A.Senthil Kumar, Coimbatore V. ITO, Coimbatore

ITA 19/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4783 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MURALI MOHAN
• Keywords: Reason to believe
• Section: 54B; 2(14); 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO. 19/MDS/2017 / ASSESSMENT YEAR : 2008-2009 SHRI. A. SENTHIL KUMAR, S/O. AYYASAMY, DOOR NO.5/154, VINAYAKARKOIL STREET, ARUMUGA GOUNDANUR, PERUR, CHETTIPALAYAM, COIMBATORE 641 010. [PAN DNAPS 4781L] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 4(2) COIMBATORE. ./I.T.A. NO. 20/MDS/2017 / ASSESSMENT YEAR : 2008-2009 SHRI. A. SELVAKUMAR, S/O. AYYASAMY, DOOR NO.5/154, VINAYAKARKOIL STREET, ARUMUGA GOUNDANUR, PERUR, CHETTIPALAYAM, COIMBATORE 641 010. [PAN BVVPS 9077C] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 4(2) COIMBATORE. ./I.T.A. NO. 21/MDS/2017 / ASSESSMENT YEAR : 2008-2009 SHRI. R. RAKKIAPPAN, S/O. RANGASWAMY, DOOR NO.8/14, KOTHUKARA AMMASIGOUNDER STREET, PAACHAPALAYAM, PERUR, CHETTIPALAYAM, COIMBATORE 641 010. [PAN BZTPR 3275D] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 4(2) COIMBATORE. ITA NOS.19 TO 22/MDS/2017. :- 2 -: ./I.T.A. NO. 22/MDS/2017 / ASSESSMENT YEAR : 2008-2009 SHRI. A. VIYAYAKUMAR, S/O. AYYASAMY, DOOR NO.5/154, VINAYAKARKOIL STREET, ARUMUGA GOUNDANUR, PERUR, CHETTIPALAYAM, COIMBATORE 641 010. [PAN AWYPV 6599F] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 4(2) COIMBATORE. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. ARJUN RAJ, C.A. /RESPONDENT BY : SHRI. M. MURALI MOHAN, JCIT. /DATE OF HEARING : 25-04-2017 !' /DATE OF PRONOUNCEMENT : 26-04-2017 % / O R D E R ASSESSEES THROUGH THESE APPEALS ASSAIL ORDERS DAT ED 27.10.2016 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-3, COIMBATORE FOR THE IMPUGNED ASSESSMENT YEAR. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSE ES IN THESE APPEALS EXCEPT FOR THE ASSESSEE SHRI. R. RAK KIAPPAN, WERE JOINT OWNERS OF AN IMMOVABLE PROPERTY MEASURING 4.78 ACRE S SITUATED AT SURVEY NO.324/2, PATTA NO.233 IN PERURCHETTIPALYAM VILLAGE. ASSESSEE ITA NOS.19 TO 22/MDS/2017. :- 3 -: SHRI. R. RAKKIAPPAN, AS PER LD. AUTHORISED REPRESE NTATIVE WAS ONE OF THE JOINT OWNERS OF ANOTHER IMMOVABLE PROPERTY MEAS URING 4 ACRES AT S.F.NO.322, JOINT PATTA 36, IN THE VERY SAME VILLAG E, WHICH WAS ADJACENT TO THE PROPERTY HELD BY OTHER THREE ASSESS EES. AS PER LD. AUTHORISED REPRESENTATIVE ALL THE ASSESSEES EXCEP T SHRI. R. RAKKIAPPAN HAD FILED THEIR RETURNS FOR THE IMPUGNED ASSESSMENT YEAR ON 13.05.2015 PURSUANT TO NOTICES ISSUED U/S.148 O F THE ACT. AS PER LD. AUTHORISED REPRESENTATIVE SHRI. R. RAKKIAPPAN H AD FILED HIS RETURN ON 19.06.2015. REFERRING TO THE REASONS FOR ISSUING THE NOTICE U/S.148 OF THE ACT, PLACED AT PAPER BOOK PAGE NO.2, LD. AUT HORISED REPRESENTATIVE SUBMITTED THAT LD. ASSESSING OFFICER HAD SPECIFICALLY MENTIONED THE PROPERTY SOLD TO BE WITHIN 8 KMS FRO M THE CORPORATION LIMIT OF COIMBATORE. AS PER LD. AUTHORISED REPRESE NTATIVE ASSESSEES HAD ON 06.05.2015, REPLIED TO THE ABOVE SAID NOTICE , POINTING OUT THAT THE LANDS SOLD WERE AGRICULTURAL IN NATURE AND SIT UATED BEYOND 8KMS OF THE CORPORATION LIMIT. AS PER LD. AUTHORISED REP RESENTATIVE, HOWEVER INADVERTENTLY, ASSESSEES WHILE FILING THEIR RETU RNS OF INCOME, HAD FAILED TO MENTION THIS FACT. NEVERTHELESS, ACCORDI NG TO HIM, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEES HAD CL EARLY STATED THAT THE LAND SOLD WAS AGRICULTURAL IN NATURE AND GAIN S THEREFROM NOT EXIGIBLE TO CAPITAL GAINS TAX. AS PER LD. AUTHORIS ED REPRESENTATIVE EVEN BEFORE LD. CIT(A) ASSESSEES HAD SPECIFICALLY RAISE D THIS GROUND. ITA NOS.19 TO 22/MDS/2017. :- 4 -: SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE WA S THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THIS GROUND. AS PER LD. AUTHORISED REPRESENTATIVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRONEOUSLY HELD THAT HE HAD NO POWERS U /S. 251(1)(A) OF THE ACT FOR CONSIDERING SUCH A CLAIM, WHICH REDUC ED THE INCOME TO NIL. AS PER LD. AUTHORISED REPRESENTATIVE RELIANCE PLACE D BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THE JUDGMEN T OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD VS. CIT 284 ITR 323 WAS WRONG. ACCORDING TO HIM, HONBLE APEX COURT HAD C IRCUMSCRIBED THE POWERS OF LD. ASSESSING OFFICER ONLY WITH REGARD TO A FRESH CLAIM, BUT APPELLATE AUTHORITIES COULD CONSIDER A CLAIM WHIC H WAS STATUTORILY ALLOWABLE TO THE ASSESSEE. RELIANCE WAS PLACED ON T HE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD VS. CIT 229 ITR 383 . 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT ASSESSEES IN THEIR RESPECTIVE RETURNS HAD CLAIMED DEDUCTION U/S.54B OF THE ACT ON THE GAINS ARISING ON SALE OF THE LAND. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE ASSESSEE ITSELF HAD A DMITTED THE AGRICULTURAL LAND TO BE LYING WITHIN 8 KMS PERIPHE RAL LIMITS OF COIMBATORE CORPORATION. THUS, ACCORDING TO LD. DEP ARTMENTAL REPRESENTATIVE THE CLAIM MADE BY THE ASSESSEE BEF ORE LD. ITA NOS.19 TO 22/MDS/2017. :- 5 -: COMMISSIONER OF INCOME TAX (APPEALS) WAS AGAINST IT S OWN ADMISSION, AND RIGHTLY REJECTED. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. REASONS GIVEN BY T HE LD. ASSESSING OFFICER FOR REOPENING THE ASSESSMENT READS AS UNDER :- 'DURING THE AY ASSESSEE HAS JOINTLY SOLD AN IMMOVAB LE PROPERTY (LAND) SITUATED AT S.F.NO.324/2, PATTA NO. 233 TO THE EXTENT OF 4.78 ACRES IN PERURCHETTIPALAYAM VILL AGE, FOR SALE CONSIDERATION OF 71, 70,000/- TO M/S. AMRESH HOLDINGS PRIVATE LIMITED, COIMBATORE THROUGH POWER OF ATTORN EY ARRANGEMENTS. M/S. AMRESH HOLDINGS PRIVATE LIMITED IS A COMPANY ENGAGED IN THE BUSINESS OF DEVELOPING REAL ESTATE AND IT HAS PURCHASED THIS LAND TO CONSTRUCT RESIDENTIAL/COMMERCIAL ESTABLISHMENTS. FURTHER THE SAID LAND IS FALLING WITHIN 8KMS OF DIS TANCE FROM THE AREA LIMIT OF MUNICIPAL CORPORATION 'OF COIMBATORE AT THE TIME OF DATE OF SALE AGREEMENT. THEREFORE, SALE PROCEEDS OF THIS LAND IS NOT ELIGIB LE TO CLAIM EXEMPTION AS PER PROVISIONS OF SECTION 2(14) OF THE IT ACT. THEREFOR E I HAVE REASON TO BELIEVE THAT INCOME IN THE FORM OF LTCG ACCRUED DURING THE YEAR HAS ESCAPED ASSESSMENT'. ASSESSEES HAD GIVEN A REPLY WHEREIN IT WAS MENTION ED AS UNDER:- I AM RESIDING AT THE ABOVE ADDRESS. I HAVE SOLD MY SHARE OF AGRICULTURAL LAND TO M/S.SHANMUGA SU;NDARAM AOP FOR 29,94,900/- BY WAY OF GENERAL POWER OF ATTORNEY TO ONE OF THE MEMBERS OF THE AOP MR.M.PONNUSAMY ON 16.10.2007. THE, AGRICULTURAL LAND IS SITUATED MORE THAN 8 KMS FROM THE CORPORATION LIMIT. I HAD PURCHASED AN AGRICULTURAL LAND FOR RS.25,19,995/- IN ACCORDANCE WITH SECTION 54B OF THE INCOME TAX: ACT, 1961 AND ALSO BOUGHT A VACANT SITE FOR RS.3,35,990/- IN ACCORDANCE WITH SECTION 54 F OF ITA NOS.19 TO 22/MDS/2017. :- 6 -: THE INCOME TAX ACT, 1961. I HAVE ALSO SPENT AN AMOUNT OF RS.19,77,928/ - FOR CONSTRUCTING A RESIDENTIAL HOUSE. THIS AMOUNT OF RS.19,77,928/- WAS BEEN RECEIVED FROM MY MOTHER (PAPPAMMAL) THROUGH A JOINT CONSTRUCTION AGREEMENT. I AM NOW FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09. IT MAY BE TRUE THAT IN RETURNS FILED ASSESSEES HAD NOT HAVE MADE A SPECIFIC CLAIM THAT AGRICULTURAL LAND SOLD WAS BEYO ND 8 KM FROM CORPORATION LIMIT. HOWEVER, THE RETURNS WERE FILED AFTER THE ABOVE REFERRED REPLY WHICH WAS AVAILABLE WITH LD. ASSESSI NG OFFICER. IN THE SAID REPLY ASSESSEE HAD MENTIONED THAT THE AGRICULT URAL LAND WAS SITUATED MORE THAN 8 KMS FROM THE CORPORATION LIMIT . FURTHER, ASSESSEES HAD PRESSED SUCH A CLAIM BEFORE LD. COM MISSIONER OF INCOME TAX (APPEALS). LD. ASSESSING OFFICER WAS AW ARE OF THE CLAIM OF THE ASSESSEE THAT LAND SOLD WAS AGRICULTURAL IN NA TURE. I CANNOT CONSIDER IT AS AN ALTOGETHER NEW CLAIM MADE BY THE ASSESSEE. COMING TO THE JUDGMENT OF APEX COURT IN THE CASE OF GOETZE (INDIA) LTD (SUPRA) RELIED ON BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) FOR REJECTING THE CLAIM OF THE ASSESSEE, WHAT I FIND I S THAT THE SAID JUDGMENT DOES NOT IMPINGE ON THE POWER OF THE APPE LLATE AUTHORITY FOR CONSIDERING A FRESH AGROUND RAISED BY THE ASSES SEE. THAT APART, AS ALREADY MENTIONED BY ME, ASSESSEE IN PURSUANT TO NO TICE U/S.148 OF THE ACT HAD MADE A SPECIFIC CLAIM THAT AGRICULTURAL LAND SOLD WERE BEYOND 8KM LIMIT OF COIMBATORE CORPORATION LIMITS. IN THE ITA NOS.19 TO 22/MDS/2017. :- 7 -: CIRCUMSTANCES, WHETHER SURPLUS ARISING OUT OF SALE OF AGRICULTURAL LAND WOULD BE EXIGIBLE TO CAPITAL GAINS TAX, IN MY OPI NION, REQUIRES TO BE ADJUDICATED BY THE LD. COMMISSIONER OF INCOME TAX ( APPEALS). I THEREFORE, SET ASIDE THE ORDERS OF THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) AND REMIT ALL THE APPEALS BACK TO HIS FIL E FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. CONNECTED MATTERS H AVE ALSO TO BE CONSIDERED AFRESH BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BASED ON HIS DECISION REGARDING THE CLAIM OF THE L AND SOLD BEING NOT EXIGIBLE TO CAPITAL GAINS TAX. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 26TH DAY OF A PRIL, 2017, AT CHENNAI SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 26TH APRIL, 2017 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,- / CIT(A) 5. )./ 0 / DR 2. / RESPONDENT 4. + / CIT 6. /1 / GF