N.Mohamed Farhaan, CHENNAI V. ITO, CHENNAI

ITA 1908/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81184 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V A SANKAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1908/MDS/2014 / ASSESSMENT YEAR : 2006-07 SHRI N. MOHAMED FARHAAN OLD NO.168/NEW NO.74 2 ND FLOOR, NORTH USMAN ROAD T. NAGAR CHENNAI 600 017 VS. THE INCOME TAX OFFICER WARD I(4) CHENNAI [PAN AGPRM 5913F ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI V.A. SANKAR, CA /RESPONDENT BY : SHRI GURU BASHYAM, JCIT / DATE OF HEARING : 11-09-2014 ! / DATE OF PRONOUNCEMENT : 25-09-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-0 7, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCO ME-TAX(APPEALS)-I CHENNAI, DATED 27.3.2014, PASSED IN I.T.A.NO.155/20 13-14 IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.1908/14 :- 2 -: 2. THE ASSESSEES GROUNDS CHALLENGE THE CIT(A)S ORDE R AFFIRMING THE ASSESSING OFFICERS ACTION IN TREATIN G HIS AGRICULTURAL LAND SOLD IN THE RELEVANT PREVIOUS YEAR AS CAPITAL ASSET RESULTING IN CAPITAL GAINS OF ` 55,35,340/-. 3. THE ASSESSEE HAS FILED AN ADJOURNMENT PETITION. HE HAS NOT REMOVED DEFECTS IN APPEAL INTIMATED VIDE ACKNOW LEDGMENT-CUM- NOTICE DATED 9.7.2014. IN THESE CIRCUMSTANCES, WE REJECT THE ASSESSEES ADJOURNMENT PETITION AND PROCEED TO DEAL WITH THE APPEAL ITSELF. 4. THE ASSESSEE IS AN INDIVIDUAL. HE HAD FILED HIS RETURN ON 31.7.2006 ADMITTING INCOME OF ` 2,88,932/-. THE SAME WAS SUMMARILY PROCESSED. 5. IN SCRUTINY, THE ASSESSING OFFICER FOUND THE ASS ESSEE TO HAVE SOLD TWO PLOTS OF LAND BOTH MEASURING 10,854 S Q FT IN RELEVANT PREVIOUS YEAR SITUATED IN NEHRU NAGAR, KOTTIVAKKAM VILLAGE, TAMBARAM TALUK, KANCHEEPURAM DISTRICT. HE SOUGHT FURTHER DE TAILS THEREOF. THE ASSESSEE APPEARS TO HAVE FILED CHITTA/PATTA COPIES ISSUED WAY BACK IN 1993 AND CLAIMED THE LAND TO BE AGRICULTURAL. PE R ASSESSING OFFICER, THE ASSESSEE HAD FAILED TO PROVE CARRYING OUT OF A NY AGRICULTURAL I.T.A.NO.1908/14 :- 3 -: ACTIVITY AND INCOME ARISING THEREFROM. HE ISSUED A NOTICE DATED 10.11.2008 FOR TREATING THE SALE CONSIDERATION OF ` 34,51,298/- AS CAPITAL GAINS. THE CONTENTS OF THE ASSESSMENT ORDE R DATED 29.12.2008 REPRODUCED IN THE LOWER APPELLATE ORDER DEMONSTRATE THAT THE ASSESSEE HAD SOUGHT UMPTEEN NUMBER OF ADJOURNMENTS. HE DID NOT PRODUCE REQUISITE DETAILS. THE ASSESSEE CHOSE TO FILE A SECTION 144A PETITION. THE ADDL. CIT OBSERVED THEREIN THAT NO A GRICULTURAL ACTIVITIES HAD BEEN CARRIED OUT IN THE AREA AND THE LAND FELL WITHIN JURISDICTION OF A MUNICIPALITY THOUGH IT WAS KNOWN AS A TOWN PANCHA YAT. HE DIRECTED THE ASSESSING OFFICER TO REFER THE CASE FOR SECTION 50C VALUATION. THE ASSESSEE DID NOT EVEN PLACE ON RECORD HIBA AND D ENIED TO HAVE CONVERTED HIS AGRICULTURAL LAND TO ANY NON-AGRICUL TURAL USE. NO SUPPORTING REVENUE RECORD WAS ADDUCED IN EVIDENCE. AN OBJECTION AGAINST APPLICABILITY OF SECTION 50C OF THE ACT WAS ALSO RAISED. EX-FACIE THE ASSESSEE APPEARS TO HAVE ADOPTED A TOTAL NON-C OOPERATIVE ATTITUDE. THE ASSESSING OFFICER DEPUTED THE INCOME -TAX INSPECTOR TO VISIT THE SITE. HE SUBMITTED HIS INSPECTION REPO RT DATED 26.9.2008 REJECTING THE ASSESSEES VERSION AND STATED THAT T HE LAND SOLD WAS SITUATED WITHIN 2 KMS OF THE THIRIVANMIYUR CITY COR PORATION. THE SUB- REGISTRAR ADYAR INFORMED THE ASSESSING OFFICER ABOU T THE SALE PRICE OF THE LAND AT ` 510 PER SQ FT TOTALLING TO ` 55,35,540/- AS AGAINST ` I.T.A.NO.1908/14 :- 4 -: 34,51,298/- STATED IN THE SALE DOCUMENT. THE ASS ESSING OFFICER FRAMED A REGULAR ASSESSMENT, TREATED THE LAND SOL D AS CAPITAL ASSET LEADING TO ASSESSMENT OF THE IMPUGNED CAPITAL GAINS . 6. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS AFFIRMED THE ASSESSING OFFICERS FINDINGS. HE OBSERVES THAT IN ASSESSEES RELATED CASES OF SHRI N. MOHD. FAHIM AND SMT. FAIZA BEGUM HAD STATED THE LAND SOLD AS NON-AGRICULTURAL. THE CONTENTS OF THE INSPECTORS REPORT (SUPRA) HAVE ALSO BEEN REPRODUCED FOR UPHOLD ING THE IMPUGNED ADDITION. THIS LEAVES THE ASSESSEE AGGRIEVED. 7. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THE CIT(A)S ORDER HAS BEEN PASSED EX-PARTE. THE ASSES SEES APPEAL SEEMS TO HAVE BEEN TRANSFERRED BY WAY OF A CORRIGEN DUM DATED 28.8.2013. THERE ARE NO DETAILS FORTHCOMING IN THE LOWER APPELLATE ORDER ABOUT THE NUMBER OF OPPORTUNITIES AT ASSESSE ES BEHEST OR ANY EFFECTIVE HEARING INSTANCES. SO, WE ARE OF THE OPIN ION THAT THE ASSESSEE HAS NOT BEEN AFFORDED ADEQUATE OPPORTUNITY OF HEARING. THE FACT ALSO REMAINS THAT FROM ASSESSMENT UPTO THE T RIBUNAL, HE HAS FAILED TO REBUT THE FACTUAL FINDINGS UNDER CHALLENG E HOLDING THE LAND SOLD AS NON-AGRICULTURAL (SUPRA). PRIMA FACIE, WE ARE ALSO SATISFIED THAT THE SAID LAND SOLD IN RELEVANT PREVIOUS YEAR APPEAR S TO BE NON- AGRICULTURAL BECAUSE OF THE OVERWHELMING EVIDENCE I .E REVENUE RECORD, I.T.A.NO.1908/14 :- 5 -: PROXIMITY TO CITY CORPORATION, LACK OF DETAILS PROV ING AGRICULTURAL ACTIVITIES, INCOME ARISING THEREFROM AND ALSO THE I NCOME TAX INSPECTORS REPORT COLLECTED IN ASSESSMENT AND LOWE R APPELLATE PROCEEDINGS. HOWEVER, WE DEEM IT APPROPRIATE IN TH E LARGER INTEREST OF JUSTICE TO REMIT THIS CASE BACK TO THE CIT(A) FOR A FRESH ADJUDICATION AS PER LAW. IT IS MADE CLEAR THAT THE ASSESSEE SHA LL CONCLUDE HIS ARGUMENTS WITHIN FIVE EFFECTIVE OPPORTUNITIES BEFO RE THE CIT(A) FAILING WHICH THIS ORDER WOULD BE DEEMED TO HAVE BEEN VACA TED. 8. THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED ON THURSDAY, THE 25 TH OF SEPTEMBER, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 25 TH SEPTEMBER, 2014 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF