Puran Lal Chadrakar, RAIPUR (CG) V. Income Tax Officer -1(2),

CO 9/BIL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1781 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 4 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 26-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI
• Keywords: Capital asset; Bonafide belief; Additional evidence; Benefit of exemption
• Section: 143(3); 54B

Judgement Text

1 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 IN TH E INCOME TAX APPELLATE TRIBUNAL: RAI PUR BENCH: RAI PUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO .65 /BLPR/2012 ASSESSMENT YEAR : 2009 - 10 THE INCOME TAX OFFICER - 1(2 ), CENTRAL REVENUE BUILDING, CI VIL LINES, RAIPUR , CHHATTISHGARH VS SHRI PURAN LAL CHANDRAKAR, C - 6 EKATM PARISAR RAJBANDHA MAIDAN, RAIPUR, CHHATTISGARH PAN:ABJPC 7097D (APPELLANT) (RESPONDENT) C. O. NO.09/BLPR/2012 (IN I.T.A.NO.65/BLPR/2012 - A Y: 2009 - 10) SHRI PURAN LAL CHANDRAKA R, C - 6 EKATM PARISAR RAJBANDHA MAIDAN, RAIPUR, CHHATTISGARH PAN:ABJPC 7097D VS THE INCOME TAX OFFICER - 1(2), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR CHHATTISHGARH (CROSS OBJECTOR ) (RESPONDENT) REVENUE BY SHRI D. K. JAIN, DR ASSESSEE BY SHRI R. B. DOSHI, AR DATE OF HEARING: 1 5 - 10 - 2015 DATE OF PRONOUNCEMENT: 4 - 12 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THE REVENUE HAS FILED THIS APPEAL AND THE RESPONDENT ASSESSEE HAS FILED THE CROSS OBJECTION BOTH ARISING FROM THE ORDER OF THE L EARNED CIT (A), RAIPUR DATED 24 - 02 - 2012. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BELOW: - 2 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.20,50,707/ - MADE BY THE AO ON ACCOUNT OF CAP ITAL GAIN. 2. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WHICH WAS NOT PRODUCED BEFORE THE AO, IN VIOLATION OF RULE 46A OF I. TAX RULES, 1962. 2. IN RESPECT OF GROUND NO.2, THE OBJECTIO N OF THE LEARNED DR, MR. D. K. JAIN WAS THAT THE LEARNED CIT (A) HAS ENTERTAINED CERTAIN EVIDENCES WITHOUT GRANTING OPPORTUNITY TO THE AO. ON THE OTHER HAND, THE LEARNED AR, MR. B. R. DOSHI HAS OBJECTED THE SAID ALLEGATION AND PLEADED THAT THERE WAS NO FRE SH EVIDENCE ADMITTED BY THE LEARNED CIT (A), HENCE, THERE WAS NO INFRINGEMENT OF RULE 46A OF THE IT RULES. 3. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE LAND IN QUESTION SHOULD NOT BE TREATED AS CAPITAL ASSET. THE ASSESSEE WAS ALSO ASKED TO SUBMIT THE DETAILS OF PURCHASE OF ANOTHER AGRICULTURAL LAND SO AS TO GRANT EXEMPTION U/S 54B OF THE IT ACT. ON EXAMINATION OF THE EVIDENCES, TH E AO HAS HELD THAT THE LAND IN QUESTION WAS A PADAT I.E. BARREN LAND, HENCE, DENIED THE EXEMPTION U/S 54B OF THE IT ACT. AFTER READING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LEARNED CIT (A), WE ARE OF THE CONSIDERED OPINION THAT STRICTLY SPEAKING THERE WAS NO INFRINGEMENT OF THE PROVISIONS OF RULE 46A OF THE IT RULES. ACCORDING TO US, THE ENTIRE JUDGMENT OF THE LEARNED CIT (A) REVOLVE AROUND THOSE EVIDENCES AND OBSERVATIONS WHICH WERE ALREADY MADE BY THE AO WHILE REJECTING THE CLAIM OF EXEMPTIONS MADE BY TH E ASSESSEE. HEN CE, IN OUR CONSIDERED OPINION, G ROUND NO.2 OF THE REVENUES APPEAL DOES NOT SURVIVE. 4. IN RESPECT OF G ROUND NO.1, THE OBSERVATION OF THE AO AS PER THE ORDER PASSED U/S 143(3) OF THE IT ACT DATED 28 - 10 - 2011 WERE THAT A RETURN OF INCOME 3 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT RS.1,91,710/ - AND AGRICULTURAL INCOME AT RS.42,800/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSEE WAS ASKED TO EXPLAIN THAT WHY THE AGRICULTURAL LAND SOLD, BE N OT TREATED AS CAPITAL ASSET. THE ASSES SEE HAD SOLD THE AGRICULTURAL LAND AT VILLAGE PIRDA FOR A CONSIDERATION OF RS.25,48,600/ - . THE SAID VILLAGE WAS STATED TO BE SITUATED WITHIN 8 KMS FROM MUNICIPAL LIMITS OF RAIPUR. THERE WERE SOME ENQUIRIES IN RESPECT OF THE CLAIM OF EXEMPTION U/S 54B OF TH E IT ACT. THE AO HAS ASSESSED THE INCOME IN THE FOLLOWING MANNER: - 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT HT ASSESSEE HAD CLAIMED TO HAVE SOLD AGRICULTURAL LAND AT VILLAGE PIRDA AND RECEIVED SALE CONSIDERATION OF RS.25,48,600/ - . SINCE VILLAGE PIRDA IS SITUATED WITHIN 8 KM FROM THE MUNICIPAL LIMITS OF RAIPUR, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY AGRICULTURAL LAND SOLD BY HIM SHOULD NOT BE CONSIDERED AS CAPITAL ASSET AND CAPITAL GAIN BE COMPUTED ACCORDINGLY. 3. IN RESPONSE , VIDE HIS WRITTEN REPLY DATED 18 - 10 - 2011 THE ASSESSEE HAS SUBMITTED THAT IF ANY CAPITAL GAIN ARISES ON SALE OF AGRICULTURAL LAND AT VILLAGE PIRDA, EXEMPTION FROM CAPITAL GAIN TAX IS TO BE GRANTED U/S 54B OF THE I. T. ACT, 1961 AS HE HAS PURCHASED ANOTHER AGRICULTURAL LAND AT VILLAGE KACHNA OUT OF THE SALE PROCEEDS OF AGRICULTURAL LAND AT VILLAGE PIRDA. 4. THE ASSESSEES SUBMISSION HAS BEEN CONSIDERED. AS PER THE PROVISIONS OF SECTION 54B OF THE I. T. ACT, 1961, THE AGRICULTURAL LAND SHOULD HAVE BEEN USED BY THE ASSESSEE OR HIS PARENTS, FOR AGRICULTURAL PURPOSE FOR A PERIOD OF TWO YEARS IMMEDIATELY PRECEDI NG THE DATE OF TRANSFER. BUT ON PERUSAL OF ANOTHER WRITTEN SUBMISSION DATED NIL FURNISHED BY THE ASSESSEE IT IS NOTICED THAT AS PER THE DETAILS OF THE SA ID LAND GIVEN BY THE PATWARI (PRATILIPI KIST BANDHI KHATOUNI AASAMIWAR), THE SAID LAND IS NOT AN AGRICULTURAL LAND BUT IT IS BARON (PADAT) LAND ON WHICH THERE WAS NO AGRICULTURAL ACTIVITY. THUS, THE SAID AGRICULTURAL LAND SHALL BE TREATED AS A CAPITAL ASSE T AND THEREFORE THE CAPITAL GAIN ARISING OUT OF THE ABOVE LAND DOES NOT QUALIFY FOR EXEMPTION U/S 54B OF THE I. T. ACT, 1961. ACCORDINGLY, THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON THE SALE OF LAND SITUATED AT VILLAGE PIRDA SHALL BE TREATED AS CAP ITAL GAIN AND TAXES 4 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 WILL BE CHARGED ACCORDINGLY. PENALTY PROCEEDINGS U/S 271 (1) OF THE I. T. ACT, 1961 IS BEING INITIATED SEPARATELY. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE LEARNED CIT (A) HAS HELD AS UNDER : - 3.2 SUBMIS SIONS OF THE APPELLANT THE APPELLANT HAS SUBMITTED THAT IF THE LAND IS NON - AGRICULTURAL AS PER REVENUE RECORDS AND IF IT IS PROVED HAT AN ASSESSEE HAS USED SUCH NON - AGRICULTURAL LAND FOR AGRICULTURAL PURPOSES IN THE PRECEDING TWO YEARS, THE EXEMPTION WOULD STILL BE ALLOWABLE U/S 54B; THAT THE MOMENT USE OF LAND FOR AGRICULTURAL PURPOSES IS ESTABLISHED, EXEMPTION U/S 54B IS ADMISSIBLE; THAT THE LAND SOLD BY THE APPELLANT WAS AGRICULTURAL LAND AND WAS ALSO ASSESSED TO LAND REVENUE AS SUCH. THE APPELLANT FILED COPY OF RIN PUSTIKA (WHICH IS ISSUED TO ONLY AGRICULTURISTS/FARMERS BY THE GOVT.) AND SALE DEED OF LAND IN SUPPORT OF HIS CONTENTION THAT THE LAND WAS AGRICULTURAL LAND. THE APPELLANT FURTHER SUBMITTED THAT HE HAS BEEN CARRYING ON AGRICULTURAL ACTIVITY IN THE LAND SOLD, WHICH IS EVIDENT FROM THE FACT THAT IN THE RETURNS OF AY 2007/08 & 08/09, AGRICULTURAL INCOME OF RS.72,000/ - AND RS.52,102/ - RESPECTIVELY WAS DISCLOSED; THAT THE AGRICULTURAL INCOME HAS ALSO BEEN ASSESSED AND ACCEPTED BY THE AO; THAT THE AO HAS ALSO MENTIONED ABOUT AGRICULTURAL INCOME OF RS.42,800/ - . THE APPELLANT FILED COPY OF P - II KHASRA ISSUED BY THE APPROPRIATE AUTHORITY IN SUPPORT OF HIS SUBMISSION THAT ON THE LAND SOLD BY THE APPELLANT, AGRICULTURAL PRODUCE WAS OBTAINED IN FY 2006/07 , 07/08 & 08/09; THAT THE RECORD B - I IS IN RESPECT OF OWNERSHIP OF THE LAND AND IT DOES NOT SPECIFY WHETHER THE AGRICULTURAL ACTIVITIES WERE CARRIED OUT ON THE LAND OR NOT; THAT THE RECORD MAINTAINED BY THE APPROPRIATE AUTHORITY IN RESPECT OF AGRICULTURAL OPERATION IS ACTUALLY P - II KHASRA; THAT THE NEW LAND PURCHASED BY THE APPELLANT IS AGRICULTURAL LAND AND IS BEING USED FOR AGRICULTURAL PURPOSES BY THE APPELLANT; THAT THE AGRICULTURAL INCOME IS ALSO BEING DISCLOSED IN THE SUBSEQUENT RETURNS; THAT THE APPE LLANT MADE A VALID CLAIM OF EXEMPTION U/S 54B THROUGH HIS LETTER DATED 18.10.2011 AND THE FACT OF AGRICULTURAL INCOME SHOWN IN THE RETURNS OF EARLIER TWO YEARS WAS ALREADY ON RECORD OF THE AO; THAT T HE APPELLANT HAD GENUINE AND BONAFIDE BELIEF THAT HE WAS NOT REQUIRED TO SUBSTANTIATE PAST AGRICULTURAL INCOME WITH P - II KHASRA AND THEREFORE, COPY THEREOF WAS NOT SUBMITTED BEFORE THE 5 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 AO; THAT SINCE NO QUERY WAS RAISED BY THE AO, THE APPELLANT COULD NOT FILE COPY OF P - II KHASRA OF NEW LAND BEFORE THE AO. 3.3 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND WRITTEN SUBMISSION OF THE APPELLANT. I AM OF THE CONSIDERED OPINION THAT FOR CLAIMING EXEMPTION UNDER THE PROVISIONS OF SECTION 54B, THE LAND HAS TO BE AGRICULTURAL LAND. IF A LAND IS USED FOR AGRICUL TURAL PURPOSES, THEN IT IS IMMATERIAL WHETHER OR NOT IT IS AGRICULTURAL LAND WITHIN THE RECORDS OF REVENUE RECORDS OR REVENUE CODE. IT IS THE FACTUM OF THE AGRICULTURAL OPERATIONS THAT IS RELEVANT. IN THE INSTANT CASE, THE APPELLANT HAS PLACED BEFORE ME COPY OF RIN - PUSTIKA WHEREIN HIS NAME IS APPEARING AS A FARMER. FROM THE PERUSAL OF SALE DEED OF THE LAND WHEREIN THE APPELLANT IS A SELLER, REGARDING DESCRIPTION OF THE PROPERTY IT IS MENTIONED THAT THE LAND IS A KRISHI BJHUMI I.E. AN AGRICULTURAL LAND. FROM THE PERUSAL OF P - II KHASRA, IT IS SEEN THAT THE AUTHORITIES HAVE DULY CERTIFIED THE AGRICULTURAL OPERATION ON THE LANDS; I AM CONVINCED WITH THE SUBMISSIONS OF THE APPELLANT THAT THE AO HAS ACCEPTED THE AGRICULTURAL INCOME RETURNED BY THE APPELLANT. THEREFORE, I AM CONVINCED THAT THE AGRICULTURAL OPERATIONS WERE CARRIED OUT ON THE LANDS SOLD BY THE APPELLANT. IT IS NOT THE CASE OF THE AO THAT THE LAND PURCHASED, FOR THE PURPOSE OF CLAIMING EXEMPTION U/S 54B, IS NOT AGRICULTURAL LAND. HENCE, THE ADDITI ON MADE BY THE AO BY DISALLOWING THE BENEFIT OF EXEMPTION U/S 54B IS NOT SUSTAINABLE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION MADE BY THE AO IS DELETED. 6 . IN THE LIGHT OF THE ABOVE BACKGROUND, WE HAVE HEARD BOTH THE SIDES. IN A S ITUATION WHEN THE ASSESSEE HAS FURNISHED CERTAIN EVIDENCES IN SUPPORT OF THE CLAIM OF AGRICULTURAL LAND AND THERE WAS NO CONTRARY MATERIAL THAT THE ASSESSEE WAS NOT ENTITLED FOR CLAIM OF EXEMPTION U/S 54B OF THE IT ACT, WE ARE OF THE CONSIDERED OPINION THA T THERE WAS NO FALLACY IN THE FINDINGS OF THE LEARNED CIT (A). THE ASSESSEE HAS NOT ONLY FURNISHED THE REVENUE RECORDS WHEREIN THE LAND IN QUESTION WAS MENTIONED AS AGRICULTURAL LAND BUT THE ASSESSEE HAS ALSO FURNISHED THE AGRICULTURAL INCOME. THEREFORE, W E ARE NOT GOING TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (A). THE SAME ARE HEREBY CONFIRMED AND THE GROUND OF APPEAL TAKEN BY THE REVENUE IS DISMISSED. 6 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 8 . THE GROUND RAISED BY THE RESPONDENT ASSES SEE IN THE CROSS OBJECTION READS AS UNDER: - 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A) WAS JUSTIFIED IN ALLOWING EXEMPTION U/S 54B TO THE APPELLANT. HE RIGHTLY DELETED THE ADDITION OF RS.20,50,707/ - MADE BY THE AO. 9. THE RESPOND ENT ASSESSEE/CROSS OBJECTOR HAS SIMPLY SUPPORTED THE RELIEF GIVEN BY THE LEARNED CIT (A) WITHOUT RAISING ANY LEGAL OR TECHNICAL GROUND. HENCE, THE CROSS OBJECTION HAS BECOME REDUNDANT IN THE LIGHT OF THE VIEW ALREADY TAKEN HEREINABOVE. THEREFORE, THE SAME IS DISMISSED. 10 . IN THE RESULT, REVENUES APPEAL AS WELL AS THE CROSS OBJECTION OF THE RESPONDENT ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF DECEMBER, 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED : 4 TH DECEMBER, 2015 LAKSHMIKANT DEKA/SR. PS 7 ITA NO .65 /BLPR /2012 CO NO.09/BLPR/2012 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCO ME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 01 - 12 - 2015 SR.P S 2. DRAFT PL ACED BEFORE AUTHOR 02 - 12 - 2015 SR.P S 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/ AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 03.12.15 SR.P S 6. DATE OF PRONOUNCEMENT 04.12.15 SR.P S 7. FILE SENT TO THE BENCH CLERK 04.12.15 SR.P S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER