OM PRAKASH RASORIA, Alwar V. CIT, Alwar

ITA 209/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91884 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARWAL DHK
• Keywords: Assessment record; Onus to prove
• Section: 143(3); 54B; 148; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 209/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-10 SHRI OM PRAKASH RAJORIA 267, ARYA NAGAR SCHEME NO.1, ALWAR CUKE VS. THE CIT AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAOPR 6556 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL JKTLO DH VKSJ LS@ REVENUE BY :SMT. ROLEE AGARWAL (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/05/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /07/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT, ALWAR DATED 24-01-2014 FOR THE ASSESSMENT YE AR 2006-07 U/S 263 OF THE ACT RAISING FOLLOWING GROUNDS. (I) CHALLENGING THE ACTION OF LD. CIT U/S 263 OF TH E ACT IN SETTING ASIDE THE ASSESSMENT ORDER DATED 23-12-2011 U/S 148 R.W.S. 143(3) OF THE ACT. (II) THE LD. CIT HELD IN NOT ALLOWING DEDUCTION U/S 54B WHILE COMPUTING THE CAPITAL GAINS AND HELD THAT THE ASSESSEE HAD SOLD THE PLOT AND NOT AGRICULTURAL LAND DESPITE THE FACT THAT AGRICULTURAL ACTIVITIES WERE CARRIED ON BY THE ASSESSEE ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL A SSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 23-12-2008. THEREAFTER THE NOTICE U/S 147/148 OF THE ACT WAS ISSUED ON 29-03-2011 WHI CH WAS DULY SERVED ON THE ASSESSEE. IN RESPONSE TO NOTICE, THE ASSESSE E VIDE APPLICATION DATED 25-04-2011 REQUESTED TO TREAT THE RETURN ALREADY FI LED AS IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT. THE BASIS AND REASONS F OR REOPENING OF THE ASSESSMENT WAS TO THE EFFECT THAT THE DEDUCTION U/S 54B OF THE ACT CLAIMED BY ASSESSEE QUA SALE OF SOHNA LAND WAS WRONGLY ALLO WED AS ONE HALF OF THE NEW AGRICULTURE LAND WAS PURCHASED IN THE NAME OF THE ASSESSEE'S WIFE SMT. ANITA RAJNI. CONSEQUENTLY, CLAIM U/S 54B OF TH E ACT WAS RESTRICTED TO RS. 15,51,730/-. 2.2 THE LD. CIT CALLED FOR THE RECORD AND FOUND THAT TH E ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE AS ENQUIRIES WERE NOT MADE BY THE AO WH ILE ALLOWING DEDUCTION U/S 54B INASMUCH AS THE ASSESSEE SOLD TH E PLOTS OF RESIDENTIAL LAND AND NOT OF AGRICULTURAL LAND. THEREFORE, THERE WAS NO ELIGIBILITY FOR CLAIM OF DEDUCTION U/S 54B OF THE ACT. CONSEQUENTLY , A SHOW CAUSE NOTICE DATED 12-10-2012 U/S 263 OF THE ACT WAS ISSUED. 2.3 THE ASSESSEE FILED ITS REPLY DATED 31-01-2013 E XPLAINING THAT AO PASSED THE ORDER U/S 148 AFTER CONDUCTING PROPER AN D ADEQUATE ENQUIRY AND ARRIVED AT A DEFINITE VIEW THAT THE LAND SOLD W AS URBAN AGRICULTURAL ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 3 LAND AND HAS BEEN USED FOR AGRICULTURAL PURPOSES IN PRECEDING TWO YEARS BESIDES SECTION 54B DOES NOT RESTRICT THE BENEFIT T O THE AGRICULTURAL LAND ONLY. FOR THIS PROPOSITION, DECISION OF HONBLE PUN JAB & HARYANA HIGH COURT IN CASE OF CIT VS. SAVITA RANI 271 ITR 40 WAS RELIED UPON. FURTHER, IN SUPPORT OF THE USER OF THE LAND FOR AGR ICULTURAL PURPOSE, COPY OF JAMABANDI WAS FILED ALONG WITH AFFIDAVIT OF SH. SHY AM SINGH CONFIRMING CARRYING ON THE AGRICULTURAL ACTIVITIES ON THE ASSE SSEES LAND. 2.4 AGGRIEVED, THE ASSESSEE IS BEFORE US WHEREIN TH E LD. COUNSEL FOR THE ASSESSEE CONTENDS AS UNDER:- (I) DURING THE COURSE OF 148 PROCEEDINGS, THE ASSES SEE FURNISHED THE COPY OF SALE DEED/ SALE AGREEMENT OF THE LAND SOLD BY HIM WHICH REFLECTS THAT LAND IN QUESTION WA S AGRICULTURAL LAND. LD. AO HAS REFERRED TO THESE DOC UMENTS AND GIVEN FINDINGS OF FACT THAT THE SOLD LAND BELON GS TO THE ASSESSEE. THUS THE AO VERIFIED THE CLAIM OF THE ASS ESSEE U/S 54B OF THE ACT AND DISALLOWED OF THE LAND WAS PU RCHASED IN THE NAME OF THE ASSESSEE. THESE FACTS CLEARLY SH OW THAT THE AO MADE PROPER ENQUIRY AND APPLIED HIS MIND. THEREF ORE, HE DISALLOWED 1/2 OF CLAIM U/S 54B OF THE ACT. SINCE D UE INQUIRIES WERE MADE, HIS ORDER CANNOT BE HELD TO B E ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. (II) IN THE RETURN FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS. 10 ,140/- WHICH WAS ACCEPTED VIDE ASSESSMENT U/S 143(3). THE ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 4 PREVIOUS RECORD WAS ALSO BEFORE THE AO AND MUST HAV E BEEN VERIFIED BY HIM. THE SUSPICION OF THE LD. CIT THAT LAND SOLD WAS NOT USED FOR AGRICULTURAL PURPOSES IS NOT JUSTI FIED AND CANNOT BE A VALID BASIS FOR ACTION U/S 263 OF THE A CT. (III) THE ASSESSEE VIDE LETTER DATED 31-01-2013 HAD ENCLOSED THE COPY OF THE JAMABANDI WHEREAS THE LD. CIT HAS GIVEN A FINDING THAT SUCH JAMANBANDI WAS NOT FOUND ATTACHED WITH THE LETTER, BESIDES THIS FACT WAS NEVER COMMUN ICATED TO THE ASSESSEE AT ANY TIME. BY AFFIDAVIT SHRI SHYAM S INGH HAS DEPOSED THAT THE ASSESSEE HAD CARRIED OUT THE AGRIC ULTURAL OPERATIONS ON THE THIS LAND. (IV) FROM THE COPY OF KHASRA GIRDAWARI FROM F.Y. 20 02- 03 TO 2006-07, IT IS REFLECTED THAT AGRICULTURAL AC TIVITIES WERE CARRIED ON THIS LAND. ALL THESE FACTS PROVE THAT AL L SUCH DOCUMENTS WERE FILED BEFORE THE AO IN THE ASSESSMEN T PROCEEDINGS WHICH WERE VERIFIED BY HIM AND AFTER PR OPER VERIFICATION AND DUE ENQUIRIES, THE CLAIM OF THE AS SESSEE U/S 54B OF THE ACT WAS EXAMINED AND ALLOWED AS ONE HALF . (V) THE FACTS ABOUT THE NATURE OF THE LAND AS RESID ENTIAL PLOT IN SALE DEED AND CONSTRUCTION COMPRISING OF 9 ROOMS, BATHROOMS, ETC. WERE ALL VERIFIED BY LD. AO. ONLY B ECAUSE IN THE SALE DEED THE NATURE OF THE LAND IS STATED TO B E A RESIDENTIAL PLOT, IT WOULD NOT OVERRIDE THE FACT TH AT THE LAND SOLD WAS AGRICULTURAL LAND SO LONG AS THE CATEGORY OF SUCH LAND IN THE REVENUE RECORDS IS AGRICULTURAL AND IT IS NOT CONVERTEDED INTO RESIDENTIAL. THE LD. AR PLACED FOLLOWING CASE LAWS:- ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 5 (I) HINDUSTAN INDUSTRIAL RESOURCES LTD. VS ACIT [2 011] 335 ITR 77 (DELHI) (II) CIT V SMT. DEBBJE ALENO [2011] 331 ITR 59 (BOM ) (III) CIT VS. SUNBEAM AUTO LTD. (2011) 332 ITR 167 (DELHI) (HC) (IV) MAHISH KUMAR VS. CIT (2012) 134 ITD 27/ 17 ITR (TRIB.) 324 (INDORE)(TRIB.) (V) CIT VS. GABERIL INDIA LTD. 203 ITR 108, 113, 1 14 (BOM.) (HC) (VI) CIT VS. AMIT CORPN. (2012) 213 TAXMAN 19 (GUJ. ) (HC) (MAG.) (VII) CIT VS. LEISURE WEAR EXPORTS LTD. (2011) 341 ITR 166/ 202 TAXMAN 130 (MAGZ.) (DELHI)(HC) 2.5 LD. AR FURTHER PLEADED THAT THE ORDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE WHICH HAS BEEN PASSED AFTER DUE ENQUIRIES AND PROPER VERIFICATION OF THE CASE. THEREFORE, THE ASSUMPTION OF JURISDICTION U/S 263 IS UNTENABL E. THUS THE ORDER OF THE LD. CIT MAY BE QUASHED. 2.6 ON THE OTHER AND, THE LD. DR CONTENDS THAT: I. LD. CIT HAS GIVEN A CLEAR FINDING THAT ON PERUSAL O F THE RECORD, THE COPY OF JAMABANDI WAS NOT FOUND AND A COPY OF JAMAB ANDI FOR FINANCIAL YEAR 2001-02 WAS FOUND WHICH DOES NOT PER TAIN TO THE LAND SOLD IN THIS YEAR. II. THE AGRICULTURAL LAND IS ALWAYS SOLD ON THE BASIS O F KHASRA NUMBR AND MEASUREMENT IN MARLA AND SARSAI WHEREAS THE ASSESSEE HAS SOLD THIS LAND AS RESIDENTIAL MEASURIN G IN SQ. YARDS. III. LAND MEASURING 222.23. SQ.YARDS SOLD VIDE AGREEME NT DATED 20- 03-2006 FOR RS. 13.60 LACS AS A BUILDING CONSISTING OF NINE ROOMS WITH BOUNDARY WALL, OPEN SPACE, STAIRS ETC. ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 6 IV. ALL THE FACTS INDICATE THAT THE LAND IN QUESTION WA S SOLD IN THE FORM OF PLOTS AND NOT AS AN AGRICULTURAL LAND. BESIDES, NO AGRICULTURAL INCOME HAS BEEN DISCLOSED IN THE IT RETURN FOR THE ASSESSMENT YEAR 2006-07. CONSEQUENTLY, THE ASSESSEE'S CLAIM OF DEDU CTION U/S 54B WAS NOT ALLOWABLE. V. FROM THE PERUSAL OF THE ASSESSMENT RECORD, IT IS FO UND THAT NO INQUIRY HAS BEEN CAUSED WITH REGARD TO FIRST CONDIT ION STATED ABOVE, I.E. USED OF SAID LAND FOR AGRICULTURAL PURPOSE IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE OF SUCH TRANSFER. IN THIS REGARD, RELIANCE IS PLACED TO THE DECISION OF KERALA HIGH C OURT IN THE CASE OF SMT. ASHA GEORGE VS. ITO (2013) 351 ITR 0123 IN WHICH HON'BLE HIGH COURT AFFIRMED THE FINDING OF THE LOWE R AUTHORITIES THAT THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT O F SECTION 54B ON THE GROUND THAT THE PROPERTY WHICH SHE SOLD WAS NOT USED FOR AGRICULTURAL PURPOSES FOR A PERIOD OF TWO YEARS PRI OR TO DATE OF THE SALE AS REQUIRED U/S 54B OF THE I.T. ACT. THEREFORE , LD. CIT HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 263. BESIDES HE HAS ADOPTED A REASONABLE VIEW IN SETTING ASIDE THE ASSESSMENT ORD ER FOR FRESH CONSIDERATION AFTER GIVING THE ASSESSEE ADEQUATE OP PORTUNITY OF BEING HEARD. 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT HAS NOT BEEN DISPUTED BY TH E ASSESSEE THAT AGRICULTURAL INCOME WAS NOT SHOWN IN THIS YEAR, THE CLAIM OF THERE BEING AGRICULTURAL INCOME RESTS ON PRECEDING YEAR. THE AG RICULTURAL INCOME SHOWN IN EARLIER YEAR HAS NOT BEEN DEMONSTRATED TO BE EARNED FROM THE ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 7 LAND WHICH IS SOLD IN THE FORM OF PLOTS BY THE ASS ESSEE. IT IS A SETTLED LAW THAT BURDEN TO PROVE THE ELIGIBILITY FOR CLAIM OF D EDUCTION AND EXEMPTION IS ON THE ASSESSEE. WHILE EXAMINING THE RECORD UNDE R SEC. 263, CIT HAS TO SEE WHETHER THE SUBORDINATE AUTHORITY HAS CONSIDERE D RELEVANT ISSUES AND ENQUIRED INTO THE RELEVANT ASPECT OF THE CLAIMS IN THE YEAR IN QUESTION. SINCE THE AGRICULTURAL INCOME IN THIS YEAR WAS NOT SHOWN, THE AO BEFORE PARTLY ACCEPTING THE ASSESSEE'S CLAIM U/S 54B OUGHT TO HAVE ENQUIRED WHETHER THE LAND IN QUESTION WAS USED FOR AGRICULTU RAL PURPOSES IN THE LAST TWO YEARS OR NOT, THERE IS NO FINDING TO THIS EFFEC T IN THE ASSESSMENT ORDER. FROM THE SECOND PAGE ONWARDS TILL THE END OF IMPUGN ED ASSESSMENT ORDER, THERE IS ONLY REFERENCE TO CLAIM OF SECTION 54B OF THE ACT. THUS IN OUR VIEW, THIS CRUCIAL ASPECT OF LAND IN QUESTION AGRIC ULTURE OR RESIDENTIAL PLOTS, ITS BEING SOLD BY WAY OF PLOTS IN SQ. YARDS BECOME NECESSARY FOR ALLOWABILITY OF CLAIM. RECORD DOES NOT REVEAL THAT THESE WERE CONSIDERED OR INQUIRED. THUS THERE IS A TOTAL LACK OF ENQUIRY ON THESE ASPECTS BESIDES WHETHER THE AGRICULTURAL INCOME WAS EARNED OR NOT F ROM THIS VERY LAND. IN OUR CONSIDERED VIEW, THE ASSESSMENT ORDER SUFFERS F ROM LACK OF ENQUIRY ON THESE CRUCIAL ASPECTS AND IT IS NOT A CASE OF PARTI AL INQUIRY AS PLEADED TO BE COVERED BY THE JUDGEMENT OF HON'BLE DELHI HIGH COU RT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. (SUPRA) AND OTHER CITATIO NS. THUS IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND MERIT IN THE ITA NO. 209/JP/2014 SHRI OM PRAKASH RAJORIA VS. CIT , ALWAR 8 ARGUMENTS OF THE LD. CIT DR AND HOLD THAT THE ORD ER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE. THE LD. CIT HAS RIGHTLY PASSED THE ORDER U/S 263 WITH THE DIREC TION THAT THE AO SHOULD PROPERLY FRAME THE ASSESSMENT ORDER AFRESH AFTER MA KING PROPER ENQUIRIES AND BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. THUS THE ORDER OF THE LD. CIT IS UPHELD AND THE APP EAL OF THE ASSESSEE IS DISMISSED. 3.0. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/07/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 /07/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH RAJORIA, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE CIT, 3. VK;DJ VK;QDR@ CIT, 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.209/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR