Santosh Brij, Chandigarh V. DCIT, Chandigarh

ITA 218/CHANDI/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6681 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N K SAINI
• Keywords: Capital asset; Principle of natural justice; Additional evidence; Tax effect; Revised return; Rule 8D; Capital Gains
• Section: 2(14); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , !' # $ % &' , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.218/CHD/2017 / ASSESSMENT YEAR : 2012-13 SANTOSH BRIJ, SCO NO.48, SECTOR 28-C, CHANDIGARH. THE D.C.I.T., CIRCLE 4(1), CHANDIGARH. ./ PAN NO.ABJPB4755H / APPELLANT / RESPONDENT /ASSESSEE BY : SHRI N.K.SAINI, ! / REVENUE BY : SMT.CHANDERKANTA, SR.DR ' # $ /DATE OF HEARING : 15.01.2019 %&'( $ /DATE OF PRONOUNCEMENT: 28.02.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH (IN SHORT CIT(A) DATED 7. 12.2016 PASSED U/S 250(6) OF THE INCOME TAX AT, 1961 (HEREI NAFTER REFERRED TO AS ACT). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE INCOME ASSESSED AT RS. MAKING ASSESSMENT AT AN INCOME OF RS.48,21,780/- AGAINST DECLARED INCOME OF RS.3,20,731/- PLUS AGRI. INCOME OF RS.1,30,000/-. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.14,94,927/- OUT OF TOTAL INTEREST CLAIMED UNDER SECTION 24(B) OF RS.53,35,290/- ON LOANS RAISED FOR PURCHASE AND CONSTRUCTION OF ITA NO.218/CHD/2017 A.Y.2012-13 2 PROPERTY. THE ADDITION MADE WAS REQUIRED TO BE DELETED. 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE UNDER SECTION 36(L)(III) OF IT ACT OF RS.30,38,425/- OUT OF TOTAL INTEREST OF RS.37,35,690 7- IN RESPECT OF WHICH COMPLETE INFORMATION WAS SUBMITTED BY ASSESSEE WRONGLY INVOKING THE JUDGMENT IN THE CASE OF AVON CYCLES LIMITED VS CIT WHICH WAS IN RELATION TO PROVISIONS OF SECTION 14A R EAD WITH RULE 8D. THE ADDITION MADE IS REQUIRED TO BE DELETED. 4. THE LEARNED CIT (A) HAD ERRED IN CONFIRMING AN ADDITION OF RS.39,47,923/- ON ACCOUNT OF LONG TERM CAPITAL GAINS WITHOUT BRINGING ANY MATERIAL ON RECO RD THAT THE LAND SOLD WAS A CAPITAL ASSET WHEREAS ASSESSEE HAS BROUGHT ENOUGH EVIDENCE THAT LAND SITUATED, IS OUTSIDE THE MUNICIPAL LIMITS. THE ADDI TION MADE IS THUS REQUIRED TO BE DELETED. 5. THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, DELE TION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE DISPOSAL OF APPEAL. 3. GROUND NOS. 1 AND 5 ARE GENERAL IN NATURE AND N EED NO ADJUDICATION. 4. GROUND NO.2 RELATES TO THE ISSUE OF DISALLOWANCE OF INTEREST EXPENDITURE OF RS.53,36,290/- U/S 24(B) OF THE ACT. 5. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE A SSESSEE HAD SHOWN RENTAL INCOME OF RS.20,54,000/- FROM TWO PROPERTIES AS UNDER: 1) HOUSE PROPERTY IN PRITAMPURA, NEW DELHI 2) INDUSTRIAL PLOT IN PHASE-I, CHANDIGARH. 6. AGAINST THE SAID INCOME THE ASSESSEE HAD CLAIMED DEDUCTION OF INTEREST AMOUNTING TO RS.89,223/- AND RS.53,36,290/- RESPECTIVELY, THUS DECLARING NET LOS S OF RS.39,87,723/-. THE ASSESSING OFFICER NOTED THE ASS ESSEE HAD PURCHASED 50% SHARES IN THE INDUSTRIAL PLOT NO. 182/2 IN CHANDIGARH ON 3.11.2009 FOR RS.3,55,00,000/- AND HA D PAID ITA NO.218/CHD/2017 A.Y.2012-13 3 STAMP DUTY OF RS.10,65,000/-. THE ASSESSEE SUBMITTE D THAT THIS PROPERTY HAD BEEN PURCHASED BY RAISING LOANS I N TWO INSTALLMENTS OF RS.3,60,00,000/- ON 30.9.2009 AND 29.10.2009 FROM M/S BAJAJ FINANCE LTD. THE A.O. NOT ED THAT THE PROPERTY HAD BEEN TRANSFERRED ON 3.11.2009 AND THE ENTIRE SALE CONSIDERATION STOOD PAID ON THE SAID DA TE WHILE OUT OF THE TOTAL LOAN TAKEN, LOAN AMOUNTING TO RS.1,20,50,000/- WAS TAKEN SUBSEQUENT TO PURCHASE O F PROPERTY ON 28.2.2010 AND 26.10.2010. HE, THEREFORE , HELD THAT SINCE THESE LOANS WERE NOT UTILIZED FOR THE PU RCHASE OF THE PROPERTY, INTEREST PERTAINING TO THE SAME AMOUN TING TO RS.14,94,927/- WAS DISALLOWED. 7. BEFORE THE LD.CIT(A) THE ASSESSEE CONTENDED THAT HE HAD PURCHASED THE PROPERTY FOR RS.3,55,25,000/- AN D PAID STAMP DUTY OF RS.10,65,500/- FOR WHICH LOAN OF RS.3,05,00,000/- WAS TAKEN ON 30.9.2009 AND RS.55,00,000/- ON 29.10.2009. HE FURTHER CONTENDED THAT SINCE THE PROPERTY WAS INCOMPLETE STRUCTURE AT THE TIME OF PURCHASE, FURTHER LOANS WERE RAISED FOR RS.90 LACS ON 28.9.2010 AND RS.30,50,000/- ON 26.10.2010, THUS MA KING THE TOTAL LOANS RAISED FOR THE ACQUISITION OF PROPE RTY TO THE TUNE OF RS.4,80,50,000/-. THE ASSESSEE THUS CONTEND ED THAT THE LOANS WERE TAKEN FOR THE PURCHASE OF THE PROPER TY AND FOR COMPLETING THE UNFINISHED STRUCTURE AND, THEREFORE, INTEREST INCURRED ON THE SAME WAS ALLOWABLE U/S 24(B) OF THE ACT SINCE THE REQUIREMENT OF THE SECTION WAS THAT BORRO WED FUNDS SHOULD HAVE BEEN USED IN THE PURCHASED STRUCT URE ITA NO.218/CHD/2017 A.Y.2012-13 4 REPAIR OF THE PROPERTY FROM WHICH RENTAL INCOME WAS BEING EARNED. THE LD.CIT(A) DISMISSED THE CONTENTIONS OF THE ASSESSEE STATING THAT NO MATERIAL HAD BEEN BROUGHT ION RECORD BY THE ASSESSEE TO ESTABLISH HOW THE LOANS R AISED SUBSEQUENT TO THE PURCHASE OF PROPERTY WAS UTILIZED AND NO EVIDENCE OR BILLS WERE BROUGHT ON RECORD TO ESTABLI SH THAT THE PROPERTY HAD BEEN CONSTRUCTED OR REPAIRED BY USING THESE LOANS. THE CIT(A) HELD THAT IN THE ABSENCE OF NEXUS OF BORROWED FUNDS TO THE USE OF THE SAID PROPERTY, THE DISALLOWANCE OF INTEREST OF RS.14,94,927/- HAD BEEN RIGHTLY MADE BY THE A.O. THE RELEVANT FINDINGS OF THE CIT( A) AT PARA 6.3 OF HIS ORDER ARE AS UNDER: 6.3 SUBMISSION OF THE APPELLANT HAVE BEEN CONSIDERED. FOR CLAIMING DEDUCTION OF INTEREST AGAINST THE HOUSE PROPERTY INCOME U/S 24(B), THE APPELLANT SHOULD HAVE USED THE BORROWED FUNDS IN THE PURCHASE, CONSTRUCTION REPAIR ETC. OF THE PROPERTY BUT THE SAME HAS NOT BEEN ESTABLISHED BEFO RE THE ASSESSING OFFICER NOR DURING APPEAL PROCEEDING. ASSESSING OFFICER HAS NOTED THAT THE LOAN HAS BEEN ACQUIRED MUCH LATER THEN ACTUAL DATE OF PURCHASE OF THE PROP ERTY AND THE ASSESSEE HAS NOT MADE ANY CLAIM REGARDING ANY EXPENDITURE HAVING BEEN INCURRED ON CONSTRUCTION / RENOVATION ETC. AFTER THE PURCHASE OF THE SAID PROP ERTY. A CATEGORICAL SUBMISSION WAS FILED BEFORE THE ASSESSING OFFICER THAT THE INTEREST OF RS.53,36,290/- HAS BEEN PAID O N LOANS RAISED FOR THE PURCHASE OF PROPERTY. THE APPELLANT HAS NOT BROUGHT ON RECORD ANY MATERIAL TO CONTROVERT THE OBSERVATION OF THE ASSESSING OFFICER. IT HAS NOT BEE N ESTABLISHED AS TO HOW THE LOAN RAISED SUBSEQUENTLY TO PURCHASE OF THE PROPERTY WAS UTILIZED AND NO EVIDEN CE / BILLS ETC. WERE BROUGHT ON RECORD TO ESTABLISH THAT THE PR OPERTY HAS BEEN CONSTRUCTED / REPAIRED BY UTILIZING THESE LOANS . IN THE ABSENCE OF NEXUS OF BORROWED FUNDS TO THE USE FOR T HE SAID PROPERTY, THE DISALLOWANCE OF INTEREST OF RS. 14,94,92 7/- MADE BY THE ASSESSING OFFICER IS UPHELD. GROUND OF APP EAL NO. 2 IS DISMISSED. 8. BEFORE US, THE LD. COUNSEL FOR ASSESSEE CONTEND ED THAT THE ABOVE FINDINGS OF THE LD.CIT(A) THAT NO MATERIA L HAD BEEN BROUGHT ON RECORD BY THE ASSESSEE TO DEMONSTRATE TH E USER OF ITA NO.218/CHD/2017 A.Y.2012-13 5 THE BORROWED FUNDS FOR THE PURPOSE OF ACQUIRING/REP AIRING THE IMPUGNED PROPERTY WAS INCORRECT. THE LD. COUNS EL FOR ASSESSEE CONTENDED THAT DUE SUBMISSIONS HAD BEEN MA DE BEFORE THE A.O. STATING THAT IT HAD TAKEN LOAN FROM M/S BAJAJ FINANCE LTD. FOR PURCHASE OF PROPERTY AND FOR COMPL ETING THE LEFT-OUT WORK ON THE PROPERTY, SO AS TO MAKE IT REN TABLE AND ALSO UTILIZED IT FOR THE SAID PURPOSE ONLY. IT WAS ALSO POINTED OUT THAT THE ASSESSEE HAD SUBMITTED THAT THE LOANS THUS RECEIVED HAD BEEN CREDITED TO HER ACCOUNT IN PUNJAB NATIONAL BANK AND HARYANA STATE COOPERATIVE BANK (HARCO) AND WITHDRAWALS MADE FROM THE SAID BANK FOR THE SAID PU RPOSE. COPY OF THE BANK ACCOUNT REFLECTING THE SAID WITHDR AWALS HAD ALSO BEEN FILED. OUR ATTENTION WAS DRAWN TO TH E LETTER FILED BEFORE THE A.O. DATED 16.2.2015 IN THIS REGAR D. THE LD. COUNSEL FOR ASSESSEE FURTHER POINTED OUT THAT IT HA D ALSO FILED DETAILS OF THE WITHDRAWALS MADE FROM TWO BANK S ON DIFFERENT DATES AND HOW THEY WERE UTILIZED IN THE A CQUISITION AND CONSTRUCTION OF THE UNFINISHED STRUCTURE. OUR A TTENTION WAS DRAWN TO PAPER BOOK PAGE NO.4 IN THIS REGARD. THE LD. COUNSEL FOR ASSESSEE ALSO DREW OUR ATTENTION TO THE COPIES OF THE BANK STATEMENT IN HARCO BANK AND PUNJAB NATIONA L BANK REFLECTING THE AFORESAID WITHDRAWALS PLACED AT PAPER BOOK PAGE NOS. 7 TO 21, 132 TO 135, 22 TO 29 AND 13 6 TO 139. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT TH E LOWER AUTHORITIES HAD FAILED TO TAKE NOTE OF THE ABOVE CO NTENTION OF THE ASSESSEE AND HAD, THEREFORE, ERRED IN REJECTING THE ASSESSEES CLAIMED OF INTEREST U/S 24(B) OF THE ACT BY RECORDING INCORRECT FINDINGS THAT THE ASSESSEE HAD BEEN ITA NO.218/CHD/2017 A.Y.2012-13 6 UNABLE TO ESTABLISH THE NEXUS BETWEEN THE BORROWED FUNDS AND THEIR USER FOR THE PURCHASE/CONSTRUCTION OF THE IMPUGNED PROPERTY. THE LD. COUNSEL FOR ASSESSEE, TH EREFORE, CONTENDED THAT THE DISALLOWANCE OF INTEREST MADE, T HEREFORE, OUGHT TO BE DELETED. 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE CIT(A). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFUL LY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ADMITT EDLY, THE ASSESSEES CLAIM OF INTEREST OF RS.14,94,927/- WAS MADE U/S 24(B) OF THE ACT ON ACCOUNT OF INTEREST PAID ON FUN DS BORROWED FOR THE PURPOSE OF ACQUIRING/CONSTRUCTING HOUSE PROPERTY, FROM WHICH RENTAL INCOME HAS BEEN EARNED AND IS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY. THE SAME HAS BEEN REJECTED FOR THE REASON THAT THE ASSESSEE HAS BEEN UNABLE TO DEMONSTRATE USER OF BORROWED FUN DS FOR THE PURPOSE OF CONSTRUCTING THE PROPERTY. THE FINDI NGS OF THE LD.CIT(A), WE NOTE, ARE THAT THE LOAN TO THE EXTENT OF RS.1,20,50,000/- WAS TAKEN SUBSEQUENT TO THE ACQUIS ITION OF THE IMPUGNED PROPERTY AND, THEREFORE, COULD NOT HAV E BEEN UTILIZED FOR ACQUIRING THE SAID PROPERTY AND FURTHE R NO EVIDENCE HAD BEEN FILED BY THE ASSESSEE OF HAVING U TILIZED THE SAID LOAN FOR UNDERTAKING ANY CONSTRUCTION ON T HE SAID PROPERTY. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT IT HAD FILED DETAIL OF THE UTILIZATION OF THE SAID LOA NS FOR THE CONSTRUCTION UNDERTAKEN OF THE SAID PROPERTY AND HA D EVEN DEMONSTRATED THE FACT THAT THE IMPUGNED LOANS TAKEN ITA NO.218/CHD/2017 A.Y.2012-13 7 AMOUNTING TO RS.1,20,50,000/- HAD BEEN PARKED IN IT S PUNJAB NATIONAL BANK ACCOUNT AND HARCO ACCOUNT AND NECESSARY WITHDRAWALS HAVE BEEN MADE FROM THESE ACC OUNTS FOR THE PURPOSE OF CONSTRUCTION UNDERTAKEN OF THE S AID PROPERTY. THE LD. COUNSEL FOR ASSESSEE HAS POINTED OUT THAT NECESSARY DETAILS AND COPY OF BANK STATEMENT EVIDEN CING THE DEPOSIT OF LOAN AMOUNT IN THE SAME AND WITHDRAWALS MADE FOR THE PURPOSE OF SAID CONSTRUCTION WERE ALSO FILE D BEFORE THE LOWER AUTHORITIES. BUT WE FIND THAT NO NOTE HAS BEEN TAKEN OF THESE SUBMISSIONS OF THE ASSESSEE AND HIS CONTENTION HAS BEEN DISMISSED SUMMARILY WITHOUT DEA LING WITH THE CONTENTIONS OF THE ASSESSEE AS STATED ABOV E. IN THE LIGHT OF THE ABOVE FACTS, WE CONSIDER IT NECESSARY TO RESTORE THE MATTER BACK TO THE A.O. TO EXAMINE THE EVIDENCE FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM AND UTILIZATIO N OF LOANS TO THE TUNE OF RS.1.20 CRORES FOR THE CONSTRUCTION OF PROPERTY AND THEREAFTER DECIDE THE ISSUE AFTER VERIFICATION OF THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. WE MAY ADD THAT THE ASSESSEE BE GIVEN DUE OPPORTUNITY OF HEARING IN THI S REGARD. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO.3 RAISED BY THE ASSESSEE RELATES TO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT AMOUNTING TO RS.30,38,425/-. 12. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE A.O. HAD NOTED THAT THE ASSESSEE HAD ADVANCED A SUM OF RS.1,44,12,931/- TO M/S GLOBAL IMPAX, A PARTNERSHIP FIRM IN ITA NO.218/CHD/2017 A.Y.2012-13 8 WHICH THE ASSESSEE WAS A PARTNER. HE FURTHER NOTED THAT THE ASSESSEE HAD CLAIMED INTEREST EXPENDITURE OF RS.1,77,20,439/- IN C.C. LIMIT FROM PUNJAB NATIONAL BANK. HE, THEREFORE, HELD THAT THE ASSESSEE HAD DIVERTED INTEREST BEARING FUNDS TO M/S GLOBAL IMPAX AND ACCORDINGLY, DISALLOWED THE CLAIM OF INTEREST EXPENDITURE RELATI NG THERETO AMOUNTING TO RS.30,38,425/- U/S 36(1)(III) OF THE A CT. THE CIT(A) DISMISSED THE CONTENTION OF THE ASSESSEE HOL DING THAT THE FUNDS OF THE ASSESSEE CAME IN COMMON KITTY AND NO NEXUS HAD BEEN ESTABLISHED BETWEEN THE INTEREST FRE E FUNDS AND THE ADVANCES GIVEN TO THE SISTER CONCERN, NOTIN G THE FACT THAT THE ASSESSEE HAD MIXED FUNDS RELYING ON THE JU DGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE C ASE OF CIT VS. ABHISHEK INDUSTRIES LTD. 286 ITR 1 AND AVON CYCLES LTD. VS. CIT (2015) 53 TAXMANN.COM 297, THE LD.CIT( A) UPHELD THE DISALLOWANCE OF INTEREST MADE BY THE A.O . 13. BEFORE US, THE LD. COUNSEL FOR ASSESSEE REITERA TED THE CONTENTIONS MADE BEFORE THE LOWER AUTHORITIES THAT SINCE IT HAD SUFFICIENT OWN FUNDS NO DISALLOWANCE OF INTERES T COULD BE MADE U/S 36(1)(III) OF THE ACT. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT THE I.T.A.T. IN A RECENT JUDGMENT HAD DEALT WITH MIXED FUND THEORY BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF AVON CYCLE S LTD. (SUPRA) HAD HELD THAT THE SAME STOOD OVERRULED BY T HE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF H ERO CYCLES LTD. WHEREIN IT WAS HELD THAT WHERE SUFFICIENT OWN FUNDS WERE AVAILABLE WITH THE ASSESSEE, THE PRESUMPTION W OULD BE ITA NO.218/CHD/2017 A.Y.2012-13 9 THAT THE SAME WERE USED FOR THE PURPOSE OF MAKING I NTEREST FREE ADVANCES WARRANTING NO DISALLOWANCE OF INTERES T U/S 36(1)(III) OF THE ACT. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT THE I.T.A.T. IN THE SAID JUDGMENT HAD HELD THA T THE PRESUMPTION THEORY AS LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF HERO CYCLES (SUPRA) WAS THE LAW OF THE LAND. COPY OF THE ORDER WAS PLACED BEFORE US. OUR ATTENTI ON WAS DRAWN TO THE RELEVANT FINDING OF THE I.T.A.T. AT PA RA 60 OF THE SAID ORDER HOLDING SO. THE LD. COUNSEL FOR ASSESSE E FURTHER DREW OUR ATTENTION TO THE FACT OF THE AVAILABILITY OF SUFFICIENT FUNDS BY WAY OF CAPITAL OF RS.65,24,879/- AND NON I NTEREST BEARING FUNDS TO THE TUNE OF RS.59,41,293/- AND OTH ER INTEREST FREE FUNDS FROM FAMILY MEMBERS, THUS MAKIN G THE TOTAL INTEREST FREE FUNDS AVAILABLE WITH THE ASSESS EE TO THE EXTENT OF RS.3,21,04,067/- AS AGAINST INTEREST FREE ADVANCE MADE TO M/S GLOBAL IMPAX OF RS.1,44,12,931/- . 14. THE LD. DR, ON THE OTHER HAND, VEHEMENTLY ARGUE D THAT THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COU RT IN THE CASE OF AVON CYCLES LTD. (SUPRA) HAD BEEN UPHELD BY THE HON'BLE SUPREME COURT IN THE CASE OF MAXOPP INVESTM ENT LTD. VS. CIT (2018) 402 ITR 640 AND THE LD.CIT(A) HAD RIGHTLY FOLLOWED THE SAME WHILE DISALLOWING THE INT EREST INCOME IN THE PRESENT CASE. THE LD. DR STATED THAT THE DECISION OF THE I.T.A.T. IN THE CASE OF CIT VS. M/S JANAK GLOBAL RESOURCES PVT. LTD. IN ITA NO.470/CHD/2018 H AD BEEN RENDERED ON AN INCORRECT APPRECIATION OF FACTS OF THE CASE IN THE CASE OF HERO CYCLES LTD. (SUPRA) WHICH DECISION ITA NO.218/CHD/2017 A.Y.2012-13 10 WAS RENDERED BY THE HON'BLE APEX COURT AND WHICH HA S BEEN RELIED UPON BY THE I.T.A.T. IN THE CASE OF M/S JANA K GLOBAL RESOURCES PVT. LTD. (SUPRA) TO HOLD THAT THE PRESUM PTION THEORY WAS THE RULE OF THE LAND. THE LD. DR STATED THAT THE FACTS OF THE CASE HAD BEEN MIS-APPRECIATED BY THE I .T.A.T. AND, THEREFORE, THE JUDGMENT IN THE CASE OF M/S JAN AK GLOBAL RESOURCES PVT. LTD. (SUPRA) WAS INCORRECT AN D NO BENEFIT COULD BE DERIVED BY THE ASSESSEE FROM THE S AID CASE. THE LD. DR FURTHER STATED THAT IN THE CASE OF M/S J ANAK GLOBAL RESOURCES PVT. LTD. (SUPRA) THE TAX EFFECT W AS BELOW THE LIMIT PRESCRIBED BY THE CBDT FOR FILING THE APP EALS AND A LETTER TO THIS EFFECT HAD BEEN FILED TO THE I.T.A.T . REQUESTING WITHDRAWALS OF THE APPEAL BUT THE I.T.A.T. HAD GONE AHEAD TO DECIDE THE CASE ON MERITS AND SINCE NO APPEAL COULD BE FILED BY THE REVENUE AGAINST THIS ORDER OF THE I.T.A.T. O N ACCOUNT OF LOW TAX EFFECT INVOLVED BEFORE THE HON'BLE HIGH COURT, THE SAID DECISION COULD NOT BE RELIED UPON IN THE PRESE NT CASE. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE BEFORE US RELAT ES TO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT AND THE CONTENTION OF THE ASSESSEE IS THAT SINCE IT HAD SUFFICIENT OWN INTEREST FREE FUNDS, THE PRESUMPTION WAS THAT THE SAME WERE USED FOR THE PURPOSE OF MAKING THE INTEREST FREE ADVANCES WARRAN TING NO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT. WE HAVE DEALT WITH AN IDENTICAL ISSUE IN THE CASE OF BAWA BROTHERS VS ITO, KURUKSHETRA IN ITA NO.1050/CHD/2016 OF EVEN DATE, WHEREIN WE HA VE TAKEN NOTE OF THE DECISION OF THE HONBLE APEX COURT IN THE CA SE OF ITA NO.218/CHD/2017 A.Y.2012-13 11 CIT VS RELIANCE INDUSTRIES LTD. IN CIVIL APPEAL NO. 10 OF 2019 DATED 02-01-19, WHEREIN IT WAS CATEGORICALLY HELD THAT WH ERE SUFFICIENT OWN /INTEREST FREE FUNDS WERE AVAILABLE ,THE PRESUMPTION WAS THAT THEY WERE USED FOR MAKING THE INTEREST FREE ADVANCES THUS WARRANTING NO DISALLOWANCE OF IN TEREST U/S 36(1)(III) OF THE ACT. WE HAVE ALSO DEALT WITH THE IDENTICAL ARGUMENTS MADE BY THE LD.DR IN THAT CASE ALSO. THE RELEVANT PORTION OF THE ORDER AT PARA 17-22 OF THE ORDER IS AS UNDER: 17. TO THIS, THE LD. COUNSEL FOR ASSESSEE COUNTERE D BY POINTING OUT THAT THE HON'BLE APEX COURT HAD REAFFI RMED THE PRESUMPTION THEORY IN RECENT DECISION IN THE CA SE OF CIT VS. M/S RELIANCE INDUSTRIES LTD. IN CIVIL APPEA L NO.10 OF 2019 DATED 2.1.2019. COPY OF THE ORDER WAS PLACE D BEFORE US. REFERRING TO THE SAME, IT WAS POINTED OU T THAT THE REVENUE HAD RAISED THE FOLLOWING QUESTION BEFOR E THE HON'BLE SUPREME COURT : 1.WHETHER THE HIGH COURT IS CORRECT IN HOLDING THAT INTEREST AMOUNT BEING INTEREST REFERABLE TO FUNDS GIVEN TO SUBSIDIARIES IS ALLOWABLE AS DEDUCTI ON UNDER SECTION 36(1)(III) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') WHEN THE INTEREST WOULD NOT HAVE BEEN PAYABLE TO BANKS, IF FUNDS WERE NOT PROVIDED TO SUBSIDIARIES; 18. TO WHICH, THE HON'BLE SUPREME COURT HAD ANSWERE D BY STATING THAT IN THE LIGHT OF THE FACT NOTED BY T HE TRIBUNAL THAT THE INTEREST FREE FUNDS WERE AVAILABLE WITH AS SESSEE WHICH WAS SUFFICIENT TO MAKE INVESTMENT, IT COULD B E PRESUMED THAT THE INVESTMENTS WERE MADE FROM THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE. OU R ATTENTION WAS DRAWN TO THE FINDINGS OF THE HON'BLE SUPREME COURT AT PAGE 3 OF THE ORDER AS UNDER: INSOFAR AS THE FIRST QUESTION IS CONCERNED, THE ISS UE RAISES A PURE QUESTION OF FACT. THE HIGH COURT HAS N OTED THE FINDING OF THE TRIBUNAL THAT THE INTEREST FREE F UNDS AVAILABLE TO THE ASSESSEE WERE SUFFICIENT TO MEET ITS INVESTMENT. HENCE, IT COULD BE PRESUMED THAT THE INVESTMENTS WERE MADE FROM THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE. THE TRIBUNAL HAS ALSO FOLLOWED ITS OWN ORDER FOR ASSESSMENT YEAR 2002-03. IN VIEW OF THE ABOVE FINDINGS, WE FIND NO REASON TO INTERFERE WITH THE JUDGMENT OF THE HIGH COURT IN REGA RD TO THE ITA NO.218/CHD/2017 A.Y.2012-13 12 FIRST QUESTION. ACCORDINGLY, THE APPEALS ARE DISMISSED IN REGARD TO THE FIRST QUESTION. 19. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT IT IS CLEAR FROM THE ABOVE THAT THE HON'BLE SUPREME COURT HAD RE AFFIRMED THE PRESUMPTION THEORY IN ITS LATEST DECISION. 20. WE HAVE HEARD THE RIVAL CONTENTIONS CAREFULLY, PERU SED THE ORDERS OF THE AUTHORITIES BELOW AND ALSO GONE THRO UGH VARIOUS CASE LAWS REFERRED TO BEFORE US. THE SOLE CO NTENTION AGAINST THE DISALLOWANCE OF INTEREST IN THE PRESENT C ASE IS THAT IN THE LIGHT OF SUFFICIENT INTEREST FREE FUNDS AVAI LABLE WITH THE ASSESSEE, NO DISALLOWANCE OUGHT TO BE MADE. WE FIND ME RIT IN THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE, IN VIE W OF THE LATEST DECISION OF THE HON'BLE APEX COURT IN THE CAS E OF M/S RELIANCE INDUSTRIES (SUPRA) WHEREIN THE HON'BLE APEX COURT HAS CATEGORICALLY HELD THAT WHERE SUFFICIENT OWN FUND S ARE AVAILABLE, IT IS TO BE PRESUMED THAT THE INVESTMENTS H AVE BEEN MADE OUT OF THE SAME CALLING FOR NO DISALLOWANCE OF IN TEREST U/S 36(1)(III) OF THE ACT. THE POSITION OF LAW, THEREFO RE, WE HOLD, IS SETTLED AS STATED ABOVE. 21. PROCEEDING FURTHER, WE FIND THAT THIS ARGUMENT O F THE ASSESSEE THAT THE DISALLOWANCE COULD HAVE NOT BEEN MADE IN THE LIGHT OF SUFFICIENT OWN FUNDS AVAILABLE WITH IT, W AS FOR THE FIRST TIME RAISED BEFORE US. |THE LD. COUNSEL FOR ASSE SSEE HAS DRAWN OUR ATTENTION TO THE BALANCE SHEET OF THE ASS ESSEE REFLECTING THE OWN FUNDS AVAILABLE WITH IT IN THE FORM OF INTEREST FREE ADVANCES RECEIVED FROM FARMERS AMOUNT ING TO RS. 47,47,120/- AND HAS STATED THAT THE SAME WERE SUFFICIE NT TO MAKE THE INTEREST FREE ADVANCES .SINCE THE ABOVE FAC TS NEED TO BE VERIFIED, WE CONSIDER IT FIT TO RESTORE THE MATTE R TO THE CIT(A) TO GET THE FACTS VERIFIED AND THEREAFTER ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. 22. BEFORE CONCLUDING, WE WOULD LIKE TO NOTE THAT THE ARGUMENTS MADE BY THE LD. DR BEFORE US VIS--VIS THE INCORRECTNESS OF AN ORDER PASSED BY THE COORDINATE BENCH IN WHICH BOTH OF US WERE PARTIES (AS MEMBERS) IN THE C ASE OF M/S JANAK GLOBAL RESOURCES PVT. LTD. (SUPRA) MERITS NO CONSIDERATION AT ALL . IF THE REVENUE IS AGGRIEVED WITH ANY ORDER PASSED BY THE I.T.A.T., THERE ARE REMEDIES AVAIL ABLE UNDER LAW BY WAY OF FILING APPEAL TO THE HIGHER FORMS OR SEEKING RECTIFICATION OF ANY ERRORS BY FILING AN APP LICATION BEFORE THE CONCERNED FORUM TO THIS EFFECT. THE SAID ORDER CANNOT BE CHALLENGED BEFORE THE SAME APPELLATE AUTHORIT Y IN ANOTHER CASE AS BEING INCORRECT. FURTHER THE CONTENTI ON OF THE LD. DR THAT THE I.T.A.T. HAS ERRED BY DECIDING THE APP EAL ON MERITS RATHER THAN DISMISSING IT ON ACCOUNT OF THE LOW TAX EFFECT INVOLVED ALSO IS DEVOID OF ANY MERITS. IN FACT NO SUCH CONTENTION WAS RAISED BY THE LD.DR BEFORE THE BENCH, THAT THE REVENUE WISHES TO WITHDRAW THE APPEAL SINCE THE TAX EFFECT INVOLVED WAS BELOW THAT PRESCRIBED BY THE CBDT FOR FI LING APPEALS BEFORE THE ITAT. ON THE CONTRARY ARGUMENTS WE RE MADE AT LENGTH BY THE LD.DR WHICH FIND MENTION IN THE ORDER AND HAVE BEEN DEALT WITH ALSO EXHAUSTIVELY BY THE ITAT WHILE ITA NO.218/CHD/2017 A.Y.2012-13 13 DELIVERING ITS JUDGEMENT. FURTHER WE FAIL TO UNDERSTAN D THE INJUSTICE DONE BY DECIDING THE APPEALS ON MERITS. WE THEREFORE DISMISS THE CONTENTIONS RAISED BY THE LD.D R AGAINST THE CORRECTNESS OF THE ORDER PASSED BY THE ITAT IN THE CASE OF JANAK GLOBAL(SUPRA). THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 16. IN VIEW OF THE ABOVE AND IN VIEW OF THE FACTS WHICH HAVE REMAINED UNDISPUTED THAT THE ASSESSEE HAD SUFF ICIENT OWN INTEREST FREE FUNDS, THE DISALLOWANCE OF INTERE ST MADE U/S 36(1)(III) WAS TOTALLY UNWARRANTED AND IS, THER EFORE, DIRECTED TO BE DELETED. THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE STANDS ALLOWED. 17. GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS REGARDING THE ISSUE OF TREATING OF ASSET SOLD BY TH E ASSESSEE AS A CAPITAL ASSET AND MAKING ADDITION OF THE CAPIT AL GAIN EARNED THERETO TO THE INCOME OF THE ASSESSEE, AS AG AINST THE CLAIM OF THE ASSESSEE AS AGRICULTURAL INCOME NOT LI ABLE TO TAX. 18. BRIEFLY STATED, THE ASSESSEE HAD SOLD TWO LANDS DURING THE IMPUGNED YEAR, ONE IN VILLAGE MAUJA RAUNI AND S ECOND IN VILLAGE JHARMARI. THE ASSESSEE HAD REFLECTED THE CA PITAL GAINS EARNED ON THE SAME AS AGRICULTURAL INCOME AND CLAIM ED THE ENTIRE AMOUNT AS EXEMPT FROM TAX. ON BEING QUESTION ED, THE ASSESSEE SUBMITTED THAT IT HAD FILED A REVISED RETU RN IN WHICH THE SAID CAPITAL GAINS HAD BEEN RETURNED TO TAX BUT THE A.O. NOTED THAT NO REVISED RETURN HAD BEEN FILED AND ONL Y A REVISED COMPUTATION SHEET HAD BEEN FILED. HE, THEREFORE, MA DE ADDITION OF THE LONG TERM CAPITAL GAIN EARNED IN THE ITA NO.218/CHD/2017 A.Y.2012-13 14 SAID LAND AFTER ALLOWING BENEFIT OF INDEXATION AMOU NTING TO RS.39,47,923/-. 19. THE ASSESSEE FILED APPEAL AGAINST THE SAID ADDI TION AND CONTENDED THAT IT HAD DECLARED LONG TERM CAPITAL GA IN UNDER A MIS-PLACED BELIEF THAT THE IMPUGNED LANDS W ERE IN THE VICINITY OF THE MUNICIPALITY CORPORATION AND, T HEREFORE, SUBJECTED TO CAPITAL GAIN. THE ASSESSEE CONTENDED T HAT IN FACT THE LANDS IN QUESTION WERE IN TEHSIL DERABASSI , WHICH WAS PART OF DISTRICT PATIALA AND SUBSEQUENTLY WHICH BECAME PART OF MOHALI. THE ASSESSEE SUBMITTED THAT AS PER THE NOTIFICATION NO.9447 DATED 6.1.1994 NO AREA OF DERA BASSI, ZIRAKPUR OR LALRU WAS DESCRIBED AS CAPITAL ASSET WI THIN THE MEANING OF SECTION 2(14) OF THE ACT. THE ASSESSEE F ILED ADDITIONAL EVIDENCE FROM THE OFFICE OF NAGAR PANCHA YAT, LALRU. THE LD.CIT(A) SENT THE ADDITIONAL EVIDENCE T O THE A.O. FOR HIS COMMENTS WHO OBJECTED THE ADMISSION OF THE SAME AND FURTHER STATED THAT SINCE THE ASSESSEE HAD HIMS ELF SURRENDERED PROFITS, THE ADDITION HAD BEEN RIGHTLY MADE. THE CIT(A) ADMITTED THE ADDITIONAL EVIDENCE FILED, BUT DISMISSED THE CLAIM OF THE ASSESSEE STATING THAT THE ASSESSEE WAS CONFUSING THE WHOLE ISSUE BY FIRST RETURNING THE CA PITAL GAINS TO TAX AND THEREAFTER CLAIMING THE SAME AS EXEMPT W ITHOUT FILING ANY CREDIBLE EVIDENCE TO SHOW THAT THE LANDS SOLD WERE NOT CAPITAL ASSETS. RELEVANT FINDINGS OF THE LD.CIT (A) AT PARAS 8.2 TO 8.3.1 ARE AS UNDER: 8.2 DURING APPEAL PROCEEDINGS APPELLANT SUB MITTED THAT WHILE FILING REVISED COMPUTATION BEFORE ASSE SSING OFFICER ASSESSEE HAD SHOWN LONG TERM CAPITAL GAINS ON SALE O F AGRICULTURE LANDS ON THE PRESUMPTION THAT THE AGRICULT URE LANDS ITA NO.218/CHD/2017 A.Y.2012-13 15 WERE IN THE VICINITY OF MUNICIPAL CORPORATION. APPEL LANT SUBMITTED THAT ASSESSEE HAS DECLARED LONG TERM CAPI TAL GAINS ON SALE OF AGRICULTURE LAND UNDER MISPLACED BELIEF THA T PROFIT ON SALE OF AGRICULTURE LAND IN THE VICINITY OF MUNICI PAL CORPORATION IS SUBJECT TO LONG TERM CAPITAL GAIN. IT WA S SUBMITTED THAT ASSESSEE SOLD LAND IN VILLAGE MAUJA R AUNI AND THE SECOND PIECE OF LAND WAS SOLD IN VILLAGE JHARMARI. TH E LAND IN QUESTION WAS IN TEHSIL DERABASSI WHICH WAS PART OF DISTRICT PATIALA AND SUBSEQUENTLY T HIS BECAME PART OF DISTT. MOHALI, APPELLANT SUBMITTED T HAT AS PER NOTIFICATION NO. 9447 DATED 06.01.1994 NO AREA OF DERABASSJOR ZIRAKPUR OR LALRU WAS DESCRIBED AS CAPITA L ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT . APPELLANT FILED ADDITIONAL EVIDENCE A LETTER RECEIVED FROM OFF ICE OF NAGAR PANCHAYAT, LALRU, COPY OF NOTIFICATION AND COPIES OF LETTER SEEKING RTI QUARRIES AND SUBMITTED THAT THE SAME BE ADMITTED UNDER RULE 46A OF THE INCOME TAX RULES, 196 2. 8.3 THE ADDITIONAL EVIDENCE SUBMITTED BY ASSESSEE ALONGWITH SUBMISSION WERE FORWARDED TO A.O AS REQUI RED UNDER INCOME TAX RULES, 1962, ASSESSING OFFICER SUBMITTED A REMAND REPORT DATED 20.10.2016 AND OBJE CTED FOR THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND T HAT ASSESSEE'S CASE DOES NOT FALL IN ANY OF THE EXEMPTION S PROVIDED UNDER RULE 46A. ON MERITS THE REPORT OF TH E A.O AS UNDER- 'IN APPEAL, IT HAS BEEN SUBMITTED THAT THE ASSESSEE H AD SOLD TWO AGRI. LANDS ONE IN VILLAGE MAUJA RAUNI AND SECOND IN VILLAGE JHARMARI, TEHSIL DERABASSI THEN DISTT. PATIALA. IT HAS ALSO BEEN STATED THAT AT THE TIME O F FILING THE RETURN AS WELL AS TILL THE REVISED COMPUTATION CHA RT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS NOT HAVING ANY DEFINITE EVIDENCE THAT THE LANDS SOLD FALL IN THE M.C. LIMITS OF THE RELEVANT TOWNS THEREFORE, THE ASSESSEE FILED AN APPLICATION BEFORE EXECUTIVE OFFICER OF MC DERA BASSI AND LALRU ON 18.11.2015. A COPY OF LETTER, RECEIVED FROM EXECUTI VE OFFICER. LALRU NAGAR PANCHAYAT HAS BEEN FILED WHEREIN IT HAS BEEN STATED THAT VILLAGE JHARMAH DO NOT FALL WITHIN THE L IMITS OF NAGAR PANCHAYAT LALRU. IT HAS, THEREFORE, BEEN CLAI MED THAT THE LAND SOLD IN VILLAGE JHARMARI WAS NOT A CAPITAL AS PROVISIONS OF SECTION 2(14) OF THE ACT AND THE PROFIT ON SALE OF THIS LAND IS NOT TAXABLE AS LONG TERM CAPITAL GAINS . AS REGARDS LAND SOLD IN VILLAGE MAUJA RAUNI, IT HAS BEEN S TATED THAT NO REPLY HAS BEEN RECEIVED FROM M.C. DERA BASSI. IT HAS ALSO BEEN ALLEGED THAT THE ASSESSING OFFICER AT NO STAGE HAS BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT TH E LAND SOLD WAS A CAPITAL ASSET WITHIN THE MEANING OF SECT ION 2(14) OF THE ACT. IT IS SUBMITTED THAT THE ASSESSEE HAD HERSELF SURREND ERED THE PROFITS EARNED ON THE SALE AGRI. LAND AS LONG TERM CAPITAL GAINS, THEREFORE, A.O WAS JUSTIFIED TO MAKE ADDIT ION ON THIS COUNT. IT WAS OBLIGATORY ON THE PART OF THE ASSESSEE TO ADDUCE EVIDENCE TO THE EFFECT THAT THE SAME ITA NO.218/CHD/2017 A.Y.2012-13 16 WERE NOT THE CAPITAL ASSETS.' 8.3.1 THE REMAND REPORT OF ASSESSING OFFICER WAS GIVE N TO APPELLANT FORM MAKING SUBMISSION. SUBMISSION OF THE APPELLANT, REMAND REPORT OF THE A.O AND ASSESSMENT ORD ER HAVE BEEN CONSIDERED CAREFULLY. THE ADDITIONAL EVID ENCE FILED ARE ADMITTED IN THE INTEREST OF NATURAL JUSTICE AND ADJUDICATED. APPELLANT HAS FILED A LETTER FROM NAGAR PANCHAYAT L ALRU STATING THAT THE VILLAGE JHARMARI IS OUTSIDE THE LIMIT OF NA GAR PANCHAIAT LALRU. NO EVIDENCE HAS BEEN FILED WITH REGARD TO THE LAND SOLD AT VILLAGE MAUJA THE CONTENTION OF THE APPELLANT THAT T HE LAND SOLD IS NOT AN ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT IS NOT ACCEPTABLE AS THE APPELLANT HAS NOT BROUGHT ON REC ORD COGENT AND RELIABLE EVIDENCE TO SATISFY ALL THE ING REDIENTS TO ESTABLISH THAT THE LANDS SOLD ARE NOT CAPITAL ASSET F OR THE PURPOSE OF SECTION 45 OF THE ACT. THE APPELLANT HAS HERSELF ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDING THAT THE LANDS SOLD ARE NOT CAPITAL ASSET AND OFFERED LONG TE RM CAPITAL GAINS ON THE SAME BY FILING A REVISED COMPUTATION B EFORE THE ASSESSING OFFICER. THE APPELLANT IS CONFUSING THE WHOLE ISSUE AND FROM THE EVIDENCE FILED IT HAS NOT BEEN ESTABLI SHED THAT THE LANDS SOLD ARE NOT CAPITAL ASSET. THEREFOR E, A.O HAS RIGHTLY COMPUTED LONG TERM CAPITAL GAINS ON THE SALE THESE LANDS AND THE SAME IS UPHELD. GROUND OF APPEAL NO. 4 IS DISMISSED. 20. BEFORE US, THE LD. COUNSEL FOR ASSESSEE CONTEND ED THAT THE IMPUGNED LANDS DID NOT FALL WITHIN THE PRESCRIB ED LIMITS OF ANY MUNICIPALITY CORPORATION AS SPECIFIED IN THE NOTIFICATION ISSUED IN THIS REGARD AND, THEREFORE, WERE NOT CAPITAL ASSETS. 21. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A). 22. WE HAVE HEARD THE RIVAL CONTENTIONS. THE ISSUE BEFORE US RELATES WHETHER THE IMPUGNED LANDS SOLD WERE CAP ITAL ASSETS WITHIN THE DEFINITION OF THE SAME AS PROVIDE D U/S 2(14) OF THE ACT. THE ISSUE RELATES TO A FINDING OF FACT TO BE ESTABLISHED ON THE BASIS OF THE DEFINITION OF THE C APITAL ASSET U/S 2(14) OF THE ACT READ WITH THE NOTIFICATION ISS UED BY THE CBDT IN 1994. NONE OF THE LOWER AUTHORITIES, NOR T HE ASSESSEE, WE FIND, HAS CATEGORICALLY ESTABLISHED TH E FACT ITA NO.218/CHD/2017 A.Y.2012-13 17 RELATING TO THE SAME. THE ASSESSEE HAS CONTENDED TH AT IT DID NOT FALL IN ANY OF THE MUNICIPALITY LIMITS SPECIFIE D IN THE CBDT CIRCULAR. THE REVENUE HAS DISMISSED THIS CONTE NTION MERELY BY STATING THAT NO EVIDENCE HAS BEEN FILED B Y THE ASSESSEE TO PROVE THAT ITS ASSET IS NOT A CAPITAL A SSET. SINCE THE ISSUE INVOLVES SIMPLE RECORDING OF FINDING OF F ACT WHETHER THE ASSET WAS CAPITAL ASSET OR NOT WHICH, WE FIND, IS ABSENT IN THE PRESENT CASE, WE CONSIDER IT FIT TO RESTORE THE ISSUE BACK TO THE A.O. TO DETERMINE WHETHER THE IMPUGNED LANDS SOLD QUALIFIED AS CAPITAL ASSET OR NOT AS PER THE D EFINITION PROVIDED U/S 2(14) OF THE ACT AND THEREAFTER ADJUDI CATE THE ISSUE BY PASSING A SPEAKING ORDER IN THIS REGARD. THE GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 23. IN EFFECT, THE APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- # $ % &' (SANJAY GARG ) (ANNAPURNA GUPTA) / JUDICIAL MEMBER ( / ACCOUNTANT MEMBER *# /DATED: 28 TH FEBRUARY, 2019 * ' * &) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $ 0 , 123/4 / DR, ITAT, CHANDIGARH 6. /3 5# / GUARD FILE &) ' / BY ORDER, ! / ASSISTANT REGISTRAR