Daryab Singh, Palwal V. ITO WARD - 1(2), Faridabad

ITA 1664/DEL/2020

AI Insights

The case involves an appeal by Daryab Singh against the order of the Commissioner of Income Tax (Appeals), Faridabad, which arose from the assessment order passed by the Assessing Officer under Section 144 read with Section 147 of the Income Tax Act, 1961 for the assessment year 2012-13. The primary contention was regarding the reassessment proceedings initiated based on information from the Directorate of Income Tax (Investigation) and the subsequent approval from the JCIT/Pr. CIT, which the assessee argued was not in accordance with the law. The assessee also claimed that the sale proceeds from the land sold were exempt under Section 10(37) of the Act, and thus, there was no escapement of taxable income. The Tribunal found merit in the assessee's arguments and remitted the matter back to the Assessing Officer for a detailed examination of the exemption claim.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121526 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 07-10-2020
• Other Referred Cases: 345 ITR 223 (Delhi)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 28; 144; 15; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1664/DEL/2020 Assessment Year 2012-13 Daryab Singh S/o Nathi Village Bhulwana Hodal Palwal Vs. The Income Tax Officer Ward-1(2) Faridabad TAN/PAN: EQDPS5894B (Appellant) (Respondent) Appellant by: Shri S.C. Singhal, CA Respondent by: Shri Sanjay Kumar Yadav, Sr.DR Date of hearing: 09 05 2023 Date of pronouncement: 09 05 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the order of the l d. C ommiss ione r of Income Ta x (A ppe als ), Far idaba d (‘C IT (A )’ i n s hor t) date d 28. 11. 20 19 a rising f rom the assess me nt orde r dat ed 22. 12. 20 17 pass ed by th e Assessing O fficer (A O ) unde r Sec ti on 14 4 r.w . s 147 of the Income T ax A ct, 1961 (t he A ct) con cerning A Y 2012-13. 2. T he grou nds of appea l ra ised b y the assesse e read as unde r: “ 1 . T h e l e a r n e d I T O a n d C I T ( A ) e r r e d i n i ni t i at i n g a nd a p p r o v i n g t h e r e a s s e s s m e nt p r o c e e d i ng s i n t hi s c a s e s im pl y o n t h e b a s i s of i n pu t of i nf o r m a t i o n f r o m D I ( I &C I ) o n 2 6 / 0 3/ 2 01 5 a nd t h e A O h ad r e c o r d e d t he r e a s o n s o n 28 / 07 / 2 01 6 a n d s ou gh t t h e ap pr o v a l f r o m J C IT / P r . C I T. It i s no t a c as e of l i v e l i n k . T h e e nqu i r y b e f o r e r e c o r d i ng o f r e a s o n s t o c o nv e r t t he i nf o r m a t i o n i nto r e as o n s to b e l i e v e i s t o t al l y m i s s in g in t h i s c a s e m a k i ng t he e n ti r e p r o c e s s I.T.A. No.1664/Del/2020 2 b a d i n l aw . 2 . T he s h ow c a us e n ot i c e d t 0 4 / 11 / 20 1 7 is s u e d by t he A O m e nt i o n o f a pp r o v al o f r e as o n s fr o m P r . C I T a n d no t f r o m A dd l . C I T. T he l a w r e q u i r e th e ap p r ov a l i n l e s s t h a n 4 y e a r s c a s e s f r o m A d d l . C I T o n ly . I n v i e w of d e c is i on s o f c o u r t s i nc l . 3 45 I T 22 3 ( D e l h i ) e t c , t he a p pr o v al i s no t a s p e r l aw an d b e h e ld as n o ap p r ova l a s p e r l aw u s 1 5 1. K i n d ly c a n c e l t h e e nt i r e pr oc e e d in g s w i t ho ut pr op e r a p pr o v al . 3 . T h e l a nd s o l d i s l oc a t e d i n v i l l a ge B h ul w an a, T eh . H o da l , D i s t t . P a l w a l i n H a r y a na . A s p e r c e r t i f ic a t e f r o m H o da l R ev e n u e P a t w a r i d t 9/ 0 5/ 2 0 18 , i t i s l o c a te d 2 35 0 m e te r s f r o m H o da l N a g ar P a r i s h a d B o r d e r an d w a s a n a gr i c u l t ur al l a n d . A s p e r pr i n t o ut f r o m l a s t c e n s u s 2 0 1 1 d at a a v a i l ab l e , t he p o pu l a t i o ns o f v i l lag e B hu l w a n a w a s 7 0 8 1 p e r s o n s . Th e c e r t i f i c at e o bt a i ne d b y A O d ef in e d t he B h ul w a na v i l l ag e B or de r f r o m H o d al M u ni c i pa l l i m i t a n d n o t t he d i s t a nc e o f p l o t i n q ue s ti o n . 4 . S e c t i on 2 (1 4 ) ( i i i ) o f I T A c t , 1 9 61 d e f i n e s a g r i cul t u r a l l a n d. A s p e r c l a us e ( a ) t he a s s e s s e e f ul f i l al l t he c o nd i t ion s no t e d t h e r e in . T he I d C I T (A ) h a s r e f e r r e d t o a n o t i f i c a t i on a p p l i cab l e f or a p e r i o d p r i o r t o 0 1/ 0 4/ 2 0 1 4 a nd h e s a y s i t s pe c i f y a d i s ta n c e of 5 k m i n c a s e o f H o d al . It a m o u nt s t o m a k i ng a r ul e ove r t he l aw a s m ad e by t h e P ar l i a m e n t . 5 . Th e c o s t of a c q u i s i t io n a n d i t s i nd e x i n g m us t a lw ay s b e r e d u c e d f r o m s a l e c o n s i de r a t i on t o f i nd ou t t a x a b l e l on g t er m c a pi t a l g a in . A l a nd s o l d f or 1. 6 0 C r / 1 . 44 C r in 2 01 1 h as be e n f ou nd by A O /C I T (A ) h a v i ng z e r o c os t a s o n 1 . 1. 1 9 84 . T hi s s h ow s l i m i ta t i on o f t he i r i m a g in a t io n . The C I T (A ) ha s f a i l e d t o a dj ud ic a t e t hi s i s s ue i n hi s o r d e r . In c as e o l de r l a nd / pr o p e r t y , t he r e a re s t a nd a r d p r o c e du r e s / v a l ue r s w ho g i v e f a i r m ar k e t p r i c e o n t ha t d at e s . B o t h l o w e r a u t ho r i t i e s h a v e f ai l e d i n t h e i r d u t i e s t o f in d t h e s a m e an d in n o t a l l ow i n g a de d u c t i o n t o a pp e l l a n t . 6 . T he s t a m p d ut y v a l ue of R s . 1 , 60 , 8 0, 5 00 i s c h al l en ge a bl e by the a s s e s s e e u /s . 5 0C (2 ) an d t he c l a i m fo r t h e s a m e w a s m ad e t o t he t r a n s ac t i o n v al u e a t R s . 1 , 4 4 , 8 0 , 00 0 . N o s t e p w a s ta k e n by e it h e r o f l ow e r a u t h o r i t i e s t o v e r i fy t h e c la i m a nd h a s b ee n s u m m ar i l y r e j e c t e d w i t h ou t op p or t u n it y o r d i s c us s i o n . T h i s i s n o t j u s t i f i e d a nd b a d i n l aw . 7 . Th e s al e i n t hi s c a s e i s n o t c o m p l e t e a s s e v e r a l c he q ue s b e i ng a p a r t o f s a l e c on s i d e r a ti o n i s s u e d by bu y e r t o s e l l er ha v e b ou n c e d a n d t h e l i t i g at i on b e t w e e n s e l l e r a n d b uy e r f o r t he s a m e i s p e nd i n g i n c o u r t s . Wi t h ou t s al e c on s i d e r at i o n a n d p a r t i c u l ar l y w h e n t he b u y e r i n d e n y i n g t h e b al a n c e pa y m e n t , t h e s a l e t r a ns ac t i o n i s n ot c o m p l e te . Le v y i ng t a x o n L TG C w h i c h h a s n o t r e a c he d t h e s e l l e r , a n d i s n o w d ou b t fu l , i s n o t c o r r e c t . ” I.T.A. No.1664/Del/2020 3 3. When the matter w as calle d fo r hearin g, the ld. couns el for the assesse e inte r alia s ubmit ted t hat the cas e of t he as sessee w as re opene d u nder Secti on 14 8 r. w. Sectio n 147 of the A ct on the gro und t ha t asses see has s old cer tain la nd pa rce l to one M /s. Cre at ive D rea m Devel ope rs P vt. L td. fo r considera tion of Rs. 1, 44, 80, 000/-. I t is further st ated in t he aforesa id re asons that the fair ma rket value as per s ta mp dut y v al ua tion stands at Rs. 160, 87, 500/ - on s uch l and a nd t he as sesse e has not f il ed the re tu rn of i nc ome and consequ entl y th e taxa bl e inc ome has escape d inco me. I n the m att er, the l d. cou nsel submi tt ed that t he s al e proceeds of t he land is e xempted under Sec tion 10(37) of t he A ct and there fore, th e sale pr oc eeds are not t axab le unde r the pro visions of the A ct. H ence, the re is no es capement of an y char gea bl e income on the pa rt of the assesse e. C onsequent ly, the reas o ns so rec or ded are inhe re ntl y incorr ec t and w ithout sat is f yi ng the re qui re me nt o f escapement of char gea bl e income. T he ld. counse l t hus urg ed for quashing t he reas ons re cor ded. O n bei ng inqui re d b y the B ench on the evidenc e i n re lat i on to the exe mpt i on cla imed, the asses see fair ly sub mi tt ed tha t s uc h evi dences w ere not pl ace d bef ore t he A O . 4. U nder the circums tances proj ecte d on beha lf of the ass essee that wh ere the as sessee has hois te d a na rra tive that t he inc ome under referenc e i n the reas ons are t otal l y exempt from ta xati on, w e cons ide r i t just and expedient t o re mi t the mat ter back to the fi le of t he Asses si ng O ffi cer. T he as sessee sh al l produce all the re le vant evi dences before t he A ssessing Of fice r t o asse rt his c la i m that th e impugn ed i nc ome is exe mp t from taxat ion u nder the pro visions of t he A ct. O n co nsi derati on of evid ences, the A ssessi ng Of fi ce r shal l pr oc eed in accorda nce w it h law and on I.T.A. No.1664/Del/2020 4 bein g satis fi ed, shall drop t he re-ass ess ment proceed ings. It s ha ll be open to A O to ma ke su ch enqui r y as it ma y cons ider ne cessa r y to apprec iate the facts i n pe rspec ti ve . H ow ever, for a ny re aso n th e proceed ings a re c onti nued, p roper opportunit y s hall be gi ven to the ass essee t o j u sti f y his case on mer its. N eedless t o sa y, the assessee shall a s sist t he Asse ssin g O fficer and attend the proceed ings wi thout a ny de mu r. T he A ssess ing O ff icer shall pro vi de reasona ble o pportunit y t o the asse ssee an d pas s orde r in accorda nce w ith la w . 5. In the r esu lt, the appeal of t he a ssessee is allow ed f or sta tis ti ca l purpos es . Order was pronounced in the open Court on 09/05/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /05/2023 prabhat