ITO, Faridabad V. Sh Ranbir Singh, Faridabad

ITA 1665/DEL/2010

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6628 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Onus to prove
• Section: 143(3); 54B; 54F; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 1665 /DEL/ 2010 ASSESSMENT YEAR: 2007 - 08 INCOME TAX OFFICER, WARD - 1(4), FARIDABAD VS. SH. RANBIR SINGH, S/O - SH. CHET RAM, VILLAGE BAROLI, NEW SECTOR - 9, FARIDABAD. PAN : AIIPC4659H (APPELLANT) (RESPONDENT) APPELLANT BY SH. F.R. MEENA, SR.DR RESPONDENT BY DR. RAKESH GUPTA, ADV. & SH. SOMIL AGGRAWAL DATE OF HEARING 04.1.2017 DATE OF PRONOUNCEMENT 28.02.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER DATED 15/02/2010 OF LEARNE D COMMISSIONER OF INCOME - TAX (APPEALS), FARIDABAD FOR ASSESSMENT YEAR 2007 - 08 , RAISING FOLLOWING GROUNDS: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE LAND UNDER CONTEXT, THE IMPUGNED AGRICULTURAL LAND IS NOT TREATED TO BE A CAPITAL ASSET IN TERMS OF SECTIO N 2(14)(III) OF THE INCOME TAX ACT, 1961 EVEN THROUGH THE ASSESSEE HIMSELF ADMITTED THAT THE LADN IN QUESTION IS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE INCOME TAX ACT, 1961, FAILING IN A TAXABLE AREA AND THAT IS WHY THE ASSESSEE HAD CL AIMED DEDUCTION U/S 54F, 54B OF THE INCOME TAX ACT AGAINST THE CAPITAL GAIN. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN 2 ITA NO. 1665/DEL/2010 AY:2007 - 08 LAW IN ALLOWING RELIEF OF RS.25,81,033/ - IN RESPECT O F ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED/UNDISCLOSED SOURCES EVEN THOUGH THE ASSESSEE HAD FAILED TO PROVE THAT THE CROPS WORTH RS.25,81,033/ - WERE STANDING AT THE POINT OF SALE AND TO SUBMIT SIMILAR DETAILS IN RESPECT OF THE LAND PURCHASED BY HIM. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.1,20,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF AGRICULTURAL INCOME D ISREGARDING THE FACT THAT THE ASSESSEE HAD NOT GIVEN ANY DETAILS OF TOTAL LAND HOLDING DURING THE YEAR UNDER CONSIDERATION AND PARTICULARLY IN VIEW OF THE FACT THT THE ASSESSEE HAD SOLD HIS LAND IN AUGUST 2006 BY WAY OF SALE OF CROPS IN APRIL AND MAY 2006. IV. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT F OR THE YEAR UNDER CONSIDERATION , ASSESSEE FILED RETURN OF INCOME ON 27/03/200 8 , DECLARING TOTAL INCOME OF RS. 18,444/ - AND AGRICULTURE INCOME OF RS.9,92,700/ - . THE CASE WAS SELECTED SCRUTINY AND NOTICE UNDER SECTIO N 143(2) OF THE INCOME T AX ACT, 1961 (FOR SHORT THE ACT ) WAS ISSUED AND C OMPLIED WITH. IN THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE ALONGWITH OTHER CO - OWNERS SOLD AGRICULTURAL AND COMPUTED CAPITAL GAIN OF RS. 99,52,800/ - ON THE SALE OF PART OF AGRICULTURAL LAND OWNED BY HIM AFTER REDUC ING INDEXED COST OF ACQUISITION. AGAINST THE SAID CAPITAL GAIN, THE ASSESSEE CLA IMED DEDUCTION UNDER SECTION 54B OF THE ACT AMOUNTING TO RS.78,49, 630/ - FOR PURCHASE OF AGRICULTURE LAND AND DEDUCT ION UNDER SECTION 54F OF THE ACT AMOUNTING TO RS.21,70, 000/ - FOR PURCHASE OF RESIDENTIAL HOUSE. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 23/12 /2009 AT ASSESSED INCOME OF RS.1,20,47, 780 / - AND AGRICULTURE INCOM E OF RS.1, 20,000/ - . THE LEARNE D COMMISSIONER OF INCOME - TAX (APPEALS ) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED , THE 3 ITA NO. 1665/DEL/2010 AY:2007 - 08 R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. IN GROUND NO. 1, THE R EVENUE HAS CHALLENGED THE FINDING OF THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) T HAT THE IMPUGNED AGRICULTURE LAND SOLD BY THE ASSESSEE WAS NOT A CAPITAL ASSET IN TERMS OF SECTION 2(14)(III) OF THE ACT. 3.1 THE FACTS IN BRIEF IN RESPECT OF THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE SOLD AGRICULTURAL LAND ALONG WITH OTHER THREE CO - OWNE RS OF THE LAND. THE ASSESSEE SHOWN SALE CONSIDERATION OF RS.1,45,20, 000/ - RECEIVED AND OFFERED THE SAME FOR CAPITAL GAIN IN THE RETURN OF INCOME FILED. THE ASSESSEE TOOK MARKET VALUE OF THE LAND AS ON 1/4/1981 AT RS.8,80, 000/ - AND WORKED OUT THE INDEXED COST OF ACQUISITION OF THE LAND AT RS.45,67, 200/ - . AFTER SUBTRACTING THE INDEXED COST OF ACQUISITION OUT OF THE SALE CONSIDERATION, THE ASSESS EE COMPUTED CAPITAL GAIN OF RS.99,52, 800/ - . AGAINST THE CAPITAL GAIN COMPUTED, THE ASSESSEE CLA IMED DEDUCTION UNDE R SECTION 54B OF THE ACT AMOUNTING TO RS.78,49, 630/ - FOR PURCHASE OF AGRICULTURAL LAND S OF RS.26,34, 630/ - AND RS.52,15, 000/ - . THE ASSESSEE ALSO CLA IMED DEDUCTION UNDER SECTION 5 4F OF THE ACT FOR PURCHASE OF RESIDEN TIAL HOUSE AMOUNTING TO RS.21,70,000/ - . IN VIEW OF THE DEDUCTION CLAIMED BY THE ASSESSEE BEING MORE THAN THE CAPITAL GAIN COMPUTED, LONG - TERM CAPITAL GAIN WAS WORKED OUT AT NIL IN THE RETURN OF INCOME FILED. 3.1. 1 HOWEVER, I N THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSEE CLAIMED THAT THE AGRICU LTURAL LAND IN QUESTION WAS NOT CAPITAL ASSET AS IT WAS LO CATED 10 KM S FROM THE FARIDABAD M UNICIPAL CORPORATION. THE ASSESSEE ALSO SUBMITTED A REPORT FROM PATWARI, ACCORDING TO WHICH , THE DISTANCE OF THE LAND IN QUESTION WAS APPROXI MATELY 9 KM S FROM THE FA RIDABAD M UNICIPAL CORPORATION. ACCORDING TO THE ASSESSEE , THE AGRICULTURAL LAND IN QUESTION WAS NOT CAPITAL ASSET LIABLE FOR CAPITAL GAIN 4 ITA NO. 1665/DEL/2010 AY:2007 - 08 AS THE LAND WAS NOT SITUATED WITHIN 8 KM OF LIMITS OF THE M UNICIPAL CORPORATION AND HENCE NOT LIABLE FOR CAPITAL GAIN TAX. 3.1.2 ACCORDING TO THE ASSESSING OFFICER , THE CERTIFICATE OF DISTANCE OF THE LAND IN QUESTION COULD NOT BE RELIED UPON DUE TO FOLLOWING REASONS: 1. THAT ACCORDING TO THE ASSESSEE , LAND WAS SITUATED MORE THAN 10 KM FROM FARIDABAD M UNICIPAL CORPORATION AN D ACCORDING TO THE PATWARI , THE DISTANCE OF THE LAND WAS APPROXIMATELY 9 KM S, SO THERE WAS NO CERTAINTY OF DISTANCE OF LAND IN QUESTION FROM MUNICIPAL CORPORATION. 2. THAT N EITHER THE ASSESSEE NOR THE PATWARI MEASURE D THE EXACT DISTANCE OF THE LAND IN QUESTIO N (A) FROM TH E OUTER LIMIT OF THE FARIDABAD M UNICIPAL CORPORATION (B) ON HORIZONTAL PLANE OR STRAIGHT - LINE METHOD 3.1.3 T HE ASSESSING OFFICER CONCLUDED THAT ASSESSEE FAILED TO DISCHARGE THE BURDEN OF PROOF THAT LAND IN QUESTION WAS MORE THAN 8 KM S FROM THE OUTER LIMITS OF FARIDABAD M UNICIPAL CORPORATION AND NO DOCUMENTS ON THE BASIS OF WHICH DISTANCE WAS MEASURED WERE SUBMITTED BEFORE HIM . THE ASSESSING OFFICER ACCORDINGLY HELD THE LAND IN QUESTION IS A CAPITAL ASSET LIABLE FOR CAPITAL GAIN. 3.2 THE I SSUE WHETHER THE AGRICULTURAL LAND IN QUESTION WAS CAPITAL ASSET OR NOT, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DECIDED IN FAVOUR OF THE ASSESSEE. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) OBSERVED THAT FIRST , THE ASSESSING OFFICER HAD NOT CHA LLENGED THE CERTIFICATE ISSUED BY THE PATWARI BY AFFORDING ANY SOLID REASONS FOR ITS REJECTION. SECONDLY, THE DISTANCE WAS TO BE MEASURED BY SHORTEST ROAD AND NOT BY HORIZONTAL PLANE ON STRAIGHT - LINE METHOD. 3.3 BEFORE US, THE LD. SENIOR DEPARTMENTAL R EPR ESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER REJECTED THE CERTIFICATE ISSUED BY THE PATWARI 5 ITA NO. 1665/DEL/2010 AY:2007 - 08 ON TWO GROUNDS. FIRST GROUND WAS THAT THE DISTANCE OF 8 KM WAS TO BE MEASURED FROM THE OUTER LIMITS OF THE MUNICIPAL CORPORATION AND SECOND IT WAS TO BE MEASURED BY STRAIGHT - LINE METHOD ON HORI ZONTAL PLANE. ACCORDING TO THE DEPARTMENTAL R EPRESENTATIVE, THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND CE RTIFICATE ISSUED BY THE PATWARI , WITHOUT PROPER EXAMINATION OF TH E FACT THAT DISTANCE OF THE LAND IN QUESTION WAS TO BE MEASURE D FROM THE OUTER LIMI TS OF THE M UNICIPAL CORPORATION . HE PRAYED THAT TO RESOLVE THE CONTROVERSY, THE ASSESSING OFFICER MAY BE DIRECTED TO VERIFY THE FACT OF DISTANCE OF THE LAND IN QUESTION AS P ER THE PROVISIONS OF SECTION 2(14)(III) OF THE ACT. 3. 4 THE LEARNED COUNSEL OF THE ASSESSEE, ON THE OTHER HAND, RELYING ON THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME - TAX (APPEALS) SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY REASONS FOR REJ ECTION OF THE CERTIFICATE ISSUED BY THE PATWARI AND NOT BROUGH T ON RECORD ANY OTHER EVIDENCE A S THE LAND IN QUESTION WAS SITUATED WITHIN 8 KM FROM THE OUTER LIMITS OF THE MUNICIPAL CORPORATION. HE FURTHER SUBMITTED THAT DISTANCE OF THE LAND WAS TO BE MEASU RED FROM SHORTEST ROAD/ ROUTE AND NOT BY STRAIGHT - LINE METHOD ON HORIZONTAL PLANE. 3.5 WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT RECORD ON THE ISSUE IN DISPUTE. ACCORDING TO THE PROVISIONS OF SECTION 2(14)(III) OF THE ACT, IN EXISTENCE FOR RELEVANT PERIOD, AGRICULTURAL LAND IN INDIA , SITUATED BEYOND THE 8 KMS FROM THE LOCAL LIMIT OF ANY MUNICIPALITY OR CANTONMENTS BOARD WAS NOT TO BE INCLUDED AS A PROPERTY FOR THE PURPOSE OF DEFINITION OF THE CAPITAL ASSET. THE RELEVANT PART OF THE SECTION IS REPRODUCED AS UNDER: 2(14) CAPITAL ASSET MEANS - (A) PROPERTY OF ANY KIND HELD BY THE ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION; 6 ITA NO. 1665/DEL/2010 AY:2007 - 08 (B) X -- X ------------- X BUT DOES NOT INCLUDE (I) X ------------- X ----- (II) ------------------ (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATE - (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF THE MUNICIPALITY ( WHETHER KNOWN AS MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, T OWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENTS BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN 10,000 ACCORDING TO THE LAST PRECEDING CENSUS OFFICES THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF PREVIOUS YEAR OR (B) IN ANY AREA WITH IN SUCH DISTANCE, NOT BEING MORE THAN 8 KMS FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENTS BOARD REFERRED TO IN ITEM (A) IS THE CENTRAL GOVERNMENT MAY HAVING REGARD TO THE EXTENT OF, ANY SCOPE FOR, URBANISATION OF THAT AREA AND OTHER RELEVANT CON SIDERATION SPECIFIED IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE. 3.5.1 THE PART (III) (B) OF THE SECTION 2(14) OF THE ACT HAS BEEN AMENDED W.E.F. 01/04/2014 AS UNDER: 2( 14 )( III ) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATE ( A ) ( B ) IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIALLY, ( I ) NOT BEING MORE THAN TWO KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN TEN T HOUSAND BUT NOT EXCEEDING ONE LAKH; OR ( II ) NOT BEING MORE THAN SIX KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN ONE LAKH BUT NOT EXCEEDING TEN LAKH; OR 7 ITA NO. 1665/DEL/2010 AY:2007 - 08 ( III ) NOT BEING MORE THAN EIGHT KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN TEN LAKH. 3. 5.2 ON PERUSAL OF THE ABOVE PROVISIONS OF THE ACT , W E FIND THAT W.E.F. 01/04/2014 THE DISTANCE OF THE LAND IN QUESTI ON FROM THE LOCAL LIMIT OF THE M UNICIPAL CORPORATION HAS TO BE MEASURED AERIALLY OR BY STRAIGHT LINE DISTANCE METHOD. BUT FOR THE P ERIOD BEFORE THE SAID AMENDMENT I.E. FOR THE RELEVANT PERIOD NO SPECIFIC METHOD HAS BEEN PRESCRIBED BUT THE HON BLE COURTS AND TRIBUNAL HAVE HELD THAT DISTANCE OF THE LAND IN QUESTION IS TO BE MEASURE D FROM THE OUTER LIMITS OF THE M UNICIPAL CORPORATION THR OUGH A SHORTEST ROAD. 3.5.3 IN THE PRESENT CASE THE ASSESSING OFFICER HAS MADE TWO OBSERVATIONS IN RESPECT OF THE DISTANCE OF THE LAND. ACCORDING TO THE FIRST OBSERVATION, THE DISTANCE OF THE LAND IN QUESTION WAS TO BE MEASURE D FROM THE OUTER LIMITS OF T HE M UNICIPAL CORPORATION. THE CERTIFICATE ISSUED BY THE PATWARI WAS NOT PRODUCED BEFORE US BY THE PARTIES. ACCORDING TO THE SECOND OBSERVATION, THE DISTANCE TO BE MEASURED THROUGH STRAIGHT - LINE METHOD OR AERIALLY . IN RESPECT OF SECOND OBSERVATIONS, THE LEA RNED COUNSEL HAS CONTENDED BEFORE US THAT METHOD OF MEASURING OF DISTANCE THROUGH STRAIGHT - LINE METHOD OR AERIALLY WAS NOT IN ACCORDANCE WITH THE JUDICIAL DECISIONS ON THE ISSUE. ON THIS ISSUE, WE ARE AGREED WITH THE CONTENTION OF THE LEARNED COUNSEL OF TH E ASSESSEE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS RELIED ON THE DECISION OF THE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT II VS. SATINDERPAL SINGH IN ITA NO. 646 OF 2009 . THE TRIBUNAL MUMBAI BENCH IN THE CASE OF LAUKIK D EVELOPERS VS. DCIT REPORTED IN 105 ITD 657 ALSO HELD THAT DISTANCE OF LAND IS NOT TO BE MEASURED BY C ROW S FLIGHT OR STRAIGHT LINE DISTANCE METHOD AND IT SHOULD BE MEASURED BY A SHORTEST ROAD FROM THE OUTER LIMITS OF THE MUNICIPAL CORPORATION TO THE LAND IN QUESTION. 8 ITA NO. 1665/DEL/2010 AY:2007 - 08 3 .5.4 AS FAR AS FIRST OBSERVATION OF THE ASSESSING OFFICER IS CONSIDERED, WE ARE AGREED THAT THE DISTANCE OF THE LAND IN QUESTION WAS TO BE MEASURE D FROM THE OUTER LIMITS OF THE M UNICIPAL CORPORATION. THE CERTIFICATE ISSUED BY THE PATWARI WAS NOT PRODUCED BEFORE US BY THE PARTIES. WE FIND FROM THE FACTS ON RECORD BEFORE US THAT IT IS NOT CLEAR WHETHER DISTANCE OF THE LAND IN QUESTION WAS MEASURE D FROM THE OUTER LIMITS OF THE M UNICIPAL CORPORATION. IT IS ALSO NOT CLEAR WHETHER THE DISTANCE MEASURED BY THE PA TWARI WAS FROM THE SHORTEST ROAD FROM THE LAND IN QUESTION. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE INITIALLY IN THE RETURN OF INCOME ACCEPTED THE LA ND IN QUESTION AS CAPITAL ASSET , HOWEVER , COULD NOT SUBSTANTIATE THE CLAIM OF DEDUCTION UND ER SECT ION 54B AND 5 4F OF THE ACT AND MADE A REVISED CLAIM THAT LAND IN QUESTION WAS NOT A CAPITAL ASSET, THEREFORE , IT WAS ONUS ON THE ASSESSEE TO ESTABLISH THAT LAND IN Q UESTION WAS NOT A CAPITAL ASSET . THE A SSESSING OFFICER OBSERVED THAT T HE ASSESSEE DID NOT D ISCHARGE ITS BURDEN OF PROOF IN THIS REG ARD . WE FIND THAT LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) HAS NOT EXAMINED THIS ISSUE WHETHER THE DISTANCE OF THE LAND IN QUESTION WAS MEASURE D FROM THE OUTER LIMITS OF THE M UNICIPAL CORPORATION THROUGH A SHORTEST ROAD . IN THIS CASE , IT IS VERY ESS ENTIAL TO DETERMINE THESE FACTS , AS THE DECISION WHETHER THE LAND IN QUE STION IS CAPITAL ASSET OR NOT, REST ON THESE FACTS ONLY. 3. 5 .5 IN THE CIRCUMSTANCES, WE FEEL IT APPROPRIATE TO RESTORE THE ISSUE TO THE FIL E OF THE ASSESSING OFFICER FOR VERIFICATION OF THE FACT THAT THE DURING RELEVANT PERIOD OF SALE OF LAND , THE LAND IN QUESTION WAS SITUATED BEYOND 8 KMS FROM THE OUTER LIMITS FROM THE M UNICIPAL CORPORATION OF FARIDABAD BY SHORTEST ROAD/ROUTE AND DECIDE THE ISSU E OF LAND IN QUESTION IS A CAPITAL ASSET OR NOT , IN ACCORDANCE WITH LAW. FOR THE PURPOSE OF VERIFICATION OF DISTANCE OF THE LAND IN QUESTION FROM THE OUTER LIMITS OF THE MUNICIPAL CORPORATION, AT RELEVANT TIME, THE LEARNED ASSESSING OFFICER, IF 9 ITA NO. 1665/DEL/2010 AY:2007 - 08 REQUIRE D, MAY ISSUE COMMISSION TO ANY AUTHORITY INCLUDING OFFICER OF THE PUBLIC WORKS DEPARTMENT ENGAGED IN CONSTRUCTING ROADS AND MAY BE DIRECTED TO SUBMIT A REPORT IN THE FORM OF MAP OF ALL POSSIBLE ROADS THROUGH WHICH THE LAND IN QUESTION COULD BE APPROACHED F ROM THE OUTER LIMITS OF MUNICIPAL CORPORATION, INDICATING DISTANCE IN KMS. IT IS NEEDLESS TO MENTION THAT ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING ON THE ISSUE IN DISPUTE. ACCORDINGLY , THE GROUND OF THE R EVENUE IS ALLOWED FOR STATISTICA L PURPOSE. 4. IN GROUND NO. 2, THE R EVENUE HAS RAIS ED THE ISSUE OF ADDITION OF RS.25,81, 033 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED/UNDISCLOSED SOURCES, WHICH HAS BEEN DELETED BY THE LEARNED COMMISSIONER OF INCOME - TAX( APPEALS). 4.1 T HE FACTS IN RESPECT OF ISSUE IN DISPUTE ARE THAT IN THE RETURN OF INCOME, THE ASSESSEE SHOWN AGRICULTURE INCOME OF RS.9,92, 700/ - . THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTANTIATE THE SAID INCOME WITH DOCUMENTARY EVIDENCES. IN RESPONSE THE ASSESSEE SUBMITTED THAT BESIDE S THE AGRICULTURE INCOME OF RS.9,92, 700/ - , HE WAS ALSO H AVING AGRICULTURE INCOME OF RS.15,88, 333/ - , WHICH WAS NOT REPORTED IN THE RETURN OF INCOME. THE ASSESSEE SUBMITTED THAT HE RECEIVED BOTH THESE AMOUNTS BY CHEQUE FROM M/S . BPT P LTD . AGAINST SALE OF AGRICULTURAL CROPS AND TREES. THE ASSESSEE SUBMITTED TWO RECEIPTS ISSUED BY M/S SHALIMAR TOWN P LANNERS PRIVATE L IMITED, NEW DELHI. THE ASSESSING OFFICER MADE ENQUIRIES FROM THE SAID COMPANY . THE COMPANY CONFIRMED THE PURCHASE OF LAND F ROM THE ASS ESSEE AS WELL AS PAYMENT OF RS.15,88,333/ - AND RS.9,92, 708 / - TO THE ASSESSEE BUT THE COMPANY DID NOT SPECIFY FOR WHAT PURPOSE THE PAYMENTS OF RS.15,83,333/ - & RS.9,92,708/ - WERE MADE TO THE ASSESSEE. THE ASSESSING OFFICER ALSO COLLECT ED REPORT OF THE GIRDAWARI I.E. CROPS DETAILS FROM R EVENUE AUTHORITIES. THE ASSESSING OFFICER FURTHER ASKED THE ASSESSEE TO SUBMIT 10 ITA NO. 1665/DEL/2010 AY:2007 - 08 DETAILS OF AGRICULTURE INCOME AND DETAILS OF GROSS SALE OF CROPS IN PAST FOUR YEARS BUT THE ASSESSEE SUBMITTED ONLY COPIES OF THE JAMABANDI/GIRDAWARI REPORT FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE FAILE D TO PROVE THAT CROPS WORTH RS.25, 8 1, 033/ - WERE STANDING AT THE POINT - OF - SALE. THE ASSESSING OFFICER ALSO HELD THAT THE ASSESSEE FAILED TO SUBMIT DETAILS OF CROPS IN RESPECT OF LAND PURCHASED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY , THE ASSESSING OFFICER HELD THE AMO UNT OF RS. 25,81, 033 / - AS INCOME OF THE ASSESSEE FROM OTHER SOURCES. THE ASSESSING OFFICER MADE A S EPARATE ADDITION FOR AGRICULTURE INCOME OF THE ASSESSEE DURING THE YEAR TILL HE SOLD THE LAND AT RS.1,20,000/ - 4.1.1 BEFORE THE LEARNE D COMMISSIONER OF INCOME - TAX ( APPEALS), THE ASSESSEE SUBMITTED CONFIRMATION FROM THE COMPANY M/S . SHALIMAR TOWN PLANNERS PRIVATE L IMITED REGARDING THE FACT THAT AMOUNT WAS PAID FOR THE STANDING CROPS, PLANTS AND TREES. RELYING ON THE CONFIRMATION OF THE COMPANY TO WHOM THE AGRICULTURE LAND WAS SOLD AN D THE ESTIMATED ADDITION OF RS.1, 20,000/ - FROM AGRICULTURE OPERATION MADE B Y THE ASSESSING OFFICER, THE LEARNER COMMISSIONER OF INCOME - TAX ( APPEALS) DELETED THE ADDI TION AND HELD THE AMOUNT OF RS.25, 8 0 ,033/ - AS IN THE NATURE OF AGRICULTURE INCOME. 4.2 BEFORE US , THE LEARNED S ENIOR D EPARTMENTAL R EPRESENTATIVE RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE ASSESSEE FAILED TO JUSTIFY THE VALUE OF THE STANDING CROPS AND TRE ES AMOUNTING TO RS. 25,81,033/ - WITH THE DOCUMENTARY EVIDENCE S . HE FURTHER SUBMITTED THAT THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE IN RESPECT OF T HE AMOUNT OF AGRICULTURE INCOME FROM SALE OF CROPS IN THE EARLIER YEARS, WHICH COULD SUPPORT THE EXTENT OF AGRICULTURE INCOME DURING THE YEAR. HE FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDING BEFORE THE ASSESSING OFFICER THE COMPANY M/S . SHALIMAR TOWN R UNNERS PRIVATE L IMITED ONLY 11 ITA NO. 1665/DEL/2010 AY:2007 - 08 CONFIRMED THE FACT OF THE PAYMENT BUT IT WAS NOT EXPLAINED WHETHER THE PAYMENT WAS TOWARDS SALE OF LAND OR TOWARDS SALE OF CROPS/TREES AND ONLY BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) THE ASSESSEE FILED CO NFIRMATION FROM THE SAID COMPANY THAT THE AMOUNT WAS PAID FOR STANDING CROPS, PLANTS AND TREES. THE LEARNED SR. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THIS BEING AN ADDITIONAL EVIDENCE IT SHOULD HAVE BEEN FORWARDED TO THE ASSESSING OFFICER FOR HIS COM MENT AND NOT PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER TO REBUT ON THIS EVID ENCE, IS A VIOLATION OF RULE 46A OF THE INCOME TAX R ULES, 1962 AND DENIAL OF NATURAL J USTICE TO THE ASSESSING OFFICER. 4.3 ON THE OTHER H AND , THE LEARNED COUNSEL OF THE ASSES SEE SUBMITTED THAT THE ASSESSEE HAS DISCHARGED HIS BURDEN OF ESTABLISHING WHETHER THE SAID INCOME WAS AGRICULTURE INCOME. HE FURTHER SUBMITTED THAT EVEN IF THE SAID PAYMENT WERE TREATED TOWARD THE SALE OF LAND, SAME BEING NOT THE CAPITAL ASSET, THE AMOUNT WOULD NOT BE LIABLE FOR CAPITAL GAIN TAX. 4.4 WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. FROM THE IMPUGNED ORDER, IT SEEMS THAT THE CONFIRMATION FROM THE COMPANY M/S. SHALIMAR TOWN PLANNERS P RIVATE L IMI TED REGARDING THE FACT THAT AMOUNT WAS PAID FOR STANDING CROPS, PLANTS AND TREES ETC . WAS FILED FOR THE FIRST TIME BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS). THIS FACT WAS NOT DISPUTED BY THE LEARNE D COUNSEL OF THE ASSESSEE ALSO BEFORE US . IN OUR OPINION , THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) SHOULD HAVE FORWARDED THE SAID CONFIRMATION TO THE A SSESSING OFFICER FOLLOWING THE R ULE 4 6A OF THE INCOME TAX R ULES, 1962. BEFORE THE ASSESSING OFFICER, THE SAID COMPANY ONLY CONFIRMED THE FACT OF PAYMENT BUT DID NOT CONFIRM WHETHER THE PAYMENT IN QUESTION WAS TOWARD PURCHASE OF CROPS, PLANT AND TREES OR IT WAS TOWARD SALE OF LAND. THE ASSESSEE ALSO FAILED TO JUSTIFY THE AGRICULTURAL INCOME EARNED IN EARLIER YEARS SO AS TO GIVE A BROAD IDEA OF 12 ITA NO. 1665/DEL/2010 AY:2007 - 08 A GRICULTURAL INCOME OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE FEEL IT APPROPRIATE TO RESTORE THE ISSUE IN DISPUTE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONDUCTING NECESSARY INQUIRY AS DEEMED FIT FOR DECIDING THE ISSUE IN DISPUTE. IT IS NEEDLESS TO MENTION THAT T HE ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING BY THE ASSESSING OFFICER TO SUBMIT THE NECESSARY EVIDENCE IN SUPPORT OF ITS CLAIM. ACCORDINGLY , THE GROUND OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 5. IN GROUND NO. 3 , THE REVENUE HAS CONTESTED THE DELETION OF ADDITION OF RS.1, 20,000/ - BY THE LEARNE D COMMISSIONER OF INCOME - TAX (APPEALS). 5.1 FROM THE FACTS ON RECORD, W E FIND THAT THE AGRICULTURE INCOME OF RS.25,81,033/ - CLAIMED BY THE ASSESSEE , WAS HELD BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES AN D HE MADE SEPARATE ADDITION OF RS.1, 20,000/ - TOWARDS AGRICULTURE INCOME. SINCE THE ISSUE OF AMOUNT OF RS . 25,81, 033/ - , WHETHER IT IS AGRICULTURE INCOME OR INCOME FROM OTHER SOURCES HAS ALREADY BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER, WE FEEL IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AS BOTH THE ISSUE ARE INTERL INKED. THE ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING ON THE ISSUE IN DISPUTE. ACCORDINGLY , THE GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT , APPEAL OF THE R EVENUE IS ALLOWED FOR STATISTICAL PURPOSE. THE DECISIO N IS PRONOUN CED IN THE OPEN COURT ON 28 TH FEBRUARY , 201 7 . SD/ - SD/ - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH FEBRUARY , 201 7 . RK / - (D.T.D) 13 ITA NO. 1665/DEL/2010 AY:2007 - 08 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI