Dr.R.Rangarajan, CHENNAI V. ACIT, CHENNAI

ITA 1779/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58085 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-03-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Assessee Lawyers: G BASKER
• Keywords: Capital asset; Revised return
• Section: 2(14); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER] I.T.A.NO. 1779/MDS/2011 ASSESSMENT YEAR : 2009-10 DR. R.RANGARAJAN 38 (OLD NO.24), AMB AVENUE R.A.PURAM, CHENNAI 28 [PAN AADPR 7092J] VS THE ACIT CENTRAL CIRCLE III(3) CHENNAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. BASKER RESPONDENT BY : SHRI R.B.NAIK, CIT/DR DATE OF HEARING : 13-03-2012 DATE OF PRONOUNCEMENT : 16-03-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSE SSEE AGAINST THE ORDER OF THE LD.CIT(A)-II, CHENNAI, DATED 23.8.2011. 2. THE ASSESSEE HAS TAKEN SEVEN GROUNDS OF APPEAL AND THE ONLY ISSUE INVOLVED IS THAT THE LD.CIT(A) ERRED IN CONCLUDING THAT THE LAND TRANSFERRED BY THE ASSESSEE IS NOT AGRICULTUR AL LAND AND THEREBY HOLDING THAT IT IS A CAPITAL ASSET THE TRANSFER OF WHICH GIVES RISE TO TAXABLE CAPITAL GAINS. I.T.A.NO.1779/11 :- 2 -: 3. THE LD. A.R OF THE ASSESSEE SUBMITTED THAT DUR ING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2009-10, THE ASSESSEE HAD SOLD AGRICULTURAL LAND MEASURING 11.96 ACRES SITUA TED AT MORAI VILLAGE, AMBATTUR TALUK, TIRUVALLUR DISTRICT. THE CAPITAL G AIN ARISING ON THIS SALE OF LAND WAS ADMITTED IN THE RETURN FILED ON 31.7.20 09. THEREAFTER, A SEARCH U/S 132 OF THE ACT WAS CONDUCTED AT THE PRE MISES OF THE ASSESSEE ON 27.8.2008 CONSEQUENT TO WHICH THE RETUR N FILED BY THE ASSESSEE WAS TAKEN FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED RETURN A LONGWTIH A DETAILED LETTER DATED 21.12.2010 WITHDRAWING THE CAPITAL GAI N ADMITTED IN THE ORIGINAL RETURN. HE SUBMITTED THAT AT THE TIME OF FILING THE RETURN, THE ASSESSEE WAS NOT AWARE OF THE FACT THAT SINCE THE A GRICULTURAL LAND SOLD WAS SITUATED IN A PLACE 8 KMS AWAY FROM THE NO TIFIED AREA, THE LAND SOLD WAS NOT A CAPITAL ASSET WITHIN THE MEANIN G OF SECTION 2(14) OF THE ACT. IN THE LETTER DATED 21.12.2010, IT WAS STATED THAT THE AGRICULTURAL LAND IN MORAI VILLAGE WAS SITUATED 10 KMS AWAY FROM THE OUTER LIMITS OF AVADI, A NOTIFIED AREA, AS PER CBD T CIRCULAR NO.SO871(E) DATED 19.11.1993 AND THAT THE LAND WAS PUT TO CULTIVATION BY THE ASSESSEE TILL ITS SALE. IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT, THE ASSESSEE FILE D A CERTIFICATE FROM THE VAO, MORAI VILLAGE CERTIFYING THAT THE LAND SO LD BY THE ASSESSEE WAS AGRICULTURAL LAND. IT WAS SUBMITTED THAT FURT HER CERTIFICATES FROM I.T.A.NO.1779/11 :- 3 -: VAO, MORAI VILLAGE AND GENERAL MANAGER, METROPOLITA N TRANSPORT CORPORATION (CHENNAI) LTD, CERTIFYING THAT THE MORA I VILLAGE IS SITUATED 10 KMS AWAY FROM AVADI WERE ALSO FILED. A ROUGH SK ETCH OF THE AVAILABLE APPROACH ROAD TO THE LAND SOLD, BY THE DE PUTY SURVEYOR, AMBATTUR TALUK, WAS ALSO FILED TO IMPRESS UPON THE FACT THAT THE LAND SOLD WAS SITUATED MORE THAN 8 KMS FROM THE PERIPHER Y OF AVADI TALUK. HE ARGUED THAT THOUGH THE ASSESSING OFFICER ADMITTE D THE CLAIM OF NON-TAXABILITY OF THE CAPITAL GAIN THROUGH THE REVI SED RETURN IN THE ASSESSMENT, HE DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE LAND SOLD WAS NOT A CAPITAL ASSET WITHIN THE MEANIN G OF SECTION 2(14) OF THE ACT. THE ASSESSING OFFICER DEPUTED AN INSPE CTOR ACCORDING TO WHOM, THE DISTANCE BETWEEN THE AVADI LIMITS AND THE LAND WAS ONLY 6 KMS. THE INSPECTOR REPORTED THAT AT THE TIME OF IN SPECTION OF THE PROPERTY, THE LAND WAS BARREN AND NO CULTIVATION WA S NOTICED EITHER IN THE LAND OR IN ITS VICINITY. BASED ON THIS REPORT OF THE INSPECTOR, THE ASSESSING OFFICER HELD THAT THE CAPITAL GAIN WAS EX IGIBLE. THE LD. A.R FURTHER SUBMITTED THAT THE INSPECTOR HAD VISITED TH E LAND ALONGWITH THE REPRESENTATIVE OF THE ASSESSEE, SMT.NOORJAHAN. TH E DISTANCE WAS MEASURED BY TRAVELLING IN A CAR AND NOTING THE DIST ANCE BY MEANS OF THE ODOMETER OF THE CAR. IT WAS SUBMITTED THAT THE REPRESENTATIVE OF THE ASSESSEE HAD TRAVELLED TO THE LAND USING THE C AMP ROAD WHICH IS NOT A PUBLIC ROAD, BUT OWNED BY TAMIL NADU SPECIAL POLICE. THEREFORE, I.T.A.NO.1779/11 :- 4 -: THE ROAD IS NOT A THOROUGHFARE AND ACCESS WAS AVAIL ABLE ONLY TO THE TAMIL NADU SPECIAL POLICE PERSONNEL. FURTHER, THE CAMP ROAD DID NOT LEAD TO THE LAND SOLD BY THE ASSESSEE, BUT ENDED W ITH THE OFFICE OF THE TAMIL NADU SPECIAL POLICE. HENCE, THE LAND SOLD CO ULD NOT BE ACCESSED TO THE CAMP ROAD. IT WAS SUBMITTED THAT BEYOND THE OFFICE OF THE TAMIL NADU SPECIAL POLICE, THE LAND COULD BE REACHE D ONLY BY TRESPASSING THE LAND BELONGING TO PRIVATE PARTIES. IT WAS SUBMITTED THAT THE INSPECTOR COULD NOT HAVE REACHED TO THE LA ND BY THE CAMP ROAD SINCE THE ROAD ENDS ON THE THRESHOLD OF THE T AMIL NADU SPECIAL POLICE CAMP. IT WAS SUBMITTED THAT THE INSPECTOR DID NOT ACTUALLY ENTER INTO THE LAND BUT HAD A VERY DISTANT VIEW FRO M THE CAMP ROAD AND COULD NOT ACTUALLY FIND THE STANDING MANGO TREE S GROWN IN THE WHOLE LAND WHICH ARE STILL AVAILABLE EVEN ON THIS D AY. IT WAS SUBMITTED THAT THE ASSESSEE HAD PROVIDED ALL EVIDENCES IN SU PPORT OF HIS CLAIM NAMELY, CERTIFICATE FROM THE VAO, THE PUBLIC TRANSP ORT DEPARTMENT AND THE CERTIFIED MAP OF DY SURVEYOR, AMBATTUR TALUK, W HICH ESTABLISH THAT THE LAND WAS SITUATED MORE THAN 8 KMS FROM AVADI LI MITS. IN SUPPORT OF THE CLAIM THAT THE LAND SOLD WAS AGRICULTURAL LA ND, ASSESSEE HAD FILED CERTIFICATE FROM VAO. THE ASSESSEE HAD ADMI TTED AGRICULTURAL INCOME FROM THIS LAND WHICH WAS GIVEN ON LEASE TO M /S VEL HORTICULTURES LTD., A COMPANY DOING AGRICULTURAL OP ERATIONS. THESE EVIDENCES GIVEN BY THE ASSESSEE HAVE NOT BEEN CONT ROVERTED BY THE I.T.A.NO.1779/11 :- 5 -: ASSESSING OFFICER. THEREFORE, THE ACTION OF THE AS SESSING OFFICER IN REJECTING THE CLAIM PURELY ON THE BASIS OF INSPECTO RS REPORT AND DISREGARDING THE EVIDENCES FROM THE LOCAL OFFICIALS WITHOUT BRINGING ANY OTHER EVIDENCES OR MATERIALS TO DISPROVE THE CLAIM WAS NOT IN ACCORDANCE WITH LAW. 4. ON THE OTHER HAND, THE LD. CIT/DR SUPPORTED TH E ORDER OF THE ASSESSING OFFICER. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PE RUSING THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAIL ABLE ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS CONSIDERED THE IMPUGNED LAND AS A CAPITAL ASSET LIABLE TO CAPITAL GAINS TAX ON THE GR OUND THAT THE PLOT OF LAND WAS SITUATED BEYOND THE NOTIFIED LIMIT OF 8 K MS FROM THE NEAREST AVADI MUNICIPALITY, THE LAND WAS BARREN AS REPORTED BY THE INSPECTOR, NO CROP WAS GROWN ON THE LAND AND THAT THE PLOT OF LAND WAS TRANSFERRED TO A TRUST RUNNING ENGINEERING COLLEGES WITH A VIEW TO GET THE DEEMED UNIVERSITY STATUS. THE LD.CIT(A) CONFI RMED THE ORDER OF THE ASSESSING OFFICER FOR THE VERY SAME REASONS. W E OBSERVE THAT THE SUBMISSIONS OF THE LD. A.R MADE DURING THE COURSE O F HEARING, HAVE NOT BEEN CONTROVERTED BY THE LD.CIT/DR. THUS, WE FIND THAT THE EVIDENCES FILED BY THE ASSESSEE SUCH AS, CERTIFICATE FROM VA O, MORAI VILLAGE, CERTIFYING THAT THE LAND SOLD WAS AGRICULTURAL LAND , CERTIFICATE FROM I.T.A.NO.1779/11 :- 6 -: GENERAL MANAGER, METROPOLITAN TRANSPORT CORPORATION (CHENNAI) LTD CERTIFYING THAT MORAI VILLAGE IS SITUATED 10 KMS AW AY FROM AVADI, ROUGH SKETCH OF THE AVAILABLE APPROACH ROAD TO THE LAND S OLD, BY THE DEPUTY SURVEYOR, AMBATTUR TALUK, TO IMPRESS UPON THAT THE LAND SOLD WAS SITUATED MORE THAN 8 KMS FROM THE AVADI TALUK, WERE NOT CONSIDERED BY THE ASSESSING OFFICER AS NO REASONS FOR NOT ACCE PTING THESE EVIDENCES HAVE BEEN GIVEN BY HIM IN THE ASSESSMENT ORDER. FURTHER, NO REASONS HAVE BEEN GIVEN BY THE ASSESSING OFFICER AS TO WHY THE INSPECTORS REPORT SHOULD BE RELIED UPON AND THE CE RTIFICATES FILED BY THE ASSESSEE SHOULD BE IGNORED. DURING THE COURSE OF HEARING, THE LD. A.R OF THE ASSESSEE HAS ALSO SUBMITTED THAT HE HAD NO OBJECTION IF THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSI NG OFFICER FOR CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE AF RESH. WE FIND FORCE IN THE SUBMISSIONS OF THE LD. A.R OF THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAN D THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICA TING THE ISSUE AFRESH AFTER VERIFYING ALL THE DOCUMENTS AND THEREAFTER PA SSING A SPEAKING ORDER. NEEDLESS TO MENTION THAT THE ASSESSING OFF ICER SHALL ALLOW PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. T HUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NO.1779/11 :- 7 -: 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16-0 3-2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 16 TH MARCH, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR