BHOMA RAM HUF L/H LALARAM RAIGAR, Jaipur V. ITO, Jaipur

ITA 148/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5099 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAGHUVIR SINGH DAGUR CIT DHK
• Keywords: Capital asset; Principle of natural justice; Bonafide belief; Cost of acquisition; Reasonable cause; Condonation of delay
• Section: 54B; 54F; 2(14); 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 148/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. M/S. BHOMA RAM HUF (THROUGH COPARCENERS AND L/HS) (1)SHRI LALARAM RAIGAR & (2) SHRI SITARAM RAIGAR, VILL. & POST: THIKARIYA, TEHSIL: SANGANER, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 7(2), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAHHB 1049 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDARTH RANKA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20.07.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/07/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-III, JAIPUR DATED 18.07.2011 PERTAINING TO ASSESSMENT YE AR 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE IMPUGNED LANDS WERE ANCESTRAL, WERE UND ER CULTIVATION, LAND REVENUE WAS BEING PAID, WERE BEYOND THE SPECIF IED LIMIT AND BEING AGRICULTURAL LANDS WERE NOT CAPITAL ASSET U/S .2(14)(III) OF THE INCOME-TAX ACT, WERE EXEMPT, WERE NOT LIABLE TO ANY CAPITAL GAIN AND THE LD. LOWER AUTHORITIES GROSSLY ERRED AND EXCEEDE D THEIR JURISDICTION IN HOLDING LIABLE TO CAPITAL GAIN AND IN COMPUTING LONG TERM CAPITAL GAIN OF RS.2,12,91,192/- AND LEVYING TAX, INTEREST AND P ENALTY. 1.1 THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN DRAWING ADVERSE INFERENCE AND NOT CONSIDERING THAT THE APPELLANTS W ERE NEVER ASSESSED IN THE PAST, HAVE NOT BEEN ASSESSED IN THE SUCCEEDI NG YEARS, ARE ILLITERATE RUSTIC AGRICULTURISTS, IGNORANT OF LAW A ND ITS TECHNICALITIES AND 2 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO THE LD. LOWER AUTHORITIES GROSSLY ERRED IN LEVYING TAX AND REJECTING THE APPEAL. 2. THAT SHRI BHOMARAM DIED ON 23.1.2010, THE FACTUM OF HIS DEATH WAS KNOWN TO THE LEARNED ASSESSING OFFICER, STILL H E CLAIMS TO HAVE SERVED THE OLD NOTICE U/S. 148 DATED 18.1.2010 ON 2 .2.2010 AFTER HIS DEATH. THE IMPUGNED NOTICE WAS NOT SERVED ON SHRI SITARAM AND SHRI LALARAM. THE ACTION AND ENTIRE PROCEEDINGS ARE WIT HOUT JURISDICTION, ILLEGAL, INVALID AND LIABLE TO BE QUASHED. 2.1. THAT THE LD. COMMISSIONER OF INCOME-TAX (A) GR OSSLY ERRED IN REJECTING THE JURISDICTIONAL ISSUE RAISED BEFORE HI M AND DISMISSING ON THE GROUND THAT THE QUESTION OF JURISDICTION OF ANY AO COULD NOT BE RAISED U/S.124(3)(B) OF THE ACT WHEN THE QUESTION H AS BEEN RAISED AS TO THE VALIDITY OF THE IMPUGNED PROCEEDINGS AND TH E IMPUGNED NOTICE. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FA ILED TO APPRECIATE THE REAL ISSUE. 2.2 THAT THE IMPUGNED PROCEEDINGS ARE ILLEGAL, IN-V ALID, UNAUTHORIZED AND LIABLE TO BE QUASHED/SET ASIDE. IN THE ALTERNATIVE AND WITHOUT PREJUDICE : 3. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN NOT ALLOWING DEDUCTION U/S.54B OF THE ACT IN RESPECT OF REINVEST MENTS MADE BY THE APPELLANT HUF IN THE NAME OF ITS CO-PARCENERS/MEMB ERS ON THE PLEA THAT UNDER THE SAID SECTION IS IMPERMISSIBLE TO A HINDU UNDIVIDED FAMILY. IT MAY BE MENTIONED THAT THE LANGUAGE OF E ARLIER EXISTING SEC.54-B WAS VAGUE, DISCRIMINATORY WITH THE SCHEME OF REINVESTMENTS CONTAINED UNDER THE CHAPTER WHILE ENACTING SECTIONS 54, 54F ETC. AND TO CURE SUCH DISCRIMINATION THE LEGISLATURE SUBSTI TUTED THE EXPRESSION THE ASSESSEE OR A PARENT OF HIS BY FINANCE ACT, 2 012 BY THE EXPRESSION THE ASSESSEE BEING AN INDIVIDUAL OR HI S PARENT, OR A HINDU UNDIVIDED FAMILY AND SUCH SUBSTITUTION IS CLARIFIC ATORY, CURATIVE, RETRO- ACTIVE AND OPERATIVE FOR THE ASSESSMENT YEAR 2006-0 7. 4. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN NOT ALLOWING DEDUCTION U/S.54-F OF THE ACT AS DETAILED IN THE WR ITTEN SUBMISSION PLACED BEFORE THE ASSESSING OFFICER IN THE ASSESSME NT/ APPELLATE PROCEEDINGS. 4.1 THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN NOT ALLOWING DEDUCTION FOR THE AMOUNT PAID FOR ADVERSE POSSESSIO N. 3 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO 4.2. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED I N NOT ALLOWING THE BROKERAGE PAID FOR THE SALE OF THE AGRICULTURAL LA ND. 4.3. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED I N NOT ALLOWING DEDUCTION FOR RS.1,01,64,900/- + RS.1,01,15,090/- C LAIMED IN THE WRITTEN SUBMISSIONS IN THE ASSESSMENT/APPELLATE PR OCEEDINGS. 5. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN NOT ADOPTING INDEXED COST CLAIMED AT RS.75,000/- PER HECTOR AGAI NST ALLOWED AT RS.3273/- PER BIGHA. 5.1. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED I N NOT ALLOWING THE EXEMPTION/DEDUCTION ALLOWED LIN RESPECT OF SIMILAR LANDS TO THE SONS OF THE CO-OWNER, SHRI MONA RAM. 6. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN NOT CONSIDERING THE COST OF IMPROVEMENT IN THE AGRICULTURAL LAND SO LD BY THE APPELLANTS FATHER. 7. THAT THE IMPUGNED ASSESSMENT AS WELL AS THE APPE LLATE ORDER ARE BAD FOR WANT OF ADEQUATE OPPORTUNITY AND BEING IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 8. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN DRAWING ADVERSE INFERENCE ON THE PLEA THAT NO EVIDENCES HAVE BEEN F ILED IN SUPPORT OF THE CLAIMS MADE WHEN ADEQUATE OPPORTUNITY WAS NOT P ROVIDED AND THE APPELLANTS BEING ILLITERATE, RUSTIC AGRICULTURISTS, UNAWARE OF THE REQUIREMENTS, THE ADVERSE INFERENCE DRAWN IS DRASTI C AND UNSUSTAINABLE IN LAW. 8.1. THAT THE IMPUGNED APPELLATE ORDER HAS BEEN MAD E IN HASTE, IGNORING DETAILED SUBMISSIONS DATED 18.7.2011, IN S INGLE HEARING AND BY ORDER ON THE SAME DAY I.E. 18.7.2011, WITHOUT AP PLICATION OF MIND, WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS MADE ORALLY AND WITH PRE-DETERMINED MIND TO REJECT IN A SUMMARY MANNER. 9. THAT THE ASSESSING OFFICER GROSSLY ERRED IN COMP UTING TOTAL INCOME AT RS.2,12,91,192/- AGAINST NIL AND THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN DISMISSING TH E APPEAL SUMMARILY. 10. THAT THE LD. LOWER AUTHORITIES GROSSLY ERRED IN LEVYING TAX AS WELL AS INTEREST. 4 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO 11. THAT THE APPELLANT SEEKS PERMISSION TO RAISE AN Y NEW GROUND, OR ALTER, AMEND OR MODIFY ON OR BEFORE OR AT THE TIME OF HEARING. 2. THE APPEAL IS BARRED BY 1249 DAYS. AN APPLICATIO N FOR CONDONATION OF DELAY IS FILED SEEKING CONDONATION OF DELAY. IN SUPPORT OF T HE APPLICATION, AN AFFIDAVIT IS ALSO FILED BY THE APPELLANT. THE LD. COUNSEL FOR THE ASS ESSEE HAS REITERATED THE SUBMISSIONS AS MADE IN THE APPLICATION. 2.1. ON THE CONTRARY, THE LD. D/R SHRI RAGHUVIR SIN GH DAGUR HAS VEHEMENTLY OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THERE IS NO REASONABLE CAUSE SHOWN BY THE ASSESSEE FOR DELAY IN FILING THE APPEAL. 2.2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE AS MADE IN T HE APPLICATION ARE AS UNDER :- (I) SHRI CHANDA RAM AND MOHNA RAM WERE SONS OF LA TE SHRI SEOJI RAM. THEY WERE CULTIVATING AGRICULTURAL LANDS WHICH WERE OWNED BY THE STATE AND WERE TENANTS. KHATONI/ GIRDAVARI WERE MUTATED IN FAVOUR OF SHRI CHANDA RAM AND SHRI MOHNA RAM ON THE DEATH OF SHRI SHYOJIRAM. ON THE DEATH O F SHRI MOHNARAM AND CHANDRAM IT WAS MUTUATED IN FAVOUR OF KANARAM AND BHOMARAM. SHRI KANARAM DIED AND HIS SHA RE WAS MUTATED IN FAVOUR OF HIS FOUR SONS. FOUR SONS OF K ANA RAM AND SHRI BHOMA RAM SOLD THE TENANCY RIGHTS OF THE AGRIC ULTURAL LANDS TO SHRI KASHI RAM S/O SHRI MANIRAM C/O SANSKA R BUILDTEK (P) LTD., NARAYANA TOWER, JAIPUR FOR TOTAL CONSIDERATION OF RS. 4,29,40,900/-. SHARE OF SHRI BHOMARAM AND H IS FAMILY WAS HALF I.E. RS. 2,14,70,450/-. HE WAS ADVCISED T HE SALE CONSIDERATION IS EXEMPT. HE WAS ALSO ADVISED AND H E INVESTED 5 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO THE SALE CONSIDERATION FOR PURCHASE OF AGRICULTURAL LAND, PLOTS AND FOR CONSTRUCTION OF HOUSES IN THE NAME OF CO- PARCENERS/MEMBERS OF THE HUF. HE WAS ADVISED AND W AS UNDER THE BONAFIDE BELIEF THAT THERE IS NO LIABILIT Y TO INCOME-TAX AND, THEREFORE, INCOME-TAX RETURN NEED NOT BE FILED VOLUNTARILY AND SUO-MOTTO. IT MAY BE STATED THAT SHRI BHOMA RA M WAS ILLITERATE, A RUSTIC AGRICULTURIST AND WAS NOT EVEN KNOWING TO PUT HIS SIGNATURES. (II) A NOTICE U/S.142(1) WAS ISSUED TO LATE SHRI BH OMA RAM FOR THE ASSESSMENT YEAR 2006-07 AND IT WAS DULY RESPOND ED AND REPRESENTED BY SHRI NARENDRA GOSWAMI, ADVOCATE, WHO FILED NECESSARY INFORMATION AND CHALLENGED THAT THE NOTIC E ISSUED TO THE INDIVIDUAL IS ILLEGAL AS THE AGRICULTURAL LANDS WERE ANCESTRAL AND BELONGED TO HIS HUF. THEREAFTER, IT APPEARS A NOTHER NOTICE U/S.148 WAS ISSUED ON 18.1.2010 IN THE HUF C APACITY AND IT IS CLAIMED BY THE REVENUE TO HAVE BEEN SERVE D ON 2.2.2010. HOWEVER, UNFORTUNATELY SHRI BHOMA RAM DI ED ON 23.1.2010 LEAVING TWO SONS, NAMELY, SHRI SITA RAM A ND SHRI LALA RAM, ONE WIDOW, NAMELY SMT. AANI DEVI (NOT KAN I DEVI) AND SEVEN DAUGHTERS, A VERY LARGE FAMILY. THE LEAR NED ASSESSING OFFGICER THOUGH KNEW THE DEATH OF SHRI BHOMARAM STI LL HE CLAIM TO HAVE SERVED THE OLD NOTICE U/S. 148 ON 2.2.2010 IGNORING HIS DEATH ON 23.1.2010. NOTICE WAS NOT SERVED ON SHRI SITA RAM AND SHRI LALA RAM. BOTH THE BROTHERS, SHRI SITA RA M AND SHRI LALA RAM ARE ILLITERATE, RUSTIC AGRICULTURISTS AND SIMPLY LEARNT TO PUT SIGNATURES. THEY WERE ABSOLUTELY IGNORANT OF L AW. (III) BOTH THE BROTHERS WERE UNDER THE BONAFIDE BEL IEF THAT DUE COMPLIANCE IS BEING MADE THROUGH SHRI NARENDRA GOSW AMI AND ALL THE NECESSARY INFORMATION WITH REGARD TO PARTIC ULARS OF SALE DETAILS, SALE CONSIDERATION, REINVESTMENTS ETC. ARE BEING/HAVE BEEN SUBMITTED TRULY, CORRECTLY AND FULLY BEFORE TH E LD. ASSESSING OFFICER IN THE EARLIER ASSESSMENT PROCEEDINGS AND S UBSEQUENTLY. 6 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO FULL COOPERATION WAS DULY EXTENDED AND THERE WAS NO NEGLIGENCE OR ANY INACTION ON THE PART OF BOTH SONS OF LATE SH RI BHOMA RAM. (IV) THE INCOME-TAX OFFICER, WARD 7(2), JAIPUR MADE AN ASSESSMENT ORDER ON 30.11.2010 DENYING THE DEDUCTIO NS AND COMPUTING ASSESSED INCOME AT RS.2,12,91,192/-. HE INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT SEPARA TELY FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME. (V) SHRI SITARAM FELL SERIOUSLY ILL AND HAD TO UNDE RGO TREATMENT WITH MANY DOCTORS AND HOSPITALS FOR OVER ONE YEAR. (VI) NEITHER IN THE PAST NOR IN SUCCEEDING YEARS TH E APPELLANTS HAVE TAXABLE INCOME AND HAVE NOT BEEN EVER ASSESSED EXCEPT IN THE ASSESSMENT YEAR 2006-07. THAT THE APPELLANTS WERE ABSOLUTELY UNAWARE OF THE PROVISIONS OF LAW AND RECEIPT OF THE IMPUGNED APPEL LATE ORDER. HOWEVER, ON RECEIPT OF RECOVERY NOTICES AND STATEME NTS ON 2.2.2015, APPROACHED SHRI NARENDRA KUMAR JAIN, ADVO CATE AND AS ASKED BY HIM SEARCHED AND CARRIED HEAP OF PAPERS LYING IN THE HOUSE ON 3.2.2015. SHRI JAIN TRACED OUT THE IM PUGNED ORDER AND HAD CONSULTATION WITH SHRI N. M. RANKA, S ENIOR ADVOCATE, WHO ADVISED TO PREFER AN APPEAL AND FOR M AKING THE CONDONATION APPLICATION. ACCORDINGLY THE COUNSEL W AS REQUESTED TO DRAW OUT APPEAL AND CONDONATION APPLIC ATION AND GET IT SETTLED BY THE SENIOR ADVOCATE. IT WAS DONE AS EXPEDITIOUSLY AS POSSIBLE, WITHOUT ANY LOSS OF TIME AND THERE IS NO NEGLIGENCE OR LATCHES OR INACTION OR MALAFIDES O N THE PART OF THE APPELLANTS. THAT THE APPELLANTS WERE PREVENTED BY GOOD, SUFFICI ENT, REASONABLE CAUSES EXPLAINED HEREINABOVE AND WHICH W OULD BE ARGUED AT THE TIME OF HEARING. WE SUBMIT IT IS A F IT CASE WHERE THE DELAY, IF ANY, DESERVES TO BE CONDONED. IT SHA LL BE IN THE INTEREST OF LAW, JUSTICE, EQUITY AND GOOD CONSCIENC E. 7 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO THAT IT IS WELL SETTLED PROPOSITION OF LAW THAT A T AX PAYER/CITIZEN AND PARTICULARLY RUSTIC AGRICULTURIST S, ILLITERATE PERSONS SHOULD NOT SUFFER FOR IGNORANCE OMISSION, I NADVERTENT MISTAKE, NON-PROPER UNDERSTANDING OR IGNORANCE OF T ECHNICAL LAWS/PROCEDURE. THAT THE HONBLE SUPREME COURT IN COLLECTOR, LAND ACQUISITION V/S. MST. KATIJI AND OTHERS (1987) 167 -ITR-471 (SC) OBSERVED : THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IN ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE PURPOSE OF THE EXISTE NCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTE R INSTITUTED IN THIS COURT . WE ARE REPRODUCING SOME PRINCIPLES LAID DOWN B Y THE HONBLE COURT :- (1) ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE; (2) REFUSING TO CONDONE DELAY CAN RESULT IN MERITORIOUS MATTER BEING THROWN OUT AT A VERY THRESHOLD AND CAUSE OF J USTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CON DONED, THE HIGHEST THAT CAN HAPPEAN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING A PARTIES. (3) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO NS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVE TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. (4) THERE IS NO PRESUMPTION THAT IS OCCASIONED DELIBERA TELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RES ORTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK. (5) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUS TICE AND 8 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO IS EXPECTED TO DO SO AND ONWARDS. SIMILAR TO PARA 5.2 TO 5.7. THE LD. COUNSEL HAS PLACED RELIANCE ON THE FOLLOWIN G JUDGMENTS :- STATE OF HARYANA VS. CHANDRA MANI & OTHERS (1996) AIR 1623 (SC) BALAKRISHNAN VS. M. KRISHNAMURTHY (1998) 7 SCC 123 (SC) SHANKARRAO VS. CHANDRASENKUNWAR (1987) SUPP SCC 338 (SC) BHARAT AUTO CENTRE VS. CIT (2006) 282 ITR 366 (ALL.) CIT VS. WEST BENGAL INFRASTRUCTURE DEVELOPMENT FI NANCE CORPN LTD. (2011) 334 ITR 269 (SC) JAIPUR MINERAL DEVELOPMENT SYNDICATE VS. CIT (1977) 106 ITR 653 (SC) THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DEC ISION OF THE COORDINATE BENCH IN THE CASE OF SITA RAM SHARMA & OTHERS VS. ITO IN ITA NO. 726/JP/2013. THE COORDINATE BENCH IN PARA 6 OF ITS ORDER DECIDED THE MATTER AS UNDER :- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ALL T HE SIX BROTHERS ARE ILLITERATE AGRICULTURALISTS. THEY ARE IGNORANT WITH THE IT LAW. THE AFFIDAVIT FILED BY THE ADVOCATE SUPPORT THE CLAIM O F THE ASSESSEE THAT HE HAD NOT INFORMED AND IMPRESSED UPON THE ASSESSEE ABOUT REPERCUSSION OF THE LEGAL PROCEEDINGS UNDER THE IT ACT AND ALSO FORGET THE MATTER TO REMIND THESE ASSESSES AS FILE OF THES E ASSESSES WERE MIXED IN THE OTHER FILES OF HIS OFFICE. FURTHER THE ADJACENT LAND HAS HBEEN TREATED AGRICULTURAL ASSETS AS ENVISAGED IN S ECTION 2(14) OF THE ACT IN THE CASE OF KAMLA DEVI SHARMA VIDE ORDER DAT ED 23.3.2011 FOR 9 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO A.Y. 2007-08 AND ORDER DATE 28/08/2014 BY THE ITAT OF THIS BENCH BUT CONFIRMED THAT THE LAND SITUATED IN SANJHARIA VILLA GE IS NOT A CAPITAL ASSET AS ENVISAGED IN SECTION 2(14) OF THE ACT. WH EN IN CASE OF OTHERS, THE ITAT HAS DECIDED THE CAPITAL ASSETS OUT SIDE THE 8 KM FROM THE MUNICIPAL LIMITS AND NON CONDONING THE DELAY BY THE BENCH WILL TANTAMOUNT TO MISCARRIAGE OF JUSTICE. THE LEGAL PO SITION ON THIS ISSUE IS AS UNDER :- (I) COLLECTOR, LAND ACQUISITION VS MST. KATIJI (167 ITR 471): HELD THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERAT IONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. (II) MOTILAL PADAMPAT SUGAR MILLS CO. LTD. VS. STATE OF UTTAR PRADESH & OTHERS (1979) 118 ITR 326 : HELD THAT IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY PROVISIONS OF LAW AND HENCE THE PRINCIPLE THAT EVERYONE IS PRESUMED TO KNOW THE LAW IS NOT AP PLICABLE UNIVERSALLY SINCE IT IS OF A VERY DIFFERENT SCOPE A ND APPLICATION. (III) N. BALAKRISHNAN VS. M. KRISHNAMURTHY (1998) 7 SCC 1 23: HELD THAT WORDS SUFFICIENT CAUSEUNDER SECTION 5 OF THE LIM ITATION ACT SHOULD RECEIVED A LIBERAL CONSTRUCTION SO AS TO ADVNCE SUBSTANTIAL JUSTICE. THE HONBLE SUPREME COURT HAS HELD IN THE CASE OF C OLLECTOR, LAND ACQUISITION VS. MST. KATIJI (SUPRA) THAT SUBSTANTIA L JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVED TO BE PREFERRED. IN THIS CASE ALSO , IT IS A FACT THAT APPEAL FILED BY THE APPELLANTS BELATED FOR YEARS IF THIS BENCH HAS NOT CONDONED THE DELAY OF THE ASSESSES THEN THE ASSESSE S WOULD NOT GET JUSTICE AND WHICH IS AGAINST THE TECHNICAL OBJECTIO NS TO FILE THE APPEAL BELATEDLY. IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE FEEL THAT DELAY SHOULD BE CONDONED AND THE ASSESSEE IS ALLOWED TO B E HEARD ON MERIT. 10 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO THE FACTS ARE IDENTICAL IN THIS CASE. THEREFORE, TA KING A CONSISTENT VIEW, WE HEREBY CONDONE THE DELAY AND ADJUDICATE THE APPEAL ON MERI T. 3. THE FIRST GROUND IN THIS APPEAL IS AGAINST TREAT ING THE AGRICULTURAL LAND AS CAPITAL ASSET. 3.1. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY AR GUED THAT THE CASE OF THE ASSESSEE IS THAT DESPITE HAVING ADMITTED THE FACT T HAT THE LAND TRANSFERRED WAS AN AGRICULTURAL LAND AND NO FINDING IS GIVEN AS TO HOW THE LAND TRANSFERRED FALLS WITHIN THE PRESCRIBED LIMIT OF MUNICIPALITY AND COME WITHI N THE SWEEP OF THE DEFINITION OF CAPITAL ASSET. HE SUBMITTED THAT THIS GOES TO THE V ERY ROOT OF THE TAXABILITY OF CAPITAL GAIN. IN CASE THE ASSESSEE IS ABLE TO PROVE THAT T HE LAND FALLS BEYOND THE PRESCRIBED LIMIT OF MUNICIPALITY, IN THAT EVENT TAXABILITY OF CAPITAL GAIN ON THE TRANSFER OF AGRICULTURAL LAND WOULD BECOME ILLEGAL AND UNJUSTIF IED. HE SUBMITTED THAT UNDER THE IDENTICAL FACTS IN CASE OF OTHER LAND OWNERS OF SIM ILARLY SITUATED, THE COORDINATE BENCH IN ITA NO. 726/JP/2013 PERTAINING TO A.Y. 200 7-08 HAS HELD THAT THE LAND IS NOT A CAPITAL ASSET. THE LD. COUNSEL, THEREFORE, UR GED THAT THE IMPUGNED ORDER BE SET ASIDE AND THE AO BE DIRECTED TO DECIDE THE ISSUE AF RESH. 3.2. ON THE CONTRARY, THE LD. D/R VEHEMENTLY OPPOSE D THE SUBMISSIONS AND SUBMITTED THAT THERE IS NO ILLEGALITY IN THE ORDER OF LD. CIT (A). 3.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT NO SUCH GROUND WAS TAKE N BEFORE THE FIRST APPELLATE AUTHORITY AS IS EVIDENT FROM FORM NO. 35. HOWEVER , THIS BEING A LEGAL GROUND AND GOES TO THE VERY ROOT OF THE TAXABILITY OF THE CAPI TAL GAIN, WE DEEM IT PROPER THAT THE SAME BE ADMITTED FOR ADJUDICATION. ACCORDINGLY, THE SAME IS ADMITTED. THE 11 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO CONTENTION OF THE ASSESSEE IS THAT THE AGRICULTURAL LAND FALLS BEYOND THE SPECIFIED LIMIT FROM THE MUNICIPAL LIMIT, HENCE COULD NOT BE AMENAB LE TO CAPITAL GAINS TAX. WE FIND THAT BOTH THE AUTHORITIES BELOW HAVE ACCEPTED THE F ACT THAT THE LAND BEING TRANSFERRED WAS AN AGRICULTURAL LAND. HOWEVER, NEIT HER OF THEM HAS GIVEN A CLEAR FINDING AS TO HOW THE TRANSFER OF AGRICULTURAL LAND WOULD BE TRANSFER OF CAPITAL ASSET AND IS OUTSIDE THE EXEMPTION CLAUSE OF SECTION 2(14 ) OF THE ACT. SINCE THIS ISSUE GOES TO THE VERY ROOT OF THE TAXABILITY OF CAPITAL GAINS , THEREFORE, WE HEREBY SET ASIDE THE IMPUGNED ORDER OF LD. CIT (A) AND RESTORE THE ISSUE TO THE FILE OF THE AO TO DECIDE IT AFRESH IN THE INTEREST OF JUSTICE. THE AO WOULD VER IFY THE DISTANCE OF AGRICULTURAL LAND FROM THE LIMIT OF MUNICIPALITY. IN THE EVENT, HE F INDS THAT THE TRANSFER OF AGRICULTURAL LAND SWEEP WITHIN THE DEFINITION OF CAPITAL ASSET, HE WOULD COMPUTE THE CAPITAL GAIN ON SUCH TRANSFER AS PER LAW AFTER GIVING THE DEDUCT IONS AS AVAILABLE TO THE ASSESSEE UNDER THE ACT. WE ALSO FIND SUPPORT FROM THE DECIS ION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 726/JP/2013 UNDER THE IDENT ICAL FACTS HAS DECIDED THE ISSUE BY OBSERVING AS UNDER :- 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LAND SOLD BY ALL THE BROTHERS SITUATED IN VILLAGE SANJHARIA, TEHSIL- SANGANER, DISTRICT- JA IPUR. IN CASE OF ASSESSEES BROTHER NAMELY SHRI RAM SAHAY SHARMA IN A.Y. 2007-0 8 BY THE ITO WARD 7(2), JAIPUR ORDER DATED 25.03.2013 HAD NOT MADE AN Y ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN. FURTHER THE LD. CIT (A) AS WELL AS THIS BENCH ALSO ALLOWED THE APPEAL IN CASE OF SMT. KAMLA DEVI SHARM A (SUPRA), WHO ALSO SOLD HER LAND AT SANJHARIA VILLAGE TO M/S. VATIKA LTD. O N 16.05.2006 AND HELD THAT THE AGRICULTURAL LAND SOLD BY THE ASSESSEE IS NOT C APITAL ASSET AS ENVISAGED U/S 2(14) OF THE ACT AS SAME WAS SOLD TO VATIKA LTD. WI THIN A SHORT SPAN OF TIME. THE OTHER CASE LAWS RELIED BY THE ASSESSEE IS ALSO SQUARELY APPLICABLE. THEREFORE, WE HOLD THAT THE LAND SOLD BY ALL THE AS SESSES ARE AGRICULTURAL LAND AND BEYOND 8 KMS FROM THE MUNICIPAL LIMITS. ACCORDI NGLY, WE ALLOW THIS GROUND OF ALL THE APPEALS. THUS, THIS GROUND OF THE ASSESSEES APPEAL IS ALLOW ED FOR STATISTICAL PURPOSES. 12 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO 4. GROUND NO. 2 IS WITH REGARD TO THE VALIDITY OF P ROCEEDINGS UNDER SECTION 148 OF THE ACT ON THE GROUND THAT THE OLD NOTICE UNDER SECTION 148 DATED 18.1.2010 WAS SERVED ON 2.2.2010 AFTER THE DEATH OF SHRI BHOMA RA M, WHO DIED ON 23.1.2010. THE LD. COUNSEL SUBMITTED THAT THE ENTIRE PROCEEDIN GS WERE INITIATED ON THE BASIS OF A NOTICE ISSUED AGAINST A DEAD PERSON AND SUCH NOTI CE ON THE DEAD PERSON IS INVALID AND HENCE THE PROCEEDINGS INITIATED ON THE BASIS OF SUCH NOTICE WOULD BECOME ILLEGAL AND UNJUSTIFIED. WE FIND THAT NO SUCH GROUND WAS R AISED BEFORE LD. CIT (A) AND THE LD. CIT (A) HAS NOT GIVEN ANY FINDING ON THIS GROUN D. HOWEVER, SINCE THE GROUND GOES TO THE LEGALITY OF THE PROCEEDINGS, THE SAME I S ADMITTED AND RESTORE TO THE FILE OF THE AO FOR DECISION AFRESH. NEEDLESS TO SAY THAT THE LD. D/R OPPOSED THE SUBMISSIONS AND SUBMITTED THAT NO SUCH GROUND WAS R AISED BEFORE LD. CIT (A) AND HENCE CANNOT BE RAISED NOW. HOWEVER, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ISSUE OF LEGALITY OF THE PROCEEDINGS CAN BE TAK EN BEFORE THE TRIBUNAL. THE OTHER GROUNDS RAISED IN THIS APPEAL RELATE TO DEDUCTION, VALUATION OF LAND AND INDEXATION OF COST OF ACQUISITION. THE REMAINING GROUNDS RELATED TO INDEXATION AND CLAIM OF DEDUCTION U/S 54B AND 54F OF THE ACT ARE ALSO RESTO RED TO THE FILE OF THE AO SINCE WE HAVE RESTORED GROUND NOS. 1 & 2 ABOVE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/07/201 6. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/07/2016. DAS/ 13 ITA NO. 148/JP/2015 M/S. BHOMA RAM HUF VS. ITO VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. BHOMA RAM HUF, JAIPUR 2. THE RESPONDENT- THE ITO WARD 7(2), JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 148/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR