Balasaheb Vishnu Yadav, Pune V. Deputy Commissioner Income-tax,

ITA 1739/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7506 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1739/PUN/2016 / ASSESSMENT YEAR : 2010-11 SHRI BALASAHEB VISHNU YADAV, PROP. M/S. MAHALAXMI STEEL CORPORATION, A-68, H-BLOCK, MIDC, PIMPRI, PUNE 411 018 PAN : AADPY0698R . / APPELLANT V/S DCIT, CIRCLE - 8, PUNE . / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI AJAY MODI / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A)-6, PUNE DATED 31-05-2016 FOR THE ASSESSMENT YEAR 2010-11. THE ISSUE RAISED IN THIS APPEAL RELATES TO AGRICULTURAL NATURE OF THE LAND A LLOTTED BY THE GOVERNMENT AS PART OF THE SCHEME OF ACQUISITION AND ALLOWABILITY OF DEDUCTION U/S.54B. 2. GROUNDS AS WELL AS THE CONCISE GROUNDS BY THE AS SESSEE ARE ELABORATIVE AND ARGUMENTATIVE IN NATURE BUT THE CORE ISSUE RAISED I N THE APPEAL RELATES TO GROUND NO.1 (OF THE CONCISE AND MODIFIED GROUNDS) WHICH RE ADS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE A. O. OF RS.1,68,91,119/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THE ASSESSEE S TATED THAT THIS ACTION OF THE A.O. IS CHALLENGED IN THE GROUNDS OF APPEAL RAISED ABOVE. THE ADDITION BE DELETED. / DATE OF HEARING : 28.08.2017 / DATE OF PRONOUNCEMENT: 30.08.2017 2 ITA NO.1739/PUN/2016 SHRI BALASAHEB V. YADAV 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS THE PROPRIETOR OF M/S. MAHALAXMI STEEL CORPORATION AND IS ENGAGED IN THE B USINESS OF M.S. SCRAP. ASSESSEE FILED THE RETURN OF INCOME ON 26-09-2010 D ECLARING INCOME OF RS.40,33,070/-. ASSESSEE ALONG WITH THE MEMBERS OF THE FAMILY OWNED A PIECE OF AGRICULTURAL LAND (4 ACRES) AT CHIKHALI VILLAGE. TH E GOVERNMENT ACQUIRED THE LAND IN THE YEAR 1970. ON 28-10-1986 THE SPECIAL LAND A CQUISITION OFFICE PUBLISHED THE AWARD OF ACQUISITION OF LAND FOR A SUM OF RS.68,724 /-. ACCORDING TO THE SAID ACQUISITION, THE GOVERNMENT IS REQUIRED TO RETURN T HE DEVELOPED LAND EQUAL TO 12.5% OF THE TOTAL LAND OWNED BY THE ASSESSEE. THE SAID OFFER OF THE GOVERNMENT WAS NOT ACCEPTABLE TO THE ASSESSEE AND THERE WAS LI TIGATION ON THE ISSUE OF ACQUISITION OF THE SAID LAND AS WELL AS THE AMOUNT OF COMPENSATION RECEIVABLE BY THE GOVERNMENT. WHILE LITIGATION IS PENDING, EVENT UALLY, THE LAND WAS ACQUIRED BY THE GOVERNMENT AND THE DEED WAS EXECUTED ON 31-05-2 008 BETWEEN THE ASSESSEE AND THE PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHO RITY (IN SHORT PCNTDA). MEANWHILE, THE ASSESSEE WAS ALLOTTED 2000 SQ.MTRS O F LAND EQUIVALENT TO 12.5% OF HIS LAND. ASSESSEE SOLD THE SAID LAND ON 15-10-200 9 FOR A SUM OF RS. 1,69,00,000/-. ASSESSEE RE-INVESTED THE SAME A ND PURCHASED AN AGRICULTURAL LAND WORTH RS.1,13,31,350/- AND CLAIMED THE DEDUCTI ON U/S.54B IN RESPECT OF THE SAID INVESTMENT. IN THE ASSESSMENT PROCEEDINGS, TH E AO HELD THAT THE ASSESSEE IS NOT ENTITLED TO SUCH CLAIM OF DEDUCTION AS THE LAND INVOLVED IS A DEVELOPED LAND AND NOT AN AGRICULTURAL LAND. AO COMPLETED THE ASS ESSMENT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.3,15,66,221/-. 4. AGGRIEVED WITH THE SAME ASSESSEE IS IN APPEAL BE FORE US WITH THE MULTIPLE GROUNDS WHICH REVOLVE ESSENTIALLY AROUND THE CORE I SSUE RAISED IN THE CONCISE GROUNDS OF APPEAL NO.1. 5. DEVIATING FROM THE ABOVE ARGUMENTATIVE GROUNDS R AISED BY THE ASSESSEE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS I SSUE NEEDS REVISIT TO THE FILE OF 3 ITA NO.1739/PUN/2016 SHRI BALASAHEB V. YADAV THE AO. ELABORATING THE SAME, SHRI M.K. KULKARNI, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BY VIRTUE OF THE CENTRAL GOVT. LEGIS LATION NAMED RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION R EHABILITATION AND RESETTLEMENT ACT (IN SHORT RECTLARR ACT, 2013) AND THE CBDT CIRCULAR NO.36/2016 DATED 25-10-2016 THE GAINS EARNED BY THE ASSESSEE IS TAX FREE. BRINGING OUR ATTENTION TO THE IMPUGNED ORDER OF CIT (A) DATED 31-05-2016 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MATTER HAS TO BE REFERRED TO THE FILE OF THE AO IN VIEW OF THE ABOVE SAID ACT AND CBDT CIRC ULAR WHICH WERE NOT EXISTING AT THE RELEVANT POINT OF TIME. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE TRANSACTION OF SALE OF LAND OF 2000 SQ.MTRS IS NOT SUBJECTED TO INCOME TAX AS IT PROVIDES FOR EXEMPTION IN RESPECT OF THE LAND BE IT A RURAL AREA OF URBAN. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGES 64 AND 65 OF THE PAPER BOOK (PARA NO.3) AND SUBMITTED THAT DISTINCT ION BETWEEN THE AGRICULTURAL LAND AND NON-AGRICULTURAL LAND DOES NOT ARISE WHEN THERE IS COMPULSORY ACQUISITION OF LAND BY THE GOVERNMENT UNDER THE SAID ACT/CIRCUL AR. THE COMPENSATION WHICH WAS RECEIVED BY THE ASSESSEE WILL NOT ATTRACT THE I NCOME-TAX PROVISIONS AFTER RECTLARR ACT IS OPERATIONAL. HE ALSO RELIED ON VAR IOUS DECISIONS INCLUDING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF P UNE MUNICIPAL CORPORATION VS. HARAKCHAND MISRIMAL SOLANKI AND OTHERS AIR 2014 SUP REME COURT 982 DATED 24- 01-2014 AND SUBMITTED THAT IT IS NOW SETTLED ISSUE THAT SUCH INCOME IS BEYOND THE TAXATION OF INCOME-TAX. 6. BRINGING OUR ATTENTION TO PAGES 1 TO 28 OF THE P APER BOOK (WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REFERENCE WAS MADE BEFORE THE CIT(A) ABOUT SUCH PROVISIONS (PAGES 7, 9 AND 13 OF THE PAPER BOOK) WITH REFERENCE TO THE LAN D ACQUISITION (AMENDMENT) BILL 2007 AND REHABILITATION AND RESETTLEMENT BILL 2007) . SUBSEQUENTLY, RECTLARR ACT HAS COME INTO EXISTENCE FROM 27-09-2014 W.E.F. 01-01-2014 WHICH PROVIDES 4 ITA NO.1739/PUN/2016 SHRI BALASAHEB V. YADAV FOR EXEMPTION OF COMPENSATION RECEIVED FROM THE GOV ERNMENT ON ACCOUNT OF COMPULSORY ACQUISITION (BE IT A RURAL AREA OR THE U RBAN AREA). HE ALSO FAIRLY SUBMITTED THAT THE EXCEPTIONS PROVIDED IN SECTION 9 6 DO NOT APPLY TO THE CASE OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE MENTION ED THAT THE CIT(A)S ORDER IS DEFICIENT SO FAR AS THE APPLICABILITY OF THE SAID A CT IS CONCERNED. THEREFORE, IT IS APPROPRIATE THAT THE MATTER SHOULD BE REMANDED TO T HE FILE OF THE AO FOR FRESH EXAMINATION OF ENTIRE ISSUES AND THE EXEMPTNESS OF THE SAID COMPENSATION RECEIVED BY THE ASSESSEE. IT IS ALSO A CASE OF ASS ESSEE THAT NO COMPENSATION WAS EVER RECEIVED DUE TO ISSUES RELATING TO LITIGATION BY THE ASSESSEE REGARDING HIS SHARE OF FULL COMPENSATION. 7. WE HEARD BOTH THE PARTIES. WE FIND THE ORDER OF THE CIT(A) IS DATED 31-05- 2016 AND THE SAME IS PRIOR TO THE CBDT CIRCULAR NO. 36/2016 DATED 25-10-2016. IT IS THE CASE OF THE ASSESSEE THAT ASSESSEE REFUNDED HIS SHARE OF COMPENSATION TO THE GOVERNMENT. THERE IS NO CLARITY SO FAR AS THE OUTCOME OR FINALITY OF THE AFORESAID LITIGATION TAKEN UP BY THE ASSESSEE REGAR DING THE ACQUISITION OF THE AGRICULTURAL LAND. IT IS AN ADMITTED FACT THAT THE CIT(A)S ORDER DOES NOT CONTAIN ANY WHISPER ABOUT THE APPLICABILITY OF THE PROVISIO NS OF RECTLARR ACT. OBVIOUSLY, THE QUESTION OF APPLYING THE PROVISIONS OF CBDT CIR CULAR REFERRED ABOVE ISSUED MUCH LATER IN 2016 DOES NOT ARISE. CONSIDERING TH E SAME, WE ARE OF THE OPINION THAT THE ENTIRE ISSUE RAISED BY THE ASSESSEE IN VAR IOUS GROUNDS SHOULD BE REMANDED TO THE FILE OF THE AO FOR FRESH EXAMINATIO N AND WANT OF A SPEAKING ORDER ON EACH ARGUMENTATIVE GROUND RAISED BY THE ASSESSEE . AO SHALL ENTERTAIN FURTHER ADDITIONAL DOCUMENTS, IF ANY, TO BE FURNISHED BY TH E ASSESSEE DURING THE PROCEEDINGS IN THE INTEREST OF PRINCIPLES OF NATURA L JUSTICE. ASSESSEE SHALL COOPERATE WITH THE AO IN ACCORDANCE WITH THE SAID P RINCIPLES. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STAT ISTICAL PURPOSES. 5 ITA NO.1739/PUN/2016 SHRI BALASAHEB V. YADAV 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUGUST, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 30 TH AUGUST, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 6 , PUNE 4 . 5. THE CIT - 6 , PUNE ( , , B BENCH PUNE; 6 . / GUARD FILE.