DCIT, CHENNAI V. Shri S.Subashchand Nahar, CHENNAI

ITA 2139/CHNY/2010

• Counselvise Citation: 213921714 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Assessee Lawyers: T BANUSEKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A.NO. 2139 /MDS/2010 ASSESSMENT YEAR : 2006-07 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-II(1), CHENNAI 34. VS. SHRI SUBASHCHAND NAHAR, 6/1, NAHAR DRIVE, MAHARANI CHINNAMMA ROAD, ALWARPET, CHENNAI 18. PAN AAEPN6258P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI, IRS, CIT RESPONDENT BY : SHRI T.BANUSEKAR, FCA DATE OF HEARING : 22 ND NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 26 TH NOVEMBER, 2012 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II AT CHENNAI DATED 20.09.2010. THE APPEAL ARISES OUT OF THE ASS ESSMENT ITA 2139/10 :- 2 -: COMPLETED UNDER SEC.153A, READ WITH SEC.143(3) OF T HE INCOME- TAX ACT, 1961. 2. THE GROUNDS RAISED BY THE REVENUE IN THE PRESENT APPEAL READ AS BELOW : 1.A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF ` 1,13,80,944 MADE ON ACCOUNT OF LONG TERM CAPITAL GAINS. 1.B. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT TH E ASSESSEE HAS NOT PROVED THAT THE LAND IS ONLY AN AGRICULTURAL LAND, THAT HE HAD CARRIED OUT AGRICULT URAL OPERATIONS DURING THE FINANCIAL YEAR 2005-06 AND EARNED AGRICULTURAL INCOME DURING THE FINANCIAL YEA R 2005-06. 1.C. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT TH E LAND IN QUESTION WAS SUBJECTED TO URBAN LAND TAX AS PER THE LETTER DATED 14-09-2010 OF THE ASSISTANT COMMISSION ER (URBAN LAND TAX). 1.D. THE LEARNED CIT(A) HAS ERRED IN RELYING ON T HE LETTER DATE DATED 03/04/1997 OF THE ASSISTANT COMMISSIONER (URBAN LAND TAX) AND HOLDING THAT THE LAND IN QUESTION WAS AN AGRICULTURAL LAND WHEREAS T HE ASSESSEE TRANSFERRED THE LAND DURING THE FINANCIAL YEAR 2005-06. 1.E. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT T HE LAND IN QUESTION WAS PURCHASED AT A COST OF ` 1,79,633 IN ITA 2139/10 :- 3 -: 1989, THE CONVERSION PRICE INTO STOCK IN TRADE WAS ` 1,19,00,000 AND THAT THE ADJOINING PROPERTY WAS ALS O BOUGHT FROM HIS PARENTS AND DEVELOPED INTO PLOTS WH ICH FACT INDICATES THAT THE LAND IN QUESTION WAS NOT AN AGRICULTURAL LAND DURING THE RELEVANT PREVIOUS YEAR . 2.A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF ` 50,00,000 MADE ON ACCOUNT OF UNEXPLAINED CASH FOUND AT THE TIME OF SEARCH. 2.B. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE ASSESSEES STATEMENT THAT HE HAS BEEN KEEPING HUGE CASH OF ` 50 LAKH SINCE JULY 2005 TILL THE DATE OF SEARCH IN OCTOBER 2005 IS AGAINST PROBABILITY. 2.C. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE ASSESSEE HAS NOT STATED ANYTHING REGARDING THE CAS H WITHDRAWAL BY THE FAMILY MEMBERS AT THE TIME OF SEA RCH AND THAT THE CLAIM IS ONLY AN AFTERTHOUGHT. 3. REGARDING THE QUESTION OF LONG TERM CAPITAL GAIN S VIS--VIS AGRICULTURAL INCOME, WE FIND THAT THE TRIBUNAL HAS ALREADY DECIDED THE MATTER IN THE APPEALS FILED BY TWO CO-OWNERS OF THE PROPERTY VIZ., SHRI SAYARCHAND NAHAR AND SMT. SOHAN KANWAR N AHAR. IN THE CASE OF SHRI SAYARCHAND NAHAR, INCOME-TAX APPEL LATE TRIBUNAL, CHENNAI D BENCH HAS HELD THROUGH THEIR ORDER DATED 16.02.2012 IN ITA NO.2140/MDS/2010 THAT THE COMMISS IONER OF ITA 2139/10 :- 4 -: INCOME-TAX(APPEALS) HAS RIGHTLY HELD THAT THE PROPE RTY TRANSFERRED BY THE ASSESSEE WAS AGRICULTURAL IN NATURE. LIKEWI SE IN THE CASE OF SMT. SOHAN KANWAR NAHAR, INCOME-TAX APPELLATE TR IBUNAL, CHENNAI D BENCH THROUGH THEIR ORDER DATED 1.3.201 2 IN ITA NO.2141/MDS/2010 HAS HELD THAT THE PROPERTY TRANSFE RRED BY THE ASSESSEE WAS AN AGRICULTURAL PROPERTY AND THEREFORE , NO LEVY OF LONG TERM CAPITAL GAINS TAX IS POSSIBLE IN THIS CAS E. 4. AS ALREADY MENTIONED ABOVE, THE ENTIRE FACTS AND CIRCUMSTANCES LEADING TO THE PRESENT APPEAL HAVE BE EN CONSIDERED BY THE TRIBUNAL IN A DETAILED MANNER AND CAME TO THE CONCLUSION THAT THE PROPERTY TRANSFERRED BY TWO CO- OWNERS WAS AGRICULTURAL IN NATURE. IN THE LIGHT OF THE EARLIE R ORDERS PASSED BY THE TRIBUNAL, WE HOLD THAT THERE IS NO CASE FOR THE REVENUE TO HOLD THAT THE PROPERTY TRANSFERRED BY THE ASSESSEE IS NO T AN AGRICULTURAL PROPERTY. THEREFORE, THE COMMISSIONER OF INCOME-TA X(APPEALS) IS JUSTIFIED IN GIVING DIRECTION TO THE ASSESSING OFFI CER TO HELD THE PROPERTY AS AGRICULTURAL PROPERTY. 5. REGARDING THE ADDITION OF ` 50 LAKHS, THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS DEALT WITH THE MATTER IN DE TAIL. ON GOING THROUGH THE CASH BOOK, THE COMMISSIONER OF INCOME-T AX(APPEALS) FOUND THAT THE AMOUNT OF ` 50 LAKHS WAS REFLECTED IN THE NAMES OF ITA 2139/10 :- 5 -: SHRI SAYARCHAND NAHAR, SMT. SOHAN KANWAR NAHAR AND SMT. KAVITHA NAHAR OF ` 20 LAKHS, ` 20 LAKHS AND ` 10 LAKHS EACH. THIS WAS AVAILABLE AT THE TIME OF SEARCH ITSELF. THEREF ORE, AS RIGHTLY HELD BY THE COMMISSIONER OF INCOME-TAX(APPEALS), TH ERE IS NO REASON TO HOLD THAT THE AMOUNT OF ` 50 LAKHS IS UNEXPLAINED. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RIGHTLY DEL ETED THE SAID ADDITION. 6. IN RESULT, WE UPHOLD THE ORDER OF THE COMMISSION ER OF INCOME-TAX(APPEALS) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED ON MONDAY, THE 26 TH OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR.O.K.NARAY ANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 26 TH NOVEMBER, 2012 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR