Sh. Harbhajan Singh HUF, Bathinda V. The Income-tax Officer, Bathinda

ITA 192/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2438 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 27-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Keywords: Capital asset; Additional evidence; Cost of acquisition
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.192(ASR)/2014 ASSESSMENT YEAR:2004-05 PAN: AACHH9 446P SH. HARBHAJAN SINGH HUF VS. INCOME TAX OFFICER, 607, MODEL TOWN, WARD-1(1), PHASE-1, BATHINDA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. ASHWANI KALIA, CA RESPONDENT BY: SH.S.S. KANWAL, DR DATE OF HEARING: 12/01/2016 DATE OF PRONOUNCEMENT: 15/01/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2004-05, AGAINST THE ORDER DATED 09.01.2014, PASSED BY THE L D. CIT(A) BATHINDA. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.6,93,824/- OF CAPITAL GAIN IN THE ASSESSMENT YEA R 2004- 05 WHEREAS THE CIT(A) IN THE CASE OF ASSESSEE UNDER THE WEALTH TAX FOR THE AY 2004-05 VIDE APPEAL DATED27. 6.2013 HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE LAND WAS SOLD ON 29.11.2013 (FALLING IN AY 2003-04) & DELETED THE SAME FOR THE LEVY OF WEALTH TAX IN THE AY 2004-05. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N NOT CONSIDERING THE SALE AGREEMENT DATED 29.11.2002 WHE N THE SAME AGREEMENT HAD BEEN CONSIDERED BY THE ITO U/S 1 43(3) DATED 15/22.02.2013 THE SAME LAND IN THE ASSESSMENT YEAR 2005-06 AND HELD THAT THE LAND IN QUESTION WAS TRAN SFERRED ON 29.11.2002 AS PER SECTION 2(47)(V) AND REFERRED TO IN SECTION 53A OF TRANSFER OF PROPERTY ACT, 1881. ITA NO.192(ASR)/2014 ASSESSMENT YEAR: 2004-05 2 3. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING TH E ADDITIONAL EVIDENCE GIVEN AT THE TIME OF HEARING. 4. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE L AND IN QUESTION WAS NOT AN AGRICULTURE LAND. 5. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING TH E EVIDENCE OF COST OF ACQUISITION, PRODUCED AT THE TIME OF HEA RING IN THE SHAPE OF REGISTRATION DEED DATED 24.04.1981. 6. THAT THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE R EBATE OF SEC. 54B, THE EVIDENCE OF THE SAME WAS GIVEN AT THE TIME OF HEARING. 2. THE FACTS IN BRIEF ARE THAT THE AO, WHILE PASSIN G THE ORDER DATED 14.12.2011 UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT OBSERVED THAT THE ASSESSEE HAS, ALONGWITH OTHER CO-OWNERS, S OLD HIS LAND MEASURING 16 KANALS SITUATED AT VILLAGE SANTE MAJRA , TEHSIL KHARAR ON 14.01.2014 FOR RS.42 LACS, OUT OF WHICH, THE SHARE OF THE ASSESSEE IS RS. 7 LACS. HENCE, THE AMOUNT OF SALE CONSIDERATION OF RS. 7 LACS IS TAKEN AS FULL VALUE OF CONSIDERATION U/S 148 OF THE ACT. THE ASSESSEE BECAME THE OWNER OF THE LAND THROUGH THE ORDER DATED 19.02.198 0 OF SUB-JUDGE, II CLASS, KHARAR. HENCE, SINCE THE ASSESSEE BECAME THE OWNER OF THE LAND IN A MANNER AS PROVIDE U/S 49(1) OF THE ACT, THE COST OF ACQUISITION AS ON 01.04.1981 SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT. SINCE THE PROPERTY IS VERY OLD AND HAS BEEN INHERITED BY THE ASSESSEE FROM ITS FOREFATHER, THE COST OF ACQUISITION SHALL BE NEGLIGIBLE IN THIS CASE. IN GOOD OLD DAYS, THE P RICES OF PROPERTY WERE VERY NEGLIGIBLE. THE LAND IS SITUATED AT VILLAGE SA NTE MAJRA, TEHSIL KHARAR WHICH WAS NOT A PROMINENT TOWN RATHER A VILLAGE. TH E LAND CAME WITHIN THE MUNICIPAL LIMITS OF KHARAR AT A VERY LATER STAG E. PREVIOUSLY, IT WAS ITA NO.192(ASR)/2014 ASSESSMENT YEAR: 2004-05 3 SITUATED AT VILLAGE SANTE MAJRA AND WAS AN AGRICULT URAL LAND. AGRICULTURAL LAND IN THOSE DAYS WAS AVAILABLE IN ABUNDANCE AT A VERY NORMAL PRICE. IN THOSE DAYS, THE RESIDENTIAL PLOTS AT CIVIL LINES AR EA, BATHINA WHICH WAS WITHIN WALLED CITY OF BATHINDA AND NEARER TO BUS ST AND. WERE OFFERED TO THE PUBLIC AT RS.2 PER SQ. YARDS AND STILL THERE WE RE NO TAKERS. THERE IS NO COMPARISON BETWEEN THE TWO. EVEN IF, THE SAME RA TE IS APPLIED, TOTAL COST OF A KANAL WORKS OUT TO RS.1,200/-. HOWEVER, K EEPING IN VIEW THE FACT THAT IT WAS AN AGRICULTURAL LAND SITUATED AT VILLAGE, THE AO ADOPTED RATE OF RS.500/- PER KANAL AS THE COST OF ACQUISITI ON BY THE FOREFATHER OF THE ASSESSEE AND THE SAME RATE WAS ADOPTED AS COST OF ACQUISITION BY THE ASSESSEE AS ON 01.04.1981. HENCE, THE TOTAL COST OF ACQUISITION OF 16 KANALS OF AGRICULTURAL LAND WAS ADOPTED AT RS.8,000 /- AS ON 01.04.1981. OUT OF THIS, THE SHARE OF THE ASSESSEE WAS 1/6 TH, I.E., RS.1,334/-. CAPITAL GAIN ON TRANSFER OF THIS LAND WAS CALCULATED AT RS. 7 LACS. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DECLINED TO ACCEPT ASSESSEES STAND THAT THE LAND IN QUESTION WAS AGRI CULTURAL LAND AND WAS NOT LIABLE TO CAPITAL GAIN. 4. BEFORE THIS BENCH, THE ASSESSEE HAS FILED AN APP LICATION, SEEKING TO PRODUCE THE FOLLOWING DOCUMENTS AS ADDITIONAL EVIDE NCE: 1. COPY OF LAY OUT PLAN SUBMITTED BEFORE CHIEF TOWN PLANNER ON 19.07.2013. 2. COPY OF THE ASSESSMENT ORDER OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06. 5. THE LD. DR HAS VEHEMENTLY OPPOSED THE AFORESAID APPLICATION FILED BY THE ASSESSEE CONTENDING THAT THE ASSESSEE HAS NO T BEEN ABLE TO MAKE ITA NO.192(ASR)/2014 ASSESSMENT YEAR: 2004-05 4 OUT A CASE AS TO WHY THESE DOCUMENTS COULD NOT BE P RODUCED BEFORE THE AO AND THAT, THEREFORE, THIS EVIDENCE IS NOT ENTITL ED TO BE ADMITTED AS ADDITIONAL EVIDENCE. 6. IN THIS REGARD, IT IS SEEN THAT THE SOLE ISSUE I NVOLVED IS AS TO WHETHER THE LAND SOLD BY THE ASSESSEE WAS AGRICULTU RAL LAND OR NOT AND AS TO WHETHER THE SAME IS LIABLE TO CAPITAL GAIN. T HE ASSESSEE, SEEKING TO PRODUCE THE AFORESAID ADDITIONAL EVIDENCE, HAS CONT ENDED THAT THE LAY OUT PLAN WAS SUBMITTED BEFORE THE CHIEF TOWN PLANER ON 19.07.2013 BY THE BUYER OF THE LAND FOR GETTING THE PROPOSED COLONY APPROVED; AND THAT THE SAME WAS NOT AVAILABLE WITH THE ASSESSEE AT THE TIM E OF HEARING BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) AND IT WAS ONLY SUBSEQUENTLY, THAT THE ASSESSEE OBTAINED A COPY THEREOF FROM THE BUYER . 7. APROPOS THE ASSESSMENT ORDER OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06, IT HAS BEEN CONTENDED THAT THIS ORDER GOES TO SUPPORT ASSESSEES CONTENTION THAT SINCE THE TRANSFER OF TH E LAND TOOK PLACE ON 29.11.2002, ON THE DATE OF EXECUTION OF THE SALE AG REEMENT, CAPITAL GAIN ARISEN DURING THE FINANCIAL YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04. IT HAS BEEN SUBMITTED THAT BOTH THESE ORDE RS COULD NOT BE SUBMITTED BEFORE THE AUTHORITIES BELOW AT THE RELEV ANT TIME, SINCE IT HAD REMAINED LYING WITH THE ASSESSEES EARLIER COUNSEL WHO DID NOT CO-OPERATE WITH THE ASSESSEE AND DID NOT HAND OVER THE DOCUMEN TS TO THE ASSESSEE. 8. NOW, SINCE THE VERY DISPUTE AT HAND IS WITH RE GARD TO THE NATURE OF THE LAND, I.E., AS TO WHETHER IT WAS OR WAS NOT AGRICULTURAL LAND. AS PER THE SALE AGREEMENT, AS HAS BEEN CONTENDED ON BEHALF OF THE ASSESSEE, THE ITA NO.192(ASR)/2014 ASSESSMENT YEAR: 2004-05 5 BUYER WAS TO SUBMIT THE LAY OUT PLAN BEFORE THE CON CERNED AUTHORITIES EVEN BEFORE THE EXECUTION OF THE SALE DEED, ON THE BASIS OF THE SALE AGREEMENT AS IT WAS MENTIONED IN THE SALE AGREEMENT THAT THE ASSESSEE WAS BOUND TO FILE THE CONSENT LETTER WITH PUDA FOR PERMISSION TO THE BUYER. ACCORDING TO THE ASSESSEE, THE SITE PLAN GOE S TO SHOW THAT THE ACTUAL PHYSICAL POSSESSION OF THE LAND WAS HANDED O VER TO THE BUYER IMMEDIATELY ON THE EXECUTION OF THE SALE AGREEMENT. THEN, THE ASSESSEES STAND HAS BEEN THAT THE TRANSFER OF THE LAND TOOK P LACE ON 29.11.2002 AT THE TIME OF SALE AGREEMENT DUE TO WHICH FACT CAPITA L GAIN AROSE DURING THE FINANCIAL YEAR 2002-03. THE ASSESSEE ASSERTS TH AT AS PER THE AO IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-0 6, WHICH IS OTHER DOCUMENT SOUGHT TO BE PLACED AS ADDITIONAL EVIDENCE , THIS FACT STANDS ACCEPTED BY THE AO. 9. IT IS NOT UNDER DISPUTE THAT THE SITE PLAN WAS N OT IN POSSESSION OF THE ASSESSEE WHILE THE MATTER WAS BEFORE THE TAXING AUTHORITIES AND IT WAS ONLY OBTAINED LATER ON BY THE ASSESSEE FROM THE BUYER. 10. IN SO FAR AS REGARDS THE ASSESSMENT ORDER FOR T HE ASSESSMENT YEAR 2005-06, THE SAME COULD NOT BE PRODUCED BEFORE THE TAXING AUTHORITIES, SINCE IT WAS LYING WITH THE ASSESSEES EARLIER COUN SEL, WHO DID NOT CO- OPERATE WITH THE ASSESSEE AND DID NOT HAND OVER THE DOCUMENTS TO HIM. THIS HAS ALSO NOT BEEN DISPUTED. 11. IN THIS ASSESSMENT ORDER, AS PER THE ASSESSEE, THE AO HAS ACCEPTED THE FACTUM OF TRANSFER OF LAND HAVING TAKEN PLACE D URING THE FINANCIAL YEAR 2002-03, AS THE POSSESSION OF THE LAND WAS HAN DED OVER ON ITA NO.192(ASR)/2014 ASSESSMENT YEAR: 2004-05 6 29.11.2002, ON THE EXECUTION OF THE SALE AGREEMENT. BE THAT AS IT MAY, BOTH THESE DOCUMENTS ARE MATERIAL FOR THE DETERMINA TION OF THE CONTROVERSY AT HAND SINCE THEY GO TO THE ROOT OF TH E MATTER. ACCORDINGLY, THEY ARE ADMITTED AS ADDITIONAL EVIDENCE. 12. FOR JUST AND PROPER DECISION OF THE MATTER, IN THE INTEREST OF JUSTICE, THE SAME IS REMITTED TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON TAKING INTO CONSIDERATION TH E AFORESAID ADDITIONAL EVIDENCE IN THE LIGHT OF THE AFORESAID TWO DOCUMENT S ADMITTED AS ADDITIONAL EVIDENCE. THE AO SHALL AFFORD DUE AND AD EQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO WHOM, ALL PLEAS AVAILABL E UNDER THE LAW SHALL REMAIN AVAILABLE. THE ASSESSEE, NOT DOUBT, SHALL C O-OPERATE IN THE FRESH PROCEEDINGS BEFORE THE AO. ORDERED ACCORDINGLY. 13. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 15/01/2016 . SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 15/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH. HARBHAJAN SINGH HUF. BATHINDA 2. THE ITO. WARD 1(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.