The ITO, Wd-1(4),Tvm, Trivandrum V. Smt.GirijaKumari M., Trivandrum

ITA 236/COCH/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4246 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: G SURENDRANATH RAO
• Keywords: Capital asset; Fair market value
• Section: 54; 6; 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 236 /COCH/201 8 : ASST.YEAR 201 2 - 201 3 THE INCOME TAX OFFICER WARD 1 (4) TRIVANDRUM. VS. SMT.GIRIJAKUMAR I M. PP 14/432, VRINDAVAN POOVACHAL P.O. VEERANAKAVU, TRIVANDRUM - 695 575. PAN : AYMPG 3 1 55E (APPELLANT) (RESPONDENT) CO NO. 50 /COCH/201 8 : ASST.YEAR 2012 - 2013 SMT.GIRIJAKUMAR I M. PP 14/432, VRINDAVAN POOVACHAL P.O. VEERANAKAVU, TRIVANDRUM - 695 575. VS. THE INCOME TAX OFFICER WARD 1 (4) TRIVANDRUM. (APPELLANT) (RESPONDENT) REVENUE BY : SMT.A.S.BINDHU, SR.DR ASSESSEE BY : SRI. G.SURENDRANATH RAO DATE OF HEARING : 08.10 .2018 DATE OF PRONOUNCEMENT : 10 .10.2018 O R D E R PER GEORGE GEORGE K., JM THIS APPEAL AT THE INSTANCE OF THE REVENUE AND THE CROSS OBJECTION PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMISSIONER OF INCOME - TAX (APPEALS) S ORDER D ATED 26.03.2018 . THE RELEVANT ASSESSMENT YEAR IS 201 2 - 201 3 . 2. IN THE REVENUES APPEAL, THE SOLITARY ISSUE THAT WAS RAISED IS, WHETHER LAND THAT WAS ACQUIRED, WAS ENTITLED TO THE BENEFIT OF SECTION 10(37) OF THE INCOME - TAX ACT? ITA NO. 236 & CO 50 / COCH /201 8 . SMT. GIRIJAKUMARI M . 2 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE WAS IN POSSESSION OF 70 CEN TS OF LAND AT VIZHINJAM VILLAGE. THE SAME WAS SOLD BY EXECUTING A SALE DEED IN FAVOUR OF VIZHINJAM INTERNATIONAL SEAPORT FOR A TOTAL CONSIDERATION OF RS.1,32,81,555. FOR THE ASSESSMENT YEAR 2012 - 2013, THE ASSESSEE FILED RETURN OF INCOME CLAIMING THE ENTIRE SALE CONSIDERATION RECEIVED AS EXEMPT FROM TAX. IT WAS CLAIMED THAT THE SAID PROPERTY, WHICH WAS TAKEN OVER BY VIZHINJAM INTERNATIONAL SEAPORT, WAS AN AGRICULTURAL LAND AND WAS COMPULSORILY ACQUIRED BY THE GOVERNMENT OF KERALA . T HEREFORE, IT WAS SUBMITTED THAT THE ASSESSEE WAS ENTITLED TO PROVISIONS OF SECTION 10(37) OF THE I.T.ACT. THE ASSESSING OFFICER, HOWEVER, REJECTED THE CONTENTIONS OF THE ASSESSEE AND COMPLETED THE ASSESSMENT U/S 1 43(3) R.W.S. 147 OF THE I.T.ACT, VIDE ORDER DATED 31.03.2015, WHEREIN THE A.O. HAD WORKED OUT THE LONG TERM CAPITAL GAIN S AT RS.1,02,65,858. IT WAS HELD BY THE A.O. THAT THE LAND TRANSFERRED FALLS WITHIN THE LIMIT OF TRIVANDRUM MUNICIPAL CORPORATION AND THE ASSESSEES CLAIM FOR EXEMPTION U/S 10(37) OF THE I.T.ACT WAS NOT AD MISSIBLE FOR THE REASON THAT IT WAS NOT A COMPULSORY ACQUISITION, BUT A SALE THROUGH NEGOTIATED SETTLEMENT. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) , BY FOLLOWING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF BALAKRISHNAN V. UNION OF INDIA [ (20 17) 391 ITR 178 (SC)] , HELD THAT THE ASSESSEE WAS ENTITLED TO THE BENEFIT OF SECTION 10(37) OF THE I.T.ACT, AND HENCE, WOULD NOT BE LIABLE ITA NO. 236 & CO 50 / COCH /201 8 . SMT. GIRIJAKUMARI M . 3 FOR LONG TERM CAPI TAL GAINS ON THE ACQUISITION OF THE IMPUGNED LAND. 5. THE REVENUE BEING AGGRIEVED, HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED ON THE ASSESSMENT ORDER. THE LEARNED AR, ON THE OTHER HAND, SUBMI TTED THAT LAND WHICH WAS ACQUIRED BY THE VIZHINJAM INTERNATIONAL SEAPORT , WAS ADMITTEDLY AGRICULTURAL LAND . IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD GRANTED THE BENEFIT OF DEDUCTION U/S 54B OF THE I.T.ACT FOR SALE PROCEEDS OF IMPUGNED LAND. IT WAS S TATED THAT THE ONLY REASON FOR THE ASSESSING OFFICER TO DENY THE BENEFIT OF SECTION 10(37) OF THE I.T.ACT WAS THAT THE LAND IN QUESTION WAS NOT COMPULSORILY ACQUIRED, BUT BY EXECUTING A SALE DEED IN FAVOUR OF VIZHINJAM INTERNATIONAL SEAPORT. IN THIS CONTEX T, THE LEARNED AR SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENTS OF THE HONBLE APEX COURT IN THE CASE OF BALAKRISHNAN V. UNION OF INDIA [(2017) 391 ITR 178 (SC)] AND UNION OF INDIA V. INFOPARK KERALA [81 TAXMANN.C OM 51 (SC)]. IT WAS CONTENDED THAT THE HONBLE APEX COURT IN ABOVE CASES HAD CLEARLY HELD THAT SINCE THE ENTIRE PROCEDURE FIXED UNDER LAND ACQUISITION ACT WAS FOLLOWED, THE CHARACTER OF ACQUISITION FROM THAT OF COMPULSORY ACQUISITION TO VOLUNTARY SALE WOUL D NOT CHANGE THOUGH THE PRICE WAS FIXED ON NEGOTIATED SETTLEMENT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEES 70 CENTS OF LAND AT VIZHINJAM VILLAGE WAS NOTIFIED FOR COMPULSORY ACQUISITION BY ITA NO. 236 & CO 50 / COCH /201 8 . SMT. GIRIJAKUMARI M . 4 GOVERNMENT OF KERA LA FOR DEVELOPING VIZHINJAM INTERNATIONAL SEAPORT . THOUGH THE ACQUISITION PROCEEDINGS WERE TAKEN UNDER THE LAND ACQUISITION ACT, THE FINAL PRICE WAS FIXED UPON NEGOTIATED SALE AGREEMENT. THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54B OF THE I.T.ACT. SECTION 54B OF THE I.T.ACT PROVIDES FOR A DEDUCTION ON ACCOUNT OF TRANSFER OF LAND USED FOR AGRICULTURAL PURPOSE AND FOR PURCHASE OF ANOTHER AGRICULTURAL LAND. THEREFORE, ADMITTEDLY, WHEN DEDUCTION HAS BEEN GRANTED U/S 54 B OF THE I.T.ACT, TH E A.O. ALSO CATEGORICALLY ADMITTED THAT THE LAND SOLD WAS AN AGRICULTURAL LAN D. THE A.O., HOWEVER, NOTICED THAT THE LAND WAS WITHIN TRIVANDRUM MUNICIPAL CORPORATION, AND THEREFORE, WOULD BE AN URBAN AGRICULTURAL LAND FALLING WITHIN THE PROVISIONS OF SECTION 2(14)( III ) OF THE I.T.ACT. THE ONLY REASON FOR THE A.O. TO DENY THE BENEFIT OF SECTION 10(37) WAS THA T THE IMPUGNED LAND WAS ACQUIRED BY EXECUTING A SALE DEED IN FAVOUR OF VIZHINJAM INTERNATIONAL SEAPORT AND IT WAS NOT A CASE OF COMPULSORY ACQUISITION. THE HONBLE APEX COURT IN THE CASE OF BALAKRISHNAN V. UNION OF INDIA & OTHERS (SUPRA) HAD CATEGORICALLY HELD MERELY BECAUSE THE SALE PRICE WA S FIXED THROUGH A NEGOTIATED SETTLEMENT , THE CHARACTER OF ACQUISITION WOULD STILL REMAIN COMPULSORY. THE RELEVANT FINDING OF THE HONBLE APEX COURT READS AS FOLLOWS: - 8. IN OUR VIEW, INSOFAR AS ACQUISITION OF THE LAND IS CONCERNED, THE SAME WAS COMPULSORILY ACQUIRED AS THE ENTIRE PROCEDURE PRESCRIBED UNDER THE LA ACT WAS FOLLOWED. THE SETTLEMENT TOOK PLACE ONLY QUA THE AMOUNT OF THE COMPENSATION WHICH WAS TO BE RECEIVED BY THE APPELLANT FOR T HE LAND WHICH HAD BEEN ACQUIRED. IT GOES WITHOUT SAYING THAT HAD STEPS ITA NO. 236 & CO 50 / COCH /201 8 . SMT. GIRIJAKUMARI M . 5 NOT BEEN TAKEN BY THE GOVERNMENT UNDER SECTIONS 4 AND 6 FOLLOWED BY AWARD UNDER SECTION 9 OF THE LA ACT, THE APPELLANT WOULD NOT HAVE AGREED TO DIVEST THE LAND BELONGING TO HIM TO TECHN O PARK. HE WAS COMPELLED TO DO SO BECAUSE OF THE COMPULSORY ACQUISITION AND TO AVOID LITIGATION ENTERED INTO NEGOTIATIONS AND SETTLED THE FINAL COMPENSATION. MERELY BECAUSE THE COMPENSATION AMOUNT IS AGREED UPON WOULD NOT CHANGE THE CHARACTER OF ACQUISITIO N FROM THAT OF COMPULSORY ACQUISITION TO THE VOLUNTARY SALE. IT MAY BE MENTIONED THAT THIS IS NOW THE PROCEDURE WHICH IS LAID DOWN EVEN UNDER THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013 AS PER WHICH THE COLLECTOR CAN PASS REHABILITATION AND RESETTLEMENT AWARD WITH THE CONSENT OF THE PARTIES / LANDOWNERS. NONETHELESS, THE CHARACTER OF ACQUISITION REMAINS COMPULSORY. 6 .1 IN THE INSTANT CASE, THE ENTIRE PROCEDURE PRESCRIBED UNDER THE LAND AC QUISITION ACT WAS FOLLOWED, ONLY PRICE WAS FIXED UPON A NEGOTIATED SETTLEMENT. THEREFORE, IN VIEW OF THE ABOVE JUDGMENT OF THE HONBLE APEX COURT (SUPRA), WE HOLD THAT THE ACQUISITION OF THE URBAN AGRICULTURAL LAND WAS A COMPULSORY ACQUISITION AND THE SAME WOULD BE ENTITLED TO THE BENEFIT ENUMERATED IN SECTION 10(37) OF THE I.T.ACT. IT IS ORDERED ACCORDINGLY. CO NO.50/COCH/2018 7 . THE ONLY GROUND RAISED IN THE CO FILED BY THE ASSESSEE IS THAT THE FAIR MARKET VALUE AS ON 01.04.1981 FIXED FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS, IS LOW. SINCE WE HAVE ALREADY DISMISSED THE REVENUES APPEAL, THE COMPUTATION ASPECT WHIC H IS RAISED IN THE CO IS RENDERED ITA NO. 236 & CO 50 / COCH /201 8 . SMT. GIRIJAKUMARI M . 6 INFRUCTUOUS, AND HENCE, THE CO IS DISMISSED AS INFRUCTUOUS. IT IS ORDERED ACCORDINGLY. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CO PREFERRED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF OCTOBER, 2018 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 10 TH OCTOBER, 2018 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A) TRIVANDRUM. 4. THE CIT TRIVANDRUM. 5. DR, ITAT, COCHIN 6 . GUARD FILE.