ITO, Hisar V. Sh. Dinesh Kumar Jain, Hisar

ITA 1751/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2407 (ITAT-DELHI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2009
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 29-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2009
• Court: TRIBUNAL
• Department Lawyers: B KISHORE
• Keywords: Capital asset; Set aside
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI DEEPAK R SHAH, ACCOUNTANT MEMBER ITA NO. 1751/DEL/2009 ASSESSMENT YEAR : 2005-06 INCOME-TAX OFFICER, WARD-1, HISAR. VS. SHRI DINESH KUMAR JAIN, S/O SHRI RAJ KUMAR JAIN, MOHALA KAMLA, HISAR. PAN : AASPJ 9533 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ARUN KUMAR JAIN, ADVOCATE, REVENUE BY : SHRI B. KISHORE, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 19 TH FEBRUARY, 2009 FOR ASSESSMENT YEAR 2005-06. GROUN DS OF APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT (A) WAS RIGHT IN DELETING THE ADDITION OF RS.13,03,390/- WITHOUT ASCERTAINING THE FACTS CORRE CTLY AVAILABLE ON RECORD IN THE SHAPE OF TEHSILDARS TWO CONTRADICTORY CERTIFICATES INDICATING THE DISTANCE FROM MUNICIPAL LIMIT. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 2. THE CAPITAL GAIN ARISING OUT OF SALE OF AGRICULT URAL LAND WAS CLAIMED AS EXEMPT ON THE GROUNDS THAT THE LANDS WERE SITUATED BEYOND 8 KMS FROM THE ITA NO.1751/DEL/2009 2 MUNICIPAL LIMITS OF HISAR AND HANSI. LAND AT VILLA GE CHIKANWAS WAS SOLD FOR A SUM OF RS.15,31,250/- AND ANOTHER LAND SITUATED AT DHANI KUTUBPUR FOR A SUM OF RS.30,000/-. IN ORDER TO VERIFY THE DISTANCE, THE AO SENT LETTER TO THE TEHSILDAR DATED 29 TH NOVEMBER, 2006 ASKING FOR ACTUAL DISTANCE OF AGRIC ULTURAL LAND SOLD BY THE ASSESSEE OF VILLAGE BEED (CHIKANWAS BLOCK) AND TEHSIL HISAR VIDE HIS OFFICE LETTER NO.388 DATED 30 TH NOVEMBER, 2006 INFORMED THAT THE LAND WAS AT ABOUT 6 KMS FROM THE LIMIT OF HISAR MUNICIPALITY. THE ASSE SSEE WAS CONFRONTED WITH THE REPORT OF TEHSILDAR VIDE ORDER SHEET ENTRY DATED 12 TH DECEMBER, 2006 (APPEARS TO BE WRONGLY WRITTEN IN ASSESSMENT ORDER AS 12.12.200 7) AND WAS REQUIRED TO CLARIFY THE POSITION. THE ASSESSEE IN REPLY DATED 19 TH FEBRUARY, 2007 FURNISHED JAMABANDI, MAP OF VILLAGE BEED, GIRDWARI OF LAND IN QUESTION, A CERTIFICATE FROM SECRETARY, MUNICIPAL COUNCIL, HISAR AND CERTIFICATE FROM MANJU ARORA, MC, WARD- 3, HISAR. THE AO STATED THAT A PERUSAL OF ALL THES E DOCUMENTS DOES NOT REVEAL THE DISTANCE OF LAND IN QUESTION FROM MUNICIPAL LIM ITS. A PLAN OF SIRSA ROAD FROM CITY TO K.M.14 PREPARED BY THE VALUER WAS ALSO SUBM ITTED BY THE ASSESSEE AND THE AO REJECTED SUCH EVIDENCE ON THE GROUND THAT VA LUER IS NOT AN AUTHORIZED PERSON TO CERTIFY THE DISTANCE OF AGRICULTURAL LAND AND VALUER ALSO FAILED TO ESTABLISH THE DISTANCE OF LAND FROM MUNICIPAL LIMIT S. SIMILARLY, THE AO FOUND THAT AGRICULTURAL LAND SITUATED AT DHANI, KUTUBPUR WAS ALSO WITHIN 8 KMS DISTANCE. THEREFORE, THE AO ASSESSED CAPITAL GAIN ON THE SALE OF BOTH THESE LANDS. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT (A) TAKING OBJECTION TO ASSESSMENT OF SALE PRICE OF AGRICULTUR AL LAND SITUATED AT BOTH THE PLACES FOR BEING EXIGIBLE FOR CAPITAL GAIN. THE EV IDENCES WERE SUBMITTED BEFORE THE CIT (A) ALONG WITH WRITTEN SUBMISSIONS WHICH WE RE REFERRED TO BY CIT (A) TO THE AO VIDE HIS LETTER DATED 19 TH NOVEMBER, 2008 ASKING THE AO TO GET THE FACTS AS TO THE SITUATION OF LAND VERIFIED FROM THE AUTHO RITIES CONCERNED. IN RESPONSE, THE AO FURNISHED LETTER DATED 13 TH FEBRUARY, 2009 AFTER CONDUCTING INQUIRIES FROM TEHSILDAR, HISAR AND AFTER CONSIDERING THE SUBMISSI ON OF THE ASSESSEE AND THE REPORT OF THE AO THE ISSUE HAS BEEN DECIDED BY THE LD. CIT (A). IT IS MENTIONED BY CIT (A) THAT AO IN HIS LETTER DATED 13 TH FEBRUARY, 2009 HAS ENCLOSED REPORT OF TEHSILDAR ACCORDING TO WHICH THE RELEVANT LAND OF C HIKANWAS IS SITUATED 10 KMS ITA NO.1751/DEL/2009 3 AWAY FROM THE MUNICIPAL LIMITS. IT IS, THEREFORE, T HE CIT (A) HAS HELD THAT THE LAND IN QUESTION IS NOT CAPITAL ASSET IN VIEW OF DEFINIT ION GIVEN IN SECTION 2(14) (III) AND, THEREFORE, NO CAPITAL GAIN IS CHARGEABLE ON TRANSFE R OF SUCH LAND AND HE HAS DELETED THE ADDITION MADE ON THIS ACCOUNT FOR ASSES SING THE CAPITAL GAIN. IN RESPECT OF OTHER LAND I.E., DHANI KUTUBPUR, THE CIT (A) HAS CONFIRMED THE ACTION OF AO AS NO SUBMISSIONS WERE MADE BY THE ASSESSEE I N THAT REGARD. THE REVENUE IS AGGRIEVED, AND IS IN APPEAL IN RESPECT O F LAND SOLD AT VILLAGE CHIKANWAS. 4. IT WAS VEHEMENTLY PLEADED BY LD. DR THAT THERE W ERE TWO CERTIFICATES EXISTING ACCORDING TO WHICH DIFFERENT STATEMENTS HA VE BEEN MADE BY TEHSILDAR. THE LD. CIT (A) WAS WRONG IN BASING HIS DECISION ON THE SECOND CERTIFICATE AND HE HAS NOT STATED ANY REASON TO DEVIATE FROM THE EA RLIER CERTIFICATE GIVEN BY TEHSILDAR. IT WAS, THEREFORE, CONTENDED BY LD. DR THAT ADDITION HAS WRONGLY BEEN DELETED. THEREFORE, THE ORDER OF THE AO SHOULD BE RESTORED AND THAT OF CIT (A) SHOULD BE SET ASIDE. 5. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR T HAT RIGHT FROM THE BEGINNING IT WAS THE CASE OF THE ASSESSEE THAT THE DISTANCE OF LAND IN QUESTION IS MORE THAN 8 KMS, THEREFORE, IT WAS NOT A CAPITAL AS SET. THE AO DID NOT ACCEPT SUCH SUBMISSION DESPITE VARIOUS EVIDENCES BEING SUB MITTED AND EVEN AFTER CONFRONTATION OF TEHSILDARS CERTIFICATE. IT WAS S UBMITTED THAT THE CIT (A) HAS CORRECTLY APPRECIATED THE POSITION. HE AGAIN REFER RED THE MATTER TO THE AO WITH EVIDENCE AND THE AO IN HIS REPORT HAS SUBMITTED A C ERTIFICATE FROM TEHSILDAR WHICH IS DATED 3 RD DECEMBER, 2009 AND ACCORDING TO WHICH THE DISTANCE OF THE LAND SOLD BY THE ASSESSEE IS 10 KMS FROM THE MUNIC IPAL LIMIT. HE HAS SUBMITTED BEFORE US A COPY OF THE SAID REPORT WHICH WAS ENCLO SED BY THE AO IN HIS REMAND REPORT TO CIT (A) AND, THUS, IT WAS SUBMITTED BY LD . AR THAT THE CIT (A) HAS RIGHTLY DELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD . 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. SO FAR AS IT RELATES TO OBJECTION OF REVENUE THAT WHY ITA NO.1751/DEL/2009 4 THE CIT (A) HAS IGNORED THE FIRST CERTIFICATE WHICH STATED THE DISTANCE OF ASSESSEES LAND FROM THE MUNICIPAL LIMIT AT 6 KMS, IT MAY BE MENTIONED THAT IT HAS BEEN THE CASE OF THE ASSESSEE THAT THE DISTANCE OF LAND FROM MUNICIPAL LIMIT IS MORE THAN 8 KMS AND FOR THAT THE ASSESSEE HAD FI LED VARIOUS EVIDENCES WHICH WERE IN THE SHAPE OF VALUERS CERTIFICATE, CERTIFIC ATE FROM MUNICIPAL COUNCIL AND CERTIFICATE FROM MUNICIPAL COMMISSIONER. ALL THESE EVIDENCES HAVE BEEN REFERRED BY THE AO IN PARA 5 OF THE ASSESSMENT ORDER. BUT T HE AO WAS NOT SATISFIED WITH THAT EVIDENCE. WHEN THE ISSUE WAS AGITATED BEFORE THE CIT (A) HE CALLED FOR THE REPORT OF AO STATING ACTUAL DISTANCE OF THE ASSESSE ES LAND FROM MUNICIPAL LIMIT OF HISAR. IN TURN, THE AO OBTAINED CERTIFICATE FROM T EHSILDAR WHICH WAS SUBMITTED ALONG WITH THE LETTER TO CIT (A). THEREFORE, THE L ATER EVIDENCE SUBMITTED BY THE AO CANNOT BE DISCARDED UNLESS IT IS SHOWN THAT THE SAID CERTIFICATE WAS NOT A GENUINE CERTIFICATE. LD. CIT (A) HAS ALL THE PO WERS TO ASCERTAIN THE CORRECT FACTS AND WHILE DOING SO HE REQUIRED THE AO TO FURNISH TH E EXACT DISTANCE OF THE ASSESSEES LAND FROM MUNICIPAL LIMIT AND IT WAS SO DONE BY THE CIT (A). IF THE LAND IS SITUATED AT A DISTANCE OF MORE THAN 8 KMS T HAT CANNOT BE REGARDED AS CAPITAL ASSET. NO MATERIAL HAS BEEN BROUGHT ON REC ORD BY THE REVENUE TO SHOW THAT THE LAND IN QUESTION WAS ACTUALLY SITUATED WIT HIN A DISTANCE OF 8 KMS. IN THE ABSENCE OF SUCH MATERIAL, THE CERTIFICATE OBTAINED AND PLACED BEFORE THE AO IN APPELLATE PROCEEDINGS SHALL HAVE TO BE GIVEN PREFER ENCE. THEREFORE, THE LD. CIT (A) WAS RIGHT IN CONSIDERING THAT EVIDENCE AND HE W AS RIGHT IN HOLDING THAT AS THE DISTANCE OF LAND FROM MUNICIPAL LIMIT WAS MORE THAN 8 KMS, NO CAPITAL GAIN CAN BE ASSESSED IN RESPECT OF THAT LAND. WE DECLINE TO INTERFERE IN SUCH FINDINGS OF THE CIT (A) PARTICULARLY IN THE ABSENCE OF ANY MATE RIAL PLACED ON RECORD BY THE DEPARTMENT AFTER THE ASSESSMENT TO SHOW THAT THE LA TER CERTIFICATE GIVEN BY TEHSILDAR WAS NOT FACTUALLY CORRECT. ITA NO.1751/DEL/2009 5 7. IN THE RESULT, FINDING NO MERIT IN DEPARTMENTAL APPEAL, THE SAME IS DISMISSED. 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.12. 2009. SD/- SD/- [DEEPAK R. SHAH] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 29.12.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES