Shri Basant Makhija, Gwalior V. A.C.I.T. Circle-I, Gwalior

ITA 23/AGR/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8507 (ITAT-AGRA)
• Duration Of Justice: 4 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 54B; 54

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 23/AGR/2015 ASSESSMENT YEAR: 2008-09 BASANT MAKHIJA, PRO P . JAI GURDEV ENTERPRISES, MADHOGANJ, LASHKAR, GWALIOR. (PAN: ADYPM9235G) (APPELLANT) VS. ACIT, CIRCLE - 1, GWALIOR. (RESPONDENT) ITA NO. 33/AGR/2015 ASSESSMENT YEAR: 2010-11 ACIT, CIRCLE - 1, GWALIOR. (APPELLANT) VS. BASANT MAKHIJA, PRO P . JAI GURDEV ENTERPRISES, MADHOGANJ, LASHKAR, GWALIOR. (PAN: ADYPM9235G) (RESPONDENT) C.O. NO.15/AGR/2016 (IN ITA NO. 33/AGR/2015 ASSESSMENT YEAR: 2010-11 BASANT MAKHIJA, PRO P . JAI GURDEV ENTERPRISES, MADHOGANJ, LASHKAR, GWALIOR. (APPELLANT) VS. ACIT, CIRCLE - 1, GWALIOR. (RESPONDENT) A SSESSEE BY SHRI ANURAG SINHA, ADVOCATE RE VENUE BY SHRI WASEEM ARSHAD, SR. DR DATE OF HEARING 03.07.2019 DATE OF PRONOUNCEMENT 04 .07.2019 ITA NO. 23, 33/AGR/2015 & CO 15/AGR/2016 2 ORDER PER BENCH: PRESENT APPEALS AND CROSS OBJECTIONS ARE BEING FI LED BY THE ASSESSEE AND THE REVENUE, FEELING AGGRIEVED BY THE ORDERS OF THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2008-09 AND 2010-11. THE GROUND RAISED IN A.Y. 2008 -09 READ AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED CIT(A) ERRED IN NOT ALLOWING REBATE/DEDUCTION U/S. 54B RS.24,70,000/- A S CLAIMED BY THE APPELLANT IS ILLEGAL UNJUSTIFIED AND BAD IN LAW. 2. THE LD. AR HAS DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE ASSESSING OFFICER WHERE THE ASSESSING OFFICER HAS DEALT WITH THE ISSUE OF DISALLOWANCE OF EXEMPTION U/S. 54 IN PARA 4 TO THE FOLLOWING EFFEC T : ISSUE OF DISALLOWING THE REBATE/EXEMPTION FROM LO NG TERM CAPITAL GAIN: ASSESSEE SOLD AGRICULTURE LAND FOR RS. 88,38,000/- SITUATED AT KEDAR PUR. THIS 7 BIGHA AGRICULTURE LAND WAS PURCHASED ON 16.09.1997 FOR RS . 4,27,778/- WHICH HAS THE PRICE OF RS. 7.12.102/- AS PER COST INFLATION INDEX. AFTER INCLU DING THE COST OF CONSTRUCTION (RS. 2,30..000/- IN 2002-03, AS PER COST INFLATION INDEX RS. 2,83,512/-) THIS LAND HAD PURCHASE VALUE OF RS. 9.95.614/- AND WAS SOLD ON 12.04.2007 FOR RS. 88.38,000/-. SO THIS WAY ASSESSEE RECEIVED RS, 78,42,386/- AS CAPITAL GAIN A ND TO GET EXEMPTION/REBATE FROM THIS CAPITAL GAIN ASSESSEE PURCHASED ANOTHER' AGRICULTUR E LAND AT KEDAR PUR FOR RS. 11.70,000/- AND AT VILLAGE HAVELI (PUNA) FOR RS. 13,00,000/- A ND HE SURRENDERED REMAINING SUM RS. 53,72,386/- FOR TAXABLE CAPITAL GAIN. BUT THERE ARE SOME REASONS ACCORDING TO INCOME TAX LAW ON WHICH THE REBATE/EXEMPTION TAKEN BY ASSESSEE CAN BE DISALLOWED. ACCORDING TO S ECTION 54B OF IT ACT. IT IS WRITTEN VERY CLEARLY 'WHERE THE CAPITAL GAIN ARISES FROM THE TR ANSFER OF A CAPITA! ASSET (ORIGINAL ASSET), BEING LAND WHICH IN THE TWO YEARS IMMEDIATELY PRECE EDINGS THE DATE ON WHICH THE TRANSFER LOOK PLACE WAS BEING USED BY THE ASSESSEE OR PARENT OF HIS FOR AGRICULTURE PURPOSES. THE LAND WHICH WAS SOLD BY THE ASSESSEE IS NOT AGRICULT URE LAND BECAUSE IN THE KHASRA KHATONI REPORT (FORM P-II) ALSO PROVES THAT IN F.Y. 2006-07 , THERE WAS NO USE OF THIS LAND FOR AGRICULTURE PURPOSE. THE ANOTHER FACT WHICH IS AGA INST THE ASSESSE'S CLAIM IS THAT IN THE RETURN FILED BY THE ASSESSEE IN ASSESSMENT YEAR 200 7-08 AND 2008-09 (F.Y. 2006-07 & 2007-08) THE AGRICULTURE INCOME WAS NOT SHOWN BY TH E ASSESSEE. WHEN ASSESSEE WAS ASKED TO PRODUCE THE BILLS AND VOUCHERS REGARDING E XPENDITURE INCURRED FOR AGRICULTURE PRODUCTS WHICH WERE NOT PRESENTED BY HIM. THE LAND WHICH WAS SOLD BY ASSESSEE IS NOT AGRICULTURE LAND BECAUSE IN THE SALE DEED DATED 12. 04.2007 IT IS WRITTEN THAT THIS AGRICULTURE LAND IS SITUATED IN JURISDICTION OF GWALIOR MUNICIP AL CORPORATION. THIS IS MENTIONED VERY ITA NO. 23, 33/AGR/2015 & CO 15/AGR/2016 3 CLEARLY IN THE SECTION 2(14)(III) 'AGRICULTURE LAND IN INDIA NOT BEEN LAND SITUATED I N ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF MUNIC IPALITY/MUNICIPAL CORPORATION OR IN ANY AREA WITHIN SUCH DISTANCE NOT BEING MORE THAN EIGHT KM. FROM THE LOCAL LIMITS OF ANY SUCH MUNICIPALITY/MUNICIPAL CORPORATION- ' SO ON THE BASIS OF ABOVE ARGUMENTS IT CAN BE SAID T HAT THE ASSESSEE RECEIVED CAPITAL GAIN ONLY FROM TRANSF ER OF CAPITAL ASSETS AND WHICH IS NOT IN THE DEFINITION OF AGRICULTURE LAND SO WHOLE OF THE AMOUNT RECEIVED FROM TRANSFER OF THIS LAND SHOULD BE TAXABLE AND ASSESSEE HAS NO SUFFICIENT RE ASONS FOR TAKING THE REBATE/EXEMPTION FROM THIS LAND. THE SECOND REASON IS THAT ASSESSEE PURCHASED ANOTHE R LAND SITUATED AT KEDAR PUR ON DATED 16.03.2007, THIS DATE FALLS BEFORE THE DATE OF SALE THE ORIGINAL ASSETS WHICH IS 12.04.2007, IN THE SECTION 548 IT IS WRITTEN VERY CLEARLY THAT 'TH E. ASSESSEE HAS WITHIN A PERIOD OF 2 YEARS AFTER THAT DATE PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURE PURPOSES '. IT MEANS ASSESSEE CAN CLAIM FOR REBATE/EXEMPTION ONLY FOR TH AT LAND WHICH WAS PURCHASED AFTER THE SALE OF ORIGINAL ASSETS BUT ACCORDING TO REGISTER D EED OF PURCHASE AND SALE THIS FACT COMES IN TO NOTICE THAT ASSESSEE SOLD THE ORIGINAL ASSETS ON 12.04.2007 (A.Y. 2008-09) BUT PURCHASE THE LAND ON 16.03.2007 (A.Y. 2007-08) JUST BEFORE O NE MONTH AND THIS LAND ALSO REFLECTED IN THE SCHEDULE OF FIXED ASSETS OF BALANCE SHEET AS ON 31.03.2007. SO ON THE BASIS OF ABOVE MENTIONED TACT THE CLAIM OF ASSESSEE FOR TAKEN THE REBATE OF THIS LAND CANNOT BE ACCEPTED. THE THIRD REASON IS THAT ASSESSEE PURCHASED ANOTHER LAND SITUATED THAT VILLAGE HAVELI (PUNA) ON DATED 07.11.2007 FOR RS. 13.00.000;- ALONG WITH DEVELOPMENT AGREEMENT AND POWER OF ATTORNEY. BUT THIS LAND MAX BE AGRICULTURE LAND BUT ACCORDING TO DEVELOPMENT AGREEMENT ATTACHED TO THE REGISTERED DEED OF THIS LAND IT IS WRITTEN THAT THIS LAND WILL BE USED FOR COMMERCIAL PURPOSE IN THE NATURE OF FLATS/SHOPS/GOD OWNS/BUILDING/PARKING PLACE. THE LANGUAGE DEVELOPMENT AGREEMENT IS AGAINST THE SPIRI T OF SECTION 54B OF I. T. ACT. THIS SECTION (54B) PROVIDES THE REBATE/EXEMPTION FROM CA PITAL GAIN RECEIVED FROM TRANSFER OF AGRICULTURE LAND TO THE FARMERS ONLY. BUT ACCORDING TO DEVELOPMENT AGREEMENT AND REGISTERED DEED WHICH WAS SIGNED BY ASSESSEE HOLDIN G THE POWER OF ATTORNEY ON BEHALF OF ORIGINAL SELLER MR. BAJANDAS KASHINATH BANKAR THIS LAND HAS COMMERCIAL AND CAPITALISTIC NATURE/INTENTIONS AND MISUSE OF THIS SECTION WHICH IS WHOLLY AND EXCLUSIVELY FOR THE RELIEF/BENEFIT FOR THE FARMERS ONLY. SO THE CLAIM O F EXEMPTION ON THE BASIS OF PURCHASE OF THIS LAND BY ASSESSEE IS DISALLOWED. SO ON THE BASIS OF ABOVE DISCUSSION ASSESSEE IS NOT AUTHORIZED TO TAKE THE REBATE BY PURCHASE OF AFORESAID LANDS WORTH RS.24,70,000/- (1 1,70,000 +13,00,000) AND THIS SUM IS DISALLOWED AND ADDED BACK IN THE ASSESSEES TOTAL I NCOME. ITA NO. 23, 33/AGR/2015 & CO 15/AGR/2016 4 HE HAS FURTHER SUBMITTED THAT FEELING AGGRIEVED FRO M THE ORDER OF LD. CIT(A) AND THE COMMISSIONER IN HIS ORDER HAS REPRODUCED THE SUBMIS SIONS OF THE ASSESSEE IN PARA 3.2 AND RECORDED HIS FINDING IN PARA 3.3 TO THE FOL LOWING EFFECT : 3.3. AFTER GOING THROUGH THE ASSESSMENT ORDER AND W RITTEN SUBMISSIONS, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS NOT FU LFILLED THE CONDITIONS LAID DOWN U/S. 54B FOR CLAIMING DEDUCTION. HENCE, THE A. O. HAS RIGHTLY DISALLOWED THE CLAIM OF THE APPELLANT. HENCE, THE DISALLOWANCE OF RS.24,70,000/- IS HEREBY CONFIRMED. FEELING AGGRIEVED, THE ASSESSEE IS BEFORE US. 3. AT THE OUTSET IT IS SUBMITTED BY THE LD. AR OF T HE ASSESSEE THAT THE ASSESSEE HAS RAISED ELABORATE LEGAL GROUNDS WHICH ARE SUBSTANTIA TED BY THE FACTUAL BACKING. HOWEVER, THE LD. CIT(A) WHILE DECIDING THE GROUNDS HAS PASSED THE ORDER IN A CRYPTIC AND STEREOTYPE MANNER. 4. PER CONTRA, THE LD. DR RELIED UPON THE ORDER OF THE LOWER AUTHORITY. 5. WE HAVE HEARD THE RIVAL CONTENTION AND ALSO THE JUDGMENTS RELIED UPON BY THE PARTIES. FROM THE PERUSAL OF PARAGRAPH 3.3 OF THE O RDER OF THE LD.CIT(A), IT IS CRYSTAL CLEAR THAT THE LD.CIT(A) HAS DECIDED THE APPEAL IN A SLIP SHOD MANNER AND HAS NOT GIVEN ELABORATE REASONS DEALING WITH THE CONTENTION S RAISED BY THE ASSESSEE ON FACTS AS WELL AS ON LAW. THUS, THE ORDER PASSED BY THE LD .CIT(A) IS CRYPTIC, STEREOTYPE AND NON-SPEAKING. IT IS EXPECTED FROM THE FIRST APPELLA TE AUTHORITY TO GIVE ELABORATE REASON FOR COMING TO THE CONCLUSION AND SHOULD NOT DECIDE THE ISSUE SUMMARILY. IN THE LIGHT OF THE ABOVE, WE HEREBY REMAND ALL THE AP PEALS TO THE FILE OF THE LD. CIT(A) TO DECIDE THE APPEALS AFRESH. IT IS EXPECTED THAT T HE LD. CIT(A) WHILE DECIDING THE APPEALS SHALL GIVE DUE OPPORTUNITY OF HEARING TO TH E ASSESSEE AND SHALL ALSO GIVE ITA NO. 23, 33/AGR/2015 & CO 15/AGR/2016 5 SUFFICIENT TIME TO FILE THE DOCUMENTS IF ANY REQUIR ED BY THE ASSESSEE. NEEDLESS TO SAY, IN CASE THE ASSESSEE FILES DOCUMENTS, THEN THE LD. CIT(A) SHALL SEEK THE REMAND REPORT FROM THE ASSESSING OFFICER AND SHALL PASS SP EAKING ORDER DEALING WITH EACH AND EVERY CONTENTION RAISED BY THE ASSESSEE. WE EXP ECT THAT THE LD. CIT(A) SHALL DECIDE THE APPEALS OF THE ASSESSEE AT THE EARLIEST AND NOT LATER THAN ONE YEAR FROM THE RECEIPT OF THIS ORDER. ACCORDINGLY, THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEALS AND CROSS OBJECTION A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA