Shri Ketankumar Maganlal Desai, Surat V. The Income Tax Officer, Ward-7(3), Surat

ITA 1489/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6771 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 25-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition; Competent authority
• Section: 54B; 2(14)

Judgement Text

SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER I.T.A. NO.1488/AHD/2015 ASSESSMENT YEAR: 2011-12 SHRI SHAILESHKUMAR M. DESAI, AT & POST LADVI, TALUKA-KAMREJ, SURAT. [PAN: ABYFS 5470 M] VS. THE INCOME TAX OFFICER, WARD-8(4), SURAT APPELLANT /RESPONDENT I.T.A. NO.1489/AHD/2015 ASSESSMENT YEAR: 2011-12 SHRI KETANKUMAR M. DESAI, THE K.C.CO-OP & DCB SEC. SCHOOL, A/P KAMREJ CHAR RASTA, KAMREJ, SURAT. [PAN: ABWPD 2622 D] VS. THE INCOME TAX OFFICER, WARD-7(3), SURAT APPELLANT /RESPONDENT /ASSESSEE BY SHRI SAPNESH SHETH, CA /REVENUE BY SHRI J. K. CHANDNANI, SR. D.R. / DATE OF HEARING : 09.07.2019 /PRONOUNCEMENT ON : 12.07.2019 /O R D E R PER O.P.MEENA, AM: 1. THESE TWO APPEALS FILED BY THE DIFFERENT ASSESSEEARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS)-3, SURAT [IN SHORT THE CIT(A)] DATED 05.03.2015AND 16.03.2015 RESPECTIVELY FOR THE ASSESSMENT YEAR 2011-12. SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 2 OF 9 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.1488/AHD/2015 READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF RS.27,53,000/- AS INCOME FROM CAPITAL GAIN ON SALE ON SALE OF LAND ALTHOUGH LAND SOLD BY ASSESSEE IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE IT ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN DISALLOWING DEDUCTION/S. 54B OF THE IT ACT, 1961& THEREBY ERRED IN MAKING ADDITION OF RS.27,53,000/- AS INCOME FROM LONG TERM CAPITAL GAIN. 3. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY PLEASE BE DELETED. 4. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 3. GROUND NO.2 OF THE APPEAL IS NOT PRESSED BEFORE US; THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 4. THUS, THE EFFECTIVE GROUND REMAINS REGARDING CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS.27,53,000/- AS INCOME FROM CAPITAL GAIN ON SALE OF LAND. EVEN THOUGH THE LAND SOLD BY ASSESSEE IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE IT ACT, 1961. 5. ON THE BASIS OF AIR INFORMATION IT WAS NOTICED THAT THE ASSESSEE SHRI SHAILESHKUMAR M. DESAI, JOINTLY WITH OTHER THREE CO-OWNERS HAS SOLD THE IMMOVABLE PROPERTY SITUATED AT BLOCK NO. 29-30 REVENUE SURVEY NO. 32/2 & 32/1 LADVI, KAMREJ, SURAT ON WHICH THE ASSESSEE SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 3 OF 9 HAS NOT SHOWN ANY CAPITAL GAIN. THE AR OF THE ASSESSEE WAS ASKED HIM TO FURNISH THE DETAILS OF CAPITAL GAIN WORKING AND OTHER DETAILS OF AGRICULTURAL LAND PURCHASED AGAINST THE SALE CONSIDERATION FOR CLAIMING EXEMPTION U/S. 54B OF THE ACT. HOWEVER, THE ASSESSEE WAS FAILED TO PRODUCE PURCHASE DEED/DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM U/S.54B OF THE IT ACT. IN VIEW OF THESE FACTS, THE AO COMPUTED CAPITAL GAIN BY CONSIDERING SALE CONSIDERATION AT RS.1,13,45,000/- IN RESPECT OF BOTH PROPERTIES AND AFTER ALLOWING DEDUCTION ON ACCOUNT OF INDEXED COST OF ACQUISITION AT RS.3,33,000/- WORKED OUT LONG TERM CAPITAL GAIN AT RS.1,10,12,000/- IN WHICH ASSESSEES LONG TERM CAPITAL GAIN BEING 1/3 RD WAS COMPUTED AT RS.27,53,000/- AND SALE WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT (A), WHEREIN, THE ADDITIONAL GROUND OF APPEAL WAS RAISED CLAIMING THAT THE AO WAS ERRED IN MAKING ADDITION OF RS.27,53,000/- AS INCOME FROM CAPITAL GAIN ON SALE OF LAND ALTHOUGH LAND SOLD BY THE ASSESSEE IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III)(B) OF THE ACT. THEREFORE, THE MATTER WAS REMANDED TO THE AO AS THE ASSESSEE HAS CLAIMED THAT THE LAND IN QUESTION WAS SITUATED MORE THAN 8 KMS AWAY FROM THE LIMITS OF SURAT MUNICIPAL CORPORATION AND THEREFORE, CANNOT BE TREATED AS CAPITAL ASSET U/S.2(14)(III)(B) OF THE ACT. THE ASSESSEE HAS ALSO PRODUCED A CERTIFICATE DATED 17.07.2014 OBTAINED FROM THE TALUKA SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 4 OF 9 PANCHAYAT SIGNED BY THE TALUKA DEVELOPMENT OFFICER, KAMREJ, HENCE, STATED THAT AS PER APPROVED LEAD CHART STATEMENT LAND WAS 9 KM AWAY FROM SURAT MUNICIPAL CORPORATION LIMIT VILLAGE-LADVI, TALUKA-KAMREJ. FURTHER, THE AO OBSERVED THAT THE ABOVE CERTIFICATE WAS IN VERY AMBIGUOUS LANGUAGE AND WAS NOT FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, IN THE COURSE OF REMAND PROCEEDINGS, THE AO HAS OBTAINED A CERTIFICATE FROM OFFICE OF DY. COMMISSIONER (PLANNING & DEVELOPMENT), SURAT MUNICIPAL CORPORATION, WHEREIN, IT WAS SPECIFICALLY MENTIONED THAT IT IS THE ROAD DISTANCE OF THE LAND SOLD WHICH IS 5.45 KMS AWAY FROM THE PERIPHERY OF SURAT MUNICIPAL CORPORATION. HOWEVER, IT WAS CLAIMED BY THE ASSESSEE THAT LETTER OF DY. COMMISSIONER (P&D) DOES NOT MENTION HOW THE DISTANCE OF 5.45 KMS HAS BEEN CALCULATED AND WHETHER THE ABOVE DISTANCE IS AERIAL DISTANCE OR ROAD DISTANCE. THEREFORE, THE MATTER WAS AGAIN REMANDED TO THE AO. THE AO FURTHER SUBMITTED THEREMAND REPORT VIDE HIS LETTER DATED 20.01.2015 CLARIFYING THAT DEPUTY COMMISSIONER (PLANNING AND DEVELOPMENT) SMC SURAT VIDE LETTER DATED 08.01.2015 (COPY WAS ENCLOSED WITH THE SAID REPORT) SPECIFICALLY MENTIONED THAT IT WAS THE ROAD DISTANCE AND NOT AERIAL DISTANCE. A MAP WAS ENCLOSED MARKING THE DISTANCE FROM PERIPHERY OF SMC ON HORIZONTAL SCALE OF 4.50 KM AND ON VERTICAL SCALE OF .95 KMS, TOTALING 5.45 KMS. THE ACTUAL ROAD MAP WAS ALSO BEEN DRAWN ON THE SAID MAP. IF THE ACTUAL ROAD DISTANCE SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 5 OF 9 IS MEASURED, IT COMES TO APPROXIMATELY 22.9 CMS ON THE MAP. THE SCALE ON THE MAP SHOWS 4.5 KMS BEING EQUIVALENT TO 18.6 CMS. FROM THIS SCALE 22.9 CMS COMES TO 5.54 KMS, WHICH IS EQUIVALENT TO THE DISTANCE OF 5.45 KMS MENTIONED IN THE CERTIFICATE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE CIT (A) HAS UPHELD THE FINDINGS RECORDED BY THE AO. 7. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE MADE AN APPLICATION UNDER RULE 29 OF THE ITAT RULE 1963 FOR ADMISSION OF DOCUMENTS BEING A CERTIFICATE ISSUED BY EXECUTIVE ENGINEER (R&B) PWD DEPARTMENT, SURAT LETTER DATED 23.09.2016 STATING THAT DISTANCE BETWEEN SMC SURAT TO VILLAGE LADVI IS 9 KM FROM LIMIT OF SMC SURAT. IT WAS FURTHER SUBMITTED THAT DURING THE APPELLATE PROCEEDINGS THE ASSESSEE FILED A CERTIFICATE OF TALUKA PANCHAYAT DATED 17.07.2014 CERTIFYING THE DISTANCE BETWEEN PERIPHERY OF SMC SURAT TO LADVI, BUT THE LD. CIT(A) DID NOT CONSIDER THE CERTIFICATE TO BE PROPER AND INSTEAD PLACED RELIANCE ON THE INFORMATION GIVEN BY DY. COMMISSIONER (PLANNING & DEVELOPMENT), SURAT MUNICIPAL CORPORATION, SURAT. IT WAS FURTHER SUBMITTED THAT WHEN THE ASSESSEE HAD REQUESTED THE SMC SURAT TO ISSUE DISTANCE CERTIFICATE, THE SAME WAS DENIED VIDE LETTER DATED 04.12.2015 ON THE GROUND THAT THE MATTER DOES NOT PERTAINS TO THEIR JURISDICTION. IN VIEW OF THIS, IT WAS SUBMITTED THAT THE MATTER MAY BE SET-ASIDE TO THE FILE OF THE AO FOR RE- EXAMINATION SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 6 OF 9 THE ISSUE IN THE LIGHT OF CERTIFICATE OBTAINED FROM EXECUTIVE ENGINEERING PWD, SURAT. 8. ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT DURING THE REMAND REPORT PROCEEDINGS THE ASSESSEE HAS SUBMITTED ADDITIONAL GROUND AS WELL AS ADDITIONAL EVIDENCE BEFORE CIT(A) ON WHICH REMAND REPORT WAS CALLED FOR FROM THE AO. THE AO HAS OBTAINED CERTIFICATE FROM DY. COMMISSIONER (P&D) SMC SURAT DATED 08.09.2015 IN WHICH THE DISTANCE WAS SHOWN 4.5 KMS FROM THE PERIPHERY OF SURAT MUNICIPAL CORPORATION. THIS LAND WAS MEASURED WITH THE HELP OF MAP. A COPY OF WHICH WAS ENCLOSED, HENCE THE AUTHENTICATION OF CERTIFICATE CANNOT BE DOUBTED. FURTHER THE ADDITIONAL EVIDENCE SOUGHT TO BE FILED UNDER RULE 29 OF THE ITAT RULES, 1963 CANNOT BE ALLOWED TO BE ADMITTED AS THE ASSESSEE HAS ALREADY BEEN ALLOWED SUFFICIENT OPPORTUNITY OF BEING HEARD DURING THE APPELLATE PROCEEDINGS AND ALSO FILED SOME ADDITION EVIDENCE AS WELL AS ADDITIONAL GROUNDS WHICH WERE CONSIDERED BY THE LD. CIT(A). THEREFORE, THE LD. DR OBJECTED THE ADDITION OF ADDITIONAL EVIDENCE. IT WAS ALSO SUBMITTED THAT THE ADDITIONAL EVIDENCE BEING A CERTIFICATE ISSUED BY THE EXECUTIVE ENGINEER (ROAD & BUILDING)PWD DEPARTMENT CANNOT BE GIVEN RELIANCE, AS IT DOES NOT SPECIFICALLY THE LAND IN QUESTION NOR IT MENTIONED THE SURVEY NO OF LAND AND LOCATION OF THE LAND, THEREFORE IT CANNOT BE RELIED UPON. SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 7 OF 9 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT DURING THE APPELLATE PROCEEDINGS THE ASSESSEE HAS FILED AN ADDITIONAL EVIDENCE AS WELL AS TO ADDITIONAL GROUNDS OF APPEAL CLAIMING THAT LAND IS SITUATED MORE THAN 8 KMS FROM THE LIMIT OF SURAT MUNICIPAL CORPORATION FOR WHICH A CERTIFICATED DATED 17.07.2014 FROM THE TALUKA-KAMREJ WAS FILED. HOWEVER, THE CIT (A) HAS EXAMINED THE SAME AND FOUND THAT THE LANGUAGE OF SAID CERTIFICATE IS VERY MUCH AMBIGUOUS AND SAME WAS NOT FILED BEFORE THE AO. THEREFORE, THE MATTER WAS REMANDED TO THE AO FOR EXAMINATION AND OBTAINING PROPER CERTIFICATEFROM THE SURAT MUNICIPAL CORPORATION. WE FIND THAT IN COMPLIANCE THEREOF THE AO HAS OBTAINED A CERTIFICATE FROM DY. COMMISSIONER (PLANNING & DEVELOPMENT), SURAT MUNICIPAL CORPORATION, SURAT DATED 20.01.2015 IN WHICH THE DISTANCE OF LAND IS SHOWN AT 5.45 KM FROM THE SURAT MUNICIPAL CORPORATION. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT LAND IS LOCATED WITHIN 8 KMS FROM THE PERIPHERY OF SURAT MUNICIPAL CORPORATION IS NOT FOUND TO BE CORRECT BY THE LOWER AUTHORITIES DURING THE COURSE OF REMAND PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS. WE FURTHER FIND THAT THIS CERTIFICATE IS ALSO SUPPORTED BY THE MAP, WHICH WAS ENCLOSED AS ANNEXURE A AND B TO THE LETTER OF THE DY. COMMISSIONER (P&D), SMC, SURAT. THEREFORE, WE HOLD THAT THE LAND IN QUESTION IS SITUATED WITHIN 8 KM FROM THE LIMIT OF SMC, SURAT. SO FAR THE ADDITIONAL EVIDENCE FILED BEFORE US ARE CONCERNED, WE FIND THAT SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 8 OF 9 SAID CERTIFICATE HAS BEEN OBTAINED FROM THE EXECUTIVE ENGINEER (R & B) PWD DEPARTMENT SURAT, WHEREAS THE AO HAS ALREADY OBTAINED A VALID CERTIFICATE FROM AN AUTHORIZED COMPETENT AUTHORITY I.E. THE DY. COMMISSIONER (P& D), SMC, SURAT. FURTHER, THE LANGUAGE EMPLOYED IN THIS CERTIFICATE OF THE EXECUTIVE ENGINEER IS ALSO VAGUE AND AMBIGUOUS AND DOES NOT MAKE OUT A CASE REGARDING EXACT DISTANCE AND LOCATION OF THE LAND UNDER CONSIDERATION. FURTHER, WE OBSERVE THAT THE ASSESSEE HAS BEEN ALLOWED SUFFICIENT OPPORTUNITY OF BEING HEARD DURING THE COURSE OF APPELLATE PROCEEDINGS WHEREIN ADDITIONAL EVIDENCE AND ADDITIONAL GROUND WAS CONSIDERED. THEREFORE, ADDITIONAL EVIDENCE FILED UNDER RULE 29 OF THE ITAT RULES DOES NOT GOING TO SERVE ANY PURPOSE. THEREFORE, THE ADMISSION OF THE SAME IS REJECTED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE FIND THAT THE LAND SOLD BY THE ASSESSEE WAS LOCATED WITHIN THE 8 KMS FROM THE PERIPHERY OF SURAT MUNICIPAL CORPORATION SURAT, HENCE, ASSESSEES CLAIM DOES NOT FALL U/S. 2(14)(III((B)OF THE ACT. THEREFORE, THE FINDINGS RECORDED BY THE LD. CIT(A) HAS FOUND TO BE IN ORDER. EX-CONSEQUENTI, THE GROUND OF APPEAL NO. 1 IS THEREFORE TREATED AS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. IN ITA NO.1489/AHD/2015 FOR A.Y. 2011-12:- 11. SINCE THE FACTS OF THIS CASE ARE IDENTICAL BEING A CO-OWNER OF AGRICULTURAL LAND SOLD BY THE ASSESSEE WITH SHRI SHAILESKUMAR DESAI SHAILESHKUMAR M DESAI AND KETANKUMAR M DESAI V. ITO, WARD-8(4) & ITO, WARD-7(3)/ITA NO.1488 &1489/AHD/2015/A.Y.2011-12 PAGE 9 OF 9 WHICH HAS BEEN DISCUSSED IN THE CASE OF SHRI SHAILESHKUMAR M DESAI IN ITA NO.1488/AHD/2015 FOR ASSESSMENT YEAR 2011-12 IN ABOVE PART OF THIS ORDER. THEREFORE, OUR FINDINGS AS GIVEN IN ABOVE CASE WOULD MUTATIS MUTANDIS APPLY TO THIS CASE ALSO, ACCORDINGLY ALL THE GROUNDS OF APPEAL OF THIS APPEAL OF THE ASSESSEE ARE THEREFORE, DISMISSED. 12. IN THE RESULT, BOTH THE APPEALS IN ITA NO.1488/AHD/2015 AND ITA NO.1489/AHD/2015 FOR THE ASSESSMENT YEAR 2011-12 ARE DISMISSED. 13. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.07.2019. SD/- SD/- (V. DURGA RAO) (O.P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER / SURAT, DATED: 12 TH JULY,2019/S.SAMANTA, PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT