Mukund R.Kathare, CHENNAI V. ACIT, CHENNAI

ITA 1221/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7870 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B. SAHADEVAN
• Assessee Lawyers: G. SEETHARAMAN
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , !.. # $%, ' () BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1221/MDS/2016 + ,+ / ASSESSMENT YEAR : 2007-08 SHRI MUKUND R. KATHARE, C/O S. VENKATRAM & CO., CHARTERED ACCOUNTANTS, 218, T.T.K. ROAD, ALWARPET, CHENNAI - 600 018. PAN : AABPK 2815 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. (.// APPELLANT) (01.// RESPONDENT) ./ 2 3 / APPELLANT BY : SHRI G. SEETHARAMAN, CA 01./ 2 3 / RESPONDENT BY : SHRI B. SAHADEVAN, JCIT # 2 4' / DATE OF HEARING : 04.01.2017 56, 2 4' / DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 1, CHENN AI, DATED 08.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI G. SEETHARAMAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD AGRICULT URAL LAND AT 2 I.T.A. NO.1221/MDS/16 PADUR VILLAGE AND OFFERED CAPITAL GAIN FOR TAXATION . ACCORDING TO THE LD. REPRESENTATIVE, THE LAND AT PADUR VILLAGE WAS C LASSIFIED AS WET LAND. THE ASSESSEE, IN FACT, WAS CULTIVATING PADDY IN THE SAID LAND. THIS IS EVIDENCED FROM THE ADANGAL AND CHITTA EXTRA CTS MAINTAINED BY THE VILLAGE ADMINISTRATIVE OFFICER. HOWEVER, TH E ASSESSEE WRONGLY INCLUDED THE CAPITAL GAIN IN THE TOTAL INCO ME. ACCORDING TO THE LD. REPRESENTATIVE, CAPITAL GAIN ON SALE OF AGR ICULTURAL LAND IS EXEMPT FOR TAXATION UNDER THE INCOME-TAX ACT. IN O THER WORDS, THE CAPITAL GAIN ON SALE OF AGRICULTURAL LAND IS ALSO C ONSIDERED TO BE AN AGRICULTURAL INCOME, HENCE, IT CANNOT BE SUBJECT MA TTER OF TAXATION UNDER THE INCOME-TAX ACT. 3. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT AN APPEAL WAS FILED BEFORE THE CIT(APPEALS) CO NTENDING THAT THE INCOME WAS WRONGLY INCLUDED IN THE TOTAL INCOME , THEREFORE, IN VIEW OF THE JUDGMENT OF MADRAS HIGH COURT IN SAKUNT ALA VEDACHALAM & VANITHA MANICKAVASAGAM V ACIT (369 ITR 558), THE PROFIT ON SALE OF AGRICULTURAL LAND CANNOT BE INCLU DED IN THE TOTAL TAXABLE INCOME. THE CIT(APPEALS) IGNORING THE EVID ENCE FILED BY THE ASSESSEE, OBSERVED THAT THE ASSESSEE HAS NOT AD DUCED ANY EVIDENCE TO SHOW THAT THE LAND IN QUESTION IS AN AG RICULTURAL LAND. 3 I.T.A. NO.1221/MDS/16 REFERRING TO THE COPY OF ADANGAL AND CHITTA EXTRACT S, A COPY OF WHICH IS AVAILABLE AT PAGE 4 AND 5 OF THE PAPER-BOOK, THE LD. REPRESENTATIVE SUBMITTED THAT THESE ARE THE REVENUE RECORDS WHICH INDICATE THAT THE LAND IN QUESTION IS AGRICULTURAL LAND AND THE ASSESSEE WAS CULTIVATING PADDY. THEREFORE, ACCORDI NG TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) IS NOT JUSTIFIED I N SAYING THAT THE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE. 4. ON THE CONTRARY, SHRI B. SAHADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE ADMITTE DLY HAS NOT CLAIMED THAT THE LAND IN QUESTION IS AGRICULTURAL L AND, BEFORE THE ASSESSING OFFICER. THE ASSESSEE VOLUNTARILY OFFERE D THE GAIN ON SALE OF THE LAND FOR TAXATION. THEREFORE, THE ASSE SSING OFFICER ACCEPTED THE OFFER MADE BY THE ASSESSEE. ACCORDING TO THE LD. D.R., THE CIT(APPEALS) FOUND THAT THERE WAS NO EVID ENCE TO INDICATE THAT THE LAND IN QUESTION IS AGRICULTURAL LAND. TH E CIT(APPEALS) FURTHER FOUND THAT EVEN IF IT IS AGRICULTURAL LAND, IT IS NOT ELIGIBLE FOR EXEMPTION SINCE THE SAID LAND WAS WITHIN THE CITY L IMIT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIG HTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4 I.T.A. NO.1221/MDS/16 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE PROFIT ON SALE OF LAND WAS WRONGLY INCLUDED IN THE TOTAL TAXABLE INCOME. THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT IF THE LAND IN QUESTION IS ACTUALLY AN AGRICULTURAL LAND, THE PROFIT ON SALE OF THE LAND CANNOT BE A SUBJECT MATTER FOR TAX ATION UNDER THE INCOME-TAX ACT PROVIDED IT IS SITUATED BEYOND THE P RESCRIBED LIMIT FROM THE CITY/MUNICIPALITY. EVEN IF THE ASSESSEE, BY MISTAKE, INCLUDED THE AGRICULTURAL INCOME OR GAIN ON SALE OF AGRICULTURAL LAND IN THE TOTAL TAXABLE INCOME, THAT CANNOT BE A REASO N FOR MAKING AN ADDITION. IF IT IS REALLY AN AGRICULTURAL INCOME O R PROFIT ON SALE OF AGRICULTURAL LAND, THE PROFIT HAS TO BE NECESSARILY EXCLUDED. 6. THE ASSESSEE HAS NOW PRODUCED COPIES OF ADANGAL AND CHITTA EXTRACTS. THESE DOCUMENTS SHOW THAT THE LAN D WAS CLASSIFIED AS WET LAND IN THE STATE REVENUE RECORDS AND THE AS SESSEE WAS ALSO CULTIVATING PADDY IN THE SAID LAND. THE VERY FACT THAT THE LAND WAS CLASSIFIED AS WET LAND SHOWS THAT THERE WAS A SOURC E OF IRRIGATION IN THE LAND EITHER FROM RIVER OR FROM NATURAL SOURCE. HOWEVER, THESE DOCUMENTS WERE NOT EXAMINED BY BOTH THE AUTHORITIES BELOW. MOREOVER, IT HAS TO BE EXAMINED WHETHER THE LAND IN QUESTION FALLS 5 I.T.A. NO.1221/MDS/16 WITHIN THE CITY / NOTIFIED MUNICIPALITY OR IT IS BE YOND THE PRESCRIBED LIMIT OF THE CITY / MUNICIPAL LIMIT. SINCE THESE F ACTS WERE NOT EXAMINED BY THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-E XAMINED. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE IN THE LIGHT OF THE COPIES OF CHITTA AND ADANGAL EXTRACTS FILED BY THE ASSESSE E AND THEREAFTER FIND OUT THE DISTANCE BETWEEN THE MUNICIPAL LIMIT A ND THE LAND IN QUESTION AND DECIDE THE ISSUE IN ACCORDANCE WITH LA W, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 31 ST JANUARY, 2017 AT CHENNAI. SD/- SD/- ( ! . . # $% ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 31 ST JANUARY, 2017. KRI. 6 I.T.A. NO.1221/MDS/16 2 04$9 :9,4 /COPY TO: 1. ./ /APPELLANT 2. 01./ /RESPONDENT 3. # ;4 () /CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 9< 04 /DR 6. !+ = /GF.