Dilip Balchand Raisoni, Pune V. Income-tax Officer, Pune

ITA 1153/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5812 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-09-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH GAWLI
• Assessee Lawyers: V L JAIN
• Keywords: Capital asset; Earning of tax free income
• Section: 143(3); 2(14)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.1153/PUN/2017 / ASSESSMENT YEAR : 2008-09 MR. DILIP BALCHAND RAISONI, 7, GURUGANESH SOCIETY, BIBWEWADI, PUNE 411 037. PAN : AAQPR2983R. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 2(1), PUNE. . / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN. REVENUE BY : SHRI RAJESH GAWLI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE, DT.01.12.2016 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FO R A.Y. 2008-09 ON 30.03.2009 DECLARING TOTAL INCOME OF RS.2,13,847/ -. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMEN T WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.24.12.2010 AND THE T OTAL INCOME / DATE OF HEARING : 11.01.2019 / DATE OF PRONOUNCEMENT: 10.04.2019 2 ITA NO.1153/PUN/2017 WAS DETERMINED AT RS.26,70,897/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE OR DER DATED 01.12.2016 (IN APPEAL NO.PN/CIT(A)-4/ITO, WARD-6(3), PUNE/274/2010-11) DISMISSED THE APPEAL OF ASSESSEE. AGG RIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS R AISED THE FOLLOWING EFFECTIVE GROUND : THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN C ONFIRMING AGRICULTURAL LAND AS NON-AGRICULTURAL LAND AS A SEQUEL IN MAKING AN ADDITION ON SALE THEREOF OF CAPITAL GAIN AT RS.24,57,050/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAS SOLD A LAND AND THE PROFITS ON ITS SALE WAS NOT OFFERED TO TAX. IT WAS ASSESSEES CONTENTION THAT THE LAND THAT WAS SOLD WAS AGRICULTURAL LAND AND THEREFORE GAINS ARE NOT TAXABLE. THE SUBMISSIONS OF THE ASSESSEE WERE NOT FOUND ACCEPTABLE TO AO AS HE NOTICED THAT THE AFORESAID LAND WAS PURCHASED IN 1984 AND WAS NOT CULTIVA TED AS EVIDENT FROM 7/12 EXTRACT. HE ALSO NOTICED THAT ASSESSE E HAD NOT SHOWN ANY AGRICULTURE INCOME FROM THE SAID LAND. HE ALSO N OTICED THAT THE ZONE CERTIFICATE ISSUED BY THE TOWN PLANNING DEPARTME NT OF GOVERNMENT OF MAHARASHTRA CERTIFIED THE LAND TO BE IN INDU STRIAL ZONE AND THE TALATI AS PER THE CERTIFICATE HAS STATED THE LA ND TO BE PAD ZAMIN. HE THEREFORE HELD THAT THE LAND SOLD BY THE ASSE SSEE TO BE NOT AN AGRICULTURAL LAND BUT A CAPITAL ASSET WITHIN THE MEANING OF SEC.2 (14) OF THE ACT. HE THEREAFTER, WORKED OUT THE LONG TERM CAP ITAL GAINS AT RS.24,57,050/- AND MADE ITS ADDITION. AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO BY OBSERVING AS UNDER : 3 ITA NO.1153/PUN/2017 5.3.2. BEFOR E DECIDING THE IS S U E, IT I S OF UTMOST IMPORTANCE OF INTENTION OF LEGISLATURES W HILE DRAFTING A C ERTAIN PRO V ISION IN THE ACT. IF TH E L A ND IN QUESTION IS USED FOR THE PURPOSE OF AGRICULTURE B Y THE SELLER, THE S ELLER MU S T NOT LOSE THE BENEFIT S OF EXEMPTION . THE CAPITAL G A IN ON S ALE OF A G RICULTU RAL LAND AS MENTIONED U/S 2(14) HAS BEEN EXEMPTED FROM TAX BECAUSE OF TH E NATUR E OF LAND. IN THE PR E SENT CA S E , THE LD. AR FOR THE APPELLANT H A S R E LI E D ON V A R I OU S D E CISI O N S FA V OU RI N G TH E A PPELL A NT. I HA V E CAREFULL Y PERU S ED TH E ASSES S MENT ORDER AND THE M A TERIAL PLACED ON RECORD . I FIND THAT , FIRSTL Y, TH E LAND IN QU E STION FORMS A PART OF INDUSTRIAL ZONE DECLARED AT THE TIME OF SALE , THEREB Y AFFECTING THE PRIC E OF CONSIDERATION. HENCE IT IS EVIDENT THAT THE B U YE R HAS BOUGHT TH E LAND W I TH AN INTENTION TO USE IT FOR INDUSTRIAL US E . SECONDL Y, THERE DOES NOT EXIST AN Y E V IDENCE TO PRO V E THE INCOME FROM TH E AGRICULTURAL ACTI V ITIES NOR AN Y E V IDENCE HAS BEEN BROUGHT ON RECORD TO PRO V E THE CONDUCT OF AGRICULTURAL ACTI V ITIES ON THE LAND. THIRDL Y, AS BROUGHT ON RECO R D BY THE AO , THE LAND IS CLASSIFIED AS ' ' ' PAD JAMIN' THEREBY MAKING TH E LAND WORTHLESS FOR CARRYING OUT THE AGRICULTURAL ACTIVIT IES . THE LAND IS NOT C AP A BLE OF BEING CULTI V ATED . ONL Y REL Y ING ON THE 7 /12 EXTR A CT SUBMITTED B Y TH E A PPELLANT , AND I G NORING THE OTHER FACTS OF THE C ASE , I C A NNOT C ONCLUD E TH E L A ND TO BE A GRI C U LTU RAL L A ND AS S TATED U/S 2 ( 14 ) OF THE A CT . U NDER SUCH C I R CUM S T A N C ES , I AM INCLI NE D T O AGR EE WI T H T HE F INDI NGS OF T H E A O IN N O T GRANTI N G T HE E XEM P TIO N . A C C OR D I N G L Y, T H E GR O U ND N O . 1 RAI S ED BY THE APPELLANT IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT THE LAND THAT WAS PURCHASED BY ASSESSEE IN 1984 WAS AN AGRICULTURAL LAND. HE SUBMITTED T HAT THE LAND BEING AN INDUSTRIAL ZONE DOES NOT CHANGE THE CHARACTER OF LAND AND FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE GURAJ AT HIGH COURT IN THE CASE OF CIT VS. SMT. LILAVATI PATEL (152 ITR 565). HE FURTHER SUBMITTED THAT WHEN THE LAND HAS BEEN CLASSIFIED A S AGRICULTURAL LAND IN LAND RECORDS AND IS SUBJECTED TO LAND REVENUE THEN THE LAND IS AGRICULTURAL LAND AND FOR THIS PROPOSITION, HE RELIE D ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. MING UEL CHANDRA PAIS AND ANOTHER REPORTED IN (2006) 282 ITR 61 8. HE FURTHER SUBMITTED THAT THE LAND AT THE TIME OF PURCHASE WAS NO T IN INDUSTRIAL ZONE BUT WAS BROUGHT IN INDUSTRIAL ZONE SUBSEQUENTLY ON 25.11.1992 AND TO SUPPORT HIS CONTENTION, HE POINTED TO THE TRANS LATED COPY OF 4 ITA NO.1153/PUN/2017 TOWN PLANNING AND VALUATION DEPARTMENT LETTER PLACED AT P AGE 89 OF THE PAPER BOOK. HE FURTHER SUBMITTED THE OBSERVATION O F LD.CIT(A) THAT CLASSIFICATION OF LAND AS PAD JAMIN MAKING THE LAND W ORTHLESS FOR CARRYING OUT THE AGRICULTURAL ACTIVITIES IS NOT CORRECT. HE SUBMITTED THAT PAD MEANS UNDEVELOPED BUT POTENTIALLY USEFUL LAND AND UNPLOWED AND UNSEEDED DURING A GROWING SEASON. HE, THE REFORE, SUBMITTED THAT THE CONCLUSION OF LD.CIT(A) THAT THE LAND C ANNOT BE CULTIVATED IS FACTUALLY INCORRECT. HE ALSO PLACED RELIANCE ON THE DECISIONS IN THE CASE OF CWT VS. H.V. MUNGALE 145 ITR 208 (BOM.), LAVLEEN SINGHAL VS. DCIT (DEL. ITAT) 111 TTJ 326. HE, THER EFORE, SUBMITTED THE ADDITION BE DELETED. LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH REFERENC E TO TAXABILITY OF SALE OF LAND. IT IS ASSESSEES CASE THAT THE LAND BE ING AGRICULTURAL LAND. THE IMPUGNED LAND WAS PURCHASED IN 1984 HAS NOT B EEN CONTROVERTED BY REVENUE. THE ASSESSEES CONTENTION T HAT THE LAND BEING CLASSIFIED AS AGRICULTURAL LAND IN THE LAND RECORDS AND IS SUBJECT TO LAND REVENUE HAS ALSO NOT BEEN CONTROVERTED BY REVENUE. 6. BEFORE ME, NO MATERIAL HAS BEEN PLACED BY REVENUE TO DEMONSTRATE THAT THE LAND HAS BEEN CONVERTED BY ASSE SSEE TO NON- AGRICULTURAL LAND. I FIND THAT THE COURTS HAVE HELD THAT T HE ENTRIES IN REVENUE RECORD RAISE A PRESUMPTION OF THE LAND BEING AGR ICULTURAL LAND UNLESS SUCCESSFULLY REBUTTED BY THE REVENUE. FURTHER, IN THE LIGHT OF THE DECISIONS CITED HEREINABOVE, I AM OF THE VIEW THAT AO WAS NOT 5 ITA NO.1153/PUN/2017 JUSTIFIED IN TREATING THE PROFIT ON SALE OF LAND AS CAPITAL GA INS AS AGAINST EXEMPT INCOME CONSIDERED BY ASSESSEE. I, THEREFOR E, DIRECT THAT THE LAND THAT WAS SOLD IS AGRICULTURAL LAND AND THEREFORE PROFIT FROM ITS SALE IS EXEMPT FROM TAX. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 10 TH DAY OF APRIL, 2019. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 10 TH APRIL, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE CIT(A)-4, PUNE. THE PR.CIT(3), PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.