M/S. JAWHARLAL NEMA (HUF), Indore V. THE ACIT CIRCLE-3(1), Indore

CO 66/IND/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7971 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G AGRAWAL
• Assessee Lawyers: ASHIMA GUPTA
• Keywords: Capital asset
• Section: 271(1)(c); 54B; 132

Judgement Text

[IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NO.81/IND/2015 ASSESSMENT YEAR: 2008-09 ACIT - 3(1) INDORE / VS. M/S. JAWAHARLAL PANNALAL NEMA(HUF) 43/4, PRAGATI KESAR BAGH ROAD INDORE (M.P.) ( APPELLANT ) ( REVENUE ) P.A. NO. AADHJ11112M C.O. NO.66/IND/2015 (ARISING OUT OF IT(SS)A NO.81/IND/2015) ASSESSMENT YEAR: 2008-09 M/S. JAWAHARLAL PANNALAL NEMA(HUF) INDORE / VS. ACIT - 3(1) INDORE (APPELLANT) (REVENUE ) [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 2 ITA NO.324/IND/2015 ASSESSMENT YEAR: 2008-09 ACIT - 3(1) INDORE / VS. M/S. JAWAHARLAL PANNALAL NEMA(HUF) 43/4, PRAGATI KESAR BAGH ROAD INDORE (M.P.) (APPELLANT) (REVENUE ) APPELLA NT BY SMT. ASHIMA GUPTA, D.R. RESPONDENT BY SHRI K.G. AGRAWAL, A.R. DATE OF HEARING: 17.12.2018 DATE OF PRONOUNCEMENT: 08.01.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL AND CROSS OBJECTION IN QUANTUM PROCEEDINGS AND APPEAL IN PENALTY PROCEEDINGS WERE TAKE N UP TOGETHER AND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER. FIRST WE TAKE UP THE REVENUES AP PEAL IN IT(SS)A NO.81/IND/2015. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A):- I. ERRED WHILE DELETING THE ADDITION OF RS.1,06,00,956 /- MADE BY THE A.O. UNDER THE HEAD LONG TERM CAPITAL GAIN OWING TO THE SALE OF LAND HAVING SURVEY NO.231/1, 207, 211,212 & 213 AT GRAM: UMARIA, TEHSIL: MHOW, DISTIRCT; INDORE. II. ERRED WHILE PLACING UNDUE RELIANCE UPON THE REPORT OF PATWARI, RAU THOUIGH THE ANUVIBHAGEEYA ADHIKARI RAU HAS NOT ENDO RSED THE SAID REPORT AND MERELY FORWARDED THE SAME WITHOUT INKING HIS/HER SPECIFIC REMARKS WITH REGARD TO CONSENT OR DISSENT WITH THE PATWARIS REPORT; AND AFTER CONSIDERING THE SAID REPORT DELET ED THE ADDITION MADE BY THE A.O. III. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND OR A LTER THE GROUND OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 2. THE ONLY EFFECTIVE GROUND IN THE REVENUES APPEAL IS AGAINST DELETION OF ADDITION OF RS.1,06,00,956/- MADE BY THE A.O. TREATING THE SALE OF AGRICULTURAL LAND AS SALE O F CAPITAL ASSET. THE FACTS IN BRIEF ARE THAT A SEARCH & SEIZ URE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (HEREI NAFTER CALLED AS THE ACT) WAS CONDUCTED ON 2.5.2008 AT THE O FFICE PREMISES OF RAJESH NEMA AND AT HIS RESIDENCE. THE A.O . ISSUED A NOTICE AFTER CASE WAS TRANSFERRED ON DCIT-1 IND ORE DATED 12.8.2010 FOR TAKING ACTION U/S 153C OF THE ACT. THE A.O. THEREAFTER FRAMED ASSESSMENT U/S 153C R.W.S. 143( 3) [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 4 OF THE ACT VIDE ORDER DATED 30.12.2010. THE A.O. WH ILE FRAMING THE ASSESSMENT TREATED THE SALE OF AGRICULTURAL LAND AS TRANSACTION IN THE NATURE OF TRANSFER OF CAPITAL ASSET AND COMPUTED LONG TERM CAPITAL GAIN ARISING THERE FROM O F RS.1,06,00,956/- AND ADDED THE SAME INTO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THIS THE ASSESSEE HAD FILED APPEAL BEFO RE LD. CIT(A) WHERE THE ASSESSEE HAD CHALLENGED PROCEEDIN GS ON BOTH LEGAL AND FACTUAL GROUNDS. THE LEGAL GROUND OF THE ASSESSEES APPEAL WAS AGAINST NOT RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. THI S GROUND OF THE ASSESSEES APPEAL WAS NOT ADJUDICATED BY THE LD. CIT(A) ON THE BASIS THAT THE RELIEF WAS GIVEN IN ASSESSEES APPEAL ON MERIT I.E. ON FACTUAL BASIS. AGAINST THIS ORDER, BOTH REVENUE AS WELL AS THE ASSESSEE HAVE F ILED APPEAL AND CROSS OBJECTION RESPECTIVELY. [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 5 4. LD. CIT(DR) VEHEMENTLY SUPPORTED ORDER OF THE A. O. AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DEL ETING THE ADDITION. HE FURTHER SUBMITTED THAT THE LD. CIT( A) HAS WRONGLY APPRECIATED THE FACTS BY COMING TO THE CONCLU SION THAT THE SAID LAND DID NOT FALL WITHIN THE MUNICIPAL LIM IT. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT LD. CIT(A) HAS CONSIDERED THE NOTIFICATION GOVERNING THE ISSUE OF ASSET BEING CAPITAL OR NOT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT LD. CIT(A) HAS CONSIDERED THE CERTIFICATE OF THE REVENUE OFFICIAL WHO HAS CATEGORICALLY STATED THAT THE LAN D IN QUESTION DO NOT FALL WITHIN 4 KMS. OF THE LIMIT OF MHAU CANTONMENT BOARD. FURTHER, IT IS NOTICED THAT LD. CIT (A) HAS DULY CONSIDERED THE OBJECTIONS OF THE ASSESSING O FFICER AND REJECTED THE SAME ON THE BASIS OF NOTIFICATION. TH E [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 6 REVENUE HAS NOT CONTROVERTED THIS FINDING BY PLACING ANY CONTRARY MATERIAL. THE FINDING OF THE LD. CIT(A) IS B ASED UPON THE NOTIFICATIONS ISSUED BY THE COMPETENT AUTHOR ITY. THEREFORE, WE DO NOT SEE ANY INFIRMITY INTO THE FIND ING OF THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. GROUN D OF THE REVENUES APPEAL IS DISMISSED. 6. NOW WE TAKE UP CROSS OBJECTION OF THE ASSESSEE. T HE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF CROSS OBJECTI ON: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, INDORE HAS RIGHTLY DELETED THE ADDITION SO MADE BY THE LEARNED ASSESSING OFFIC ER OF RS.1,06,00,956/- UNDER THE HEAD LONG TERM CAPITAL GAIN OWNING TO THE SALE OF LAND HAVING SURVEY NO.231/1, 207, 21 1, 212 & 213 AT GRAM UMARIA, TEHSIL MHOW, DISTRICT INDORE BY RELYIN G ON THE REPORT OF PATWARI, RAU. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, INDORE HAS OBSERVED THAT THE ALTERNATE PLEA OF THE RESPONDENT RELATING TO CL AIM OF EXEMPTION U/S 54B THOUGH JUSTIFIED AND ALLOWABLE BUT, ERRED I N REJECTING THE SAME IN VIEW OF THE ALLOWANCE OF MAIN GROUND OF APP EAL. III. THE RESPONDENT CRAVES LEAVE TO MAKE AN ADDITION ALT ERATION, DELETION AND/OR AMENDMENT IN THE GROUNDS OF APPEAL ARISING O UT OF THIS ORDER. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE L D. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE GROUNDS ME RELY ON [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 7 THE BASIS THAT THE ASSESSEE HAS SUCCEEDED ON MERIT AS TH E ADDITION HAS BEEN DELETED. HE SUBMITTED THAT THE LEGA L GROUND RAISED BY THE ASSESSEE GOES TO THE ROUTE OF TH E JURISDICTION OF THE A.O. AND THE SAME OUGHT TO HAVE BE EN ADJUDICATED. HE FURTHER SUBMITTED THAT THE REVENUE H AS GROSSLY FAILED TO FURNISH SATISFACTION RECORDED BY THE A.O. OF THE SEARCHED PERSON. HE SUBMITTED THAT IN THE RECENT JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MECHMEN IN ITA NO.44/2011 DATED 10.7.2015 HAS HEL D THAT THE SATISFACTION IS TO BE RECORDED NOT ONLY BY TH E A.O. OF THE SEARCHED PERSON BUT ALSO THE ASSESSING OFFICER OF THE ASSESSEE. HE HAS PLACED RELIANCE ON THE DECISION OF TH E TRIBUNAL IN THE CASE OF MANSINGH CHOUHAN VS. ACIT IN IT A NO.235/IND/2016. 8. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS . [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 8 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE H AD RAISED ISSUE OF RECORDING OF SATISFACTION BY THE ASSESS ING OFFICER OF THE SEARCHED PERSON AS WELL AS ALLOWABILITY OF DEDUCTION U/S 54B OF THE ACT. BOTH THESE GROUNDS H AVE NOT BEEN ADJUDICATED BY THE LD. CIT(A). WE ARE OF THE VIEW THAT THE LD. CIT(A) OUGHT TO HAVE ADJUDICATED THIS GROU ND. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. TOLARAM HASSOMAL 298 ITR 22 (MP) WE RESTORE BOTH THE GROUNDS TO THE FILE OF THE A.O. TO DECIDE THE CASE AF RESH. 10. NOW WE TAKE UP THE REVENUES APPEAL IN ITA NO.324/IND/2015. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 9 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A):- I. ERRED WHILE DELETING THE PENALTY OF RS.20,96,410/- LEVIED BY THE A.O. U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. II. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND OR A LTER THE GROUND OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 11. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ADDITION MADE BY THE A.O. HAS BEEN DELETED B Y THE LD. CIT(A). HE FURTHER SUBMITTED THAT THE APPEAL AGAINS T DELETION OF ADDITION HAS BEEN FILED BY THE REVENUE I N IT(SS)A NO.81/IND/2015. THE ASSESSEE HAS RAISED CROSS OBJECTI ON REGARDING VALIDITY OF THE ASSESSMENT. HE REITERATED TH E SUBMISSIONS AS MADE BEFORE THE LD. CIT(A). 12. LD. D.R. SUPPORTED THE ORDER OF THE A.O. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN QUANTUM APPEAL IN IT(SS)A NO.81/IND/2015, WE HAVE ALREADY AFFIRMED THE VIEW OF TH E LD. CIT(A) DELETING THE ADDITION. WE THEREFORE, DO NOT SEE [IT(SS)A 81/IND/2015, CO 66/IND/2015 & ITA 324/IND/ 2015] [M/S. JAWAHARLAL PANNALAL NEMA, INDORE] 10 ANY REASON TO INTERFERE IN THE FINDING OF THE LD. CIT (A). THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 14. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AR E DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESS EE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 . 01.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBE R JUDICIALMEMBER INDORE; DATED : 08/01/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE