Mushtaque Ahmed, Kolkata V. I.T.O., Ward-40(4), Kolkata, Kolkata

ITA 112/KOL/2023

AI Insights

The case revolves around the appeal by Mushtaque Ahmed against the order of the Commissioner of Income Tax (Appeals), which sustained the addition of Rs.90,62,720 as long-term capital gain on the sale of agricultural land. The land was acquired for non-agricultural purposes, and the assessee claimed exemption under section 10(37) of the Income Tax Act, asserting that the land was used for agricultural purposes up to two years prior to its acquisition. The Assessing Officer had treated the land as non-agricultural, leading to the addition of the capital gain to the assessee's income. The Tribunal, after reviewing the evidence presented, including a certificate from the Public Information Officer and records of agricultural activities, concluded that the land was indeed agricultural and granted the exemption.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128994 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 08-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 147; 250

Judgement Text

ITA No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, KOLKATA Before Shri Rajesh Kumar,Accountant Member & Shri Sonjoy Sarma, Judicial Member I.T.A. No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed,..................................Appellant 2, Tiretta Bazar Street, Kolkata-700073 [PAN: BARPA4927J] -Vs.- Income Tax Officer,.................................Respondent Ward-40(4), Kolkata, 3, Government Place West, Kolkata-700001 Appearances by: Shri Sanjay Bhattacharyya, FCA, appeared on behalf of the assessee Shri P.P. Barman, Addl. CIT,Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing : June 14, 2023 Date of pronouncing the order: June 28, 2023 O R D E R Per Shri Rajesh Kumar, Accountant Member:- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 15.12.2022 passed under section 250 of the Income Tax Act, 1961 for A.Y. 2014-15. ITA No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed 2 2. The only issue raised by the assessee in the grounds of appeal is against the order of ld. CIT(Appeals) for not allowing the deduction under section 10(37) of the Act thereby sustaining the addition of Rs.90,62,720/- on account of long-term capital gain on sale of agricultural land. 3. The facts in brief are that the assessee filed his return of income on 5 th December, 2015 disclosing total income at Rs.88,750/-, which was received from the Bank by way of interest. Thereafter the case of the assessee was reopened under section 147 of the Act on the ground of escaped assessment for non-disclosure of capital gain arising from compensation received from land acquisition by the Collector ,Distt Arwal for construction of Arwal Sahar approach road for acquiring non-agricultural land. The assessee received total compensation of Rs.91,62,720/- on which TDS of Rs.9,18,270/- was deducted. The assessee claimed that the said land was used for agricultural purposes prior to the date of acquisition i.e. 12.04.2012 and therefore the capital gain arising from the said acquisition is exempt from tax u/s 10(37) of the Act. The statutory notices were duly issued and served upon the assessee. According to the ld. Assessing Officer, the said land was non agricultural land but an urban agricultural land which was not used for agricultural purposes prior to the date of acquisition ITA No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed 3 and accordingly capital gain arising from the said acquisition was treated as long-term capital gain arising from sale of non-agricultural land resulting into an addition of Rs.91,62,720/- to the income of the assessee in the assessment framed under section 143(3) vide order dated 28.12.2017. 4. Being aggrieved, the assessee went in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) also affirmed the order of ld. Assessing Officer without giving any reason by holding that the assessee failed to establish and corroborate his claim for exemption under section 10(37) of the Act. 5. After hearing the rival contentions and perusing the material placed before us, we find that the assessee has received compensation of Rs.91,62,720/- on which TDS of Rs.9,16,272/- was deducted. The assessee filed the return for obtaining the refund of TDS deducted from the said compensation on the ground that capital gain arising from the sale of impugned asset is not taxable within the meaning of section 10(37) of the Act as the land was agricultural land and exclusively used for agricultural purposes during the period of two years prior to the date of acquisition. To corroborate this argument, ld. A.R. placed before the Bench the reply received in consequence to information sought under the Right to ITA No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed 4 Information Act, 2005, from Public Information Officer & Anchal Adhikari, Arwal, Office of Anchal Adhikari, Arwal bearing No. 553 dated 12 th May, 2023, which certifies the impuged land to be agricultural land prior to the date of acquisition. The ld. A.R. drew our attention to page no. 7, which represented the receipt of Malgujari, which was stated to be deposited when the agricultural activities were carried out on the said land, which clearly states that Khata Nos. 143 & 144 were subjected to agricultural operations prior to land acquired in the year 2012. We have also perused the details of land to be ‘Dhanattar, which means that the land was used for growing rice. After appreciating all these facts, we are satisfied that the impugned land was agricultural land and was being used for agricultural operations prior to the date of acquisition during two years prior to acquisition. Accordingly, the conditions as envisaged under section 10(37) of the Act are satisfied and any capital gain arose out of the said agricultural land is exempt under section 10(37) of the Act. We, therefore, set aside the order of ld. CIT(Appeals) by allowing the appeal of the assessee. The is accordingly directed to allow the exemption u/s 10(37) of the Act. ITA No. 112/KOL/2023 Assessment Year: 2014-2015 Mushtaque Ahmed 5 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on June 28 th , 2023. Sd/- Sd/- Sonjoy Sarma (Rajesh Kumar) Judicial Member Accountant Member Kolkata, the 28 th day of June, 2023 Copies to : (1) Mushtaque Ahmed, 2, Tiretta Bazar Street, Kolkata-700073 (2) Income Tax Officer, Ward-40(4), Kolkata, 3, Government Place West,Kolkata-700001 (3) Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi; (4) Commissioner of Income Tax-; (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.