ITO, Wd 8(4), Akurdi, Pune, V. Shri Suresh Kantilal Sanghavi,

ITA 1319/PUN/2010

• Counselvise Citation: 131924514 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: PRASANNA JOSHI
• Keywords: Capital asset
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 1319/PN/2010 : A.Y. 2006-07 I.T.O. WARD 8(4), AKURDI, PUNE APPELLANT VS. SHRI SURESH KANTILAL SANGHAVI PROP. SANDEEP AGENCIES AT & POST CHAKAN TAL. RAJGURUNAGAR, PUNE. PAN ACGPT 5700 H RESPONDENT APPELLANT BY: MS. ANN KAPTHUAMA RESPONDENT BY: SHRI PRASANNA JOSHI DATE OF HEARING: 14-2-2012 DATE OF PRONOUNCEMENT: 17-2-2012 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER OF THE CIT-(A)-V PUNE DATED 9-8-2010 FOR A.Y. 2006- 07 ALLOWING EXEMPTION U/S 10(37) OF THE ACT. 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE HAD CLA IMED U/S 10(37) OF THE ACT ON THE BASIS THAT THE LAND BE LONGING TO THE ASSESSEE WHICH WAS COMPULSORILY ACQUIRED WAS LOCATED WITHIN 8 KMS FROM THE BOUNDARY OF THE PUNE MUNICIPAL CORPORATION. THE ASSESSING OFFICER AFTER EXAMINING THE MAP OF PUNE CORPORATIONS TERRITORIAL JURISDICTION ASCERTAINED THAT VILLAGE KHARABWADI, W HERE THE LAND WAS SITUATED, WAS LOCATED WITHIN 8 KMS OF THE MUNICIPAL BOUNDARY. THEREFORE, THE CLAIM OF DEDUCTI ON U/S 2 ITA NO.1310/PN/2010 SURESH K SANGHAVI A.Y. 2006-07 10(37) WAS NOT ADMISSIBLE TO THE ASSESSEE AND ACCOR DINGLY MADE AN ADDITION OF RS. 21,54,364/- TO THE INCOME O F THE ASSESSEE. ON APPEAL, THE CIT(A) FOLLOWING HIS OWN DECISION IN THE CASE OF PRAVIN BABUBHAI SHAH (ITA NO. 524/09 - 10(TR.IN.) ALLOWED THE CLAIM OF THE ASSESSEE. THE SAME IS CHALLENGED BY THE REVENUE BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE RAISED I N THIS APPEAL IS COVERED BY THE DECISION OF CO-ORDINATE BE NCH OF THIS TRIBUNAL IN THE CASE OF SHRI PRAVIN BABUBHAI S HAH IN ITA NO. 1047/PN/2010 FOR A.Y. 2006-07 VIDE ITS ORDE R DATED 30-11-2011, WHEREIN THE ISSUE HAS BEEN DECIDE D IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY OBSERVING AS UNDER: 2. RELEVANT FACTS ARE THAT THE A.O DISALLOWED THE CLAI MED EXEMPTION U/S. 10(37) OF THE ACT ON THE BASIS THAT THE LAND BELONGING TO THE ASSESSEE WHICH WAS COMPULSORILY AC QUIRED WAS LOCATED WITHIN 8 KMS FROM THE BOUNDARY OF THE P UNE MUNICIPAL CORPORATION. THE LD CIT(A) HAS, HOWEVER, GIVEN RELIEF BY ALLOWING THE CLAIMED EXEMPTION ON THE BAS IS OF PROPER INTERPRETATION OF SECTION 10(37) OF THE ACT. 3. HAVING GONE THROUGH THE ORDERS OF THE LOWER AUTH ORITIES, WE FIND THAT THE CONTENTION OF THE ASSESSEE BEFORE LD CIT(A) REMAINED THAT THE AGRICULTURAL LAND AT GAT NO. 199 , KHARABWADI, TAL. RAJGURUNAGAR, DIST. PUNE, OWNED BY THE ASSESSEE, WAS COMPULSORILY ACQUIRED BY MAHARASHTRA STATE GOVERNMENT FOR MIDC AGAINST PAYMENT OF COMPENSATIO N TO THE TUNE OF RS. 21,62,541/-. IT WAS CONTENDED THAT THE PURPOSE OF EXEMPTION PROVIDED U/S. 10(37) IS TO EXE MPT CAPITAL GAIN ON COMPULSORY ACQUISITION OF AGRICULTURAL LAN D FALLING UNDER THE DEFINITION OF CAPITAL ASSET AND OBSERVAT ION OF THE A.O THAT FOR EXEMPTION UNDER THE SAID PROVISION, L AND SHOULD BE OUTSIDE THE 8 KMS. LIMIT OF MUNICIPAL CORPORATIO N IS INCORRECT. IT WAS FURTHER SUBMITTED THAT THE LAND SITUATED OUTSIDE THE LIMIT OF 8 KMS. FROM BOUNDARIES OF THE MUNICIPALITY ARE NOT CAPITAL ASSET AT ALL AND CONSE QUENTLY DO 3 ITA NO.1310/PN/2010 SURESH K SANGHAVI A.Y. 2006-07 NOT ATTRACT CAPITAL GAINS WHEREAS SECTION 10(37) WA S INSERTED TO SPECIFICALLY EXCLUDE AGRICULTURAL LAND WHICH ARE COVERED UNDER THE DEFINITION OF CAPITAL ASSET I.E. LAND WHI CH IS WITHIN THE LIMIT OF 8 KMS. FROM THE MUNICIPAL LIMITS. DI SCUSSING THE CASES OF THE PARTY, THE LD CIT(A) HAS COME TO THE F OLLOWING CONCLUSION VIDE PARA NOS. 9 & 10 OF ITS ORDER, REPR ODUCED HEREUNDER FOR A READY REFERENCE : 9. I HAVE GIVEN CAREFUL CONSIDERATION TO THE MATTE R UNDER DISPUTE. IN MY VIEW THE LEARNED AO HAS MISR EAD THE PROVISION OF SECTION 10(37). I AM IN AGREEMENT WITH THE LEARNED A.R. OF THE APPELLANT AS REGARDS THE TRUE MEANING AND PURPOSE OF THE SAID PROVISION. UNDER SECTION 10(37), CAPITAL GAIN ARISING TO AN INDIVIDU AL OR AN HUF ON TRANSFER BY WAY OF COMPULSORY ACQUISITION OF URBAN AGRICULTURAL LAND IS NOT CHARGEABLE TO TAX FR OM THE ASSESSMENT YEAR 2005-06 IF SUCH COMPENSATION IS RECEIVED AFTER MARCH 31, 2004 AND THE AGRICULTURAL LAND WAS USED BY THE ASSESSEE (OR BY HIS PARENTS) FOR AGRICULTURAL PURPOSES DURING TWO YEARS IMMEDIATELY PRIOR TO THE TRANSFER. THAT, IN SHORT, IS THE IMPORT OF THE SAID PROVISION OF THE ACT. HOWEVER THE AO DENIED THE BE NEFIT OF EXEMPTION TO THE APPELLANT IN THIS CASE BASED ON LY ON THE FACT THAT THE LAND IS LOCATED WITHIN THE 8 KM L IMIT, WHICH FACT WAS NEITHER IN DISPUTE, NOR WAS IT IN AN Y WAY A DISQUALIFICATION FOR CLAIMING THE BENEFIT OF THE S AID PROVISION. DURING THE COURSE OF APPELLATE PROCEEDI NGS, THE LEARNED A.R. OF THE APPELLANT SUBMITTED COPIES OF THE NOTICE OF COMPULSORY ACQUISITION AND TALATHIS CERT IFICATE IN EVIDENCE OF USE OF THE LAND FOR PURPOSES OF AGRI CULTURE, WHICH ALSO SHOWS THE APPELLANT TO BE PART OWNER OF THE SAID PIECE OF AGRICULTURAL LAND. 10. THUS, UPON CAREFUL CONSIDERATION OF THE FACTUAL AND LEGAL POSITION, I AM OF THE VIEW THAT DENIAL OF THE BENEFIT OF THE SECTION 10(37) TO THE APPELLANT IN THIS CASE WAS BASED ON A WRONG READING OF THE RELEVANT LEGAL PROV ISION, AND, AS SUCH, IS NOT SUSTAINABLE. ACCORDINGLY, THE SE GROUNDS OF APPEAL ARE ALLOWED. 4. HAVING GONE THROUGH THE PROVISIONS OF SECTION 10 (37), PRINCIPALLY WE DO NOT FIND REASON TO INTERFERE WIT H THE FINDING OF THE LD CIT(A) ON THE ISSUE ESPECIALLY WHEN THE F ACT THAT ASSESSEE HAD RECEIVED COMPENSATION ON THE DATE AFTE R MARCH 31, AGAINST THE COMPULSORY ACQUISITION OF AGRICULTU RAL LAND IN QUESTION, AS NARRATED IN STATEMENTS OF FACTS BEFORE THE LD CIT(A) HAS NOT BEEN REBUTTED. THE ISSUE IS THUS DECIDED AGAINST THE REVENUE. 4 ITA NO.1310/PN/2010 SURESH K SANGHAVI A.Y. 2006-07 4. FACTS BEING SIMILAR, SO FOLLOWING THE SAME, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING TH E CLAIM OF THE ASSESSEE. THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 17-2-2012 SD/- SD/- G.S. PANNU SHAILENDRA KUMAR YADAV ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 17 TH FEBRUARY 2012 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-(A)- V PUNE 4. THE CIT V PUNE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL