ITO, CHENNAI V. Ananthi Rabindran, CHENNAI

ITA 1427/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7833 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-11-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R DURAIPANDIAN
• Assessee Lawyers: R VIJAYARAGHAVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO. 1427/MDS/2015 & +& / ASSESSMENT YEAR : 2008-09 THE INCOME-TAX OFFICER, NON-CORPORATE WARD 3(1), CHENNAI 600 034. V. SMT. ANANTHI RABINDRAN, 3/6, 13 TH AVENUE, HARRINGTON ROAD, CHETPET, CHENNAI 600 031. PAN : ADYPA0970E (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI R. DURAI PANDIAN, JCIT /0-. 1 2 / RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCAT E 3 1 4( / DATE OF HEARING : 23.11.2016 56+ 1 4( / DATE OF PRONOUNCEMENT : 22.12.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -4, CHENNA I, DATED 30.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS COMPU TATION OF CAPITAL GAINS. 2 I.T.A. NO.1427/MDS/15 3. SHRI R. DURAI PANDIAN, THE LD. DEPARTMENTAL REPR ESENTATIVE, SUBMITTED THAT THE ASSESSEE SOLD A PROPERTY AT TIRU PORUR FOR ` 2.18 CRORES TO M/S SKYLINES. THE ASSESSEE CLAIMED BEFOR E THE ASSESSING OFFICER THAT THE LAND IN QUESTION WAS AGR ICULTURAL LAND SITUATED BEYOND 8 KM RADIUS FROM THE NEAREST MUNICI PAL LIMITS, THEREFORE, THE SAME IS EXEMPT FROM TAXATION. THE A SSESSING OFFICER FOUND THAT THE LAND WAS CLASSIFIED AS RESIDENTIAL LAND BY TAMIL NADU REGISTRATION DEPARTMENT, THEREFORE, IT CANNOT BE CONSTRUED AS AGRICULTURAL LAND AT ALL. SINCE THE LAND WAS CLASS IFIED AS RESIDENTIAL LAND, THE ASSESSING OFFICER REJECTED THE CLAIM OF T HE ASSESSEE AND HELD THAT THE ASSESSEE IS LIABLE FOR CAPITAL GAINS TAX. HOWEVER, ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) FOUND THAT THE LAND IN QUESTION WAS CLASSIFIED AS AGRICULTURAL LAND AND TH E ASSESSEE WAS GROWING AGRICULTURAL CROPS ALL ALONG THE PERIOD OF HOLDING. THEREFORE, THE CAPITAL GAINS ARISING ON SALE OF THAT LAND IS N OT LIABLE FOR TAXATION. ACCORDING TO THE LD. D.R., SINCE THE LAND WAS CLASS IFIED AS RESIDENTIAL LAND BY THE STATE REGISTRATION DEPARTME NT, THE SAME CANNOT BE AN AGRICULTURAL LAND FOR ANY OTHER REASON S. 4. REFERRING TO THE COPY OF ADANGAL EXTRACT, WHICH IS AVAILABLE AT PAGE 18 OF THE PAPER-BOOK, THE LD. D.R. SUBMITTED T HAT IT WAS 3 I.T.A. NO.1427/MDS/15 CLASSIFIED AS PUNJAI LAND (DRY LAND). IT APPEARS T HE STANDING CROPS ARE COCONUT AND MANGO TREES. THE SOURCE OF IRRIGAT ION FOR CULTIVATING THE COCONUT AND MANGO TREES IS NOT AVAI LABLE ON RECORD. ACCORDING TO THE LD. D.R., MERELY BECAUSE SOME COCO NUT AND MANGO TREES ARE PLANTED ON RESIDENTIAL LAND THAT CA NNOT BE TREATED AS AGRICULTURAL LAND FOR THE PURPOSE OF CLAIMING EX EMPTION UNDER THE INCOME-TAX ACT. THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 5. ON THE CONTRARY, SH. R. VIJAYARAGHAVAN, THE LD.C OUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE LAND IN QUESTION W AS CLASSIFIED AS PUNJAI LAND IN THE STATE REVENUE RECORDS. THE PUNJ AI LAND, ACCORDING TO THE LD. COUNSEL, IS ALSO AN AGRICULTUR AL LAND. THE ASSESSEE HAS CULTIVATED COCONUT, MANGO TREES, WHICH IS EVIDENT FROM ADANGAL EXTRACT FILED BY THE ASSESSEE. ON A Q UERY FROM THE BENCH, HOW THE ASSESSEE WAS ABLE TO CULTIVATE COCON UT, MANGO TREES WITHOUT ANY SOURCE OF IRRIGATION?, THE LD.COU NSEL SUBMITTED THAT THE SOURCE OF IRRIGATION IS NOT KNOWN TO HIM. HE HAS FURTHER CLARIFIED THAT IT IS NOT KNOWN WHETHER THE ASSESSEE HAS OBTAINED ANY ELECTRICITY SERVICE CONNECTION FOR AGRICULTURE PURP OSE. SINCE THE LAND IN QUESTION WAS CLASSIFIED AS PUNJAI LAND BY THE ST ATE GOVERNMENT, 4 I.T.A. NO.1427/MDS/15 ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE LAND IN QUESTION IS AGRICULTURAL LAND. 6. REFERRING TO PAGES 21, 22 & 23 OF THE PAPER-BOOK , THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAND IS ALSO SUBJECT MATTER OF ACQUISITION BY THE STATE HIGHWAY AND MINO R PORTS DEPARTMENT. IN THE NOTIFICATION ISSUED UNDER LAND A CQUISITION ACT, THE LAND WAS SHOWN AS PUNJAI LAND, THEREFORE, IT IS OBVIOUS THAT THE SUBJECT MATTER WAS AGRICULTURAL LAND. SINCE IT IS ADMITTEDLY SITUATED BEYOND 8 KM OF RADIUS OF NEAREST MUNICIPAL LIMIT, T HE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE ASSESSEE IS NOT LIABLE T O PAY CAPITAL GAINS TAX. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAS SOLD LAND AT TIRUPORUR FOR ` 2.18 CRORES TO M/S SKYLINES. THE ASSESSEE CLAIMED BEFORE THE ASSESSIN G OFFICER THAT THE LAND IN QUESTION IS AGRICULTURAL LAND AND SITUA TED BEYOND 8 KM RADIUS OF NEAREST MUNICIPALITY, THEREFORE, EXEMPT F ROM CAPITAL GAINS. ON PERUSAL OF VILLAGE (10) I ACCOUNT, IT APPEARS TH E LAND IN QUESTION WAS CLASSIFIED AS PUNJAI (DRY LAND). THE LD.COUNSE L FOR THE ASSESSEE CLAIMS BEFORE THIS TRIBUNAL THAT PUNJAI LA ND ALSO AN 5 I.T.A. NO.1427/MDS/15 AGRICULTURAL LAND. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT CROPS CAN ALSO BE CULTIVATED IN PUNJAI LAND, BUT AL L THE PUNJAI LANDS CANNOT BE CONSTRUED AS AGRICULTURAL LAND. IF THE P UNJAI LAND IS ACTUALLY USED FOR CULTIVATION, THEN NECESSARILY SUC H A LAND HAS TO BE CONSTRUED AS AGRICULTURAL LAND. IN THE EARLIER YEA RS, OUR ANCESTORS USED TO CULTIVATE PUNJAI LANDS DURING RAINY SEASONS WITHOUT ANY SOURCE OF IRRIGATION. SUCH LANDS ARE CLASSIFIED IN STATE REVENUE RECORDS AS MANAVARI LANDS. IT IS NOT THE CASE OF THE ASSESSEE THAT THIS LAND IS CLASSIFIED AS MANAVARI LAND. IF THE L ANDS WERE CLASSIFIED AS MANAVARI LANDS AND USED FOR CULTIVATION DURING R AINY SEASONS, THEN WE MAY SAY THAT SUCH LANDS ARE AGRICULTURAL LA NDS. 8. NOW THE ASSESSEE CLAIMS THAT COCONUT AND MANGO T REES ARE CULTIVATED IN THE SUBJECT LAND. COCONUT AND MANGO TREES NEED IRRIGATION ATLEAST IN THE BEGINNING OF THE PLANTATI ON. WITHOUT THE SOURCE OF IRRIGATION, MANGO AND COCONUT TREES CANNO T BE GROWN ON PUNJAI LAND. IT IS NOT THE CASE OF THE ASSESSEE TH AT RIVER IRRIGATION IS AVAILABLE FOR THE SUBJECT LAND. ADMITTEDLY, NO RIV ER IRRIGATION IS AVAILABLE FOR THE SUBJECT LAND. THEREFORE, THE ASS ESSEE HAS TO NECESSARILY MAKE ARRANGEMENTS FOR IRRIGATION OF THE LAND BY LIFTING THE GROUND WATER THROUGH MOTOR PUMP. THE DETAILS O F THE ELECTRICAL 6 I.T.A. NO.1427/MDS/15 SERVICE CONNECTION OBTAINED BY THE ASSESSEE ARE NOT AVAILABLE ON RECORD. IT IS ALSO NOT KNOWN WHETHER THE ASSESSEE HAS CONSTRUCTED ANY BUILDING ON THE SUBJECT LAND. IN THE ABSENCE O F ANY SUCH DETAILS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE NATURE OF LAND CANNOT BE DECIDED BY THIS TRIBUNAL. THEREFORE , THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF CAPITAL GAINS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE MATTER AND BRING ON RECORD THE SOURCE OF IRRIGATION FOR CULTIVATING COCONUT AND MANGO TREES AND ALSO BRING ON RECORD WHETHER THE ASSESSEE HAS OBTAINED ANY ELECTR ICITY SERVICE CONNECTION FROM STATE ELECTRICITY BOARD. THE ASSES SING OFFICER SHALL ALSO EXAMINE THE PURPOSE FOR WHICH THE ELECTRICITY SERVICE CONNECTION WAS OBTAINED AS TARIFF. THEREAFTER THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LA W, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. 7 I.T.A. NO.1427/MDS/15 ORDER PRONOUNCED ON 22 ND DECEMBER, 2016 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 22 ND DECEMBER, 2016. KRI. 1 /49: ;:+4 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. 3 <4 () /CIT(A)-4, CHENNAI 4. 3 <4 /CIT-V, CHENNAI 5. := /4 /DR 6. & > /GF.