G.Ramkumar, Coimbatore V. DCIT, Coimbatore

ITA 1584/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58044 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-03-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Assessee Lawyers: S SIVASHANMUGAM
• Keywords: Capital asset; Additional evidence; Benefit of exemption
• Section: 54B; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1584/MDS/2011 (ASSESSMENT YEAR : 2 008-09) SHRI G.RAMKUMAR, C/O. SHRI K.LEELA KRISHNAN, 995/B-5, GNANALAKSHMI BUILDING, METTUPALAYAM ROAD,R.S.PURAM, COIMBATORE-641 002. PAN:AKTPR7852A VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-III, COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SIVA SHANMUGAM RESPONDENT BY : SHRI E.S .NAGENDRA PRASAD, CIT DR DATE OF HEARING : 14 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 14 TH MARCH, , 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER DATED 22.06.2011 RELEVANT TO TH E ASSESSMENT YEAR 2008-09 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I, COIMBATORE. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE ALLEGED THAT HE IS THE OWNER OF AGRICULTURAL LAND. THE ASSESSE/APPELLANT FILED RETURN OF INCOME FOR THE A SSESSMENT ITA NO.1584/MDS /2011 2 YEAR 2008-09 ON 31.03.2010. THE SAME WAS TAKEN UP FOR SCRUTINY UNDER SECTION 143(3). THE ASSESSE AND HIS CO-OWNERS SOLD 1.81 ACRE OF LAND IN THE RELEVANT PREVIOUS YEA R. THE ASSESSEE WAS HAVING 1/3 RD SHARE IN THE LAND. FROM HIS SHARE OF SALE CONSIDERATION, THE ASSESSEE PURCHASED ANOT HER PIECE OF AGRICULTURAL LAND AND CLAIMED EXEMPTION UNDER SE CTION 54B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) TO THE EXTENT OF INVESTMENT MADE. THE ASSESS ING OFFICER DISALLOWED THE ENTIRE CLAIM OF THE ASSESSEE UNDER S ECTION 54B AND COMPUTED CAPITAL GAINS. THE ASSESSE FURTHER CL AIMED EXPENDITURE INCURRED TOWARDS IMPROVEMENT OF LAND D URING THE YEAR 1982-83. THE SAID EXPENDITURE WAS ALSO DISALLO WED BY THE ASSESSING OFFICER. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(APP EALS) IMPUGNING THE ADDITIONS AND DISALLOWANCES MADE BY T HE ASSESSING OFFICER. THE LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) AFTER GOING THROUGH THE FACTS OF THE CASE AND DOCUMENTS ON RECORD OBSERVED AS UNDER:- ITA NO.1584/MDS /2011 3 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED A.R. SUBMITTED THAT THERE IS NO EXTRA EVIDENCE AVAILABLE REGARDING AGRICULTURAL OPERATIONS DONE FOR THE CULTIVATION OF CROPS IN THE LANDS OWNED BY THE APPELLANT. THE A.R. STATED THAT NEIGHBOUR CERTIFICATES WERE AVAILABLE AND COULD BE PRODUCED. THE A.R. WAS ASKED TO PRODUCE ANY FORM OF EVIDENCE TO SHOW THAT THE LAND WAS USED FOR AGRICULTURAL PURPOSES. THE A.R. WAS GIVEN OPPORTUNITY TO PROVE THAT THE CULTIVATION OF CROPS HAS BEEN DONE, BY FURNISHING PROOF OF PURCHASE OF SEEDS, FERTILIZERS, PESTICIDES ETC. THE APPELLANT COULD NOT PRODUCE ANY EVIDENCE EVEN REGARDING SALE OF AGRICULTURAL PRODUCE. THE ASSESSING OFFICER HAS GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PROVE THE CLAIM OF DEDUCTION UNDER SECTION 54B. SECTION 54 DEALS WITH THE CAPITAL GAINS ON TRANSFER OF LAND USED FOR AGRICULTURAL PURPOSE NOT TO BE CHARGED IN CERTAIN CASES. THE A.R. COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT IN THE PAST TWO YEARS PRECEDING THE DATE OF SALE, THE APPELLANT AND HIS FAMILY CARRIED AGRICULTURAL OPERATIONS IN THE LAND. IN THE ABSENCE OF CREDIBLE EVIDENCE TO SHOW THAT THE LAND WAS USED FOR AGRICULTURAL PURPOSES IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, THE CLAIM OF THE APPELLANT FOR EXEMPTION UNDER SECTION 54B CANNOT BE ENTERTAINED AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS CONFIRMED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSION ER OF INCOME TAX(APPEALS), NOW THE ASSESSEE HAS COME IN A PPEAL BEFORE US. ITA NO.1584/MDS /2011 4 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS AN AGRICULTURIST AND THE LAND IS AN AGR ICULTURAL LAND. THE CIT(A) AND THE ASSESSING OFFICER FAILED T O TAKE THIS FACT INTO CONSIDERATION AND DISALLOWED EXEMPTION UN DER SECTION 54B OF THE ACT. THE ASSESSING OFFICER ERRED IN HOLDING THAT THE LAND IS NOT AGRICULTURAL LAND. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS ERRED IN DISALLOWING THE EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS THE IMPROVEMENT OF LAND. 6. ON THE OTHER HAND, THE LEARNED D.R. CONTENDED TH AT THE ASSESSEE MISERABLY FAILED TO SHOW THAT THE LAND IN QUESTION IS AGRICULTURAL LAND AND HE WAS CONDUCTING AGRICULTURA L OPERATIONS OR WAS CULTIVATING CROPS. LEARNED D.R. F URTHER SUBMITTED THAT THE ASSESSING OFFICER CONDUCTED ENQU IRY WITH THE REVENUE AUTHORITIES HAVING JURISDICTION OVER TH E AREA UNDER CONSIDERATION. THE VILLAGE ADMINISTRATIVE OFFICER, PULIKULAM VILLAGE, COIMBATORE (NORTH) PROVIDED DETAILS WHICH CONCLUSIVELY PROVE THAT NO CROP WAS CULTIVATED IN T HE LAND OWNED BY THE ASSESSEE FROM JULY, 2006 TO JUNE, 2008 . FURTHER, ENQUIRY FROM TAHSILDAR, COIMBATORE (NORTH) REVEALED ITA NO.1584/MDS /2011 5 THAT NO AGRICULTURAL ACTIVITY WAS CARRIED ON BY THE ASSESSEE IN THE LAND OWNED BY HIM. THE LEARNED D.R. ALSO SUBMI TTED THAT A PERUSAL OF REVENUE RECORDS (CHITTA ADANGAL) REVEA LED THAT NO AGRICULTURAL OPERATIONS WERE BEING DONE IN THE T WO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFE R TOOK PLACE. 7. THE LEARNED A.R. SUBMITTED THAT CERTIFICATES FR OM THE NEIGHBOURS WERE PRODUCED BEFORE THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) TO SHOW THAT THE LAND IN QUE STION IS AGRICULTURAL LAND BUT THE LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) FAILED TO TAKE NOTE OF THE SAME. 8. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S AND HAVE GONE THROUGH THE DOCUMENTS ON RECORD. THE ASSE SSEE IS CLAIMING EXEMPTION FROM CAPITAL GAIN TAX ON TRANSFE R OF LAND USED FOR AGRICULTURAL PURPOSES. THE RELEVANT EXTRAC T OF THE PROVISIONS OF SECTION 54B(1) IS REPRODUCED HEREIN B ELOW:- 54B(1): SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH IN THE TWO YEAR S IMMEDIATELY PRECEDING THE DATE ON WHICH THE ITA NO.1584/MDS /2011 6 TRANSFER TOOK PLACE, WAS BEING USED BY THE ASSESSEE OR A PARENT OF HIS FOR AGRICULTURAL PURPOSES AND THE ASSESSEE HAS WITHIN A PERIOD OF TWO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION. 9. AS PER THE ABOVE PROVISIONS OF SUB-SECTION (1) O F SECTION 54B, IT IS ESSENTIAL THAT FOR CLAIMING THE BENEFIT OF EXEMPTION BOTH THE FOLLOWING CONDITIONS SHOULD BE SATISFIED:- (I) THAT THE CAPITAL ASSET SOLD SHOULD HAVE BEEN US ED EITHER BY THE ASSESSEE OR HIS PARENTS FOR AGRICULTURAL PURPOSES IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE; AND (II) THAT THE ASSESSEE SHOULD PURCHASE WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF ITA NO.1584/MDS /2011 7 ORIGINAL ASSET, ANOTHER LAND FOR AGRICULTURAL PURPOSES. IT IS EVIDENT FROM THE RECORDS THAT THE ASSESSEE HA S NOT SATISFIED THE CONDITION NO.1 (SUPRA). THE ASSESSING OFFICER HAD MADE A DETAILED ENQUIRY TO ASCERTAIN THE NATURE OF THE LAND AND THE CROPS CULT IVATED ON THE LAND OWNED BY THE ASSESSEE. DURING THE COURSE O F ENQUIRY BY THE ASSESSING OFFICER, THE LAND REVENUE AUTHORIT IES HAD CATEGORICALLY STATED THAT AS PER REVENUE RECORDS N O CROP WAS CULTIVATED/AGRICULTURAL ACTIVITY UNDERTAKEN ON THE LAND OWNED BY THE ASSESSEE. WE FIND THAT NO CONCRETE EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO CONTROVERT T HE FINDING OF FACTS RECORDED BY THE LOWER AUTHORITIES, EXCEPT PRODUCTION OF STATEMENTS OF NEIGHBOURS OF THE ASSESSEE . A PER USAL OF THE SAME SHOW THAT THE STATEMENTS ALLEGED TO BE MADE B Y THE NEIGHBOURS OF THE ASSESSEE ARE VAGUE AND SKETCHY. T HERE IS NO MENTION OF THE CROPS GROWN ON THE LAND AND THE A CTIVITIES UNDERTAKEN BY THE ASSESSEE FOR CULTIVATION OF CROPS ON THE LAND IN QUESTION. BE THAT AS IT MAY, THE STATEMENTS FROM ITA NO.1584/MDS /2011 8 NEIGHBOURS CANNOT BE CONSIDERED AS EVIDENCE SUPERIO R TO REVENUE RECORD WHICH CLEARLY SHOWS THAT THERE WAS N O CULTIVATION OF CROP / AGRICULTURAL ACTIVITY ON THE LAND IN QUESTION OWNED BY THE ASSESSE IN THE PAST TWO YEARS PRECEDIN G THE DATE OF SALE. THE LEARNED COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HIS SUBMISSION PLACED ON RECORD PHOTOCOPI ES OF SOME BILLS TO SHOW THAT AGRICULTURAL ACTIVITY WAS UNDERTAKEN BY THE ASSESSEE ON THE LAND IN QUESTION. HOWEVER, T HESE BILLS WERE NEVER PRODUCED EITHER BEFORE THE ASSESSING OFF ICER OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS). THESE BILLS / INVOICES ARE NOTHING BUT AN AFTERTHOU GHT TO FILL THE LACUNA. THEREFORE NO RELIANCE CAN BE PLACED ON SUCH BILLS EITHER. THE ASSESSE/APPELLANT HAS FURTHER CLAIMED D EDUCTION ON ACCOUNT OF COST OF IMPROVEMENT INCURRED DURING 1 982-83. IN SUPPORT OF HIS CLAIM, THE ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER TO SHOW THE EXPENDITURE OR THE NATURE OF IMPROVEMENT CARRIE D OUT. SINCE THE ASSESSEE HAS MISERABLY FAILED TO PROVE TH AT THE LAND IN QUESTION WAS AGRICULTURAL LAND AND HE HAD CULTIV ATED CROPS IN THE LAND, WE SEE NO INFIRMITY IN THE ORDER OF TH E LEARNED ITA NO.1584/MDS /2011 9 COMMISSIONER OF INCOME TAX (APPEALS) AND UPHOLD THE SAME. WE THEREFORE DISMISS THE APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 14 TH MARCH, 2012. SD/- SD/- (ABRAHAM P.GEORGE) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 14 TH MARCH, 2012. SOMU COPY TO: (1) APPELLANT ( 4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.