Prasad Ashok Potdar, Raigad V. Income-tax Officer, Panvel

ITA 1339/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9352 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-01-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Set aside; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI ANIL CHATURVEDI , AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 1339 /PUN/20 17 / ASSESSMENT YEAR : 2011 - 12 PRASAD ASHOK POTDAR PROP. M/S. ASHOK & SONS. SONARALI, MAIN ROAD, AT & POST. MHASLA, DIST. RAIGAD, PIN - 402105 PAN : ALQPP9488A ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD - 1, PANVEL. / RESPONDENT A SSESSEE BY : SHRI SUBODH RATNAPARKHI REVENUE BY : SHRI S.P WALIMBE / DATE OF HEARING : 08 .01.2020 / DATE OF PRONOUNCEMENT : 09 .01.2020 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 1, AURANGABAD DATED 20.03.2017 FOR THE ASSESSMENT YEAR 2011 - 12 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: 2 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 1. THE HON. CIT (A) ERRED IN DIRECTING THE L D . AO TO COMPUTE LONG TERM CAPITAL GAINS ON ACCOUNT OF SALE OF SHARE IN AGRICULTURAL LAN D AT VILLAGE KHADAND, MANGAON, DIST. RAIGAD, BY TAKING SALE CONSIDERATION IN THE HANDS OF THE APPELLANT AT RS.16,00,000/ - , NOT APPRECIATING THAT THE SAID LAND W AS 'AGRICULTURAL LAND' COVERED BY THE EXCEPTION CONTAINED IN SECTION 2(14)(III) OF THE I.T. ACT 1961, AND ACCORDINGLY THE GAINS ARISING ON SALE THEREOF DID NOT LEAD TO ANY I NCOME LIABLE TO TAX IN THE HANDS OF THE APPELLANT. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR VARY THE GROUNDS OF APPEAL AT ANY TIME BEFORE THE DECISION OF THE APPEAL . 2. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSING OFFICER MADE ADDITION OF RS.80,00,000/ - ON SALE OF AGRICULTURAL LAND UNDER THE HEAD CAPITAL GAINS. THAT BEFORE THE LD. CIT(APPEALS) IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSEE AL ONG WITH FOUR CO - OWNERS HAD SOLD THEIR AGRICULTURAL LANDS AT GUT NO.539/HISSA NO .1, VILLAGE KHADAND, MANGAON, DIST. RAIGAD FOR THE TOTAL SALE CONSIDERATION OF RS.80,00,000/ - ON 28.12.2010 AND THE SAID LAND HAD BEEN PURCHASED BY LATE SHRI ASHOK GAJANAN POTDAR I.E. FATHER OF THE ASSESSEE FOR PURCHASE CONSIDERATION OF RS.30,000/ - ON 09.0 1.1989. AS PER REGISTERED DOCUMENTS, THE SHARE OF THE ASSESSEE IN THE SALE CONSIDERATION ARISING FROM THE SAID SALE TRANSACTION WAS 1/5 TH BEING RS.16,00,000/ - ONLY. THE ASSESSING OFFICER HAD ALSO MENTIONED IN THE ASSESSMENT ORDER THAT FIVE CO - OWNERS WERE I NVOLVED IN THE SALE OF SAID LAND. IN SPITE OF THE ABOVE FINDINGS, THE ASSESSING OFFICER HAD PROCEEDED TO TAX THE ENTIRE SALE CONSIDERATION OF RS.80,00,000/ - IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER CONTENDED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT THE LAND SOLD WAS AGRICULTURAL LAND AT VILLAGE KHADAND, MANGAON, DIST. RAIGAD AND THE SAME WAS NOT CAPITAL ASSET AS THE SAID AGRICULTURAL LAND WAS COVERED BY THE EXCEPTION CONTAINED IN SECTION 2(14)(III) OF THE ACT. ACCORDINGLY, THE GAINS ARISING ON SALE OF SUCH AGRICULTURAL LAND DID NOT LEAD !O ANY 'INCOME' LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF THE ABOVE CLAIM, CERTIFICATE DATED 8.5.2015 FROM LOCAL 3 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 TALATHI (LAND REVENUE OFFICER) CONFIRMING THAT THE SAID AGRICULTURAL LAND WAS PUT TO USE FOR RAISING VEGETABLES AND AFFIDAVIT DATED 11.05.2015 FROM ONE SHRI AMOD SAPLE C ONFIRM ING THAT HE WAS ENGAGED IN UTILIZING THE CONCERNED LAND FOR RAISING AGRICULTURAL PRODUCE, WERE ALSO FILED. IT WAS SUBMITTED THAT THE ABOVE EVIDENCES COULD NOT BE PRODUCED BEFORE THE A SSESSING OFFICER FOR BONA FIDE REASONS AND THEREFORE THE SAME MAY KINDLY BE ADMITTED U/R . 46A OF THE INCOME TAX RULES. 3. THE LD. CIT(APPEALS), THEREAFTER, CALLED FOR REMAND REPORT VIDE LETTER DATED 20.11.2015. THE ASSESSEE PRIMA - FACIE CHALLENGED THE IMPUGNED ADDITION ON ACCOUNT OF CAPITAL GAIN PRIMARILY ON THE GROUND OF LAND BEING AGRICULTURAL IN NATURE. THEREFORE, IT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT HE SHOULD DEPUTE HIS INSPECTOR TO ASCERTAIN THE DIST ANCE OF LAND IN QUESTION FROM MAHAD MUNICIPAL CORPORATION OR ROHA MUNICIPALITY. HE WAS ALSO DIRECTED TO OBTAIN THE REPORT OF TALATI/REVENUE OFFICER ABOUT AGRICULTURAL ACTIVITIES BEING PERFORMED ON THE SAID LAND. THE REMAND REPORT WAS DATED 17.12.2015 WAS N OT RECEIVED IN TIME. THE INCOME TAX OFFICER, WARD - 1, PANVEL VIDE HIS REMAND REPORT DATED 05.05.2016 STATED THAT HE HAD DEPUTED HIS WARD INSPECTOR TO ASCERTAIN THE DISTANCE OF LAND FROM MUNICIPAL CORPORATION/ MUNICIPALITY JURISDICTION. THE WARD INSPECTOR HA D SUBMITTED REPORT DATED 30.12.2015 WHEREIN IT WAS STATED THAT THE LAND SITUATED AT GUT NO.539, VILLAGE KHADAND, TALUKA MANGAON, DIST. RAIGAD WAS ABOUT 32 KILOMETER AWAY FROM ROHA MUNICIPALITY AND 27 KILOMETER AWAY FROM MAHAD MUNICIPAL CORPORATION. THE INS PECTOR FURTHER REPORTED THAT THE LAND IN QUESTION WAS BEING USED FOR GROWING VEGETABLES AT THE TIME OF HIS VISIT AND FOR THE IRRIGATION OF LAND; THERE WAS A CANAL NEARBY I.E. 350 METERS AWAY FROM AGRICULTURAL LAND. THE LD. CIT(APPEALS) AS PER DETAILED REAS ONING AND OBSERVATION CONTAINED IN HIS ORDER WHICH IS ON RECORD HAD PARTLY ALLOWED THE GROUNDS OF APPEAL OF THE 4 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 ASSESSEE . T O THE EXTENT THAT WHERE THE ASSESSING OFFICER HAS MADE ADDITION OF ENTIRE SALE CONSIDERATION OF RS.80,00,000/ - , THE LD. CIT(APPEALS) FOUND THAT THE ASSESSEE HAD 1/5 TH SHARE IN THE SAID LAND AS PER SALE DEED DATED 28.12.2010 AND ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO COMPUTE LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE BY TAKING SALE CONSIDERATION OF RS.16,0 0,000/ - . THE A SSESSING OFFICER WA S ALSO DIRECTED TO ALLOW THE INDEXED COST OF ACQUISITION ON PROPORTIONATE BASIS (ONE FIFTH SHARE) TO THE ASSESSEE AS THE LAND IN QUESTION WAS PURCHASED ON 09.01.1989 FOR PURCHASE CONSIDERATION OF RS.30,000/ - . THUS, THIS G ROUND OF APPEAL WAS PARTLY ALLOWED BY THE LD. CIT(APPEALS) . 4. WE HAVE PERUSED THE CASE RECORD S AND GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(APPEALS). WE FIND THAT THE ASSESSEE SUBMITTED DOCUMENTS IN THE FORM OF ADDITIONAL EVIDENCES I.E. CERTIFICATE FRO M LOCAL TALATI (LAND REVENUE OFFICER) DATED 08.05.2015 CONFIRMING THAT THE SAID LAND WAS AGRICULTURAL LAND AND WAS PUT TO USE FOR AGRICULTURAL CROPS ALONG WITH AFFIDAVIT DATED 11.05.2015 FROM SHRI AMOD SAPLE CONFIRMING THAT HE WAS ENGAGED IN UTILIZING THE CONCERNED LAND FOR RAISING AGRICULTURAL PRODUCE ETC. THESE ADDITIONAL EVIDENCES WERE FORWARDED TO THE ASSESSING OFFICER AND REMAND REPORT WAS CALLED FOR BY THE LD. CIT(APPEALS) AND SPECIFICALLY ASKING THE ASSESSING OFFICER TO DEPUTE AN INSPECTOR ON THE SAI D LAND IN ORDER TO ASCERTAIN THE ACTUAL CHARACTER OF THE LAND AND WHETHER IT IS AGRICULTURAL LAND OR NOT. IT IS EVIDENT FROM THE RECORD THAT THE WARD INSPECTOR IN HIS REPORT DATED 30.12.2015 HAS STATED THAT THE LAND SITUATED AT GUT NO.539, VILLAGE KHADAND , TALUKA MANGAON, DIST. RAIGAD WAS ABOUT 32 KILOMETER AWAY FROM ROHA MUNICIPALITY AND 27 KILOMETER AWAY FROM MAHAD MUNICIPAL CORPORATION. THAT FURTHER, THE WARD INSPECTOR FURTHER REPORTED THAT THE LAND IN QUESTION 5 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 WAS BEING USED FOR GROWING VEGETABLES AT THE TIME OF HIS VISIT AND FOR THE IRRIGATION OF LAND; THERE WAS A CANAL NEARBY I.E. 350 METERS AWAY FROM THE SAID AGRICULTURAL LAND. THE ONLY REASON THAT THE LD. CIT(APPEALS) DECIDED TO COMPUTE LONG TERM CAPITAL GAIN ON PROPORTIONATE BASIS I.E 1/5 TH SHARE OF THE ASSESSEE BECAUSE AS PER 7/12 EXTRACT, THE LAND WAS SHOWN AS PADIT/ BARREN LAND. THE LD. CIT(APPEALS) ALSO OBSERVED THAT SO FAR THE INSPECTOR REPORT IS CONCERNED, HE HAS STATED THAT AT PRESENT AGRICULTURAL CROPS WERE GROWN BUT IT WAS NOT THE POSITION WHEN THE LAND WAS SOLD. WE OBSERVE IN THE ENTIRE ORDER OF THE LD. CIT(APPEALS), HE HAS NOT CLEARLY BROUGHT ANY FINDINGS NEGATING INSPECTORS REPORT. THE LD. CIT(APPEALS) HAS ALSO NOT GIVEN HIS FINDINGS ABOUT THE GENUANITY OF THE TALATI REPORT AN D ALSO OF THE AFFIDAVIT OF THE PERSON DOING AGRICULTURAL ACTIVITIES ON THAT LAND. 5. WE FIND IN THE CASE OF SHRI GOVIND GANGADHAR SABANE VS. ITO, WARD - 1(4) , PARBANI , IN ITA NO.1654/PUN/2016 FOR ASSESSMENT YEAR 2009 - 10 , IT HAD BEEN HELD THAT WHEN THE INS PECTOR HAS VISITED THE SITE AND HAS GIVEN A DETAILED REPORT THEN WITHOUT NEGATING THIS REPORT, THE REVENUE AUTHORITIES CANNOT SIMPLY REJECT THE CLAIM OF THE ASSESSEE WHICH IS NOT VALID IN LAW AND WE HAD ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THE PRESENT CASE BEFORE US, THE INSPECTORS REPORT CATEGORICALLY SUGGESTED THAT AGRICULTURAL PRODUCE WERE GROWN ON THE SAID LAND, THERE WAS A CANAL FROM WHICH IRRIGATION WAS DONE ON THE SAID LAND. EVEN THE CERTIFICATE OBTAINED FROM LOCAL TALATI SPECIFIES THE LAND BEING AGRICULTURAL LAND. THE LD. CIT(APPEALS) HAS NOT DISTINGUISHED OR BROUGHT ANY OTHER MATERIALS ON RECORD TO NEGATE SUCH FINDINGS IN THE INSPECTORS REPORT AND THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LAND SOLD WAS AGRICULTURAL LAND AND T HE SAME IS NOT 6 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 A CAPITAL ASSET AND THE SAME IS COVERED BY THE EXCEPTION CONTAINED IN SECTION 2(14)(III) OF THE ACT. IN VIEW OF THE EXAMINATION OF FACTS ON RECORD, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND ALLOW THE GROUNDS RAISED IN APPEAL BY THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON 09 TH DAY OF JANUARY , 20 20 . SD/ - SD/ - ANIL CHATURVEDI PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 09 TH JANUARY, 2020. SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, AURANGABAD. 4. THE PR. CIT - 2, THANE. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 7 ITA NO. 1339 /PUN/20 17 A.Y. 2011 - 12 DATE 1 DRAFT DICTATED ON 08 .01.2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 09 . 01 .20 20 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER