ACIT, CHENNAI V. Shri Sherif Dyan, CHENNAI

ITA 2088/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4815 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: C V RAJAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 2088/MDS/2010 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IX, CHENNAI 600 006. (APPELLANT) V. SHRI SHERIT DYAN, 22, SECOND LANE BEACH, CHENNAI 600 034. PAN : AACPD1249G (RESPONDENT) APPELLANT BY : SHRI P.B. SEKARAN RESPONDENT BY : SHRI C.V. RAJAN O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANCE IS THAT LD. CIT(APPEALS) DELETED AN ADDITION OF ` 2,54,08,298/- MADE BY THE A.O. AS LONG TERM CAPITAL GAIN. 2. SHORT FACTS APROPOS ARE THAT ASSESSEE, DURING TH E RELEVANT PREVIOUS YEAR, HAD SOLD TWO PROPERTIES, ONE AT NAVA LUR VILLAGE AND ANOTHER AT SIRUSERI VILLAGE. AS PER THE ASSESSEE, LAND SOLD WERE AGRICULTURAL AND THEREFORE, NOT EXIGIBLE FOR CAPITA L GAIN TAX. LAND AT I.T.A. NO. 2088/MDS/10 2 NAVALUR VILLAGE WAS LOCATED 15 KMS FROM THIRUVANMIY UR AND LAND AT SIRUSERI CILLAGE WAS SITUATED BEYOND 8 KMS FROM CHE NGELPET MUNICIPALITY. AS PER THE ASSESSEE, THE SURPLUS ON SALE OF LAND AT SIRUSERI AND NAVALUR ` 47,30,586/- AND ` 2,06,77,712/- RESPECTIVELY, WERE NOT EXIGIBLE FOR CAPITAL GAIN TAX, THE LAND BE ING PURELY AGRICULTURAL. HOWEVER, THE A.O. IN ASSESSMENT PROC EEDINGS, CONSIDERED THESE TO BE COMMERCIAL PLOTS BASED ON OP INION OBTAINED FROM SRO, THIRUPORUR. A.O. ALSO NOTED THAT THE ASS ESSEE COULD NOT PRODUCE CHITTA, ADANGAL AND VAO CERTIFICATE REGARDI NG THE NATURE OF LAND. 3. IN HIS APPEAL BEFORE LD. CIT(APPEALS), ASSESSEE PRODUCED CHITTA AND ADANGAL CERTIFICATE FROM THE VILLAGE AUT HORITIES IN RESPECT OF HIS CLAIM THAT THE LANDS SOLD WERE AGRICULTURAL IN NATURE. LD. CIT(APPEALS) OBTAINED A REMAND REPORT FROM A.O. TH E A.O. IN THE REMAND REPORT STATED THAT HE HAD DEPUTED AN INSPECT OR FOR SPOT ENQUIRY WHO HAD REPORTED THAT NO AGRICULTURAL OPERA TIONS WERE DONE IN THE RESPECTIVE LANDS SINCE 5 TO 10 YEARS. ON THIS REMAND REPORT, SUBMISSION OF THE ASSESSEE WAS THAT AGRICULTURAL AC TIVITIES WERE CARRIED OUT IN THESE LANDS AND AGRICULTURE INCOME E ARNED BY HIM RIGHT FROM THE YEAR OF PURCHASE OF RESPECTIVE LANDS WERE SHOWN IN THE I.T.A. NO. 2088/MDS/10 3 RETURNS OF INCOME FILED. ASSESSEE ALSO POINTED OUT THAT LANDS SOLD WERE OUTSIDE MUNICIPAL AREA AND AGRICULTURAL IN NAT URE. LD. CIT(APPEALS) CAME TO A CONCLUSION THAT THESE LANDS COULD NOT BE CONSIDERED AS EXIGIBLE TO CAPITAL GAIN TAX BEING AG RICULTURAL IN NATURE. HE, THEREFORE, ALLOWED THE APPEAL OF THE ASSESSEE I N THIS REGARD. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS), SUBMITTED THAT LD. CIT(APPEALS) WENT BY THE VAO CERTIFICATE AND ADANGAL BUT DID NOT APPRECIATE THAT THERE WERE NO AGRICULTURAL OPERATIONS IN THE LANDS SINCE LAST VER Y MANY YEARS. AS PER LEARNED D.R., THE AGRICULTURAL LANDS WERE LATER CONVERTED INTO PLOTS BY THE BUYERS AND THIS SUBSTANTIATED THE CLAIM OF T HE REVENUE THAT THE LANDS THEMSELVES WERE NON-AGRICULTURAL NATURE. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF SARIFA BIBI MD IBRAHIM AND OTHERS V. CIT (204 ITR 631). A S PER THE LEARNED D.R., ASSESSEE HAD SOLD THE LANDS TO A CONSTRUCTION COMPANY AND THERE WAS A HIGH-RISE BUILDING IN THE LAND AT THE T IME WHEN THESE WERE SOLD. THEREFORE, THE LEARNED D.R. SUBMITTED THAT T HERE WAS PERMANENT ABANDONMENT OF AGRICULTURAL USE THEREBY C HANGING THE CHARACTER OF THE LANDS TO NON-AGRICULTURAL. I.T.A. NO. 2088/MDS/10 4 5. PER CONTRA, LEARNED A.R. STRONGLY SUPPORTED THE ORDER OF LD. CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. THERE IS NO DISPUTE THAT THE LANDS BOTH AT NAVALUR VILLAGE AND SIRUSERI VILLAGE WERE SITUATED OUTSIDE THE MUNICIPAL LIMITS AND BEYOND 25 KMS FROM SUCH LIMITS. THERE IS ALSO NO DISPUTE THAT AS SESSEE WAS RETURNING AGRICULTURE INCOME FROM THE ABOVE SAID LA NDS SINCE ACQUISITION THEREOF. THE LAND AT SIRUSERI VILLAGE WAS ACQUIRED IN 1989-90 AND THAT AT NAVALUR VILLAGE IN 1985-86 AND AGRICULTURE INCOME THEREFROM WAS SHOWN BY THE ASSESSEE IN ITS R ETURNS EVERY YEAR INCLUDING THE IMPUGNED ASSESSMENT YEAR UPTO TH E DATE OF SALE OF LANDS. THE CHITTA AND ADANGAL CLEARLY SHOWED THAT THE AGRICULTURAL OPERATIONS WERE BEING CARRIED OUT IN THE LANDS. IN OUR OPINION, THE A.O. WENT BY THE REPORT OF THE INSPECTOR, WHICH WAS NEVER PUT TO THE ASSESSEE AND WHICH COULD NOT BE CONSIDERED AS AN EX PERT OPINION REGARDING NATURE OF LAND. 7. IN SO FAR AS RELIANCE PLACED BY THE REVENUE ON T HE DECISION OF HON'BLE APEX COURT IN THE CASE OF SARIFA BIBI MD IB RAHIM AND OTHERS (SUPRA) IS CONCERNED, THERE THE LAND WAS SITUATED W ITHIN THE MUNICIPAL I.T.A. NO. 2088/MDS/10 5 LIMITS, WHEREAS, IN THIS CASE ON HAND, THE LANDS WE RE WELL OUTSIDE THE MUNICIPAL LIMITS. WE ARE, THEREFORE, OF THE OPINIO N THAT ASSESSEE WAS ABLE TO SHOW THE NATURE OF LAND TO BE AGRICULTURAL AT THE TIME OF TRANSFER THEREOF. NOTHING WAS BROUGHT ON RECORD BY THE LEARNED D.R. IN RESPECT OF HIS ARGUMENT THAT THERE WAS A HIGH-RI SE BUILDING IN THE LAND OR NO AGRICULTURAL OPERATIONS WERE CARRIED OUT BY THE ASSESSEE THEREIN. WE ARE, THEREFORE, OF THE OPINION THAT CI T(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION. NO INTERFERENC E IS CALLED FOR. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24 TH JUNE, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH JUNE, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IX, CHENNAI-34 (4) CIT-VIII, CHENNAI-34 (5) D.R. (6) GUARD FILE