Shri Chetan H. Shah, Vadodara V. The Income Tax Officer, Ward-1(3)(1), Vadodara

ITA 1320/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0871 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-12-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDYUT TRIVEDI
• Assessee Lawyers: NIRMIT ME H TA
• Keywords: Capital asset; Business income; Opportunity of being heard
• Section: 271(1)(c); 143(3); 2(14); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1320/AHD/2017 (ASSESSMENT YEAR: 2011-12) SHRI CHETAN H SHAH 23, AMARKUNJ SOCIETY, ELLORA PARK, VADODARA- 390007 VS. ITO WARD-1(3)(1), AAYKAR BHAVAN RACE COURSE CIRCLE, VADODARA- 390007 [PAN NO. AGY PS3 617 H] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI NIRMIT MEHTA, AR RESPONDENT BY : SHRI VIDYUT TRIVEDI, SR. D.R. DATE OF HEARING 19.12.2019 DATE OF PRONOUNCEMENT 20.12.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 28.02.2017 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS) 4, VADODARA ARISING OUT OF THE ORDER DA TED 28.03.2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED AS TO THE ACT) PASSED BY THE ITO, WARD-3(1), BARODA FOR ASSESSMENT YEAR 2010-11 WITH THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-4, VADODARA [THE CIT(A)] ERRED IN FACT AND IN LAW IN CONFIRMI NG THE ACTION OF THE LEARNED INCOME TAX OFFICER, WARD 3(1), VADODARA IN CONSIDERING THE LAND SITUTATED AT VILLAGE SHERKHI AS NOT AN AGRICULTURAL LAND. ITA NO.1320/AHD/2017 SHRI CHETAN H SHAH VS. ITO ASST.YEAR 2011-12 - 2 - 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN HOLDING THE ASSESSEES LAND VILLAGE, S HERKHI AS A CAPITAL ASSET AS DEFINED IN SECTION 2(14) OF THE INCOME TAX ACT, 1961 (THE ACT) AND THEREBY TAXING THE GAIN ARISING ON SALE OF LAND U/S . 45 OF THE ACT. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT( A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN NOT ALLOW ING EXEMPTION U/S. 10(37) OF THE ACT ON THE SUM OF RS. 29,90,006/-. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN TREATING THE INCOME ARISING ON SALE OF LAND AS BUSINESS INCOME INSTEAD OF CAPITAL GAIN. 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW CONF IRMING THE ACTION OF THE AO IN TREATING AGRICULTURAL INCOME AMOUNTING TO RS. 1,62,200/- AS INCOME FROM OTHER SOURCES. 6. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTIONS OF THE AO IN CHARGING INTEREST U/S. 234A OF THE ACT . 7. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTIONS OF THE AO IN CHARGING INTEREST U/S. 234B OF THE ACT . 8. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN CHARGING INTEREST U/S. 234C OF THE ACT . 9. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTIONS OF THE AO IN INITIATING PENALTY U/S. 271(1)(C) OF T HE ACT. 2. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE GROUND NO. 1 IS THE MAIN GROUND AND IF THIS GROUND IS DECIDED ALL O THER GROUND BECOME INFRUCTUOUS. ASSESSEES CASE IS THIS THAT THE LAND IN QUESTION SITUATED AT SHERKHI IS AN AGRICULTURAL LAND AND AWAY FROM 8KMS. FROM THE MUNICIPAL LIMITS OF BARODA. THUS, IT IS NOT A CAPITAL ASSET AS DEFINED UNDER SECTION 2(14) OF THE ACT AND THEREBY TAXING THE GAIN ON THE SALE OF THE SAID LAND UNDER SECTION 45 OF THE ACT DOES NOT ARISE. HE ALS O RELIED UPON A CIRCULAR DATED 06.01.1994 IN SUPPORT OF HIS CASE AND ALSO TH E JUDGMENTS ITA NO.1320/AHD/2017 SHRI CHETAN H SHAH VS. ITO ASST.YEAR 2011-12 - 3 - PRONOUNCED BY THE CO-ORDINATE BENCH ON IDENTICAL IS SUE. HOWEVER, THIS PARTICULAR ASPECT HAS NOT BEEN CONSIDERED BY THE AU THORITIES BELOW AND HENCE, HE FAIRLY PRAYS FOR SETTING ASIDE THE ISSUE TO THE FILE OF THE LD. AO FOR DECIDING THE SAME AFRESH. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDE R PASSED BY THE AUTHORITIES BELOW. 3. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S AVAILABLE ON RECORD INCLUDING THE NOTIFICATION DATED 06.01.1994 ISSUED BY THE CBDT. AND THE JUDGMENT PASSED BY THE CO-ORDINATE BENCH IN ITA NO. 2138/AHD/2012 FOR A.Y. 2009-10. IT APPEARS THAT WHILE DECIDING THE ISSUE THE AUTHO RITIES BELOW HAS NOT TAKEN INTO CONSIDERATION THE PREVAILING NOTIFIC ATION DATED 06.01.1994 WHICH IS APPLICABLE TO THE INSTANT CASE OF THE ASSE SSEE. IT IS FACT THAT IN THE EVENT THE LAND IN QUESTION IS FOUND TO BE BEYOND MU NICIPAL LIMITS IN TERMS OF SUCH NOTIFICATION AND THUS SATISFIES THE C RITERIA AS AN AGRICULTURAL LAND THEN IT IS NOT A CAPITAL ASSET, NEITHER THE GA IN ARISING OUT OF THE SALE OF THE SAID LAND IS TAXABLE UNDER SECTION 45 OF THE AC T. HOWEVER, SINCE THE ISSUE HAS NOT CONSIDERED BY THE AUTHORITIES BELOW W E FIND IT FIT AND PROPER TO REMIT THE SAME TO THE FILE OF THE LD. AO TO DECI DE IT AFRESH UPON TAKING INTO CONSIDERATION THE NOTIFICATION DATED 06.01.199 4 AND ALSO JUDGMENT PASSED BY THE CO-ORDINATE BENCH IN ITA NO. 2138/AHD /2012 AND UPON GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E AND UPON TAKING INTO CONSIDERATION THE EVIDENCE ON RECORD AND ANY OTHER EVIDENCE WHICH THE ITA NO.1320/AHD/2017 SHRI CHETAN H SHAH VS. ITO ASST.YEAR 2011-12 - 4 - ASSESSEE TO CHOOSE TO FILE AT THE TIME OF HEARING O F THE ISSUE. THUS, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 20 / 1 2 /201 9 SD/- SD/- (PRADIP KUMAR KEDIA) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/12/2019 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 19.12.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.12.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 19 .12.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .12.2019 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S .12.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.12.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER