Rani Shakuntla Devi, Panchkula V. ACIT, Panchkula

ITA 1099/CHANDI/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81085 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 20-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Assessee Lawyers: ALOK MITTAL
• Keywords: Reopening of assessment; Capital asset; Principle of natural justice; Additional evidence; Question of law; Capital receipt; Reason to believe; Reassessment proceedings
• Section: 143(3); 54B; 54F; 45(5); 2(14); 142(1); 234B; 260A; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 869/CHD/2009 ASSESSMENT YEAR: 2006-07 SMT. RANI TARA DEVI, VS. THE ITO, WARD-2, #1075, SECTOR 2, PANCHKULA PANCHKULA PAN NO. AANPD4045P ITA NO. 1098/CHD/2010 ASSESSMENT YEAR: 2007-08 SMT. RANI TARA DEVI, VS. THE ACIT, CIRCLE, #1075, SECTOR 2, PANCHKULA PANCHKULA PAN NO. AANPD4045P ITA NO. 1099/CHD/2010 ASSESSMENT YEAR: 2007-08 SMT. RANI SHAKUNTALA DEVI, VS. THE ACIT, #1075, SECTOR 2, CIRCLE, PANCHKULA PANCHKULA PAN NO. AFAPD3739C ITA NO. 870/CHD/2009 ASSESSMENT YEAR: 2007-08 SMT. RANI SHAKUNTALA DEVI, VS. THE ACIT, #1075, SECTOR 2, PANCHKULA CIRCLE, PANCHKULA PANCHKULA PAN NO. AFAPD3739C ITA NO. 160/CHD/2009 ASSESSMENT YEAR: 2006-07 SHRI PURJIT SINGH (HUF), VS. THE ACIT, CIRCLE 4( 1), CHANDIGARH CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ALOK MITTAL RESPONDENT BY : DR. AMARVEER SINGH 2 ITA NO. 868/CHD/2009 ASSESSMENT YEAR: 2006-07 SMT. RANI KAMLA DEVI, VS. THE ACIT, #1075, SECTOR 2, PANCHKULA PANCHKULA PAN NO. AGKPD2401N ITA NO. 716/CHD/2006 ASSESSMENT YEAR: 2003-04 SMT. RANI KAMLA DEVI, VS. THE ACIT, VPO RAMGARH, PANCHKULA CIRCLE, PANCHKULA PANCHKULA PAN NO. AGKPD2401N ITA NO. 952/CHD/2009 ASSESSMENT YEAR: 2006-07 THE DCIT, VS. SMT. RANI KAMLA DEVI, PANCHKULA CIRLCE, VPO RAMGARH, PANCHKULA PANCHKULA PAN NO. AGKPD2401N APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : DR. AMARVEER SINGH ITA NO. 316/CHD/2011 ASSESSMENT YEAR: 2006-07 SMT. PRABHA SINGH, VS. THE ACIT, PANCKULA CIRCLE, PANCHKULA PANCHKULA PAN NO. AIQPS2103P ITA NO. 684/CHD/2007 ASSESSMENT YEAR: 2004-05 THE ACIT, CIRCLE, VS. SMT. PRABHA SINGH PANCHKULA PANCHKULA PAN NO. AIQPS2103P ITA NO. 827/CHD/2009 ASSESSMENT YEAR: 2006-07 SHRI TULVINDER SINGH, VS. THE ACIT, VILL. KHANGESRA,PO KOT, PANCHKULA PANCHKULA PAN NO. AIQPS9025F & 3 ITA NO. 1102/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI VARINDER SINGH & OTHERS, VS. THE DCIT, L/H OF LATE YOGINDER SINGH, PANCHKULA CIRCLE, VILL KHANGESRA, PO KOT, PANCHKULA PANCHKULA PAN NO. AKOPS2088N APPELLANT BY : SHRI NEERAJ JAIN RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 18/11/2014 DATE OF PRONOUNCEMENT : 12/12/2014 ORDER PER BENCH THE BUNCH OF 11 APPEALS FILED BY THE DIFFERENT ASSE SSEES AND REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF CIT(A) . 2. SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL AND CORRELATED, THEREFORE, ALL THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATION ORDER. FIRST WE SHALL DEAL WITH THE APPEAL OF THE ASSESSEE IN ITA NO. 869/CHD/2009 FOR ASSESSMENT YEAR 2006-07 IN THE CASE OF SMT. RANI TARA DEVI. ITA NO. 869/CHD/2009 ASSESSMENT YEAR 2006-07 3. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING MODIFIED GROUNDS:- 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN AS SESSING COMPENSATION OF RS. 13,67,958/- AND ENHANCED COMPENSATION OF RS. 4,89,53,990/- ARISING ON ACCOUN T OF ACQUISITION OF LAND SITUATED AT BANA MADANPUR AND JHURIWALA AS TAXABLE CAPITAL GAINS UNDER THE PROV ISIONS OF THE INCOME TAX ACT, 1961 (THE ACT). 1.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT LAND IN QUESTION BEING AGRICULTURAL LAND WITHIN THE MEANING OF CLAUSE (III ) OF 4 SUB-SECTION (14) OF SECTION 2, NO CAPITAL GAINS WER E CHARGEABLE TO TAX UNDER THE PROVISIONS OF THE ACT. 1.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE FINDING OF THE ASSESSING OFFICER THAT THE LAND IN QUESTION WAS SITUATED WITHIN THE PRESCRIBED LIMITS OF PANCHUKULA AS ON DATE OF ACQUISITION, WITHOUT APPRECIATING THAT PANCHUKULA MUNICIPALITY WAS NOT EVEN FORMED ON THAT DATE. 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT SINCE THE ORIGINAL COMPENSATION W AS ACCEPTED TO BE NOT LIABLE TO TAX UNDER THE PROVISIO NS OF THE ACT, IT WAS NOT OPEN TO THE INCOME TAX DEPARTMENT T O BRING TO TAX COMPENSATION OF RS. 13,67,958/- AND ENHANCED COMPENSATION OF RS. 4,89,53,990 RECEIVED DURING THE YEAR ON ACCOUNT OF THE VERY SAME ACQUISITION OF LAND. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN UPHOLDING TAXATION OF INTEREST ON ENHANCED COMPENSATION OF RS. 18,15,585/- 3.1 THAT THE CIT(A) FAILED TO APPRECIATE THAT AS PE R THE DECISION OF THE SUPREME COURT IN THE CASE OF C IT, FARIDABAD V. GHANSHYAM (HUF: 182 ITR 368, INTEREST OF RS. 18,15,585/- WAS IN THE NATURE OF CAPITAL REC EIPT NOT LIABLE TO TAX. 4. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN ENHANCING THE INCOME OF THE APPELLANT BY DENYING EX EMPTION OF RS. 1,13,91,750/- CLAIMED AND ALLOWED UNDER SECT ION 54F OF THE ACT. 4. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WHICH READS AS UND ER:- BEFORE THE INCOME TAX APPELLATE TRIBUNAL, B BENC H CHANDIGARH IN THE MATTER OF : RANI SHAKUNTLA DEVI 5 ASSESSMENT YEAR : 2006-07 ITA NO. : 869/CHD/09 SIR, RE: REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE RULE 29 OF THE INCOME-TAX (APPELLANT TRIBUNAL ) RULES, 1963. IT IS RESPECTFULLY SUBMITTED AS FOLLOWS: THE APPELLANT CRAVES LEAVE TO FURNISH COPY OF THE C ERTIFICATE FROM PATWARI ALONGWITH DETAIL FOR USAGE OF LAND PLACED A T PG. NO. 96-98 OF THE PAPER BOOK, AS ADDITIONAL EVIDENCE FOR THE R EASONS STATED HEREUNDER: THE BRIEF FACTS ARE THAT THE APPLICANT HAD INHERITE D AGRICULTURAL LAND SITUATED IN VILLAGE BANA MADANPUR AND JHURIWALA FRO M HER FATHER IN 1971. PART OF THE SAID LAND WAS COMPULSORILY ACQUIR ED BY THE HARYANA URBAN DEVELOPMENT AUTHORITY (HUDA) UNDER SE CTION 4 OF THE LAND ACQUISITION ACT ON THE FOLLOWING DATES: - 26.06.89- IST ACQUISITION - 04.05.95- IIND ACQUISITION - 11.07.95 IIIRD ACQUISITION SINCE THE AFORESAID LAND WAS AGRICULTURAL LAND, COM PENSATION (INCLUDING ENHANCED COMPENSATION) RECEIVED ON COMPU LSORY ACQUISITION OF LAND WAS CLAIMED TO BE NOT LIABLE TO TAX UNDER THE PROVISIONS OF THE INCOME TAX ACT, 1961(THE ACT). IN THE ASSESSMENT YEARS 1997-98 (IST ACQUISITION ) AND ASSESSMENT YEA R 2003-04 (2 ND ACQUISITION), COMPENSATION RECEIVED HAS BEEN ACCEPT ED TO BE NOT TAXABLE SINCE THE LAND SO ACQUIRED WAS AGRICULTURAL LAND UNDER SECTION 2(14) OF THE ACT. DURING THE YEAR UNDER CONSIDERATION, THE APPLICANT RECEIVED ENHANCED COMPENSATION AND INTEREST THEREON ON ACCOU NT OF LAND COMPULSORILY ACQUIRED IN THE YEAR 1995, REFERRED AS 2 ND ACQUISITION. THE ENHANCED COMPENSATION WAS CLAIMED TO BE CAPITAL RECEIPT NOT LIABLE TO TAX BY THE APPLICANT. IN THE IMPUGNED ASSESSMENT ORDER DATED 22.12.2008, THE ASSESSING OFFICER DID NOT ACCEPT THE AFORESAID AND BROUGHT TO TAX THE COMPENSATION SO RECEIVED UNDER THE HEAD CAPITAL GA INS. THE ASSESSING OFFICER HELD THE THAT LAND SO TRANSFERRED WAS NOT AN AGRICULTURAL LAND, INTER ALIA, ON THE GROUND THAT A CTUAL AGRICULTURAL OPERATIONS WERE NOT CARRIED OUT BY THE APPLICANT ON THE ABOVE LAND. THE ASSESSING OFFICER, HOWEVER, FAILED TO APPRECIAT E THAT: (A) THE AFORESAID LAND WAS ACCEPTED TO BE AGRICULTURAL LAND IN THE EARLIER YEAR(S), PARTICULARLY IN THE YEAR OF RECEIP T OF ORIGINAL COMPENSATION, AND THEREFORE, THERE WAS NO WARRANT T O REJECT THE CLAIM OF THE APPLICANT IN THE YEAR UNDER CONSID ERATION; (B) THE APPLICANT WAS ACTUALLY CARRYING ON AGRICULTURE ON THE SAME LAND, WHICH IS EVIDENT FROM THE FACT THAT AGRI CULTURAL INCOME WAS DULY DISCLOSED AND ACCEPTED IN THE RETUR NS OF INCOME; 6 (C) IN THE AWARD ORDER ITSELF, THE LAND ACQUISITION OFF ICER GAVE PERMISSION TO THE FARMERS TO HARVEST THEIR CROP AFT ER RIPING; (D) THE APPLICANT, IN THE VARIOUS SUBMISSIONS, HIGHLIGH TED THAT THE LAND IS RECORDED AS AGRICULTURAL LAND IN THE REVENU E RECORDS, WHICH IS ALSO EVIDENT FROM THE WRITTEN STATEMENT FI LED ON BEHALF OF LAND ACQUISITION COLLECTOR, PANCHKULA, IN THE CASE BEFORE THE COURT OF DISTRICT JUDGE, PANCHKULA; (E) THE APPLICANT HAS NEVER APPLIED FOR PERMISSION TO C ONVERT THE AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND. ALL THE AFORESAID FACTS CLEARLY HIGHLIGHT THAT THE AFORESAID LAND WAS AGRICULTURAL LAND ON THE DATE OF TRANSFER / COMPULS ORY ACQUISITION. DESPITE THE AFORESAID, THE ASSESSING OFFICER HELD T HAT THE AFORESAID LAND WAS NOT AGRICULTURAL LAND SINCE THE APPLICANT WAS NOT DOING ANY AGRICULTURAL ACTIVITY, WHICH HAS BEEN CONFIRMED BY THE CIT(A). IN ORDER TO REBUT THE AFORESAID FINDINGS OF THE ASS ESSING OFFICER / CIT(A) THAT THE LAND WAS AGRICULTURAL LAND AND IN S UPPORT OF THE REPEATED / CONSISTENT CONTENTION OF THE APPLICANT T HAT THE LAND WAS ACTUALLY USED FOR AGRICULTURAL ACTIVITY, CERTIFICAT E DATED 24.01.2010 HAS RECENTLY BEEN OBTAINED FROM PATWARI ALONG WITH THE DETAIL FOR USAGE OF LAND, WHICH IS PLACED AT PAGE NO. 96-98 OF THE PAPER BOOK. SINCE THE AFORESAID CERTIFICATE WAS NOT AVAILABLE W ITH THE APPLICANT EARLIER, THE SAME COULD NOT BE FILED BEFORE THE LOW ER AUTHORITIES AND IS THEREFORE, BEING FILED BEFORE THE TRIBUNAL AS AD DITIONAL EVIDENCE IN ORDER TO REBUT THE FINDINGS OF THE ASSESSING OFF ICER/CIT(A). THE ADDITIONAL EVIDENCE SO PLACED BY THE APPLICANT IS C RUCIAL FOR THE JUDICIOUS DISPOSAL OF THE APPEAL. IN ABSENCE OF ANY MALAFIDE MOTIVES FOR NOT PRODUCING THE ABOVE EVIDENCE BEFORE THE ASS ESSING OFFICER, THE AFORESAID EVIDENCE MAY KINDLY BE TAKEN INTO ACC OUNT BY THE HONBLE BENCH FOR DISPOSING THE APPEAL. IN THE INTEREST OF EQUITY AND JUSTICE, IT IS RESPEC TFULLY PRAYED THAT THE ABOVE ADDITIONAL EVIDENCE, MAY KINDLY BE ADMITTED A ND TAKEN INTO CONSIDERATION WHILE ADJUDICATING THE APPEAL UNDER R ULE 10 READ WITH RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULE S, 1963. THE APPLICANT TRUSTS THAT THE REQUEST SHALL MERIT S YMPATHETIC CONSIDERATION. PLACE: DELHI DATE: APRIL 6,2010 (APPLICANT) 5. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THIS AP PLICATION AND SUBMITTED THAT CERTIFICATE FROM PATWARI WHICH ARE SOUGHT TO B E ADMITTED NOW COULD NOT BE OBTAINED EARLIER AND SINCE THE SAME GOES TO THE ROO T OF THE MATTER, THEREFORE, THEY MAY BE ADMITTED NOW. 7 6. ON THE OTHER HAND, LD. DR POINTED OUT THAT THE I SSUE WHETHER THE SAID LAND IS AGRICULTURAL LAND OR NOT CROPPED UP IN THE EARLI ER YEARS ALSO. IT WAS POINTED OUT THAT IN EARLIER YEAR ONLY INTEREST RECEIVED WAS TAXED BY THE ASSESSING OFFICER WHICH WAS DELETED BY THE CIT(A) AND THE ORDER OF CI T(A) WAS CONFIRMED BY THE TRIBUNAL. HOWEVER, ON FURTHER APPEAL BY THE REVENU E BEFORE THE HON'BLE HIGH COURT THE MATTER WAS AGAIN REMANDED BACK TO THE TRI BUNAL TO DECIDE THE SAME IN THE LIGHT OF LATEST DECISION OF HON'BLE SUPREME CO URT IN THE CASE OF CIT VS. GHANSHYAM (HUF) 315 ITR 1. EARLIER COMPENSATION WAS NOT TAXED BUT LATER ON AN ORDER U/S 263 WAS PASSED THROUGH WHICH ASSESSING OFFICER WAS DIRECTED TO BRING TO TAX THE COMPENSATION ALSO. HERE AGAIN, TH E ORDER U/S 263 WAS QUASHED BY THE TRIBUNAL AND ON APPEAL BY THE REVENUE THE H ON'BLE HIGH COURT OF PUNJAB & HARYANA VIDE ORDER DATED 27.10.2010 SET ASIDE THE ORDER OF THE TRIBUNAL AND REMANDED THE SAME BACK TO THE FILE OF TRIBUNAL TO D ECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA). AGAINST THIS ORDER OF TH E HON'BLE PUNJAB & HARYANA HIGH COURT THE ASSESSEE FILED A SPECIAL LEAVE PETI TION BEFORE THE HON'BLE SUPREME COURT AND CONTENDED THAT DECISION OF CIT VS . GHANSHYAM (HUF) (SUPRA ) WAS NOT APPLICABLE BECAUSE THE LAND IN QUESTION WAS AGRICULTURAL LAND. ON THE BASIS OF THIS CONTENTION, THE HON'BLE SUPREM E COURT DIRECTED THE TRIBUNAL TO GIVE FINDING OF FACT WHETHER THE LAND IN QUESTIO N WAS AGRICULTURAL LAND OR NOT. THE TRIBUNAL VIDE DETAILED NOTE DATED 7.6.2012 REND ERED A FINDING THAT LAND WHICH WAS ACQUIRED WAS NOT AGRICULTURAL LAND. AFTE R CONSIDERING THIS FINDING THE HON'BLE SUPREME COURT DISMISSED THE SPECIAL LEAVE P ETITION OF THE ASSESSEE AND REMANDED THE MATTER TO THE FILE OF HON'BLE HIGH COURT. THE HON'BLE HIGH COURT HAS CONSIDERED THESE ISSUES IN DETAIL INCLUDI NG THE ISSUE WHETHER THE LAND IS SITUATED WITHIN THE AREA NOTIFIED BY THE CENTRAL GOVERNMENT AND ULTIMATELY HELD THAT LAND WAS NOT AGRICULTURAL LAND AND IT WAS A CAPITAL ASSET U/S 2(14) IN ASSESSEES OWN CASE REPORTED AT 355 ITR 457(P&H). 8 7. IN THE ABOVE BACKGROUND HE CONTENDED THAT ONCE T HE ISSUE HAS BEEN DECIDED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT AGAINST THE ASSESSEE THEN THERE WAS NO NEED TO ADMIT FRESH EVIDENCE BECAUSE I DENTICAL ISSUE HAS ALREADY BEEN DECIDED BY THE HON'BLE HIGH COURT. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT HON'BLE HIGH COURT OF PUNJAB & HARYANA IN ASSESSEES OWN CASE REPORTED IN 355 ITR 457 CONSIDERED THE FOLLOWING QUESTION OF LAW.:- 1. WHETHER, ON THE FACTS AND THE ADDITIONAL INFORM ATION MADE AVAILABLE TO THIS COURT AND IN THE CIRCUMSTANC ES OF THIS CASE, THE LAND ACQUIRED IS NOT AN AGRICULTURAL LAND AND, THEREFORE, COMPENSATION SHALL BE ASSESSED IN THE YE AR OF RECEIPT AND NOT AS AND WHEN THE MATTER IS FINALLY R ESOLVED ? AFTER CONSIDERING THE VARIOUS ISSUES IT WAS HELD TH AT THE SAID LAND WAS NOT AGRICULTURAL LAND AND WAS A CAPITAL ASSET AS DEFINE D IN CLAUSE (III) OF SECTION 2(14), THEREFORE, IN OUR OPINION THIS ISSUE STANDS ALREADY DECIDED BY THE DECISION OF HON'BLE HIGH COURT OF PUNJAB & HARYANA AND THERE IS NO NEED TO ADMIT THE ABOVE ADDITIONAL EVIDENCE AND ACCORDINGLY WE DECLIN E TO ADMIT THE ADDITIONAL EVIDENCE. 9. GROUND NO.1: AFTER HEARING BOTH THE PARTIES WE F IND THAT ASSESSEE HAS NOT OFFERED TO TAX THE ENHANCED COMPENSATION RECEIVED O N ACQUISITION OF LAND BUT AFTER DETAILED DISCUSSION THE SAME WAS HELD TO BE T AXABLE BY ASSESSING OFFICER AND THE ACTION OF THE ASSESSING OFFICER HAS BEEN CO NFIRMED BY THE LD. CIT(A). 10. BOTH THE PARTIES WERE HEARD. 11. BEFORE US IT WAS FAIRLY ADMITTED BY THE LD. COU NSEL FOR THE ASSESSEE THAT THE ISSUE NOW STANDS COVERED AGAINST THE ASSESSEE I N VIEW OF THE DECISION OF HON'BLE HIGH COURT OF PUNJAB & HARYANA IN ASSESSEE S OWN CASE AS REPORTED AT 355 ITR 457. SOME ARGUMENTS WERE MADE THAT HARYANA URBAN DEVELOP MENT AUTHORITY (HUDA) CANNOT BE CONSTRUED AS MUNICIPALIT Y. HOWEVER, THESE 9 CONTENTIONS WERE ALSO CONSIDERED BY THE HON'BLE HIG H COURT IN THE CASE AND IN ANY CASE A NOTIFICATION OF SO 9447 WAS ISSUED BY GO VERNMENT OF INDIA ON 6.1.1994 U/S 2(14)(III)(B) THROUGH WHICH PANCHKULA WAS NOTIFIED FOR THE PURPOSE OF SUB CLASS (B) OF CLAUSE (3) TO SECTION 2(14) OF THE INCOME-TAX ACT. SECTION 2(14) OF THE LIST PERTAINING TO HARYANA STATE READS AS UNDER:- 44. PANCHKULA AREAS UP TO A DISTANCE OF 5 KMS. (DISTT. AMBALA) FR OM THE MUNICIPAL LIMITS IN ALL DIRECTIONS. THEREFORE, IT BECOMES CLEAR THAT PANCHKULA WAS NOTI FIED AND LAND WAS WITHIN THE DISTANCE NOTIFIED AND HAS BEEN RIGHTLY SUBJECTED TO TAX. THEREFORE, IN OUR OPINION, THE LD. CIT(A) HAS CORRECTLY CONFIRMED THE ADDITION OF ENHANCED COMPENSATION AND WE UPHOLD HIS ORDER. RESPECTFULL Y FOLLOWING THE DECISION OF HON'BLE HIGH COURT WE DECIDE THIS GROUND AGAINST TH E ASSESSEE. 12. GROUND NO. 2 THROUGH THIS GROUND THE ONLY DIS PUTE RAISED BY THE ASSESSEE IS THAT ENHANCED COMPENSATION IS NOT TAXAB LE BECAUSE THE LAND WHICH HAS BEEN ACQUIRED WAS AGRICULTURAL LAND. THIS ISSU E IS NOW BEEN FINALLY DECIDED BY THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN AS SESSEES OWN CASE REPORTED IN 355 ITR 457 WHEREIN IT HAS BEEN HELD THAT THE LA ND WHICH HAS BEEN ACQUIRED FROM THE ASSESSEE IS A CAPITAL ASSET AND IS NOT AGR ICULTURAL LAND. THE SECOND CONTENTION IS THAT SINCE COMPENSATION HAS NOT BEEN FINALIZED AND THE MATTER IS STILL DISPUTED, THEREFORE, IT CANNOT BE TAXED. HOWE VER, THIS SITUATION STANDS CHANGED BECAUSE OF THE AMENDMENT TO SECTION 45 WHER EIN SUB SECTION (5) HAS BEEN INSERTED MAKING SUCH ENHANCED COMPENSATION TAX ABLE ON THE RECEIPT BASIS AND THIS POSITION WAS CONFIRMED BY HON'BLE APEX COU RT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA ). FURTHER, WE FIND THAT THIS ISSUE RAISED BEFORE US THROUGH THIS GROUND WAS NEVER RAISED BEFORE CIT(A), THEREFORE, IT DOES NOT EMANATE FROM THE IMPUGNED ORDER. FURTHER, NOW THE LAND HAS BEEN HELD TO BE A CAPITAL ASSET, THEREFORE, IN ANY CASE THE ISSUE STA NDS COVERED AGAINST THE ASSESSEE 10 BY THE DECISION OF HON'BLE HIGH COURT. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE HIGH COURT WE DECIDE THIS GROUN D AGAINST THE ASSESSEE. 13. GROUND NO. 3 : AFTER HEARING BOTH THE PARTIES WE FIND THAT INTEREST RECEIVED BY THE ASSESSEE ON ENHANCED COMPENSATION H AS BEEN TAXED ON RECEIPT BASIS BY THE ASSESSING OFFICER AND THE ACTION OF TH E ASSESSING OFFICER HAS BEEN CONFIRMED BY LD. CIT(A). 14. BEFORE US, LD. COUNSEL FOR THE ASSESSEE DID NO T MAKE ANY ARGUMENTS ON HIS ISSUE. 15. ON THE OTHER HAND, LD. DR SUBMITTED THAT THIS I SSUE IS ALSO COVERED AGAINST THE ASSESSEE BY THE DECISION OF HON'BLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF CIT V SMT. PARKASH KAUR AND OTHERS 330 ITR 332, CIT V SMT. BURFI 331 ITR 1 AND CIT VS. KARAMBIR SINGH 337 ITR 159. HE FURTHER SUBMITTED THAT EVEN THE CHANDIGARH BENCH HAS FOLLOWED THIS DECISIO N IN THE CASE OF ACIT V AVINASH SINGH GREWAL IN ITA NO. 460/CHD/2008. 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT V KARAMBIR S INGH (SUPRA) HAS CLEARLY HELD THAT INTEREST ON ENHANCED COMPENSATION IS REQU IRED TO BE TAXED ON THE RECEIPT BASIS IN VIEW OF THE DECISION OF HON'BLE SU PREME COURT IN CIT VS. GHANSHYAM (HUF) (SUPRA) . THIS DECISION WAS FOLLOWED IN THE CASE OF CIT V SMT. BURFI (SUPRA) AND CIT V SMT. PARKASH KAUR (SUP RA), THEREFORE, IN VIEW OF THE VARIOUS DECISION OF HON'BLE JURISDICTIONAL HIGH COURT WE SET ASIDE THIS ISSUE AGAINST THE ASSESSEE. 17. GROUND NO.4: AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSESSEE HAS MADE CLAIM U/S 54F FOR FOLLOWING PROPERTIES. 11 A) FLAT AT UPPALS (MANIMAJRA) - RS. 1,13,91,750/- B) FLAT AT ZIRAKPUR - RS. 49,41,862/- ACCORDING TO ASSESSING OFFICER THE EXEMPTION COULD BE ALLOWED ONLY IN RESPECT OF ONE ASSET, THEREFORE, HE ALLOWED EXEMPTION ONLY IN RESPECT OF A FLAT AT UPPALS (WHICH WAS HIGHER AMOUNT). 18. ON APPEAL, THE LD. CIT(A) FOUND THAT DEDUCTION U/S 54F WAS ALLOWABLE AGAINST PURCHASE OF A HOUSE OR CONSTRUCTION OF A HO USE. SINCE ASSESSEE HAS MERELY BOOKED A FLAT, THEREFORE, EXEMPTIONS WERE NO T ALLOWABLE AND ASCCRDINGLY HE ISSUED A NOTICE FOR ENHANCEMENT BY ASKING THE AS SESSEE THAT WHY DEDUCTION U/S 54F SHOULD NOT BE DENIED. 19. THE LD. CIT(A) REFERRED TO THE PROVISIONS OF SE CTION 54F AND OBSERVED THAT IT IS CLEAR THAT EXEMPTION COULD BE ALLOWED ON LY IF ASSESSEE HAD PURCHASED A HOUSE. IN THIS CASE ASSESSEE HAS MERELY BOOKED A F LAT, THEREFORE, ASSESSEE WAS DENIED THE DEDUCTION U/S 54F. IN RESPECT OF THIS G ROUND NO CONTENTIONS WERE ADVANCE BEFORE US. 20. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED TH E ORDER OF CIT(A) . 21. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT NO EVIDENCE WAS ADDUCED BEFORE CIT(A) DURING APPEAL PROCEEDINGS EVE N AFTER ISSUE OF ENHANCEMENT NOTICE TO PROVE TAT ASSESSEE HAS REALLY PURCHASED THE FLATS. EVEN BEFORE US NEITHER ANY CONTENTIONS WERE RAISED NOR A NY EVIDENCE WERE FILED TO SHOW THAT ASSESSEE HAS REALLY PURCHASED THE FLAT A GAINST WHICH EXEMPTION HAS BEEN CLAIMED, THEREFORE, WE ARE CONSTRAINED TO CONF IRM THE FINDINGS OF LD. CIT(A). 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. 12 ITA NO. 1098/CHD/2010 ASSESSMENT YEAR 2007-08 23. IN THIS APPEAL, VARIOUS GROUNDS HAVE BEEN RAISE D BUT THROUGH THESE GROUNDS THE ONLY ISSUE RAISED IS REGARDING ACTION O F THE LD. CIT(A) IN CONFIRMING THE ADDITION AMOUNTING TO RS. 5,07,69,57 6/- ON ACCOUNT OF ENHANCED COMPENSATION RECEIVED BY THE ASSESSEE. 24. THIS ISSUE HAS BEEN ADJUDICATED BY US WHILE ADJ UDICATING APPEAL NO. 869/CHD/2009 FOR ASSESSMENT YEAR 2006-07 VIDE PARA 11 AND, THEREFORE, FOLLOWING THE SAME, WE DECIDE THIS APPEAL AGAINST T HE ASSESSEE. 25. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ITA NO. 870/CHD/2009 ASSESSMENT YEAR 2006-07 26. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING MODIFIED GROUNDS:- 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN AS SESSING COMPENSATION OF RS. 13,67,958/- AND ENHANCED COMPENSATION OF RS. 4,94,45,708/- ARISING ON ACCOUN T OF ACQUISITION OF LAND SITUATED AT BANA MADANPUR AND JHURIWALA AS TAXABLE CAPITAL GAINS UNDER THE PROV ISIONS OF THE INCOME TAX ACT, 1961 (THE ACT). 1.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT LAND IN QUESTION BEING AGRICULTURAL LAND WITHIN THE MEANING OF CLAUSE (III ) OF SUB-SECTION (14) OF SECTION 2, NO CAPITAL GAINS WER E CHARGEABLE TO TAX UNDER THE PROVISIONS OF THE ACT. 1.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE FINDING OF THE ASSESSING OFFICER THAT THE LAND IN QUESTION WAS SITUATED WITHIN THE PRESCRIBED LIMITS OF PANCHUKULA AS ON DATE OF ACQUISITION, 13 WITHOUT APPRECIATING THAT PANCHUKULA MUNICIPALITY WAS NOT EVEN FORMED ON THAT DATE. 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT SINCE THE ORIGINAL COMPENSATION W AS ACCEPTED TO BE NOT LIABLE TO TAX UNDER THE PROVISIO NS OF THE ACT, IT WAS NOT OPEN TO THE INCOME TAX DEPARTMENT T O BRING TO TAX COMPENSATION OF RS. 13,67,958/- AND ENHANCED COMPENSATION OF RS. 4,94,45,708/- ADDITIONAL COMPEN SATION AND ENHANCEMENT RECEIVED DURING THE YEAR ON ACCOUNT OF THE VERY SAME ACQUISITION OF LAND. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN UPHOLDING TAXATION OF INTEREST ON ENHANCED COMPENSATION OF RS. 18,33,801/- 3.1 THAT THE CIT(A) FAILED TO APPRECIATE THAT AS PE R THE DECISION OF THE SUPREME COURT IN THE CASE OF C IT, FARIDABAD V. GHANSHYAM (HUF: 182 ITR 368, INTEREST OF RS. 18,33,801/- WAS IN THE NATURE OF CAPITAL RECEIPT NOT LIABLE TO TAX. 4. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN ENHANCING THE INCOME OF THE APPELLANT BY DENYING EX EMPTION OF RS. 1,13,91,750/- CLAIMED AND ALLOWED UNDER SECT ION 54F OF THE ACT. IN THIS CASE ALSO AN APPLICATION FOR ADMISSION OF A DDITIONAL EVIDENCE HAS BEEN FILED BEFORE US. THIS APPLICATION IS IDENTICAL TO THE APPLICATION MOVED IN THE CASE OF RANI TARA DEVI IN ITA NO. 869/CHD/2009 FOR ASSESSMENT YEAR 2006-07. IN THIS CASE ALSO, SAME CONTENTIONS WERE MADE BY BO TH THE PARTIES. 27. THIS ISSUE HAS BEEN ADJUDICATED BY US WHILE ADJ UDICATING THE APPEAL OF SMT. RANI TARA DEVI IN ITA NO. 869/CHD/2009 VIDE PA RAS 4 TO 8 AND FOLLOWING THE SAME WE DECLINE TO ADMIT THE ADDITIONAL EVIDENC E. 14 28. GROUND NO. 1 TO 3 : BOTH THE PARTIES SUBMITTED THAT THE ISSUES RAISED VIDE GROUND NOS. 1 TO 3 ARE IDENTICAL TO THE ISSUES RAIS ED IN ITA NO. 869/CHD/2009 FOR ASSESSMENT YEAR 2006-07. WE HAVE ALREADY ADJUD ICATED THE ISSUES IN QUESTION VIDE ADJUDICATING GROUND NOS. 1 TO 3 OR OU R ABOVE ORDER IN PARAS 9 TO 16 IN ITA NO. 869/CHD/2009. THEREFORE, OUR FINDING S WILL APPLY MUTATIS- MUTANDIS TO THESE GROUNDS ALSO AND, THEREFORE, THES E GROUNDS ARE DISMISSED. 29. GROUND NO.4: SINCE THE ISSUE RAISED IN THIS GRO UND IS ALSO SIMILAR AS RAISED IN ITA NO. 869/CHD/2009 WHICH WE HAVE ADJUD ICATED VIDE PARA 21, THEREFORE, FOLLOWING THE SAME WE DECIDE THIS ISSUE AGAINST THE ASSESSEE. 30. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED ITA NO. 1099/CHD/2010 - ASSESSMENT YEAR 2007-08 31. IN THIS APPEAL, VARIOUS GROUNDS HAVE BEEN RAISE D BUT THROUGH THESE GROUNDS THE ONLY ISSUE RAISED IS REGARDING ACTION O F THE LD. CIT(A) IN CONFIRMING THE ADDITION AMOUNTING TO RS. 5,12,79,50 9/- ON ACCOUNT OF ENHANCED COMPENSATION RECEIVED BY THE ASSESSEE. 32. THIS ISSUE HAS BEEN ADJUDICATED BY US WHILE ADJ UDICATING APPEAL NO. 869/CHD/2009 FOR ASSESSMENT YEAR 2006-07 VIDE PARA 11 AND, THEREFORE, FOLLOWING THE SAME, WE DECIDE THIS APPEAL AGAINST T HE ASSESSEE. 33. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ITA NO. 160/CHD/2000 ASSESSMENT YEAR 2006-07 34. BOTH THE PARTIES SUBMITTED THAT THE ISSUES RAIS ED VIDE GROUND NOS. 1 TO 3 OF THIS APPEAL IS IDENTICAL TO ISSUE RAISED VIDE GR OUND NO.1 IN ITA NO. 869/CHD/2009 IN THE CASE OF RANI TARA DEVI VS. ITO PANCHKULA. WE FIND THAT THE ISSUE RAISED VIDE GROUND IN QUESTION IS SIMILAR WHICH WE HAVE ADJUDICATED IN PARAS 9 & 11 IN ITA NO. 869/CHD/2009 IN THE CASE OF SMT. RANI TARA DEVI V 15 ITO. FOLLOWING OUR FINDINGS GIVEN ABOVE, WE UPHOL D THE ORDER OF LD. CIT(A) AND APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED . ITA NO. 868/CHD/2009 ASSESSMENT YEAR 2006-07 35. IN THIS APPEAL THOUGH VARIOUS GROUNDS HAVE BEEN RAISED BUT ONLY TWO ISSUES HAVE BEEN RAISED NAMELY:- A) CHARGING OF TAX ON THE AMOUNT OF ENHANCED COMPENSAT ION. B) ENHANCEMENT BY DENYING DEDUCTION U/S 54F 36. AS REGARDS THE ISSUE RAISED VIDE (A) ABOVE I.E. RELATING TO CHARGING OF TAX ON THE AMOUNT OF ENHANCED COMPENSATION, THE SAME IS COVERED BY OUR DECISION RENDERED IN GROUND NO. 01 (PARA 11) IN ITA NO. 869/ CHD/2009. FOLLOWING THAT DECISION REFERRED TO HEREINABOVE, WE UPHOLD THE ORD ER OF LD. CIT(A) ON THIS ISSUE AND ACCORDINGLY THIS GROUND IS DECIDED AGAINS T THE ASSESSEE. 37. SIMILARLY, THE ISSUE RAISED VIDE (B) ABOVE I.E. ENHANCEMENT BY DENYING DEDUCTION U/S 54F IS ALSO COVERED BY OUR DECISION R ENDERED WHILE ADJUDICATING GROUND NO.4 IN ITA NO. 860/CHD/2009 IN PARA 21 ABOV E. FOLLOWING THE SAME, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. IN THE RESULT, APPEAL IS DISMISSED. ITA NO. 716/CHD/2006 ASSESSMENT YEAR 2003-04 38. IN THIS APPEAL THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT AT THE TIME OF HEARING LD. COUNSEL SUBMITTED THAT ONLY TWO DISPUTE S ARE INVOLVED NAMELY (I) REOPENING OF ASSESSMENT. (II) TAXATION OF CAPITAL GAIN 39. FIRST ISSUE:- IN THIS CASE ORIGINALLY THE RET URN WAS PROCESSED US 143(1). LATER ON IT WAS NOTICED THAT ISSUE REGARDING ENHANC ED COMPENSATION AND 50% OF THE INTEREST HAS ESCAPED ASSESSMENT, THEREFORE, ASS ESSMENT WAS REOPENED BY 16 ISSUING NOTICE U/S 148.. THE ACTION OF REOPENING O F ASSESSMENT WAS CONFIRMED BY LD. CIT(A) BY OBSERVING THAT ASSESSING OFFICER H AS RECORDED PROPER REASONS FOR THE SAME. 40. BEFORE US IT WAS SUBMITTED THAT NO FRESH MATERI AL HAS COME TO THE POSSESSION OF ASSESSING OFFICER, THEREFORE, REOPENI NG WAS BAD. 41. ON THE OTHER HAND LD. DR SUBMITTED THAT ORIGINA LLY RETURN WAS PROCESSED U/S 143(1), THEREFORE, REOPENING IS VALID IN VIEW O F THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ACIT V RAJESH JHAVERI STOCK BROKERS P. LTD IN 291 ITR 500. 42. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE FIND THAT ISSUE OF REOPENING HAD BEEN CONSIDERED IN DETAIL BY THE JUR ISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF ARUN KUMAR GOYAL V CIT & ANR IN ITA NO. 54 OF 2012(O&M). AFTER CONSIDERING THE LATEST DECISION O F HON'BLE SUPREME COURT IN THE CASE OF ACIT V RAJESH JHAVERI STOCK BORKERS P. LTD (SUPRA) , IT WAS OBSERVED AT PARAS 11 TO 14 AS UNDER:- (11) WITH REFERENCE TO THE SCOPE OF JURISDICTION E XERCISABLE UNDER SECTION 147 AS IT STOOD PRIOR TO 01.04.1989, IT WAS RULED THAT THE ASSESSING OFFICER WAS REQUIRED TO SA TISFY THE TWIN TEST THAT (I) HE HAS REASON TO BELIEVE THAT INCOME, PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCA PED ASSESSMENT; AND (II) THAT SUCH ESCAPEMENT HAS OCCUR RED BY REASON OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FA CTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. (12). THERE IS, HOWEVER, A SEA-CHANGE AFTER THE AME NDMENT IS SECTION 147 FOR DETERMINING JURISDICTIONAL SCOPE FO R RE- ASSESSMENT OF THE ESCAPED INCOME. THE HONBLE SUPRE ME COURT IN RAJESH JHAVERIS CASE (SUPRA) HAS EXPLAINED AND 17 LAID DOWN THAT UNDER THE SUBSTITUTED SECTION 147 E XISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS I F THE ASSESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IT CONFERS JURIS DICTION TO RE-OPEN THE ASSESSMENT. IT WAS FURTHER HELD THAT SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE A SSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTIO N 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE RE-ASSESSME NT PROCEEDINGS EVEN WHEN INTIMATION UNDER SECTION 143( 1) HAD BEEN ISSUED. (13) THE EXPRESSION REASON TO BELIEVE THUS CANNOT BE RESTRICTIVELY CONSTRUED TO SAY AS IF THE AO IS OBLI GATED FIRSTLY TO FINALLY ASCERTAIN THE FACTUM OF ESCAPED INCOME O N THE BASIS OF ADMISSIBLE EVIDENCE AND THEN ONLY TO ISSUE SHOW CAUSE TO THE ASSESSEE. THE SUPREME COURT HELD THAT THE FINAL OUTCOME OF THE PROCEEDINGS INITIATED UNDER SECTION 147 IS N OT RELEVANT AND WHAT IS OF RELEVANCE IS THE EXISTENCE OF REASON S TO MAKE THE AO BELIEVE THAT THERE HAS BEEN UNDER ASSESSMENT OF THE ASSESSEES INCOME FOR A PARTICULAR YEAR. (14) IT IS EXPLICIT FROM THE POST-AMENDMENT DECISIO NS CITED ABOVE THAT ONCE THERE ARE REASONS FOR THE AO TO BEL IEVE, WHETHER SUCH REASONS ORIGINATE OUT OF THE RECORD AL READY SCRUTINIZED OR OTHERWISE, HE SHALL BE WITHIN HIS CO MPETENCE TO INITIATE THE RE-ASSESSMENT PROCEEDINGS. THE FORM ATION OF BELIEF BY THE AO MUST ALWAYS BE TENTATIVE AND NOT A FIRM OR FINAL CONCLUSION AS THE LATTER WILL NEGATE THE VERY OBJECT OF GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AS IT WILL AMOUNT TO POST-DECISIONAL HEARING . FROM THE ABOVE IT IS CLEAR THAT ONCE THE ASSESSING OFFICER HAS REASONS AND EVEN IF THEY ARE EMANATING OUT OF THE SCRUTINY OF THE RE CORDS WHICH HAD ALREADY BEEN SCRUTINIZED EVEN THEN THE REASSESSMENT IS VALID. TH EREFORE, FOLLOWING THIS DECISION, WE DECIDE THIS ISSUE AGAINST THE ASSESSEE . 18 43. 2 ND ISSUE: LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T ONLY DISPUTE HERE IS THAT THIS ISSUE PERTAINS TO ASSESSMENT YEAR 2003-04 AND, THEREFORE, THE AMENDED PROVISIONS OF SECTION 45(5) WERE NOT APPLICABLE. 44. ON THE OTHER HAND, LD. DR SUBMITTED THAT ORIGIN ALLY THE TRIBUNAL DECIDED THE APPEALS IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF SPECIAL BENCH IN THE CASE OF DCIT VS. SHRI PADAM PARKASH (HUF) IN ITA NO. 2964/D/2002 (DELHI)( SPECIAL BENCH). THE SPECIAL BENCH HAS FOLL OWED THE DECISION OF HINDUSTAN HOUSING & LAND DEVELOPMENT TRUST LTD IN 1 61 ITR 524. HOWEVER, WHEN THE REVENUE FILED APPEAL BEFORE THE HON'BLE HI GH COURT OF PUNJAB & HARYANA, THE COURT REMANDED THE MATTER TO THE FILE OF TRIBUNAL BY DIRECTING THE TRIBUNAL TO FOLLOW THE ORDER IN CASE OF CIT V PRABH A SINGH IN ITA NO. 897. THEN HE REFERRED TO THE DECISION IN THE CASE OF CI T VS. PRABHA SINGH IN ITA NO. 897 OF 2008 WHEREIN THE TRIBUNAL WAS DIRECTED T O DECIDE THE ISSUE ON THE BASIS OF CIT V GHANSYMAN (SUPRA). FURTHER THE HON' BLE HIGH COURT IN THE CASE OF CIT V SMT. RANI SHAKUNLALA DEVI IN ITA NO. 955 O F 2008 HAS HELD THAT FOR ASSESSMENT YEAR 2003-04, THE DECISION OF CIT V GHAN SHYAM (HUF) (SUPRA) IS APPLICABLE. 45. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE FIND THAT HON'BLE HIGH COURT HAS DECIDED THE ISSUE IN THE APPEAL BY T HE REVENUE IN ITA NO. 966 OF 2008 VIDE ORDER DATED 22.10.2009 WHICH READS AS UNDER:- IN VIEW OF THE ORDER PASSED TODAY IN ITA 897 OF 20 08 (THE COMMISSIONER OF INCOME TAX, PANCHKULA VS SMT. PRABH A SINGH), THIS APPEAL IS DISPOSED OF IN THE SAME TERM S. 46. FURTHER IN THE CASE OF CIT VS. SMT. PRABHA SING H IN ITA NO. 897 OF 2008 VIDE ORDER DATED 22.10.2009 THE HON'BLE HIGH COURT REMITTED THE MATTER BACK TO THE TRIBUNAL TO BE DECIDED IN THE LIGHT OF CIT V GH ANSHYAM (HUF) (SUPRA). . SECTION 45(5) WAS INTRODUCED BY FINANCE ACT 1987 W. E.F 1.4.1988 WHICH MEANS 19 THE ENHANCED COMPENSATION BECOME TAXABLE W.E.F 1.4. 1988. WE FURTHER FIND THAT IN CASE OF CIT V RANI SHAKUNTLA DEVI IN ITA NO. 955 OF 2008 ORDER DATED 27.10.2010, THE HON'BLE COURT WAS SEIZED THE ISSUE FOR ASSESSMENT YEAR 2003-04 WHICH BECOMES CLEAR FROM THE FOLLOWING PARA 1 AT PA GE 1 OF THE ORDER:- THIS APPEAL UNDER SECTION 260A OF THE INCOME-TAX A CT, 1961 (FOR SHORT THE ACT) HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 7.7.2008, PASSED BY INCOME TAX APPE LLATE TRIBUNAL, CHANDIGARH BENCH (B), CHANDIGARH (IN SHOR T THE TRIBUNAL) IN ITA NO. 990/CHANDI/2007 IN RESPECT OF ASSESSMENT YEAR 2003-04 , RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW FOR DETERMINATION BY THIS COURT . ULTIMATELY THE ISSUE WAS DECIDED AS UNDER;- THE ISSUES IS NO LONGER RES INTERGRA. THE SAID QUE STION CAME UP BEFORE THE HON'BLE SUPREME COURT IN COMMISSIONER OF INCOME-TAX V. GHANSHYAM (HUF) [2009] 315 ITR 1 (SC AND THE SAME WAS DECIDED IN VARIOUS OF THE REVENUE BY HOLDI NG THAT IRRESPECTIVE OF THE FACT WHETHER LITIGATION WITH RE GARD TO AWARD OF COMPENSATION HAD ATTAINED FINALITY OR NOT, UNDER SECTION 45(5)(B) OF THE ACT, WHICH WAS INSERTED RETROSPECTI VELY W.E.F 1.4.1998, TAXABILITY OF INCOME SHALL BE IN THE YEA R OF RECEIPT. IN VIEW OF THE ABOVE, THE CIT RIGHTLY INVOKED REVIS IONAL JURISDICTION U/S 263 OF THE ACT. ACCORDINGLY, WE S ET ASIDE THE ORDER OF TRIBUNAL AND ANSWER QUESTION NO.1 IN FAVOU R OF THE REVENUE AND REMIT THE MATTER TO THE TRIBUNAL FOR PA SSING ORDERS IN ACCORDANCE WITH LAW. QUESTION NO.2 HAS BE EN RENDERED ACADEMIC IN VIEW OF ANSWER TO QUESTION NO. 1 47. THUS, FROM THE ABOVE IT BECOMES CLEAR THAT HON' BLE HIGH COURT CLEARLY HELD THAT EVEN IN ASSESSMENT YEAR 2003-04, THE PRIN CIPLES LAID DOWN IN THE CASE OF CIT V GHANSHYAM (HUF) (SUPRA) ARE APPLICABLE. W E HAVE FURTHER DECIDED THIS ISSUE WHILE ADJUDICATING GROUND NO.1 IN ITA N O. 869/CHD/2009 VIDE PARAS 9 TO 11 AND FOLLOWING THE SAME WE DECIDE THIS ISSUE AGAINST THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 20 ITA NO. 952/CHD/2009 - ASSESSMENT YEAR 2006-07 48. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUND:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND WHETHER IN VIEW OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF ) IN CIVIL APPEAL NO. 4401 OF 2009, LD. CIT(A) WAS RI GHT IN LAW IN DELETING THE ADDITION OF RS. 19,58,276/- ON ACCOUNT OF INTERS TON ENHANCED COMPENSATION BY HOLDING THAT THE INTEREST RECEIVED BY THE ASSESSEE WILL BE ASSESSABL E TO TAX ON ACCRUAL BASIS WHEN THE LITIGATION REGARDING THE QUANTUM OF ENHANCED COMPENSATION AND INTEREST THERE ON IS FINALLY SETTLED. 49. AFTER HEARING BOTH THE PARTIES WE FIND THAT IDE NTICAL ISSUE FOR TAXABILITY ON INTEREST RECEIVED ON ENHANCED COMPENSATION HAS BEEN DECIDED IN THIS CONSOLIDATED ORDER WHILE ADJUDICATING GROUND NO.3 I N THE CASE OF RANI TARA DEVI IN ITA NO. 869/CHD/2009 AND FOLLOWING THE SAME WE DECIDE THIS ISSUE IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN THE RESULT, APPEAL IS ALLOWED. ITA NO. 316/CHD/2011 - ASSESSMENT YEAR 2006-07 50. IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED BUT THE SAME INVOLVES THE FOLLOWING THREE ISSUES:- A) TAXATION ON ENHANCED COMPENSATION ON RECEIPT OF BAS IS. B) DENIAL OF DEDUCTION U/S 54F BY WAY OF ENHANCEMENT C) LEVY OF INTEREST U/S 234B AND 234D 51. AS REGARDS THE ISSUE (A) WHICH RELATES TO TAXAT ION ON ENHANCED CONDENSATION ON RECEIPT BASIS IS CONCERNED, THE SAM E IS COVERED BY OUR DECISION GIVEN IN PARA 11 TO GROUND NO. 1 IN ITA NO. 869/CH D/2009. FOLLOWING THE SAME, WE UPHOLD THE ORDER OF LD. CIT(A) AND ACCORDI NGLY THIS GROUND IS DECIDED AGAINST THE ASSESSEE.. 21 52. SIMILARLY, THE ISSUE RAISED IN (B) ABOVE REGARD ING DENIAL OF DEDUCTION U/S 54F IS ALSO COVERED BY OUR DECISION RENDERED IN ITA NO. 869/CHD/2009 VIDE PARA 21 ABOVE AND FOLLOWING THE SAME THIS ISSUE IS ALSO DECIDED AGAINST THE ASSESSEE. 53. THIS ISSUE IS CONSEQUENTIAL IN NATURE AND ASSES SING OFFICER IS DIRECTED TO CHARGE INTEREST AS PER THE PROVISIONS OF THE LAW. 54. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMI SSED. ITA NO. 684/CHD/2007 ASSESSMENT YEAR 2007 55. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF ENHANCED COMPENSATION AND INTEREST ON ENHANCED COMPENSATION, WHEREAS THE HON'BLE HIGH COURT IN THE LAND ACQUISITION CASE OF THE ASSESSEE HAS HELD THAT THE ENHANCED COMPENSATION ALREADY PAID SHALL NOT BE RECOVERED TI LL THE FRESH ADJUDICATION OF THE COMPENSATION BY THE DISTR ICT JUDGE. THE ASSESSEE HAS THUS RECEIVED THE COMPENSA TION, WHICH CANNOT BE RECOVERED. IT IS A REVENUE RECEIPT LIABLE TO BE TAXED FOR CAPITAL GAIN U/S 145(5). 56. THE ABOVE ISSUE IS COVERED BY THE DECISION GIVE N IN ITA NO. 869/CDH/2009 IN RESPECT OF GROUND NOS.1 AND 3 IN PA RAS 10 TO 16 HEREINABOVE.. THEREFORE, FOLLOWING THE SAME, THE ISSUES ARE DECID ED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN THE RESULT APPEAL IS ALLOWED ITA NO. 827/CHD/2007 ASSESSMENT YEAR 2006-07 57. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE LAND ACQUIRED UNDER COMPULSORY ACQUISITION AS CAPITAL AS SET 2(14) OF THE I.T. ACT, 1961. 22 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE ADDITION ON ACCOUNT OF ENHANCED COMPENSATION ON COMPULSORY ACQUISITION OF LAND. 3 THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ALLOW ING THE EXEMPTION U/S 10(37) OF THE I.T. ACT, 1961. 58 GROUNDS NOS.1 & 2: THE ISSUES RAISED IN THESE GR OUNDS ARE COVERED BY OUR DECISION GIVEN IN ITA NO. 869/CHD/2014 VIDE PARAS 1 1 HEREINABOVE. ACCORDINGLY THESE GROUNDS ARE DECIDED AGAINST THE A SSESSEE. 59. GROUND NO. 3 : THIS ISSUE WAS DECIDED BY LD. CI T(A) AGAINST THE ASSESSEE. 60. BEFORE US LD. DR STRONGLY SUPPORTED THE ORDER O F LD. CIT(A). 61. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE DID NOT MAKE ANY SUBMISSIONS BEFORE US. 62. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) VIDE PARA 9.4 WHICH IS AS UND ER:- 9.4 THE LAST AND FINAL ARGUMENT TAKEN UP BY THE APPELLANT IS THAT THE ENHANCED COMPENSATION RECEIVED BY THE APPE LLANT IS NOT TAXABLE AND IS EXEMPT U/S 10(37) WHICH HAS BEEN INSERTED W.E.F 1.04.2005 AND AS PER WHICH ANY AGRICULTURAL L AND BELONGING TO ANY INDIVIDUAL OR HUF IF IT FALLS WITH IN THE DEFINITION OF CAPITAL ASSET AS GIVEN IN SECTION 2(1 4) AND HAS BEEN ACQUIRED COMPULSORILY, THEN THE CAPITAL GAINS OF SUCH TRANSFER IS EXEMPT U/S 10(37) OF THE ACT. THE APPE LLANT HAS ARGUED THAT SINCE THE ENHANCED COMPENSATION HAS BEE N RECEIVED DURING THE FINANCIAL YEAR 2005-06 AND SUC H LAND HAS BEEN USED FOR AGRICULTURAL PURPOSES DURING THE PERI OD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER, T HE 23 ENHANCED COMPENSATION IS EXEMPT U/S 10(37) OF THE ACT. I HAVE CAREFULLY CONSIDERED ARGUMENT OF THE APPELLANT . A BARE READING OF SECTION 10(37) SHOWS THAT THE ARGUMENT O F THE APPELLANT IS NOT CORRECT. THE PROVISIONS OF SECTION 10(37) ARE APPLICABLE TO CASES WHERE THE AGRICULTURAL LAND HAS BEEN COMPULSORILY ACQUIRED AFTER 1.4.2004. IN THE PRESEN T CASE THE LAND WAS ACQUIRED VIDE LAND ACQUISITION COLLECTORS ORDER DATED 9.3.1988 WHICH IS MUCH EARLIER THAN 1.4.2004. HENCE THE APPELLANTS CASE IS NOT COVERED BY THE PROVISIO N OF SECTION 10(37) AND THE ENHANCED COMPENSATION IS NOT EXEMPT U/S 10(37). THIS ARGUMENT IS ALSO REJECTED . 63. IN OUR PINION LD. CIT(A) HAS CORRECTLY DECIDED THE ISSUE BECAUSE SECTION 10(37) OF THE ACT VERY CLEARLY MENTIONS THAT ANY INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN ARISING FROM THE TRANSFER OF AGR ICULTURAL LAND. IN THE CASE BEFORE US, INCOME WOULD ARISE ON THE ACQUISITION OF LAND BY THE GOVERNMENT AND NOT ON THE DATE OF RECEIPT OF COMPENSATION. MOREOVE R THE LAND WHICH HAS BEEN ACQUIRED IS NOT AGRICULTURAL LAND AND THEREFORE, TH IS PROVISION IS NOT APPLICABLE. THEREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND WE CONFIRM THE SAME. 64. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ITA NO. 1102/CHD/2011 ASSESSMENT YEAR 2007-08 65. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT GIVING THE PROPER OPPORTUNITY OF HEARING WHICH IS AGAINST THE NATURAL JUSTICE AND THE ORDER OF LD. CIT(A) BE SET ASIDE. 2. THAT THE CLAIM OF THE A.O. THAT THE NOTICE U/S. 143 (2) WAS SERVED TO THE ASSESSEE ON 27.09.2008 IS NOT CORRECT AS THE ASSESSEE EXPIRED ON 08.04.2008 AND THE NOTICE ISSUED U/S. 14 3(2) IS INVALID. 24 3. THAT WITHOUT PREJUDICE TO ABOVE, THE NOTICE U/S. 14 3(2) SERVED TO ASSESSEE ON 27.09.2008 IS BARRED BY LIMITATION AND CONSEQUENT ASSESSMENT COMPLETED U/S. 143(3) OF THE I.T. ACT IS BAD IN LAW AND BE QUASHED. 4. THAT THE NOTICE U/S.143(2) ISSUED TO LEGAL HEIRS ON 15.12.2009 IS BARRED BY LIMITATION AND THE CONSEQUENT ASSESSMENT COMPLETED U/S. 143(3) OF THE I.T. ACT IS BAD IN LAW AND BE QU ASHED. 5. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN APPLYING TH E PROVISIONS OF SECTION 292BB OF THE I.T. ACT. 6. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN HOLDING THA T THE LAND ACQUIRED UNDER COMPULSORY ACQUISITION IS AN CAPITAL ASSET U/S.2(14) OF THE I.T. ACT. 7. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN HOLDING THA T THE ENHANCED COMPENSATION RECEIVED SUBSEQUENTLY IS CHARGEABLE TO TAX, WHEN THE LAND ACQUIRED UNDER COMPULSORY ACQUISITION WAS NOT TREATED AS CAPITAL ASSET AT THE TIME OF RECEIPT OF ORIGINAL COMPENSATION. 8. THAT THE LD. CIT(A) HAS ERRED IN APPLYING PROVISION S OF SECTION 45(5)(B) AND 45(5)(C) OF THE INCOME-TAX ACT, 1961. 9. A) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION OF RS. 7,53,20,932/- ON ACCOUNT OF INTEREST ON ENHA NCED COMPENSATION. B) THAT WITHOUT PREJUDICE TO ABOVE, THE APPELLANT DISP UTES THE QUANTUM OF ADDITION. 10. THAT WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPE AL: A) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT GRAN TING THE EXEMPTION U/S. 10(37) OF THE I.T. ACT. B) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT GRAN TING THE DEDUCTION U/S. 54-B OF THE I.T. ACT. 66. OUT OF THE ABOVE GROUNDS, GROUND NO.1 WAS NOT P RESSED BEFORE US; THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 25 67. GROUND NOS. 2, 3, 4 & 5:- AFTER HEARING BOTH TH E PARTIES WE FIND THAT NOTICE U/S 143(2) WAS SERVED ON ASSESSEE ON 27.9. 2008 IN RESPONSE TO WHICH SHRI MUKESH AGGARWAL , CHARTERED ACCOUNTANT APPEARED. LATER ON, IT CAME T O THE KNOWLEDGE OF ASSESSING OFFICER THAT ASSESSEE HAS EX PIRED AND FOLLOWING LEGAL HEIRS WERE THERE:- I. SMT. SUMITRA DEVI, WIFE II. SH. VARINDER SINGH, SON III. SH. NARESH SINGH, SON IV. SH. PARDEEP SINGH, SON V. SMT. SUSHMA DEVI, DAUGHTER ACCORDINGLY, FRESH NOTICE U/S 143(2) AND 142(1) ALO NG WITH DETAILED QUESTIONNAIRE WAS ISSUED TO THE LEGAL HEIRS ON 15.2 .2009 68. THE REPRESENTATIVES OF THE LEGAL HEIRS RAISED O BJECTIONS BEFORE CIT(A) REGARDING SERVICE OF NOTICE BY POINTING OUT THAT AS SESSEE SHRI YOGINDER SINGH HAD EXPIRED ON 8.4.2008, THEREFORE, NOTICE COULD NO T HAVE BEEN SERVED ON HIM ON 27.9.2008. THE LD. CIT(A) AFTER EXAMINING THESE DE TAILS REJECTED THE OBJECTIONS BY OBSERVING THAT SINCE THE ASSESSEE HAS APPEARED B EFORE ASSESSING OFFICER AND HAS NOT RAISED ANY OBJECTIONS, THE NOTICE IS TREATE D AS VALID AS PER PROVISIONS OF SECTION 292 BB. 69. BEFORE US LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE ASSESSMENT ORDER AND POINTED OUT THAT FIRST NOTICE U/S 143(2) IS SA ID TO HAVE BEEN SERVED ON ASSESSEE ON 27.9.2008 WHEREAS SHRI YOGINDER SINGH H AD EXPIRED ON 8.4.2008, THEREFORE, NO NOTICE COULD HAVE BEEN SERVED ON HIM. FURTHER, THE REVENUE CAME TO KNOW ABOUT THE DEATH OF THE ASSESSEE AND LEGAL H EIRS WERE BROUGHT ON RECORD ONLY ON 15.12.2009, THEREFORE, NOTICE COULD NOT HAV E BEEN SERVED WITHIN THE TIME 26 PRESCRIBED EVEN ON THE LEGAL HEIRS. IN ANY CASE NO TICE HAS BEEN SERVED BEYOND THE TIME PRESCRIBED US/ 143(2)(II). HE ALSO RELIED ON THE FOLLOWING DECISIONS:- I) CIT VS. SURESH CHANDRA JAISWAL 325 ITR 563 (ALL.) II) SMT. KESAR DEVI VS. CIT 321 ITR 344 (RAJ.) 70. ON THE OTHER HAND, LD. DR SUBMITTED THAT NO OBJ ECTION HAS BEEN RAISED BEFORE THE ASSESSING OFFICER, THEREFORE, SERVICE OF NOTICE IS DEEMED TO BE VALID IN TERMS OF SECTION 292BB. IN THIS REGARD HE STRON GLY RELIED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PACHWATI MOTORS LIMITED 243 CTR 189. FURTHER, NOTICE HAS BEEN SERV ED WITHIN THE TIME AS PER SECTION 143(2). 71. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND DO NOT FIND ANY FORCE IN THE CONTENTIONS OF LD. COUNSEL FOR THE ASS ESSEE. PERUSAL OF THE ASSESSMENT ORDERS CLEARLY SHOWS THAT FIRST NOTICE W AS SERVED ON THE ASSESSEE ON 2 7.9.2008. SECTION 143(2)(II) READS AS UNDER:- 143(2(II) NOTWITHSTANDING ANYTHING CONTAINED IN CL AUSE (I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDER STATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID THE T AX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HI M, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED THERE, ANY EVIDENC E ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETUR N : PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM TH E END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED . 72. THE PROVISO HAS BEEN INSERTED TO THE ABOVE PROV ISION BY FINANCE ACT 2008 W.E.F 1.4.2008. SINCE THIS IS A PROCEDURAL OR MACHI NERY PROVISION AND IT WOULD BE APPLICABLE TO ALL THE PENDING ASSESSMENTS. IN TH IS CASE RETURN HAS BEEN FILED 27 ON 31.7.2008 I.E. FOR FINANCIAL YEAR 2007-08 AND NO TICE WAS REQUIRED TO BE SERVED WITHIN THIS MONTH FROM THE END OF THE FINAN CIAL YEAR I.E. BEFORE 30.09.2008 AND NOTICE HAS BEEN CORRECTLY SERVED BEF ORE THAT DATE ON 27.9.2008 AND, THEREFORE, IT CANNOT BE SAID THAT NOTICE IS TI ME BARRED. AS FAR AS THE CONTENTION THAT VALID NOTICE WAS NOT SERVED ON THE ASSESSEE IS CONCERNED, THE SAME IS ALSO DEVOID OF ANY MERIT BECAUSE OF SECTION 292BB. THE SECTION READS AS UNDER:- 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROC EEDING OR CO- OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT O R REASSESSMENT, IT SHALL BE DEEMED THAT NAY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN D ULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF TH IS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTI ON IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTIC E WAS- (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN ANY IMPROPER MANNER; PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHA LL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE C OMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. 73. THE ABOVE PROVISION CAME UP FOR INTERPRETATION BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V PANC HVATI MOTORS LTD (SUPRA) AND AFTER REFERRING TO THE SECTION, IT WAS OBSERVED IN PARAS 11 & 13 AS UNDER:- 11. A PRESUMPTION HAS BEEN RAISED UNDER THE SAID PR OVISION RELATING TO SERVICE OF NOTICE UPON THE ASSESSEE IN RESPECT OF ASSESSMENT OR REASSESSMENT PROCEEDINGS. ACCORDING T O THIS PROVISION, WHERE AN ASSESSEE APPEARS IN ANY PROCEED INGS OR COOPERATES IN ANY ENQUIRY RELATING TO ASSESSMENT OR REASSESSMENT PROCEEDINGS, IT SHALL BE PRESUMED THAT THE ASSESSEE HAS BEEN VALIDLY SERVED AND IT SHALL NOT BE OPEN TO THE ASSESSEE TO OBJECT THAT THE NOTICE WAS NOT SERVED UPON HIM OR WAS NOT SERVED IN TIME OR WAS SERVED UPON HIM IN AN IMPROPER MANNER. HOWEVER, AN EXCEPTION TO THE AFORESAID PRESUMPTION HAS BEEN MADE IN A CASE W HERE SUCH 28 OBJECTION HAS BEEN RAISED BEFORE COMPLETION OF ASSE SSMENT OR REASSESSMENT. THE PROVISIONS HAS BEEN MADE EFFECTIV E FROM 1 ST APRIL, 2008 AND THEREFORE, SHALL APPLY TO ALL PENDI NG PROCEEDINGS. THE CBDT ISSUED CIRCULAR NO. 1 OF 2009 DT. 27 TH MA RCH, 2009 [(2009) 222 CTR(ST)69; (2009) 310 ITR(ST) 42] GIVIN G EXPLANATORY NOTES ON THE PROVISIONS RELATING TO DIRECT TAXES CO NTAINED IN FINANCE ACT, 2008. CLAUSE 42.7 IS RELEVANT WHICH RE LATES TO APPLICABILITY OF THIS PROVISION AND READS THUS; 13. IT IS NOT DISPUTED THAT IN THE RETURN WHICH WAS FILED BY THE ASSESSEE, IT WAS MENTIONED THAT THE SAME WAS FILED IN RESPONSE TO NOTICE UNDER S. 148 OF THE ACT. NO OBJECTION REGARD ING VALID SERVICE OF NOTICE UNDER S. 148 OF THE ACT WAS RAISED BEFORE THE AO. ONCE THAT IS SO, THE ARGUMENT OF THE ASSESSEE THAT THERE WAS NO VALID SERVICE OF NOTICE UNDER S. 148 OF THE ACT FAILS. TH E TRIBUNAL WAS, THUS, IN ERROR IN CONCLUDING OTHERWISE AND HOLDING THE PROCEEDINGS TO BE INVALID. 74. THE ABOVE PARAS CLEARLY SHOW THAT ONCE NO OBJEC TION HAS BEEN RAISED BEFORE THE ASSESSING OFFICER THEN NO OBJECTION CAN BE RAISED LATER ON. FURTHER, THE PROVISIONS OF SECTION 292BB ARE APPLICABLE TO A LL THE PENDING ASSESSMENTS. THEREFORE, RESPECTFULLY FOLLOWING THIS DECISION, WE UPHOLD THE VALIDITY OF SERVICE OF NOTICE. 75. THOUGH LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISIONS IN THE CASE OF CIT VS. SURESH CHANDRA JAISWAL (SUPRA) AND SMT. KESAR DEVI VS. CIT (SUPRA) WHEREIN IT HAS BEEN HELD THAT NOTICE SERVED ON DEAD PERSON IS NOT VALID BUT BOTH THE DECISIONS ARE DISTINGUISHABLE BECAUSE BOTH DECISIONS HAVE NOT CONSIDERED THE PROVISION OF SECTION 292BB . THE AMENDED PROVISIONS OF SECTION 292BB MAKES IT CLEAR THAT NO OBJECTION CAN BE TAKEN LATER ON IF ASSESSEE OR REPRESENTATIVE APPEARS BEFORE ASSESSING OFFICER AND DOES NOT RAISE ANY OBJECTION AGAINST NOTICE.. SINCE THE ISSUE HAS BEEN DECIDED B Y THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V PANCHVATI MOTORS (S UPRA), WE ARE BOUND TO FOLLOW THE SAME. 29 76. GROUND NOS. 6 TO 9 : THE ISSUE REGARDING TAXAB ILITY OF CAPITAL GAIN HAS ALREADY BEEN DISCUSSED BY US WHILE ADJUDICATING THE ISSUE IN ITA NO. 869/CHD/2009 WHERE FOLLOWING THE DECISION OF HON'BL E PUNJAB & HARYANA HIGH COURT IN THE 355 ITR 457, THE ISSUE WAS DECIDED AG AINST THE ASSESSEE . FOLLOWING THAT DECISION, WE DECIDE THIS ISSUE AGAIN ST THE ASSESSEE SO THESE GROUNDS ARE DECIDED AGAINST THE ASSESSEE. 77. GROUND NO. 10 : THE ISSUE REGARDING EXEMPTION U /S 10(37) WAS REJECTED BY THE ASSESSING OFFICER BY OBSERVING THAT PROVISIO NS OF SECTION 10(37) IS APPLICABLE ONLY ON ACQUISITION OF AGRICULTURAL LAND WHEREAS IN THE CASE OF THE ASSESSEE LAND ACQUIRED WAS NOT AGRICULTURAL LAND. MOREOVER, THE LAND HAS BEEN ACQUIRED IN 1998 WHEREAS THE SECTION PROVIDES THAT ONLY INCOME ARISING OUT TO THE CAPITAL GAIN WOULD BE EXEMPT, THEREFORE, INCOME HAS ARISEN IN EARLIER YEARS AND NOT ON RECEIPT OF COMPENSATION. 78. WE HAVE ALREADY DEALT WITH THIS ISSUE VIDE PARA S 62 & 63 WHILE ADJUDICATING ITA NO. 827/CHD/2007 IN THE ABOVE NOT ED PARS AND FOLLOWING THE SAME WE SET ASIDE THIS ISSUE AGAINST THE ASSESSEE. 79. GROUND NO. 10. THE LAST ISSUE RAISED VIDE THIS GROUND IS REGARDING EXEMPTION U/S 54B. THIS EXEMPTION WAS DENIED BECAU SE THE ASSESSEE HAS NOT SOLD ANY AGRICULTURAL LAND. THE ACTION OF THE ASSES SING OFFICER WAS CONFIRMED BY LD. CIT(A). 80. BEFORE US, LD. COUNSEL FOR THE ASSESSEE DID NOT RAISE ANY CONTENTION AND ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORD ER OF CIT(A). 30 81. AFTER CONSIDERING RIVAL SUBMISSIONS WE FIND THA T SECTION 54B READS AS UNDER:- 54B. CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRI CULTURAL PURPOSES NOT TO BE CHARGED IN CERTAIN CASES.--(1) S UBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE THE CAPITA L GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BEING L AND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING USED BY *THE ASSESSE E BEING AN INDIVIDUAL OR HIS PARENT, OR A HINDU UNDIVIDED FAMI LY FOR AGRICULTURAL PURPOSES (HEREINAFTER REFERRED TO AS T HE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF TW O YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES, THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEA R IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WI TH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SE CTION, THAT IS TO SAY,-- (I) & (II) .. 82. THE READING OF THE ABOVE PROVISION CLEARLY SHOW S THAT THE SAME IS APPLICABLE IF LAND SOLD OR ACQUIRED BY THE GOVERNME NT HAS BEEN USED FOR AGRICULTURAL PURPOSE IN THE TWO YEARS IMMEDIATELY P RECEDING THE DATE ON WHICH TRANSFER TOOK PLACE. SINCE THE LAND ACQUIRED IN THE CASE BEFORE US HAS BEEN HELD TO BE NOT AN AGRICULTURAL LAND, THEREFORE, EXEMPTIO N UNDER THIS SECTION IS NOT APPLICABLE. ACCORDINGLY, WE DECIDE THIS ISSUE AGA INST THE ASSESSEE. 83. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/12/2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH DECEMBER, 2014 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR 31