N.Sankaralingam, Trichy V. ITO, Trichy

ITA 1799/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8016 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Reasonable cause; Assessment record
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! . ! ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 1799/MDS/2015 $ & !'& / ASSESSMENT YEAR : 2008-2009 SHRI. N. SANKARALINGAM, NO.70, III STREET, PARVATHIPURAM, MUSIRI TOWN, TRICHY DIST. VS. THE INCOME TAX OFFICER, WARD I(1) TRICHY [PAN AAZPS 1990E ] ( / APPELLANT) ( /RESPONDENT) () * + / APPELLANT BY : SHRI. PHILIP GEORGE, ADVOCATE ,-() * + /RESPONDENT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT ' ! * . / DATE OF HEARING : 03-02-2016 /0' * . / DATE OF PRONOUNCEMENT : 11-02-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TIRU CHIRAPALLI IN ITA NO.270/2013-14/CIT(A)/TRY, DATED 03.03.2015 FOR THE ASSESSMENT ITA NO. 1799/MDS/2015 :- 2 -: YEAR 2008-2009 PASSED U/S.143(3) R.W.S. 147 AND 2 50 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE AC T). 2. THERE IS A DELAY OF 30 DAYS IN FILING THE APPEAL BY THE ASSESSEE. AT THE TIME OF HEARING THE LD. COUNSEL H AS FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY AND THE LD. DR HAS NO SERIOUS OBJECTIONS FOR CONDONATION OF DELAY. AFTER HEARING THE SUBMISSIONS, WE ARE SATISFIED WITH SUFFICIENT AND REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY AND WE THEREFORE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ASSESSEE HAS RAISED SUBSTANTIVE GROUNDS IN RESP ECT OF COMPUTATION OF LONG TERM CAPITAL GAINS UNDER PROVIS IONS OF SEC.50C OF THE ACT BY THE ASSESSING OFFICER IN RESPECT OF A GRICULTURAL LAND AND LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN D ISMISSING THE APPEAL WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF H EARING AND VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. 4. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED RETURN OF INCOME ON 29.10.2008. SUBSEQUEN TLY, AS PER I & CI INFORMATION THE REVENUE FOUND THAT ASSESSEE HAS SO LD IMMOVABLE PROPERTY AND PROVISIONS OF SEC. 50C OF THE ACT ARE APPLICABLE AND ISSUED NOTICE U/S.148 OF THE ACT DATED 27.02.2013. IN COMPLIANCE TO THE NOTICE THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED ITA NO. 1799/MDS/2015 :- 3 -: THAT THE ASSESSEE HAS SOLD AGRICULTURAL LAND FOR A SALE CONSIDERATION OF B10,00,000/- ON 28.05.2007. AT THE TIME OF REGISTR ATION THE VALUE ADOPTED AT B150/- PER SQ.FT BY THE REGISTER AND T HE SALE DEED WAS REGISTERED ON MARKET VALUE ADOPTED FOR THE STAMP DU TY B26,16,000/. THE LD. AUTHORISED REPRESENTATIVE PRODUCED CHITTA A DANGAL FOR LAND NOS.1405 & 1406 AND CLAIMED THAT SALE TRANSACTION S HALL NOT ATTRACT PROVISIONS OF CAPITAL GAINS. THE LAND SOLD WAS USE D FOR AGRICULTURAL PURPOSE TILL THE DATE OF SALE AND PRODUCED CERTIFIC ATE FROM VILLAGE ADMINISTRATIVE OFFICER (VAO), MUSIRI TALUK DECLARIN G AGRICULTURAL CROP PADDY WAS HARVESTED DURING THE FINANCIAL YEAR 2007- 2008. BUT THE LD.ASSESSING OFFICER ON PERUSAL OF SALE DEED AND P ROPERTY DETAILS HAS FOUND THAT THE LAND IS SITUATED IN MUSIRI TOWN PA NCHAYAT AND PROVISIONS OF SEC2(14)(III) (A) OF THE ACT ARE ATTR ACTED AND CONCLUDED THAT THE LAND SOLD WAS A HOUSING PLOT. THE AUTHORI SED REPRESENTATIVE SUBMITTED THAT THE LAND WAS USED FOR AGRICULTURAL P URPOSE BEFORE TWO YEARS TILL THE DATE OF DISPOSAL AND RELIED ON PROVI SIONS OF SEC.54B OF THE ACT WERE THE CAPITAL GAINS ARISING ON TRANSFER OF L AND USED FOR AGRICULTURAL PURPOSE IS EXEMPTED IF ANOTHER LAND IS PURCHASED WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER AND E MPHASIZED ON THE DEFINITION OF AGRICULTURAL LAND AND CONTESTED THAT THE POPULATION OF ENTIRE MUNICIPALITY TO BE CONSIDERED NOT ANY PARTIC ULAR VILLAGE FOR ITA NO. 1799/MDS/2015 :- 4 -: TREATING AGRICULTURAL LAND AND SUPPORTED WITH JUDI CIAL DECISIONS. THE ASSESSING OFFICER CONSIDERED THE SUBMISSIONS AND TR EATED THE LAND AS CAPITAL ASSET AND APPLYING THE PROVISIONS OF SEC. 5 0C OF THE ACT BY ADOPTING SRO VALUE, DETERMINED LONG TERM CAPITAL GA INS AND ASSESSED TOTAL INCOME OF B26,53,385/- AND RAISED DEMAND. AG GRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 5. IN THE APPELLATE PROCEEDINGS, NONE APPEARED ON BEHA LF OF THE ASSESSEE. THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) BASED ON THE FINDINGS OF THE ASSESSING OFFICER, PROVISION S OF SEC.50C AND CERTIFICATE FROM VILLAGE ADMINISTRATIVE OFFICER (VA O) IN RESPECT OF PADDY CULTIVATION HAS CONCLUDED THAT LAND SOLD WAS ONLY HOUSING PLOT AND NOT AGRICULTURAL LAND IGNORING THE SUBMISSIONS MADE BY ASSESSEE IN ASSESSMENT PROCEEDINGS THAT THE PURCHASER OBTAINED THE LAND AND MADE THEM INTO HOUSING PLOTS. THE ASSESSEE FOR PERS ONAL REASONS MADE DISTRESS SALE TO SETTLE THE LOANS AND MARRIAG E EXPENSES OF THE DAUGHTER AND ALSO THE GUIDELINE VALUE OF SRO SHALL NOT BE APPLIED TO THE AGRICULTURAL LAND. THE LD. COMMISSIONER OF INC OME TAX (APPEALS) BASED ON INFORMATION OF ASSESSMENT RECORDS AND GRO UNDS OF APPEAL CONSIDERED THE PROVISIONS OF SEC.50C OF THE ACT AR E MANDATORY ON THE ASSESSING OFFICER TO ADOPT THE VALUE OF REGISTRATI ON AUTHORITIES AND ITA NO. 1799/MDS/2015 :- 5 -: CONCURRED WITH THE FINDINGS OF THE ASSESSING OFFICE R WITHOUT GIVING ANOTHER OPPORTUNITY TO THE ASSESSEE AND CONFIRMED T HE ORDER OF THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPE AL BEFORE THE TRIBUNAL. 6. BEFORE US, LD. AUTHORISED REPRESENTATIVE OF THE ASS ESSEE REITERATED HIS SUBMISSIONS MADE BEFORE ASSESSING AU THORITIES ALONGWITH EVIDENCE AND ALSO JUDICIAL DECISIONS THAT THE LAND SOLD IS AGRICULTURAL LAND AND PADDY WAS HARVESTED AND ASSESSEE UNDERTAK EN AGRICULTURAL OPERATIONS PRIOR TO DATE OF SALE AND RECEIVED SAL E CONSIDERATION OF B10,00,000/- AND THE VALUE WAS ADOPTED AT THE TIME OF REGISTRATION. FURTHER, THE ASSESSEE IS A SENIOR CITIZEN SOLD PROP ERTY AS DISTRESS SALE FOR DISCHARGING THE LIABILITIES, EXPENDITURE IN PER FORMING DAUGHTERS MARRIAGE AND TO PAY THE DEBTS. THE PURCHASER TOOK THE POSSESSION OF LAND AND CONVERTED INTO HOUSING PLOT BUT TILL THE DATE OF SALE IT IS AN AGRICULTURAL LAND AND LAND FALLS WITHIN THE DEFIN ITION OF AGRICULTURAL LAND REFERRED U/S.2(14)(III) OF THE ACT AND ALSO T HE ASSESSEE HAS A GOOD CASE WITH EVIDENCE TO SUPPORT HIS GROUNDS AND ARGUMENTS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT PR OVIDED ADEQUATE OPPORTUNITY OF HEARING AND CONFIRMED THE ORDER OF T HE ASSESSING ITA NO. 1799/MDS/2015 :- 6 -: OFFICER AND PLEADED FOR SET ASIDE OFF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE ALLOW THE APPEAL. 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND OB JECTED TO THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE. 8. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS CITED BEFORE US. THE LD.AR EMPHASIZED ON THE FACTS THAT THE ASSESSEE HAS SOLD AGRICULTURAL L AND DULY SUPPORTED WITH CHITTA ADANGAL, CERTIFICATE OF VILLAGE ADMINIS TRATIVE OFFICER (VAO) CERTIFYING HARVEST OF PADDY IN THE AGRICULTURAL LAN D AND ALSO AGRICULTURAL OPERATIONS CARRIED FOR MORE THAN TWO YEARS BEFORE T HE DATE OF SALE. THE PROVISIONS OF SEC. 50C OF THE ACT DOES NOT APPL Y TO AGRICULTURAL LAND AND IT IS APPARENT THAT THE SALE OF THE PROPER TY IS A DISTRESS SALE. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDE D THE CASE ON THE FINDINGS OF THE ASSESSING OFFICER AND CONFIRMED WITHOUT PROVIDING OPPORTUNITY OF HEARING. CONSIDERING THE CIRCUMSTANC ES PLEADED BY THE LD. AUTHORISED REPRESENTATIVE THAT NOT PROVIDING AD EQUATE OPPORTUNITY TO PLEAD THE CASE BEFORE THE APPELLATE AUTHORITY, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) A ND REMIT THE ISSUE IN DISPUTE TO THE FILE OF COMMISSIONER OF IN COME TAX (APPEALS) ITA NO. 1799/MDS/2015 :- 7 -: TO PASS THE ORDER ON MERITS AFTER GIVING ONE MORE O PPORTUNITY TO THE ASSESSEE TO PUT FORTH HIS ARGUMENTS AND TO DECIDE AFRESH. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ITA NO.1799/MDS/2015 IS PARTLY ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 11TH DAY OF F EBRUARY, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' # ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 1 / DATED: 11.02.2016 KV 2 * ,$.34 54'. / COPY TO: 1 . () / APPELLANT 3. ' 6. () / CIT(A) 5. 4!9: ,$.$ / DR 2. ,-() / RESPONDENT 4. ' 6. / CIT 6. :;& < / GF