K.Bhavani Shankar, Coimbatore V. DCIT, Coimbatore

ITA 1271/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3967 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K RAGHU
• Section: 2(14)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1271/MDS/2017 ' (' / ASSESSMENT YEAR : 2013-14 SHRI K. BHAVANI SHANKAR, 37, RACE COURSE ROAD, COIMBATORE 641 018. PAN : ALTPB 6312 J V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, INCOME TAX OFFICE, RACE COURSE ROAD, COIMBATORE 641 018. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI K. RAGHU, CA ,-*+ . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1$ / DATE OF HEARING : 24.07.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 27.07.2017 / 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, COIMB ATORE, DATED 31.03.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2 I.T.A. NO.1271/MDS/17 2. SHRI K. RAGHU, THE LD. REPRESENTATIVE FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSEE SOLD AN AGRICULTURAL LA ND. EVEN THOUGH THE LAND WAS SITUATED WITHIN 8 KMS RADIUS OF COIMBA TORE MUNICIPALITY, IT IS NOT A NOTIFIED MUNICIPALITY, TH EREFORE, THE AGRICULTURAL LAND CANNOT BE CONSTRUED AS CAPITAL AS SET FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. ACCORDING TO T HE LD. REPRESENTATIVE, FOR ASSESSMENT YEAR 2012-13, AN IDE NTICAL ISSUE CAME BEFORE THIS TRIBUNAL AND THIS TRIBUNAL REMITTE D BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDER ATION. REFERRING TO THE INFORMATION SAID TO BE RECEIVED FROM TALUKA OFF ICE UNDER RIGHT TO INFORMATION ACT, THE LD. REPRESENTATIVE SUBMITTE D THAT THE SUBJECT LAND IS SITUATED WITHIN TERRITORIAL JURISDICTION OF PERUR TOWN PANCHAYAT AND IT DOES NOT FORM PART OF COIMBATORE M UNICIPALITY. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE L AND IS CLASSIFIED AS AGRICULTURAL LAND, THEREFORE, THERE CANNOT BE AN Y LEVY OF CAPITAL GAIN TAX. 3. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE POPULATION OF PERUR TOW PANCHAYAT IS LESS THAN TEN LAKHS. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, AS PER DEFINITION PROVIDED IN SECTION 2(14) OF THE INCOME-TAX ACT, 19 61 (IN SHORT 'THE 3 I.T.A. NO.1271/MDS/17 ACT'), THE SUBJECT LAND CANNOT BE CONSTRUED TO BE C APITAL ASSET. ACCORDING TO THE LD. REPRESENTATIVE, THE SUBJECT LA ND HAS TO BE NECESSARILY TREATED AS AGRICULTURAL LAND AND NOT LI ABLE FOR CAPITAL GAIN TAX. REFERRING TO THE ORDER OF THIS TRIBUNAL FOR A SSESSMENT YEAR 2012-13 IN I.T.A. NO.689/MDS/2016 DATED 23.02.2017, THE LD. REPRESENTATIVE SUBMITTED THAT ON IDENTICAL SITUATIO N, THE MATTER WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE SUBJ ECT LAND WAS SITUATED WITHIN 2 KMS RADIUS FROM COIMBATORE MUNICI PALITY. MOREOVER, THE ASSESSING OFFICER HAS NOT CONSIDERED THE POPULATION OF LOCALITY. THE ASSESSEE IS RAISING THIS ISSUE FO R THE FIRST TIME BEFORE THIS TRIBUNAL, THEREFORE, ACCORDING TO THE LD. D.R. , AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSING OFFICER TO CONSIDER T HE POPULATION OF LOCALITY AND THEREAFTER DECIDE THE ISSUE, AS IT WAS REFERRED TO THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2012-13. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A PART OF THE LAND WAS SOLD BY THE ASSESSEE DURING ASSESSMENT YEAR 201 2-13, WHICH CAME BEFORE THIS TRIBUNAL FOR CONSIDERATION IN I.T. A. 4 I.T.A. NO.1271/MDS/17 NO.689/MDS/2016. THIS TRIBUNAL BY AN ORDER DATED 2 3.02.2017 REMANDED BACK THE MATTER TO THE ASSESSING OFFICER B Y OBSERVING AS UNDER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE LAND IN QUESTION IS AN AGR ICULTURAL LAND. FROM THE ASSESSMENT ORDER, IT APPEARS THAT T HE ASSESSEE WAS EXAMINED. THE ASSESSEE CLARIFIED BEFOR E THE ASSESSING OFFICER DURING THE COURSE OF EXAMINATION THAT HE PURCHASED THE LAND IN QUESTION FOR MAKING THE SAME INTO PLOTS AND SELL IN AS FARM SITES. THE ASSESSING OFF ICER HOWEVER PROCEEDED ON THE ASSUMPTION THAT THE ASSESS EE CLAIMED THAT THE LAND IN QUESTION IS AN AGRICULTURA L LAND. THE ASSESSEE HAS NOW PRODUCED THE COPIES OF THE CHITTA ISSUED BY THE TALUK OFFICE AND ALSO COPY OF THE ORDER OF S ETTLEMENT COMMISSIONER IN RESPECT OF THIS LAND. THESE MATERI ALS WERE NOT CONSIDERED BY THE ASSESSING OFFICER AND THE CIT (APPEALS). THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT WHEN THE ASSESSEE CLAIMS THAT THE LAND IN QUESTION IS AGRICULTURAL LAND, THE CLASSIFICATION OF THE LAND B Y THE STATE REVENUE DEPARTMENT PLAYS AN IMPORTANT ROLE. THEREF ORE, IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE CLASSIFI CATION OF THE LAND BY THE STATE REVENUE DEPARTMENT BEFORE REA CHING ANY CONCLUSION. IN OTHER WORDS, THE ASSESSING OFFI CER HAS TO FIND OUT WHETHER THE LAND IN QUESTION IS A WET L AND OR DRY LAND. IN CASE OF WET LAND, DEFINITELY THERE WILL BE A SOURCE FOR IRRIGATION. IN CASE OF DRY LAND, THE ASSESSEE COULD ALSO CULTIVATE THE SAME BY CREATING ARTIFICIAL SOURCE OF IRRIGATION BY DIGGING WELL OR BORE WELL. THEREFORE, BEFORE CO NCLUDING THAT THE LAND IN QUESTION IS NOT AN AGRICULTURAL LA ND, IT IS NECESSARY TO BRING ON RECORD THAT THE CLASSIFICATIO N OF THE LAND BY THE STATE REVENUE DEPARTMENT., THE ACTUAL C ROP IF ANY CULTIVATED BY THE ASSESSEE. MOREOVER SINCE THE ASSESSEE CLAIMS TO HAVE PURCHASED THE LAND TO MAKE INTO PLOTS AND SALE IT AS FARM SITES, IT NEEDS TO BE ASC ERTAINED WHETHER THE ASSESSEE INTENDED TO ENGAGE IN THE BUSI NESS OF 5 I.T.A. NO.1271/MDS/17 REAL ESTATE. SINCE, THESE ASPECTS WERE NOT EXAMINED EITHER BY THE ASSESSING OFFICER OR BY THE CIT (APPEALS), T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCOR DINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER TH E MATTER AFRESH AND DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO FILE THE NECESSARY MATERIAL B EFORE THE ASSESSING OFFICER. 6. SINCE THE ISSUE IS IDENTICAL AS THAT OF ASSESSME NT YEAR 2012- 13, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED AS DIRECTED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2012-13. MOREOVER, THE ISSUE RAISED BY THE ASSESSE E REGARDING POPULATION AND NOTIFICATION OF MUNICIPALITY ALSO NE ED TO BE EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE ASSESSEE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH AND DECID E THE SAME IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPO RTUNITY TO THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO FILE NECESSARY MATERIAL BEFORE THE ASSESSING OFFICER. 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF LEGAL EXPENDITURE OF ` 12,07,193/-. 6 I.T.A. NO.1271/MDS/17 8. THE ASSESSEE CLAIMS LEGAL EXPENDITURE OF ` 12,07,193/- ON SALE OF AGRICULTURAL LAND, DUE TO SOME DISPUTE WITH BUYER FOR REALIZATION OF TIME OF SALE CONSIDERATION. THE CIT (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT THESE EXPENDITURES WERE INCURRED AFTER TRANSFER OF THE LAND, AND ALLOWED THE BALANCE SALE CONSIDERATION. SINCE THE MAIN ISSUE OF ASSESSMENT OF CAPITAL GAIN IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THIS ISSUE ALSO NEEDS TO BE RECONSIDERED BY THE ASSESSIN G OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ISSUE OF DISALLOWANCE OF LEGAL EXPENDITURE IS ALSO REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RECONSIDER THE MATTER IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACC ORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. 9. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 I.T.A. NO.1271/MDS/17 ORDER PRONOUNCED ON 27 TH JULY, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 27 TH JULY, 2017. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-1, COIMBATORE 4. PRINCIPAL CIT-1, COIMBATORE 5. 69 ,1 /DR 6. :' ; /GF.