Prabha Farms Pvt. Ltd., Aurangabad V. Assistant Commissioner of Income-tax,

ITA 1653/PUN/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4405 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: N R AGRAWAL
• Keywords: Capital asset; Principle of natural justice; Set aside; Capital Gains
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 1653/ PUN/20 16 / ASSESSMENT YEAR : 2013 - 14 PRABHA FARMS PVT. LTD. NATH HOUSE, PAITHAN ROAD, AURANGABAD - 431 005. PAN : AACCP3782D ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, AURANGABAD. / RESPONDENT A SSESSEE BY : SHRI N.R. AGRAWAL REVENUE BY : SHRI S.P WALIMBE / DATE OF HEARING : 2 6 .0 2 .2020 / DATE OF PRONOUNCEMENT : 27 .02 .2020 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 1, AURANGABAD DATED 15.06.2016 FOR THE ASSESSMENT YEAR 2013 - 14 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 1653 /PUN/20 16 A.Y. 2013 - 14 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.1 AND 2. IN VIEW OF THE SUBMISSIONS OF THE LD. AR, GROUND NO.1 AND 2 ARE DISMISSED AS NOT PRESSED . THUS, THE ONLY EFFECTIVE GROUND LEFT FOR ADJUDICATION IS GROUND NO.3 WHICH READS AS UNDER: 3. THE CIT(APPEALS) HAS ERRED IN HOLDING THAT THE LANDS IN QUESTION WERE CAPITAL ASSET IN TERMS OF SECTION 2(14) OF THE INCOME TAX ACT, 1961 AND HENCE, CAPITAL GAI N TAX WAS LEVIABLE. 3. THE ASSESSEE HAS RAISED CERTAI N ADDITIONAL GROUNDS WHICH READ AS FOLLOWS: 1. THE LEARNED AO & LD. CIT(APPEALS) ERRED IN NOT GIVING RELIEF FOR CARRY FORWARD LONG TERM LOSS FOR A.Y 2008 - 09 RS.34,73,513/ - & FOR A.Y. 2010 - 11 RS.24,47,315/ - TOTALING RS.59,20,828/ - . 2. LD. AO ERRED IN MAKING ADDITION OF RS.37,60,707/ - BEING DIFFERENCE IN BETWEEN GOVERNMENT VALUATION RS.99,65,485/ - & SALE PRICE RS.62,04,778/ - WITHOUT REFERRING IT TO VALUATION OFFICER. 4. SO FA R AS THE GROUND NO.3 OF THE APPEAL MEMO IS CONCERNED, THE GRIEVANCE OF THE ASSESSEE ARISES FROM FACT THAT IT IS THE CONTENTION OF THE REVENUE THAT THE LAND SOLD IS CAPITAL ASSET AND HENCE, CAPITAL GAINS ARE ATTRACTED VIDE PROVISIONS OF SECTION 2(14) (III ) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WHICH SHOWS THAT AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATED IN ANY AREA WHICH COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORP ORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME OR A CANTONMENT BOARD AND WHICH HAD A POPULATION OF NOT LESS THAN TEN THOUSAND OR IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIALLY: NOT BEING MORE THAN TWO KILOME TERS, FROM THE LOCAL LIMITS OF ANY 3 ITA NO. 1653 /PUN/20 16 A.Y. 2013 - 14 MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAD A POPULATION OF MORE THAN TEN THOUSAND BUT NOT EXCEEDING ONE LAKH, OR NOT BEING MORE THAN SIX KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAD A POPULATION OF MORE THAN ONE LAKH BUT NOT EXCEEDING TEN LAKH, OR NOT BEING MORE EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAD A POPULATION OF MORE THAN TEN LAKH. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS AGREED, THE LAND SITUATED WITHIN MUNICIPAL AREA LIMIT WHICH IS NOT DISPUTED AS CERTIFIED BY TEHSILDAR - AURANGABAD. THE LD. COUNSEL STRONGLY CONTENDED THAT SINCE REQUIREMENTS OF SECTION 2(14) OF THE ACT AND AGAIN THIS WAS NOT CONSIDERED BY THE ASSESSI NG OFFICER. THE LD. AR SUBMITTED THAT THE SECOND CONDITION WHICH THE SECTION PROVIDES WITH FOREWORD AND STIPULATED THE POPULATION TO BE NOT LESS THAN TEN THOUSAND, WHEREAS, IN THE CASE OF THE ASSESSEE, LAND SITUATED MITMITA VILLAGE POPULATION IS FAR BELOW THE FIGURE OF TEN THOUSAND AND THIS ISSUE WAS NOT ADJUDICATED BY THE ASSESSING OFFICER AND THEREFORE, THE LD. AR PRAYED THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFICATION. 6. THE LD. DR DID NOT OBJECT TO THE PRAYE R OF THE LD. AR OF THE ASSESSEE. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE. AS PER SECTION 2(14) OF THE ACT WHICH DEFINES CAPITAL ASSET AND THEREIN, SUB - SECTION (I II) PROVIDES TWO CRITERIA TO BE SATISFIED IN ORDER TO QUALIFY AS CAPITAL ASSET I.E. (I) NOT BEING MORE THAN 8 KMS FROM LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED IN ITEM(A) AND (II) WHICH HAS A POPULATION OF MORE 4 ITA NO. 1653 /PUN/20 16 A.Y. 2013 - 14 THAN TEN LAKHS. THE GR IEVANCE OF THE ASSESSEE IS THAT HE IS NOT QUALIFIED WITH REGARD TO THE SECOND CONDITION SINCE POPULATION OF MITMITA VILLAGE WHERE THE LAND IS SITUATED, IS LESS THAN TEN THOUSAND. THIS ISSUE WAS NOT CONSIDERED BY THE ASSESSING OFFICER. WE, THEREFORE, IN T HE INTEREST OF JUSTICE, SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE BACK THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR PROPER ADJUDICATION AS PER LAW IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. THUS, GROUND NO.3 RAISED IN APPEAL BY T HE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. SIMILAR SINCE THE MAIN GROUND IS RESTORED TO THE FILE OF ASSESSING OFFICER FOR PROPER ADJUDICATION, ADDITIONAL GROUNDS RAISED IN APPEAL BEFORE US ARE ALSO RESTORED TO THE FILE OF ASSESSING OFFICER FOR PROPER APPRECIATION OF THE MATTER IN TOTALITY AND PASS A REASONED ORDER AS PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS , ADDITIONAL GROUNDS RAISED IN APPEAL BY THE ASSESSEE ARE ALSO ALLOWED FOR STATISTICAL PURPOSES. 9. THAT APART GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS CONSIDERED THE VALUE APPEARING IN THE SALE DEED FOR THE PURPOSE OF TAXATION FOR THIS CASE WHEREAS THE ASSESSEE SUBMITTED THAT THIS VALUE REFLECTED IN THE SALE DEED IS FOR THE PURPOSE OF STAMP DUTY AND THE ASSESSEE HAS FURTHER REQUESTED THE ASSESSING OFFICER TO REFER THE MATTER TO DVO FOR PROPER VALUATION. THE ASSESSING OFFICER ON THE EAR LIER OCCASION HAD NOT ACCEPTED THIS PART OF REQUEST. THE ASSESSEE BEFORE US PRAYED THAT THE ASSESSING OFFICER MAY KINDLY BE DIRECTED FOR REFERRING THE MATTER TO DVO. 10. THE LD. DR FAIRLY CONCEDED TO THE REQUEST OF THE ASSESSEE SINCE DVO IS THE QUALIFIED PERSON FOR VALUATION PURPOSE AND IT IS WITHIN THE LEGAL FRAMEWORK 5 ITA NO. 1653 /PUN/20 16 A.Y. 2013 - 14 OF THE ACT AND THEREFORE THE REQUEST OF THE ASSESSEE SHOULD BE ACCEPTED FOR REFERENCE TO DVO. 11. HAVING HEARD THE SUBMISSIONS OF BOTH THE PARTIES, WE DIRECT THE ASSESSING OFFICER TO ADJUD ICATE THIS ISSUE AS PER LAW. THIS ISSUE IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR NECESSARY ADJUDICATION. THUS, THIS PART OF THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRO NOUNCED ON 27 TH DAY OF FEBRUARY , 20 20 . SD/ - SD/ - D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 27 TH FEBRUARY , 2020. SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, AURANGABAD. 4. THE PR. CIT - 1, AURANGABAD. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 6 ITA NO. 1653 /PUN/20 16 A.Y. 2013 - 14 DATE 1 DRAFT DICTATED ON 26 .02 .2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 26 . 0 2 .20 20 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER