DCIT, CHENNAI V. P.R.Ramasamy, CHENNAI

ITA 1271/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86316 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Capital asset
• Section: 2(14); 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . ! '# , $ % BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO.1271/MDS/2013 $ # '# / ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE VII, CHENNAI - 600 034. V. SHRI P.R. RAMASAMY, NO.18, L.G.N. STREET, MOUNT ROAD, CHENNAI - 600 002. PAN : AABPR 3090 C ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT +,)* - . / RESPONDENT BY : SHRI PHILIP GEORGE. ADVOCATE ! - / / DATE OF HEARING : 12.01.2015 0' - / / DATE OF PRONOUNCEMENT: 25.02.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I X, CHENNAI, DATED 19.02.2013 RELEVANT TO THE ASSESSMENT YEAR 20 08-09. 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIV IDUAL INVOLVED IN THE BUSINESS OF MANUFACTURE OF FASTENERS. THE A SSESSEE HAS FILED A RETURN OF INCOME BY ADMITTING A TOTAL INCOME OF ` 5,37,30,760/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. HAS OBSERVED THAT THE ASSESSEE HAS SOLD A LAND (LONG TE RM CAPITAL ASSET) FOR A CONSIDERATION OF ` 1,08,00,000/- AND CLAIMED THE ABOVE AS AGRICULTURAL LAND WHICH IS SITUATED AT NO.50, KANAT HOOR REDDYKUPPAM VILLAGE, KANCHEEPURAM DISTRICT. THE A. O. HAS SOUGHT EXPLANATION FROM THE ASSESSEE BY ISSUING SHO W CAUSE NOTICE ON 27.12.2010. IN REPLY, THE ASSESSEE HAS SUBMITTE D THAT HE HAD PURCHASED THE AGRICULTURAL LAND VIDE SALE DEED DATE D 18.01.1990 MEASURING 1.015 ACRES COMPRISED IN SURVEY NO.6/1 (P ART) AT NO.35, KANATHOOR REDDIKUPPAM VILLAGE, CHENGALPATTU TALUK, KANCHEEPURAM DISTRICT. THE SAID LAND IS SITUATED A DJACENT TO BUCKINGHAM CANAL. IN THE SAID LAND, THE ASSESSEE H AD CULTIVATED CUCUMBER, WATERMELON AND CASUARINA BESIDES GREENS A ND VEGETABLES. SOME OF THEM WERE LOCALLY SOLD AND SOM E OF THEM WERE CONSUMED BY THE ASSESSEES FAMILY. HE SUBMIT TED THAT HE DID NOT MAKE ANY GAIN FROM THE AGRICULTURAL OPERATIONS. THE SAID LAND WAS SOLD ON 12.04.2007, WHICH WAS RELEVANT TO ASSES SMENT YEAR 2008-09 FOR A TOTAL CONSIDERATION OF ` 1,08,00,000/- IN ACREAGE AS AGRICULTURAL LAND, WHICH IS APPARENT FROM THE SALE DEED. THE LAND IS 3 SITUATED BEYOND 8 KILOMETERS FROM LOCAL MUNICIPAL L IMITS. HE FURTHER SUBMITTED THAT ANY GAIN ARISING OUT OF SALE OF THE AGRICULTURAL LAND, WHICH WILL NOT FALL WITHIN THE MEANING OF CAPITAL A SSET UNDER SECTION 2(14)(III) OF THE INCOME-TAX ACT, 1961, WAS NOT LIA BLE TO CAPITAL GAINS TAX. THE A.O., AFTER CONSIDERING THE EXPLANATION O F THE ASSESSEE, CAME TO A CONCLUSION AS UNDER:- 3. THE ASSESSEE HAS PURCHASED THE LAND DURING THE F INANCIAL YEAR 1999-2000. FROM THE DATE OF PURCHASE THE ASSE SSEE HAS NOT CARRIED OUT ANY AGRICULTURAL ACTIVITIES. I HAV E VISITED THE LAND AT KANATHOOR REDDYKUPPAM VILLAGE, KANCHEEPURAM DIST RICT WITH THE HELP OF VILLAGE ADMINISTRATIVE OFFICER SHRI MAH ENDRA BABU, I HAVE NOT FIND OUT ANY TRACES OF AGRICULTURAL ACTIVI TIES CARRIED OUT IN KANATHOOR REDDYKUPPAM VILLAGE LAND. I HAVE FOUND O UT BUSHES IN THE KANATHOOR REDDYKUPPAM VILLAGE LAND. THERE IS M ASSIVE CONSTRUCTION ACTIVITIES IS GOING ON IN AND AROUND T HE ABOVE SAID LAND. TWO MULTISTORIED APARTMENTS HAS BEEN CONSTRU CTED NEAR TO KANATHOOR REDDYKUPPAM VILLAGE LAND. THE CALLING FO R INFORMATION U/S 133(6) HAS BEEN SENT TO THE TASHILDAR, CHINGALP ET TALUK . THE TASHILDAR HAS CERTIFIED THAT THERE WAS NO AGRICULTU RAL ACTIVITIES HAS NOT BEEN CARRIED OUT BEFORE AND AFTER THE SILLING O F LAND. THE ASSESSEE ALSO ASKED FURNISHED THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEARS 2004-05, 05-06, 06-07 AND 2007-08 IN WHICH THE ASSESSEE HAS NOT OFFERED ANY AGRICULTURAL INCOM E. IF THE ASSESSEE HAS CARRIED OUT ANY AGRICULTURAL ACTIVITIE S, THE AGRICULTURAL INCOME SHOULD BE OFFERED IN THE RETURN OF INCOME FILED. IN THE REVENUE LAND RECORDS ALSO THERE IS N O EVIDENCE FOR THE AGRICULTURAL ACTIVITIES CARRIED OUT. IF THE AS SESSEE HAS CARRIED OUT ANY AGRICULTURAL ACTIVITIES, THE USAGE OF LAND SHOULD BE ENTERED IN THE REVENUE LAND RECORDS. AS PER THE RE VENUE LAND RECORDS, THE LAND HAS NOT BEEN USED FOR THE AGRICUL TURAL ACTIVITIES FROM THE DATE OF PURCHASE TO TILL DATE. THE ASSESS EE HAS DIVIDED THE LAND INTO THREE PLOTS AND SOLD TO THE THREE PAR TIES. THE THREE PERSONS WHO ARE BUYING THE LAND IS GOING TO CONSTRU CT THE FARM HOUSE. THEREFORE THE KANATHOOR REDDYKUPPAM VILLAGE LAND HAS NOT BE USED FOR THE PURPOSE OF AGRICULTURE BEFORE A ND AFTER THE SELLING OF THE LAND. THE ASSESSEE COULD NOT PRODUC E EVEN SINGLE EVIDENCE THAT THE KANATHOOR REDDYKUPPAM VILLAGE LAN D HAS BEEN USED FOR THE PURPOSE OF AGRICULTURAL LAND. THE KAN ATHOOR REDDYKUPPAM VILLAGE LAND IS NOT USED FOR THE AGRICU LTURAL PURPOSE IN THE PAST AND PRESENT TIME ALSO. THE ASSESSEES CLAIM OF AGRICULTURAL LAND IS NOT CORRECT FOR THE FOLLOWING REASONS. 4 I. THE LAND IS NOT USED FOR THE PURPOSE OF AGRICULT URAL ACTIVITIES. II. IN THE REVENUE LAND RECORDS THE CERTIFICATE REC EIVED FROM THE TASHILDAR OFFICE CHENGALPET STATED THAT AS PER THE REVENUE LAND RECORDS THE ABOVE SAID LAND NEVER HAS BEEN USED FOR THE AGRICULTURAL ACTIVITIES. III. THE ASSESSEE HAS NOT OFFERED ANY AGRICULTURAL INCOME IN THE RETURN OF INCOME FILED. IV. THE ASSESSEE DOES NOT HAVE ANY BOREWELL. SINCE THE IRRIGATION FACILITIES ARE NOT AVAILABLE, THERE IS N O CHANCE TO AGRICULTURAL ACTIVITIES HAS BEEN CARRIED OUT. V. THE PEOPLE WHO ARE RESIDING NEAR TO THE LAND SAI D THAT THE LAND IS NEVER USED FOR THE PURPOSE OF AGRICULTURAL ACTIVITIES. VI. MASSIVE CONSTRUCTION ACTIVITIES IS GOING ON NEA R TO THE KANNATHUR REDDYKUPPAM VILLAGE LAND. THEREFORE THE ABOVE SAID LAND IS LOCATED IN THE RESIDENTIAL AREA. VII. THE ASSESSEE HAS DIVIDED LAND INTO THREE PLOTS AND SOLD TO THREE PARTIES (REAL ESTATE). VIII. IT IS VERY NEAR TO MAAYAJAL MULTIPLEX THEATRE (COMMERCIAL AREA). IX. THE ASSESSEE HAS SUBMITTED THAT HE HAD CULTIVAT ED CUCUMBER, WATERMELON AND CASURINA. AT THE SAME TIM E THE REVENUE LAND RECORDS SHOWS THAT THERE WAS NO AGRICULTURAL ACTIVITIES HAS BEEN CARRIED OUT. THEREFORE THE KANATHOOR REDDYKUPPAM VILLAGE LAND I S CONSIDERED AS CAPITAL ASSET AND CAPITAL GAINS CALCULATED ON SA LE PROCEEDS OF THE KANATHOOR REDDYKUPPAM VILLAGE LAND. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE LD. CIT(APPEALS). THE LD. CIT(AP PEALS) HAS GIVEN A FINDING THAT AS PER THE SALE DEED, THE LAND IS CLASSIFIED AS AGRICULTURAL LAND. THE ASSESSEE HAS PRODUCED BASIC EVIDENCES THAT THE LAND IS AGRICULTURAL LAND BY FURNISHING COPIES OF ADANGAL. WHEN THERE IS AN EVIDENCE PRODUCED BY THE ASSESSEE THAT THE LAND IS AN AGRICULTURAL ONE, THE BURDEN IS ON THE A.O. TO PROV E THAT THE LAND IS A NON-AGRICULTURAL ONE. IN THE ABSENCE OF ANY FINDIN G CONTRARY TO THE EVIDENCE SUBMITTED BY THE ASSESSEE, THE A.O. IS NOT JUSTIFIED IN 5 TREATING THE LAND AS NON-AGRICULTURAL LAND. THE LD . CIT(APPEALS) HAS FURTHER GIVEN A FINDING THAT AS PER THE ADANGAL, TH E ASSESSEE HAS MADE CASUARINA CULTIVATION. ACCORDINGLY, HE HELD T HAT THE LAND IS AN AGRICULTURAL LAND AND HENCE NOT TO BE CONSIDERED AS CAPITAL ASSET UNDER SECTION 2(14) OF THE ACT. HE THUS ALLOWED TH E ASSESSEES APPEAL. 4. ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER I N APPEAL BEFORE THE TRIBUNAL. THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE HAS NOT CARRIED ANY AGRICULTURAL OPERATIONS. THERE FORE THE GAIN ARISING OUT OF THE SALE OF CAPITAL ASSET IS TAXABLE AS CAPITAL GAINS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT PROD UCED ANY REVENUE RECORDS BEFORE THE A.O. THEREFORE, ACCORDI NG TO THE LD. D.R., THE FINDING GIVEN BY THE LD. CIT(APPEALS) BAS ED ON ADANGAL HAS TO BE VERIFIED. 5. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAD PURCHASED THE LAND AS AGRICULTURAL LAND AND SOLD THE SAME WITHOUT CONVERTING AS NON-AG RICULTURAL IN NATURE. THEREFORE THE LAND IS TO BE TREATED AS AGR ICULTURAL LAND AND IT IS EXEMPT FROM THE CAPITAL GAINS TAX. HE RELIED ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F MRS. SAKUNTHALA VEDACHALAM V. ACIT IN TC(A) NO.566/2013 DATED 06.08 .2014. 6 6. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBMISSIONS OF THE A SSESSEE, HAS COME TO A CONCLUSION THAT THE LAND WHICH IS IN DISP UTE NOT AT ALL USED FOR AGRICULTURAL ACTIVITIES. THE A.O. GAVE A SPECI FIC FINDING THAT THE CERTIFICATE ISSUED BY TEHSILDAR, CHINGALPET TALUK, STATED THAT AS PER THE REVENUE LAND RECORDS, THE ABOVE SAID LAND NEVER WAS USED FOR AGRICULTURAL ACTIVITIES. HOWEVER, THE LD. CIT(APPE ALS) HAS GIVEN A FINDING THAT AS PER THE ADANGAL ISSUED BY THE TEHSI LDRA, THE ASSESSEE CARRIED THE CASUARINA CULTIVATION. THE FI NDINGS OF THE A.O. AND LD. CIT(APPEALS) CONTRADICT EACH OTHER. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT TO DECIDE THE ISSUE WHETHER IT IS AGRICULTURAL LAND OR CAPITAL AS SET, IT IS NECESSARY TO EXAMINE ALL THE DETAILS. THEREFORE WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(APPEALS) AND REMIT THE MATTER BACK T O A.O. TO DECIDE THE ISSUE AFRESH KEEPING IN VIEW THE JUDGMENT OF TH E HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MRS. SAKUN THALA VEDACHALAM V. ACIT (SUPRA) AND ALSO THE JUDGMENT OF HON'BLE SU PREME COURT IN THE CASE OF CWT V. OFFICE-IN-CHARGE (COURT OF WARDS ), PAIGAH (105 ITR 133) (SC) AFTER GIVING REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 7 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 25 TH OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( . ) ( . ! '# ) (A. MOHAN ALANKAMONY) (V. DURGA RAO) /ACCOUNTANT MEMBER $ /JUDICIAL MEMBER /CHENNAI, = /DATED, THE 25 TH FEBRUARY, 2015. KRI. > - +$/?@ A@'/ /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. ! B/ () /CIT(A)-IX, CHENNAI-34 4. ! B/ /CIT-VII, CHENNAI-34 5. @D' +$/$ /DR 6. 'E# F /GF.