRA ROAD, NEHRU NAGAR, CHROMEPET, CHENNAI-44. [PAN: AAAHS 8731 E] VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-22, TAMBARAM, CHENNAI-45. ( & /APPELLANT) ( '(& /RESPONDENT) ./ ITA NO.397/MDS/2017 /ASSESSMENT YEAR: 2007-08 THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-22, TAMBARAM, CHENNAI-45. VS. SMT.R.VASANTHI RAM NARAYAN, NEW NO.32, OLD NO.28, RAMACHANDRA ROAD, NEHRU NAGAR, CHROMEPET, CHENNAI-44. [PAN: AADPV 7989 A] ( & /APPELLANT) ( '(& /RESPONDENT) ITA NO.395 OF 2017 & CO NO.56 OF 2017 ITA NO.397 OF 2017 & CO NO.57 OF 2017 :- 2 -: CO NO.57/MDS/2017 /ASSESSMENT YEAR: 2007-08 SMT.R.VASANTHI RAM NARAYAN, NEW NO.32, OLD NO.28, RAMACHANDRA ROAD, NEHRU NAGAR, CHROMEPET, CHENNAI-44. [PAN: AADPV 7989 A] VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-22, TAMBARAM, CHENNAI-45. ( & /APPELLANT) ( '(& /RESPONDENT) ASSESSEE BY : MR.K.N.RAGHAVAN, CA DEPARTMENT BY : MR.AR.V.SREENIVASAN, JCIT * /DATE OF HEARING : 16.08.2017 * /DATE OF PRONOUNCEMENT : 16.08.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.395/MDS/2017 IS AN APPEAL FILED BY THE REVE NUE IN THE CASE OF M/S.SHIRIDI ESTATES AGAINST THE ORDER OF COMMISS IONER OF INCOME TAX (APPEALS)-10, CHENNAI, IN ITA NO.12/2015-16/CIT(A)- 10 DATED 18.11.2016 FOR THE AY 2007-08 & CO NO.56/MDS/2017 I S A CROSS- OBJECTION FILED BY THE ASSESSEE IN REVENUES APPEAL NO. ITA NO.395/MDS/2017. 2. ITA NO.397/MDS/2017 IS AN APPEAL FILED BY THE RE VENUE IN THE CASE OF SMT.R.VASANTHI RAM NARAYAN AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, IN ITA NO.13/2015 -16/CIT(A)-10 DATED 18.11.2016 FOR THE AY 2007-08 & CO NO.57/MDS/ 2017 IS A CROSS- ITA NO.395 OF 2017 & CO NO.56 OF 2017 ITA NO.397 OF 2017 & CO NO.57 OF 2017 :- 3 -: OBJECTION FILED BY THE ASSESSEE IN REVENUES APPEAL NO. ITA NO.397/MDS/2017. 3. MR.AR.V.SREENIVASAN, JCIT REPRESENTED ON BEHALF OF THE REVENUE AND MR.K.N.RAGHAVAN, CA REPRESENTED ON BEHALF OF TH E ASSESSEE. 4. AS BOTH THE APPEALS ARE INTER-CONNECTED AND THE ISSUES ARE IDENTICAL, THE APPEALS ARE BEING DISPOSED OF BY THIS COMMON OR DER. 5. AT THE TIME OF THE HEARING, IT WAS SUBMITTED BY THE LD.DR THAT THE ISSUE IN THESE APPEALS WERE AGAINST THE ACTION OF T HE LD.CIT(A) IN HOLDING THAT THE TRANSACTION ENTERED INTO BY THE ASSESSEE I N RESPECT OF THE SALE OF THE LAND WAS LIABLE TO BE ASSESSED AS LONG TERM CAP ITAL GAINS AS AGAINST BUSINESS INCOME. IT WAS SUBMITTED BY THE LD.DR THAT THE LD.CIT(A) HAD ALLOWED THE ASSESSEES APPEAL BY FOLLOWING THE DECI SION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE I N THE CASE OF M/S.SHIRIDI ESTATES IN ITA NOS.1802 & 1803/MDS/2015 DATED 18.12 .2015 FOR THE AYS 2008-09 & 2009-2010 IN THE CASE OF SMT.R.VASANTHI R AM NARAYAN IN ITA NOS.1804, 1805 & 1806/MDS/2015 DATED 18.12.2015 FOR THE AYS 2008-09, 2009-10 & 2011-12. IT WAS A SUBMISSION THAT THE OR DER OF THIS TRIBUNAL HAVING NOT BECOME FINAL AND THE APPEALS ARE PENDING BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. IT WAS A PRAYER THAT TH E ORDER OF THE LD.CIT(A) IS LIABLE TO BE REVERSED. ITA NO.395 OF 2017 & CO NO.56 OF 2017 ITA NO.397 OF 2017 & CO NO.57 OF 2017 :- 4 -: 6. IN REPLY, THE LD.AR VEHEMENTLY SUPPORTED THE ORD ER OF THE LD.CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LD.CIT(A) IN THE CASE OF M/S.SHIRIDI ESTATES SH OWS THAT THE LD.CIT(A) HAS FOLLOWED THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS.1802 & 1803/MDS/2015 DATED 18.12.2015, WHEREIN THE TRIBUNAL HAS HELD AS FOLLOW S: IN THE CASE BEFORE US, THE LAND WAS PURCHASED IN 1 999. THE ASSESSEE KEPT THE SAME AS INVESTMENT FOR ALMOST TEN YEARS AND THEREAFTER, FOR REALIZING BETTER PRICE, DIVIDED THE LAND INTO VARIOUS PLOTS AND SOLD THE SAME THROUGH M/S.TEL LUS AVENUE. THEREFORE, THE JUDGMENT OF APEX COURT IN SMT.INDRAMANI BAI (SUPRA) IS NOT ID ENTICAL TO THE CASE OF THE ASSESSEE. MOREOVER, THE APEX COURT IN SMT.INDRAMANI BAI (SUPR A) HAS NOT CONSIDERED THE JUDGMENT IN RAJA J RAMESHWAR RAO (SUPRA) AND G.VENKATASWAMI NAID U & CO. (SUPRA). THE MADRAS HIGH COURT IN IDENTICAL SET OF FACTS, AFTER CONSIDERING THE JUDGMENT OF APEX COURT IN RAJA J RAMESHWAR RAO (SUPRA) AND G. VENKATASWAMI NAIDU & CO . (SUPRA) FOUND THAT THE PROFIT ON SALE OF THE LAND IS ONLY A REALIZATION OF CAPITAL I NVESTMENT. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE PROFIT ON SALE OF THE LAND H AS TO BE TREATED AS LONG TERM CAPITAL GAIN. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE SAME IS CONFIRMED. 8. IN THE CASE OF SMT.R.VASANTHI RAM NARAYAN ALSO I T IS NOTICED THAT THE LD.CIT(A) HAS FOLLOWED THE DECISION OF THE CO-O RDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS. 180 4, 1805 & 1806/MDS/2015 DATED 18.12.2015, WHEREIN IT HAS BEEN HELD AS FOLLOWS: 24. THE NEXT GROUND OF APPEAL WITH REGARD TO ADDIT ION OF RS.2,75,00,000/- BEING SHORT TERM CAPITAL GAIN ON SALE OF LAND AT NATHANALLUR VI LLAGE. ITA NO.395 OF 2017 & CO NO.56 OF 2017 ITA NO.397 OF 2017 & CO NO.57 OF 2017 :- 5 -: 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS PROD UCED COPIES OF ADANGAL EXTRACT AND CERTIFICATE FROM VILLAGE ADMINISTRATIVE OFFICER TO E STABLISH THAT THE LAND IN QUESTION AT NATHANALLUR VILLAGE TO THE EXTENT OF 3.63 ACRES IS AGRICULTURAL LAND. IT IS NOT IN DISPUTE THAT THE LAND IN QUESTION CLASSIFIED AS AGRICULTURAL LAN D IN REVENUE RECORDS. THE VILLAGE ADMINISTRATIVE OFFICER, WHO IS EMPOWERED BY THE STAT E GOVERNMENT TO TAKE THE CROPS ACCOUNT IN CULTIVATION. THE ADANGAL EXTRACT MAINTAI NED BY THE VILLAGE ADMINISTRATIVE OFFICER UNDER THE SUPERVISION OF TEHSILDAR, CLEARLY ESTABLI SHES THAT THE LAND IN QUESTION IS SUBJECTED TO CULTIVATION. IGNORING THE CERTIFICATE ISSUED BY THE VILLAGE ADMINISTRATIVE OFFICER AND THE ADANGAL EXTRACT, THE ASSESSING OFFICER FOUND THAT TH E LAND IS NOT AN AGRICULTURAL LAND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADAN GAL EXTRACT AND THE VILLAGE ADMINISTRATIVE OFFICERS CERTIFICATE HAVE TO BE PREFERRED IN DECIDI NG THE CHARACTERISTICS OF THE LAND IN QUESTION. THE ADANGAL EXTRACT MAINTAINED BY THE VIL LAGE ADMINISTRATIVE OFFICER UNDER THE SUPERVISION OF SENIOR OFFICERS OF THE REVENUE DEPAR TMENT IS AN OFFICIAL DOCUMENT OF THE STATE GOVERNMENT. THEREFORE, IT CANNOT BE BRUSHED A SIDE SO LIGHTLY BY THE ASSESSING OFFICER. WHEN THE LAND IN QUESTION IS SUBJECTED TO C ULTIVATION AS ESTABLISHED BY THE CERTIFICATE OF VILLAGE ADMINISTRATIVE OFFICER AND TH E ADANGAL EXTRACT, THIS TRIBUNAL HAS NO REASON TO DOUBT THE CLAIM OF THE ASSESSEE. THE VILL AGE ADMINISTRATIVE OFFICER HAS ALSO CERTIFIED THAT THE LAND IN QUESTION IS BEYOND 8 KMS RADIUS OF ANY NOTIFIED MUNICIPALITY. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE CIT(APPEALS) HAS RIGHTLY PLACED RELIANCE ON THE JUDGMENT OF MADRAS HIGH COUR T IN MRS.SAKUNTHALA VEDACHALAM (SUPRA). THEREFORE, THIS TRIBUNAL DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS) AND ACCORDINGLY, THE SAME IS CONFIRMED . 9. AS IT IS NOTICED THAT THE LD.CIT(A) HAS FOLLOWED THE JUDICIAL DISCIPLINE IN FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A). CONSEQUENTLY, THE APPEALS FILED BY THE REVENUE STANDS DISMISSED. 10. AT THE TIME OF HEARING, THE LD.AR SUBMITTED THA T HE DID NOT WISH TO PRESS THE CROSS-OBJECTIONS FILED BY THE ASSESSEES. CONSEQUENTLY, THE CROSS-OBJECTIONS FILED BY THE ASSESSEES ARE DISMISS ED AS WITHDRAWN. ITA NO.395 OF 2017 & CO NO.56 OF 2017 ITA NO.397 OF 2017 & CO NO.57 OF 2017 :- 6 -: 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA NOS.395 & 397/MDS/2017 STANDS DISMISSED AND CROSS-OBJECTIONS FILED BY THE ASSESSEES IN CO NOS.56 & 57/MDS/2017 STANDS DISMISS ED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH AUGUST, 2017, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 16 TH AUGUST, 2017. TLN * '12 32 /COPY TO: 1. & /APPELLANT 4. 4 /CIT 2. '(& /RESPONDENT 5. 2 ' /DR 3. 4 ( ) /CIT(A) 6. /GF