ITO Non Corporate Ward 12(2) , CHENNAI V. M.Razzack , CHENNAI

ITA 1807/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5591 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1807/MDS/2017 & C.O. NO.165/MDS/2017 (IN I.T.A. NO.1807/MDS/2017) ' (' / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, NON CORPORATE WARD 12(2), CHENNAI - 600 006 V. SHRI M. RAZZACK, NEW NO.279, OLD NO.133, 3 RD FLOOR, THAMBU CHETTY STREET, CHENNAI - 600 001. PAN : AAJPR 3011 R (*+/ APPELLANT) ( RESPONDENT & CROSS OBJECTOR) *+ , - / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ./*+ , - / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE 0 , 1$ / DATE OF HEARING : 21.12.2017 2!( , 1$ / DATE OF PRONOUNCEMENT : 28.12.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNA I, DATED 17.05.2017 PERTAINING TO ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS FILED THE CROSS-OBJECTION AGAINST THE SAME ORDE R OF THE 2 I.T.A. NO.1807/MDS/17 C.O. NO.165/MDS/17 CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APPEAL AND THE CROSS- OBJECTION TOGETHER AND DISPOSING OF THE SAME BY THI S COMMON ORDER. 2. SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE SOLD A LAND ON 21.11.2007 FOR 3,18,60,000/-. ACCORDING TO THE LD. D.R., THE SALE CONSIDERATION WAS INVESTED IN SHARES / MUTUAL FUNDS ON 28.03.2008. THE ASSESSEE CLAIMED THAT THE PROFIT OF SALE OF LAN D WAS EXEMPTED ON THE GROUND THAT THE LAND IN QUESTION IS AGRICULT URAL LAND. ACCORDING TO THE LD. D.R., THE ASSESSEE NEITHER USE D THE LAND FOR AGRICULTURE PURPOSE NOR UTILISED THE SAME FOR PURCH ASING ANOTHER ASSET. SINCE NO AGRICULTURAL ACTIVITY WAS CARRIED ON, ACCORDING TO THE LD. D.R., THE LAND IN QUESTION IS NOT CONSIDERED TO BE AGRICULTURAL LAND, THEREFORE, THE ASSESSEE HAS TO PAY TAX ON THE CAPITAL GAIN. ACCORDING TO THE LD. D.R., SINCE THE LAND WAS SOLD WITHIN A PERIOD OF 18 MONTHS FROM THE DATE OF PURCHASE, THE ASSESSING OFFICER LEVIED SHORT TERM CAPITAL GAIN. MOREOVER, THE LAND WAS AL SO SOLD FOR NON- AGRICULTURAL PURPOSE FOR EXORBITANT PRICE. ACCORDI NG TO THE LD. D.R., WHEN THE ASSESSEE SOLD THE LAND FOR EXORBITANT PRIC E, IT CANNOT BE CONSIDERED TO BE AGRICULTURAL LAND. ACCORDING TO T HE LD. D.R., THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE O F THE PROPERTY 3 I.T.A. NO.1807/MDS/17 C.O. NO.165/MDS/17 WAS NOT TO USE FOR AGRICULTURE PURPOSE, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN HOLDING THAT THE LAND IN QUESTI ON IS AGRICULTURAL LAND. 3. ON THE CONTRARY, SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND. REFERRING TO ADANGAL EXTRACT, A COPY OF WHICH IS AV AILABLE AT PAPER- BOOK AND ALSO A-REGISTER OF THE VILLAGE, THE LD.COU NSEL SUBMITTED THAT THE LAND IN QUESTION IS CLASSIFIED AS WET LAND (NANJAI LAND). IN FACT, THE ASSESSEE CULTIVATED PADDY WHICH IS EVIDEN T FROM ADANGAL EXTRACT. ACCORDING TO THE LD. COUNSEL, WHEN THE LA ND ITSELF IS CLASSIFIED AS NANJAI LAND IN THE REVENUE RECORDS, I T IS NOT CORRECT TO SAY THAT THE LAND IS NOT AGRICULTURAL LAND MERELY B ECAUSE THE ASSESSEE WAS ABLE TO SELL THE LAND FOR A GOOD PRICE . ACCORDING TO THE LD. COUNSEL, THE ASSESSEE AT THE TIME OF PURCHA SE INTENDED TO CULTIVATE THE LAND. SINCE THE ASSESSEE WAS ABLE TO FETCH A GOOD PRICE FOR THE LAND, IT WAS SOLD WITHIN A PERIOD OF 18 MONTHS. HOWEVER, THE NATURE OF LAND CONTINUOUS TO BE AGRICU LTURAL LAND. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE PROFIT ON SALE OF SUCH LAND CANNOT BE CONSIDERED AS CAPITAL GAIN. PLACING RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN MRS. SAKUNTHALA VE DACHALAM V. ACIT (2014) 369 ITR 558, THE LD.COUNSEL SUBMITTED T HAT WHEN THE 4 I.T.A. NO.1807/MDS/17 C.O. NO.165/MDS/17 LAND IS CLASSIFIED AS NANJAI LAND IN THE REVENUE RE CORDS, MERELY BECAUSE THE PURCHASER INTENDED TO USE THE LAND FOR SOME OTHER PURPOSE, IT CANNOT BE SAID THAT THE LAND IN QUESTIO N IS NOT AGRICULTURAL LAND. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A PERUSAL OF ADANGAL EXTRACT AND A-REGISTER OF THE VILLAGE CLEAR LY INDICATES THAT THE LAND IN QUESTION IS CLASSIFIED AS NANJAI LAND ( WET LAND). FOR THE PURPOSE OF CLASSIFYING A LAND AS NANJAI LAND, THERE SHOULD BE NATURAL SOURCE OF IRRIGATION FROM THE TANK BELONGING TO GOV ERNMENT OR GOVERNMENT AGENCY. UNLESS THERE IS A NATURAL SOURC E OF IRRIGATION, THE LAND CANNOT BE CLASSIFIED AS NANJAI LAND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE LAND IN QUESTION I S NANJAI LAND, MERELY BECAUSE IT WAS NOT CULTIVATED DUE TO FAILURE OF MONSOON FOR SOME YEARS, THE CLASSIFICATION OF LAND WILL NOT BE CHANGED. THE NANJAI LAND CONTINUOUS TO BE NANJAI LAND IN THE STA TE REVENUE RECORDS, THEREFORE, IT IS AN AGRICULTURAL LAND FOR ALL PRACTICAL PURPOSE. 5. IT IS ALSO NECESSARY TO KEEP IN MIND THAT THERE IS A PROHIBITION FOR CONVERSION OF NANJAI LAND TO ANY OTHER PURPOSE. THEREFORE, THE 5 I.T.A. NO.1807/MDS/17 C.O. NO.165/MDS/17 ASSESSEE HAVING PURCHASED A NANJAI LAND, NECESSARIL Y HAS TO USE THE SAME FOR CULTIVATION. IN FACT, THE ASSESSEE CU LTIVATED PADDY, WHICH IS EVIDENT FROM ADANGAL EXTRACT FILED BEFORE THE AUTHORITIES. THE ASSESSEE WAS ABLE TO BARGAIN AND SELL THE LAND FOR GOOD PRICE THAT DOES NOT MEAN THAT THE CHARACTER OF THE LAND W OULD CHANGE. EVEN IN THE HANDS OF PURCHASER, THE LAND IN QUESTIO N CONTINUOUS TO BE NANJAI LAND. TO USE THE LAND FOR SOME OTHER PUR POSE, THERE SHOULD BE APPROVAL OF THE CONCERNED AUTHORITIES. T HEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY B ECAUSE THE ASSESSEE WAS ABLE TO SELL THE LAND FOR A GOOD PRICE THAT ALONE CANNOT BE A REASON FOR HOLDING THE LAND AS NON-AGRI CULTURAL LAND. HENCE, THE CIT(APPEALS) HAS RIGHTLY PLACED HIS RELI ANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN MRS. SAKUNTHALA VE DACHALAM (SUPRA). THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 5. THE ASSESSEE HAS FILED CROSS-OBJECTION. IN VIEW OF THE DECISION TAKEN IN THE APPEAL ON MERIT, IT MAY NOT B E NECESSARY TO ADJUDICATE THE ISSUE RAISED IN THE CROSS-OBJECTION. 6 I.T.A. NO.1807/MDS/17 C.O. NO.165/MDS/17 6. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS- OBJECTION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED ON 28 TH DECEMBER, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 28 TH DECEMBER, 2017. KRI. , .156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. 0 81 () /CIT(A)-13, CHENNAI-34 4. PRINCIPAL CIT-8, CHENNAI-34 5. 69 .1 /DR 6. :' ; /GF.