Dilbagh Singh, Mohali V. ITO, Mohali

ITA 120/CHANDI/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6708 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUMAR SHARMA
• Keywords: Capital asset
• Section: 54B; 54F; 147; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 118/CHD/2014 ASSESSMENT YEAR: 2009-10 SH. HARI SINGH, VS. THE ITO, WARD 6(3), VILLAGE BALLOMAJRA, MOHALI TEHSIL & DISTT. MOHALI PAN NO. DGBPS4098N ITA NO. 120/CHD/2014 ASSESSMENT YEAR: 2009-10 SH. DILBAG SINGH, VS. THE ITO, WARD 6(3), VILLAGE BALLOMAJRA, MOHALI TEHSIL & DISTT. MOHALI PAN NO. ACEPS9810J & ITA NO. 121/CHD/2014 ASSESSMENT YEAR: 2009-10 SH. LABH SINGH, VS. THE ITO, WARD 6(3), VILLAGE BALLOMAJRA, TEHSIL, MOHALI TEHSIL & DISTT. MOHALI PAN NO. CLXPS4916B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI PAWAN KUMAR SHARMA DATE OF HEARING : 24.10.2017 DATE OF PRONOUNCEMENT : 31.10.2017 2 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE DIFFERENT ASSESSEES AGAINST THE SEPARATE ORDERS OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)] , CHANDIGARH DATED 4..11.2013. 2. SINCE THE FACTS AND ISSUE INVOLVED IN ALL THE CA PTIONED APPEALS ARE IDENTICAL, THEY HAVE BEEN HEARD TOGETHER AND ARE BE ING DISPOSED OF BY THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE, THE FA CTS HAVE BEEN TAKEN FROM THE CASE OF SHRI HARI SINGH, ITA NO. 118/CHD/2 014, AS A LEAD CASE, WHEREIN, THE ASSESSEE HAS TAKEN THE FOLLOWING EFFEC TIVE GROUNDS OF APPEAL:- 2. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSIT ION OF THE CASE, THE LD. AO HAS ERRED IN INITIATING THE PROCEEDINGS U/S 148 R.W.S. 147 OF THE ACT AND THEREFORE THE WHOLE IMPUGNED A SSESSMENT IS VOID-AB-INITIO AND DESERVES TO BE QUASHED . FURTHER, VIDE PARA 5.1 OF HIS ORDER, WORTHY CIT(A) HAS ERRED IN N OT ALLOWING THIS GROUND AGITATED BEFORE HIM. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WORTHY CIT(A) VIDE PARA 4.2.1 OF HIS ORDER, HAS ERRED IN NOT ALLO WING THE DEDUCTION OF RS. 85,18,750/- CLAIMED U/S 54B OF THE ACT TO BE SET OFF ON ACCOUNT OF PURCHASE OF AGRICULTURAL LANDS AG AINST GAIN ON SALE OF AGRICULTURAL LANDS. THE ACTION OF LD. AO AS WELL AS WORTHY CIT(A) WAS ARBITRARY IN THIS REGARD. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WORTHY CIT(A) VIDE PARA 4.2.2 OF HIS ORDER, HAS ERRED IN NOT ALLO WING THE DEDUCTION OF RS. 85,18,750/- CLAIMED U/S 54F OF THE ACT TO BE SET OFF ON ACCOUNT OF CONSTRUCTION OF RESIDENTIAL HOUSE AGAINST GAIN ON SALE OF AGRICULTURAL LANDS. THE ACTION OF L D. AO AS WELL AS 3 WORTHY CIT(A) WAS ARBITRARY IN THIS REGARD. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WORTHY CIT(A) VIDE PARA 6.1 OF HIS ORDER, HAS ERRED IN CONFIRMING THE ACTION OF LD. AO WHEREIN LD. AO ARBITRARILY CALCULATED THE COST O F ACQUISITION WHICH IS TOTALLY UNJUSTIFIED. 3. THE SHORT ISSUE INVOLVED IN THIS APPEAL IS AS TO WHETHER THE INCOME EARNED BY THE ASSESSEE ON ACCOUNT OF SALE OF HIS AGRICULTU RAL LAND IS A CAPITAL ASSET WHICH IS SUBJECTED TO CAPITAL GAIN TAX OR THE SAME DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET AS PROVIDED U/S 2(14)(I II) OF THE INCOME-TAX ACT, 1961. 4. BRIEF FACTS OF THE CASE ARE THAT PROCEEDING U/S 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WERE INITIATED AGAINST TH E ASSESSEE AS INFORMATION AVAILABLE WITH THE DEPARTMENT HAS REVEALED THAT THE ASSESSEE ALONGWITH SHRI MANJIT SINGH, LABH SINGH DALJIT SINGH (EACH HAVING SHARE OF 13.33%) AND MOTA SINGH HAVING SHARE OF 46.68%) HAD SOLD THEIR AGRICU LTURAL LAND MEASURING 1.875 ACRES IN VILLAGE BALLOMAJRA TO M/S HAMIR REAL ESTA TE (P) LTD DURING THE FINANCIAL YEAR FOR RS. 10,31,35,000/-, OUT OF WHICH THE ASSESSEES SHARE WAS WORKED OUT TO RS. 1,37,50,000/- BUT NO TAX ON THE C APITAL GAINS EARNED THEREFROM WAS OFFERED. DURING THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE DID NOT COMPLY TO THE NOTICES ISSUED HENCE THE ASSESSING OFFICER PASS ED ORDER U/S 144 DETERMINING THE CAPITAL GAINS BASED ON THE INFORMATION OBTAINED FROM REVENUE AUTHORITIES AND DETERMINING THAT THE LAND IS SITUATED WITHIN 1 KM FROM THE URBAN AREA OF MOHALI KHARAR ROAD NH-2 AND, HENCE, WAS A CAPITAL A SSET U/S 2(14)(III) OF THE I.T. ACT. 5. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THA T HE HAD INVESTED IN PURCHASE OF AGRICULTURAL LAND AND WAS ELIGIBLE FOR EXEMPTION U/S 54B OF THE ACT. 4 THE CIT(A), HOWEVER, DID NOT ACCEPT THE CLAIM ON TH E GROUNDS THAT ONLY AGREEMENTS TO SELL HAVE BENE PRODUCED AND HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION. 6. AGGRIEVED THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 7. THE ASSESSEE HAS PRODUCED THE COPY OF SALE DEED AND AGREEMENT TO SELL. 8. THE LD. AR OF THE ASSESSEE HAS FURTHER BROUGHT T O OUR NOTICE THE COPY OF THE ORDER IN THE CASE OF DCIT VS. SURINDER SINGH CH AHAL, MOHALI ITA NO. 156/CHD/2015 DECIDED ON 3.8.2016 WHEREIN THE TRIBUN AL HAS UPHELD THE FINDINGS OF THE LD. CIT(A) HOLDING THAT THE LAND OF THAT ASS ESSEE SITUATED AT VILLAGE BALLOMAJRA WAS AT A DISTANCE OF MORE THAN 1 KM FROM THE EARMARKED POINT AT THE TIME WHEN THE TRANSACTION OF SALE OF LAND HAD TAKEN PLACE AND WOULD NOT CONSTITUTE CAPITAL ASSET AS PER THE NOTIFICATION NO . S.O. 10(E) DATED 6.1.1994 AND AS AMENDED BY NOTIFICATION NO. S.O. 1302 DATED 28.1 2.1999 ISSUED BY GOVERNMENT OF INDIA THE LD. COUNSEL HAS FURTHER RE LIED UPON THE DECISION IN THE CASE OF M/S MANJIT SINGH / KAKA SINGH, MOHALI VS. I TO (ITA NO. 119/CHD/2014) ORDER DATED 20.9.2017 WHEREIN ON IDEN TICAL ISSUE THE MATTER HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT. THE LD. COUNSEL HAS ALSO RELIED UPON THE CBDT CIRCULAR NO. 17/2015 DATED 6.10.2015 WHEREIN IT HAS BEEN DIRECTED THAT THE AME NDMENT PRESCRIBING THE DISTANCE OF THE LAND IN QUESTION FROM THE MUNICIPAL ITY HAS TO BE TAKEN AERIALLY IS TO BE APPLIED PROSPECTIVELY I.E. IN RELATION TO TH E YEAR 2014-15 AND SUBSEQUENT ASSESSMENT YEARS. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT SINCE IN RELATION TO THE IDENTICAL TRANSACTION OF THE SALE O F SIMILARLY SITUATED LAND, THE ISSUE AS TO WHETHER THE SAID LAND FALLS WITHIN THE DEFINITION OF CAPITAL ASSET OR NOT HAS BEEN REMANDED BACK TO THE FILE OF THE ASSES SING OFFICER, HENCE, THE MATTER RELATING TO THE APPEALS OF THE PRESENT ASSES SEES BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 5 9. THE LD. DR, HOWEVER, HAS SUPPORTED THE ORDER OF THE CIT(A). 10. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. SURINDER SINGH CHAHAL (SUPRA) WHEREIN IN RESPECT OF SIMILARLY SITUATED LAND, THE TRIBUNAL HAS UPHELD THE FINDINGS OF THE CIT(A) HOLD ING THE SAME AS NOT A CAPITAL ASSET SUBJECTABLE TO CAPITAL GAINS TAX. FURTHER, IN THE CASE OF M/S MANJIT SINGH / KAKA SINGH (SUPRA), IDENTICAL MATTER HAS BEEN RESTO RED TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT. SINCE, T HE FACTS AND CIRCUMSTANCES OF THE CASES UNDER CONSIDERATION ARE IDENTICAL, HENCE, THE MATTER IN THE CAPTIONED APPEALS IS ALSO RESTORED TO THE FILE OF THE ASSESSI NG OFFICER FOR DE NOVO ASSESSMENT. 11. IN THE RESULT, ALL THE APPEALS ARE TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2017 . SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST OCT, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR