Deputy Commissioner of Income-tax, Circle - 5, Pune V. Dnyanoba Shivram Bhintade, Pune

ITA 1618/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1120 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VUDAL RAJ SINGH
• Keywords: Revised return; Set aside; Capital Gains
• Section: 143(3); 54B; 54

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1618/PUN/2017 / ASSESSMENT YEAR : 2011-12 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 5, PUNE. . / APPELLANT. V/S SHRI DNYANOBA SHIVRAM BHINTADE, PLOT NO.45, SHIVSUNDAR BUNGLOW, GULABNAG HOUSING SOCIETY S.NO.32, DHANKAWADI, PUNE 411 043. PAN: AAVPB4765C. . / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE. REVENUE BY : SHRI VUDAL RAJ SINGH / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE DATED 12.02.2017 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM AGRICULTURE, INCOM E FROM PARTNERSHIP FIRMS AND OTHER SOURCES. ASSESSEE FILED O RIGINAL RETURN OF INCOME FOR A.Y. 2011-12 ON 30.12.2011 DECLARING TOTAL TAXA BLE INCOME / DATE OF HEARING : 02.08.2019 / DATE OF PRONOUNCEMENT: 12.09.2019 2 OF RS.47,78,256/- AND AGRICULTURAL INCOME OF RS.2,37,86,406/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSME NT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 30.12.2013 AND T HE TOTAL INCOME WAS DETERMINED AT RS.1,97,11,530/-. AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORD ER DATED 12.02.2017 (IN APPEAL NO.PN/CIT(A)-4/ACIT, CIRCLE-2, PUNE/634 /2013- 14) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISE D THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 54B OF RS. 1,48,37,673/- WHICH HAS NEITHER BEEN CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME NOR HAS FILED THE REVISED RETURN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) IS NOT CORRECT IN IGNORING THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF M/S GOETZE INDIA PVT. LTD., 28 4 ITR 323 (SC), WHEREIN IT HAS BEEN HELD THAT SUCH CLAIM CAN ONLY B E ALLOWED WHEN THE ASSESSEE FILED A REVISED RETURN. 3. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTIC ED THAT ASSESSEE HAS CLAIMED PROFIT ON SALE OF AGRICULTURAL LAND OF RS.3,90,31,399/- AS BEING EXEMPT. ON VERIFICATION OF THE SALE DEED, AO NOTICED THAT THE LAND WAS SITUATED AT SASWAD, EKHATPUR VILLAGE, NEAR SASWAD AND KUMBHOSHI VILLAGE. AO WROTE A LETTER TO THE C HIEF OFFICER, MUNICIPAL CORPORATION, SASWAD, REQUESTING TO PROVIDE THE DISTANCE OF EKHATPUR FROM THE MUNICIPAL LIMITS OF SASWAD VILLAGE. AO HAS NOTED THAT CHIEF OFFICER VIDE LETTER DATED 28.11.2013 CONFIRMED THA T THE DISTANCE BETWEEN SASWAD AND EKHATPUR VILLAGE IS 5 KMS. AND 2 KMS. FROM THE LIMITS OF MUNICIPAL CORPORATION. TO FURTHER RE-CON FIRM THE 3 DISTANCE, AO DEPUTED THE INSPECTOR TO VERIFY THE FACTS WHO ALSO SUBMITTED A REPORT STATING THAT THE DISTANCE OF THE LOCA TIONS WAS NOT MORE THAN 2 TO 3 KMS. FROM THE LIMITS OF THE SASWAD M UNICIPALITY. ASSESSEE WAS THEREFORE SHOW CAUSED AND ASKED TO EXPLA IN AS TO WHY THE INCOME FROM SALE OF LANDS SITUATED AT SASWAD AND EKHATPUR NOT BE CONSIDERED AS CAPITAL GAINS AND BROUGHT TO TAX. AO NOTE D THAT VIDE SUBMISSION DATED 23.12.2013 ASSESSEE ACCEPTED THE DISC REPANCY AND DECLARED THE CAPITAL GAIN ON SALE OF LANDS SITUATED AT SAS WAD AND EKHTAPUR VILLAGES AND IT WAS ALSO SUBMITTED BY THE ASSESS EE THAT HE HAS PURCHASED AGRICULTURAL LAND WITHIN THE TIME LIMIT PRESCRIBED A ND WILL BE ENTITLED FOR EXEMPTION U/S 54B OF THE ACT. AO NOTED THA T ASSESSEE HAD NOT CLAIMED THE DEDUCTION IN THE RETURN OF INCOME AND HE ACCEPTED THE TAXABILITY OF CAPITAL GAINS ONLY AFTER THE DISCREPANCIES WERE POINTED OUT DURING THE SCRUTINY PROCEEDINGS. HE THEREAFTER RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/S. GOETZE IND IA PVT. LTD., HELD THAT ANY CLAIM CAN BE ALLOWED ONLY ON THE BASIS OF A REVISED RE TURN. SINCE THE ASSESSEE HAD NOT CLAIMED THE DEDUCTION U/S 54 B IN THE RETURN OF INCOME NOR HAD CLAIMED IT IN THE REVISED RETURN, THE CLAIM OF DEDUCTION U/S 54B CANNOT BE ALLOWED. HE ACCORDINGLY DIS ALLOWED THE CLAIM OF CAPITAL GAINS AND BROUGHT THE AMOUNTS OF RS.42,7 3,364/- AS SHORT TERM CAPITAL GAINS AND RS.1,05,64,309/- AS LONG TERM CAPITAL GAINS. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED T HE MATTER BEFORE LD.CIT(A), WHEREIN THE ASSESSEE ALSO CLAIMED DEDUCTION U/S 5 4B OF THE ACT BY RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS REPORTED IN 349 ITR 336 (BOM). LD.CIT(A) NOTED THAT THE CLAIM OF DEDUCTION U/S 54B OF THE ACT WAS NOT EXAMINED BY THE AO AND THEREFORE HE RESTORED THE ISSUE TO THE FILE OF AO. 4 AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPE AL BEFORE US. 5. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE AO AN D LD.CIT(A) AND FURTHER SUBMITTED THAT IDENTICAL ISSUE AROSE IN THE CA SE OF WIFE OF THE ASSESSEE SMT. UMA DNYANOBA BHINTADE BEFORE THE T RIBUNAL. PUNE BENCH OF THE TRIBUNAL VIDE ORDER DT.09.07.2019 IN ITA NO .1485/PUN/ 2017 HAD DISMISSED THE GROUNDS OF THE REVENUE. HE PLACE D ON RECORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT SINCE THE FACTS OF THE CASE OF ASSESSEE AND THE FACTS OF THE CASE OF ASSESSEES WIFE ARE IDENTICAL, NO INTERFERENCE TO THE ORDER OF LD.CIT(A) IS CALLED FOR. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO THE ALLOWABILITY OF CLAIM OF SEC.54B OF THE ACT WHICH WAS NOT CLAIM ED BY THE ASSESSEE IN THE RETURN OF INCOME BUT WAS CLAIMED BEFORE L D.CIT(A) AND LD.CIT(A) HELD THAT THE CLAIM BE ALLOWED BY THE AO IF THE REQ UIRED CONDITIONS ARE SATISFIED BY THE ASSESSEE. WE FIND THAT IDEN TICAL ISSUE AROSE IN ASSESSEES WIFES CASE SMT. UMA DNYANOBA BHINTA DE (SUPRA), WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL UPHELD THE ORDER OF LD.CIT(A) BY OBSERVING AS UNDER : 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE WHICH ARISES IN THE PRESENT APPEAL FIL ED BY REVENUE IS AGAINST DIRECTIONS OF CIT(A) IN ALLOWING THE BENEFI T CLAIMED UNDER SECTION 54B OF THE ACT BY ASSESSING OFFICER, IN CASE THE AS SESSEE HAS FULFILLED ALL THE CONDITIONS LAID DOWN IN THE SAID SECTION. ADMIT TEDLY, THE ASSESSEE HAD NOT OFFERED ANY INCOME FROM LONG TERM CAPITAL G AINS OR SHORT TERM CAPITAL GAINS ON SALE OF AGRICULTURAL LAND IN ITS H ANDS, IN THE RETURN OF INCOME. HOWEVER, IT HAD SHOWN EXEMPT AGRICULTURAL I NCOME ON ACCOUNT OF SALE OF AGRICULTURAL LAND WHICH WAS DULY REFLECTED IN THE RETURN OF INCOME. THE ASSESSING OFFICER SOUGHT INFORMATION FROM THE M UNICIPAL AUTHORITY 5 AND SINCE THE LAND SOLD BY ASSESSEE WAS WITHIN 8 KI LOMETERS FROM THE MUNICIPAL LIMITS, THE ASSESSING OFFICER HELD THAT G AIN ARISING FROM THE SALE OF AGRICULTURAL LAND WAS TAXABLE IN THE HANDS OF AS SESSEE AND COMPUTES THE INCOME FROM LONG TERM CAPITAL GAINS AND SHORT T ERM CAPITAL GAINS. HOWEVER, THE CLAIM OF ASSESSEE DURING ASSESSMENT PR OCEEDINGS IN ALLOWING THE BENEFIT OF DEDUCTION UNDER SECTION 54B OF THE ACT I.E. ON ACCOUNT OF INVESTMENT IN NEW AGRICULTURAL LAND WAS DENIED TO THE ASSESSEE ON THE GROUND THAT NO SUCH CLAIM WAS MADE I N THE RETURN OF INCOME AND HENCE, NOT ALLOWABLE AS PER THE RATIO LA ID DOWN BY THE HON'BLE SUPREME COURT IN M/S. GOETZE INDIA PVT. LTD. VS. CI T (SUPRA). THE CIT(A) ON THE OTHER HAND, ALLOWED THE CLAIM OF ASSESSEE IN TURN, RELYING ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PRUTHVI BROKERS & SHAREHOLDERS (SUPRA). IN THIS REGARD, WE FIND NO MERIT IN THE APPEAL FILED BY REVENUE, WHEREIN THE MATTER HAS BEE N DECIDED BY THE CIT(A) OBSERVING THAT THE ASSESSEE WOULD BE ENTITLE D TO THE AFORESAID DEDUCTION UNDER SECTION 54B OF THE ACT, IN VIEW OF THE DICTATE OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. PRUTHVI BROKER S & SHAREHOLDERS (SUPRA). WE FIND NO ERROR IN THE ORDER OF CIT(A) IN THIS REGARD. THE DECISION OF JURISDICTIONAL HIGH COURT IS SQUARELY BINDING AN D IN VIEW OF THE SAID RATIO LAID DOWN, THE CIT(A) WAS DUTY BOUND TO ALLOW THE CLAIM OF ASSESSEE THOUGH NOT MADE IN THE RETURN OF INCOME. IT MAY BE POINTED HEREIN ITSELF THAT EVEN THE INCOME FROM SALE OF AGRICULTURAL LAND AS EITHER LONG TERM CAPITAL GAINS OR SHORT TERM CAPITAL GAINS, WAS NEVE R OFFERED BY ASSESSEE IN ITS RETURN OF INCOME. IN SUCH CIRCUMSTA NCES, WHEN THE ASSESSING OFFICER COMPUTING INCOME FROM CAPITAL GAI NS IN THE HANDS OF ANY ASSESSEE, THEN IT IS HIS DUTY NOT ONLY TO COMPU TE INCOME UNDER THE RESPECTIVE HEADS BUT ALSO TO ALLOW EXEMPTIONS WHICH ARE DULY ALLOWABLE TO THE ASSESSEE. THE CIT(A) HAD IN ALL FAIRNESS DIR ECTED THE ASSESSING OFFICER TO VERIFY WHETHER THE ASSESSEE HAS FULFILLE D THE CONDITIONS LAID DOWN IN SECTION 54B OF THE ACT AND HAD FURTHER OBSE RVED THAT IN CASE THEY ARE NOT SO FULFILLED, THEN NO DEDUCTION UNDER SECTI ON 54B OF THE ACT IS TO BE ALLOWED TO THE ASSESSEE. WE FIND NO ERROR IN THE OR DER OF CIT(A) IN THIS REGARD. SO, WE DISMISS THE GROUNDS OF APPEAL RAISED BY REVENUE. 7. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGUISH ING FEATURE IN THE FACTS OF THE PRESENT CASE AND TO THE CASE OF AS SESSEES WIFE SMT. UMA DNYANOBA BHINTADE THAT WAS DECIDED BY THE TRIBUNAL IN ITA NO.1485/PUN/2017 (SUPRA). REVENUE HAS ALSO NOT PLACED A NY MATERIAL ON RECORD TO DEMONSTRATE THAT THE DECISION OF PUNE TR IBUNAL IN THE CASE OF ASSESSEES WIFE IN A.Y. 2011-12 HAS BEEN SET ASIDE / O VERTURNED OR STAYED BY THE HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORES AID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 6 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 12 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 12 TH SEPTEMBER, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR. CIT-3, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.