Dilip Jayawant Palkar, Kolhapur V. Income-tax Officer, Ward - 2, Ranagiri

ITA 2476/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9233 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-01-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 25-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P S SHINGTE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Search and seizure; Set aside
• Section: 143(3); 50C; 2(14); 234B; 131; 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.2476/PUN/2017 / ASSESSMENT YEAR : 2006-07 SHRI DILIP JAYAWANT PALKAR, A/P SADAVALI, DEVRUKH, TAL. SANGAMESHWAR, DIST. RATNAGIRI. PAN : BDWPP7952G. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD-2, RATNAGIRI. . / RESPONDENT . / ITA NO.2477/PUN/2017 / ASSESSMENT YEAR : 2006-07 SHRI ARUN JAYAWANT PALKAR, A/P SADAVALI, DEVRUKH, TAL. SANGAMESHWAR, DIST. RATNAGIRI. PAN : BDWPP7950E. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD-2, RATNAGIRI. . / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS ARE FILED BY TWO DIFFERENT ASSESSEES E MANATING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (A) 2, KOLHAPUR BOTH DATED 01.08.2017 FOR THE ASSESSMENT YEAR 2006-07. / DATE OF HEARING : 02.01.2019 / DATE OF PRONOUNCEMENT: 29.03.2019 2 ITA NOS.2476 & 2477/PUN/2017 2. BEFORE US, AT THE OUTSET, BOTH THE PARTIES SUBMITTED THAT THE APPEALS FILED BY TWO ASSESSEES ARE FAMILY MEMBERS AND THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT TH E ASSESSEE AND THE AMOUNTS INVOLVED AND THEREFORE THE SUBMISSIONS MADE BY THEM WHILE ARGUING ONE APPEAL WOULD BE EQUALLY APPLICABLE TO THE OTHER APPEAL ALSO AND THUS, BOTH THE APPEALS CAN BE HEARD TOGETHE R. IN VIEW OF THE AFORESAID SUBMISSIONS OF BOTH THE PARTIES, WE, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER BUT HOWEVER, PROCEED WITH NARRATING THE FACTS IN I TA NO.2476/PUN/2017 IN THE CASE OF DILIP J. PALKAR. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL. AO ON THE BASIS OF AIR INFORMATION RECEIVED FROM THE OFFICE OF CHIEF COMMISSIONER OF INCOME TAX NOTED THAT A PURCHASE DEED WAS REGISTERED IN THE OFFICE OF THE SUB-RE GISTRAR, DEVRUKH ON 11.05.2005 FOR THE FINANCIAL YEAR 2005-06 AND THE VALU E OF THE SAID PROPERTY WAS RS.18 LAKH BUT ASSESSEE DID NOT FILE HIS RETU RN OF INCOME. ASSESSEE WAS THE SELLER OF THE LAND, ACORDINGLY, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 05.03.2009 AND WAS SERVED ON THE ASSESSE E. IN RESPONSE TO THE NOTICE, ASSESSEE FILED RETURN OF INCOME ON 11.02.20 09 DECLARING TOTAL INCOME AT RS. NIL. THE CASE WAS TAKEN UP FOR SCRUT INY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 O F THE ACT VIDE ORDER DT.24.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS.14,34,670/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.01.08.2017 (IN APP EAL NO. 3 ITA NOS.2476 & 2477/PUN/2017 RTB/371/2009-10) DISMISSED THE APPEAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US AND HAS RAISE D THE FOLLOWING GROUNDS : 1. ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE L EARNED CIT (APPEALS) HAS ERRED IN LAW AND ON MERIT IN UPHOLDIN G THE ORDER OF THE ASSESSING OFFICER WHICH HELD THAT THE LAND SOLD BY THE ASSESSEE WAS NOT AN AGRICULTURE LAND AND THEREFORE LIABLE FO R CAPITAL GAIN. 2. ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE LE ARNED CIT (APPEALS) HAS ERRED IN CONFIRMING ADDITIONS MADE ON ACCOUNT OF CAPITAL GAIN OF RS. 14,34,667/ - WHEN THE LAND SOLD WAS NOT A CAPITAL ASSET AS STIPULATED U/S. 2(14) OF THE INCOM E TAX ACT, 1961. 3. ON FACTS AND IN CIRCUMSTANCES IN NOT DECIDING TH E ASSESSEE'S GROUND REGARDING APPLICABILITY OF PROVISIONS OF SEC TION 50C OF THE ACT. 4. ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE LE ARNED CIT (APPEALS) HAS ERRED LAW AND ON MERIT IN LEVYING INT EREST UNDER SECTION 234A, 234B & 234C OF THE ACT. 4. SIMILAR GROUNDS HAVE BEEN RAISED IN ITA NO.2477/PUN/2017. 4.1 ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGET HER. 5. AO ON THE BASIS OF INFORMATION RECEIVED NOTICED THAT AN ANCESTRAL LAND SITUATED AT SADAVALI, TAL SANGAMESHWAR ADMEASURING 0 4-05-18.75 WHICH WAS IN THE NAME OF LATE JAYAWANT GANPAT PALKAR, FAT HER OF THE ASSESSEE WAS TRANSFERRED IN THE NAME OF THE ASSESSEE A ND HIS MOTHER SMT. VIJAYA J. PALKAR AFTER HIS DEATH. THE AFORESAID LAND W AS SOLD BY THE ASSESSEE FOR 18 LAKH TO FIVE PERSONS NAMELY, 1) MANOJ SH ASHIKANT JOSHI, 2) SATISH DAHKU MESTRY, 3) ANIL VITTHAL JOHI, 4) PANKAJ RAJAR AM BANDARKAR AND 5) VIDULA NITIN PUROHIT. SUMMONS U/S 131 O F THE ACT WERE ISSUED AND SERVED ON THE ASSESSEE AND THE STATE MENT OF SMT. VIJAYA J. PALKAR WAS RECORDED AND IT WAS ALSO SIGNED BY THE ASS ESSEE WHEREIN 4 ITA NOS.2476 & 2477/PUN/2017 THEY HAD ADMITTED TO SELLING THE LAND TO FIVE PURCHASERS T HROUGH THE POWER OF ATTORNEY HOLDER SHRI UMESH S. SHETYE AND ADMITT ED TO HAVE RECEIVED RS.18 LAKH. ASSESSEE CLAIMED THE LAND TO BE AN A GRICULTURAL LAND. THE ASSESSEE WAS ASKED TO FURNISH DOCUMENTARY EV IDENCE IN SUPPORT OF HIS CLAIM. AO ON THE BASIS OF 7/12 EXTRACTS WHICH WERE ENCLOSED WITH THE PURCHASE DEED AND ON THE BASIS OF INFOR MATION CALLED FROM TALATHI OF SADAVALI GRAMPANCHAYAT NOTICED THAT THE LA ND WAS NOT USED FOR AGRICULTURE FROM THE YEAR 1992-93 AND IT WAS CO NVERTED INTO NON-AGRICULTURAL LAND W.E.F. 02.11.2009 (I.E., AFTER THE SALE). HE W AS THEREFORE OF THE VIEW THAT THE LAND SOLD WAS NOT AN AGRIC ULTURAL LAND. AO NOTED THAT THE VALUE OF THE PROPERTY FOR STAMP DUTY PU RPOSE WAS ADOPTED BY THE STAMP VALUATION AUTHORITY AT RS.67,89,000/-. HE IN VIEW OF THE PROVISIONS OF SEC.50C OF THE ACT CONSIDERED THE VALUE ADO PTED BY THE STAMP VALUATION AUTHORITY TO BE FULL VALUE OF CONSIDERATION AND ACCORDINGLY WORKED OUT THE TAXABLE CAPITAL GAINS AT RS.1 4,34,667/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO FOLLOWING THE DECISION OF TRIBUNAL IN THE CASE OF A BHIJIT SUBHASH GAIKWAD REPORTED IN (2015) 60 TAXMANN.COM UPHELD THE ORDER OF AO BY OBSERVING AS UNDER : 5.1 GROUND 1: IT COULD BE SEEN FROM THE FACTS OF THE CASE , THE FINDINGS OF THE AO AND THE SUBMISSIONS OF THE APPEL LANT THAT THE CONTRO V E R S Y IS WHETHER THE LAND SOLD BY THE APPELLANT IS AGRICU LTURAL OR NO T . THE APPELLANT CLAIMS THE LAND TO BE AGRICULTURAL WH ILE THE AO IS OF THE V I E W THA T THE LAND IS NOT AGRICULTURAL AS THERE ARE NO AGR I CULTURAL ACTI V IT I ES CARRIED O N BY THE APPELLANT FOR THE PAST SO MANY YEARS. I HAVE EXAMINED THE 7/1 2 EXTRACT IN THIS CASE AND FIND THAT FOR THE LAND IN QUEST I ON , THE ONL Y ENT RY THEREIN IS 'GAVAT' WHICH MEANS GRASS IN MARATHI. I T I S EVIDEN T THEREFORE THAT THERE ARE NO AGRICULTURAL ACTIVITIES CARRIED ON BY THE APPELLANT ON THE SAID LAND. THE CASE OF THE APPELLA NT IS THAT THE LAND REVENUE RE CORDS SHO W THE LAND TO BE AGRICULTURAL AS ALSO THE INDEX 2 AT THE TIME OF S A LE. THE APPELLANT ALSO SUBMITS THAT THE LAND IS NOT WITHIN THE 8 KMS LIMI T AND IS ALSO NO T IN A LOCALITY HAVING POPULATION MORE THAN 10,000. ON THE BASIS OF THIS THE APPELLANT CLAIMS THE LAND TO BE AGRICULTURAL. IT IS SEEN FROM THE SUBMISSIONS OF THE APPELLANT THA T 'BEFORE ITS SALE , ON THIS LA N D UP T O T HE F . Y 1995-96 THERE W AS MANGO TREE CUL T IVATION, WARI AND TIL 5 ITA NOS.2476 & 2477/PUN/2017 CULTIVATION ON THIS LAND. TH E SAID PI E C E OF LA N D WAS GUTTED IN FIRE IN F. Y 1996 - 9 7 AND THEREAFT E R THERE WA S ONLY GRASS ON 3.9 7 R WI T H FALLOW LAND OF 18 R . THE GRASS WHICH GRE W ' IN THE LAND WAS USED BY TH E ASSESSEE A N D H I S FAMILY FOR FODDER WHICH WAS USED FOR CULT IV A TI ON O N L A ND IN SUR V EY NO. 69 & O T HERS AGRICULTURAL LANDS . THUS UP TO THE PERIOD 1995 - 96 THE LAND WAS PU T T O AGRICULTURAL PURPOSE. BECAUSE OF THE CALAMITY OF FIRE AND UNFORTUNATE ACCIDENT MET BY THE ASSESSEE , THE ASSESSEE COULD NOT FURTHER CARRY AGRICULTURAL ACTIVITY FOR SOMETIME ON THIS PI ECE OF LAND ' . THESE FACTS AS ADMITTED B Y THE APPELLAN T ACTUALL Y SUPPORT THE CASE OF THE AO AND ARE ALSO CORROBORATED B Y THE 7/12 EXTRAC T MENTIONING THAT ONLY GRASS GROWS ON THE LAND. THE QUESTION BEFORE ME THEREFORE IS , WHETHER THE LAND IS AGRICULTURAL GIVEN THESE FACTS. I AM AFRAID THE MATTER IS SQUARELY COVERED AGAINST THE APPELLANT BY THE DECISION OF TH E HON'BLE ITAT PUNE BENCH IN THE CASE OF ABHIJIT SUBHASH GAIKWAD ( 2015) 60 TAXMANN . COM 259 (PUNE-TRIB). THEREIN IT HAS BEEN HELD AS UNDER : FACTS XXXXXX HELD XXXXX ON A CAREFUL PERUSAL OF THE DECISION, I ALSO FIND T HAT THE HONBLE ITAT HAS CONSIDERED ALL THE DECISIONS CITED BY THE APPELLANT IN HIS DEFENCE IN THE PRESENT APPEAL. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THOSE IN THE DECISION CITED SUPRA AND THEREFORE I AM OF THE VIEW THAT THE APPELLANT NOT HAVING CARRIED OUT ANY AGRICULTURAL ACTIVITIES ON T HE LAND FROM 1995-96 ONWARDS, CANNOT CLAIM THE LAND TO BE AGRICULTURAL. IN ITS DECISION IN PARAS 15 TO 22, THE HONBLE ITAT HAS DISCUSSED ALL THE CA SE LAWS REFERRED TO BY THE APPELLANT IN THE PRESENT APPEAL. FURTHER THEY HAVE HELD AS UNDER : 22. XXXXX 23. XXXXX 24 XXXXX 25 XXXXX 26. XXXXX IT IS EVIDENT FROM THE ABOVE THAT THE FACTS ARE IDE NTICAL AND THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDIC TIONAL ITAT, I HOLD THAT THE LAND IN QUESTION IS NOT AGRICULTURAL LAND AND THERE FORE A CAPITAL ASSET. THE SALE OF LAND WOULD INVITE CAPITAL GAINS IN THE HAND S OF THE APPELLANT. ACCORDINGLY GROUND 1 IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT TILL F.Y. 1995-96 THERE WAS MANGO TREE CULTIVATION, WARI AND TIL CULTIVATION ON THE LAND BUT THE SAID PIECE OF LAND WAS GUTTED IN FIRE IN F.Y. 1996-97 AND THEREAFTER ONL Y GRASS WAS 6 ITA NOS.2476 & 2477/PUN/2017 GROWN WHICH WAS USED BY THE ASSESSEE FAMILY FOR FODDER. HE SUBMITTED THAT BECAUSE OF THE CALAMITY OF FIRE AND UNFORTUNATE ACCIDE NT, THE ASSESSEE COULD NOT CARRY OUT ANY AGRICULTURAL ACTIVITY ON SAID PIECE OF LAND BUT HOWEVER THE LAND CONTINUED TO BE AN AGRICULTURA L LAND. HE FURTHER SUBMITTED THAT LD.CIT(A) HAS ERRED IN RELYING THE DECISION OF PUNE ITAT IN THE CASE OF ABHIJIT SUBHASH GAIKWAD AS THE FACTS IN THE CASE OF ABHIJIT SUBHASH GAIKWAD (SUPRA) ARE DISTINGUISHABLE AND THE REFORE NOT APPLICABLE TO THE PRESENT CASE. HE THEREFORE SUBMITTED T HAT THE ORDER OF AO BE SET ASIDE. LD.D.R. ON THE OTHER HAND SUPPORTED TH E ORDER OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO TAXABILITY OF SALE OF LAND. IT IS THE CASE OF THE REVENUE THAT THE LAND WHIC H HAS BEEN SOLD IS NOT AN AGRICULTURAL LAND BECAUSE NO AGRICULTURAL ACTIVITIES HAVE BEEN CARRIED OUT FOR PAST 13 YEARS. ON THE OTHER HAND, IT IS ASSESSEES CONTENTION THAT THE LAND WHICH HAS BEEN SOLD IS AN AGRIC ULTURAL LAND AND THEREFORE BE EXEMPT. BEFORE US, LD.A.R. HAS NOT CONTROVERTED THE FINDINGS OF LOWER AUTHORITIES THAT SINCE A.Y. 1996-97 NO AGRICULTURAL ACTIVITIES HAVE BEEN CARRIED ON THE SAID LAND AND THE 7/12 EXTRAC TS ALSO MENTION THAT ONLY GRASS HAS BEEN GROWN ON THE LAND. WE FURT HER FIND THAT PUNE ITAT IN THE CASE OF ABHIJIT SUBHASH GAIKWAD (SUPRA), AT PA RA 22 HAS HELD AS UNDER : 22. THE JUDICIAL PRECEDENTS HAVE LAID DOWN THAT TH E EXPRESSION AGRICULTURAL LAND THOUGH NOT DEFINED UNDER THE IN COME-TAX ACT, BUT WOULD BE APPLICABLE TO SUCH LAND WHERE THE ACTUAL USER OF THE LAND WAS FOR AGRICULTURAL PURPOSES IN RECENT TIMES. JUST BECAUS E THE LAND WAS USED FOR AGRICULTURAL PURPOSES IN THE REMOTE PAST OR IT CONT INUES TO BE ASSESSED IN THE LAND REVENUE RECORDS AS AGRICULTURAL LAND IS NO T DECISIVE TO DETERMINE THE NATURE OF LAND BEING AGRICULTURAL LAND. WHERE THE LAND HAS NOT BEEN 7 ITA NOS.2476 & 2477/PUN/2017 PUT TO USE FOR AGRICULTURAL PURPOSES FOR REASONABLE SPAN OF TIME PRIOR TO THE DATE OF ITS TRANSFER, THE LAND IN QUESTION CANNOT B E HELD TO BE AGRICULTURAL LAND. THE ONUS WAS UPON THE ASSESSEE TO ESTABLISH ITS CASE OF HAVING CULTIVATED THE LAND IN RECENT PAST AND IN THE ABSEN CE OF ASSESSEE HAVING DISCHARGED ITS ONUS AND MERELY BECAUSE THE LAND IS RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORDS, DOES NOT ESTABLISH THE CASE OF ASSESSEE. BEFORE US ALSO, ASSESSEE HAS NOT PLACED ANY MATERIAL ON R ECORD TO DEMONSTRATE THAT SOME AGRICULTURAL ACTIVITIES WERE CARRIED ON BY HIM ON THE LAND. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT LD .CIT(A) HAS RIGHTLY UPHELD THE ORDER OF AO. WE THEREFORE FIND NO REAS ON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.2476/PUN/2017 IS DISMISSED. 9. NOW WE TAKE UP APPEAL OF ASSESSEE IN ITA NO.2477/PUN /2017 IN THE CASE OF ARUN J. PALKAR. 10. BEFORE US BOTH THE PARTIES HAVE ADMITTED THAT THE FACTS OF THE CASE OF ASSESSEE I.E., DILIP J. PALKAR IN ITA NO.2476/PUN/2017 AR E SIMILAR TO THE FACTS OF CASE IN ITA NO.2477/PUN/2017 IN THE CASE OF A RUN J. PALKAR. WE HAVE HEREINABOVE, WHILE DISPOSING OF THE APPEAL IN CASE OF DILIP J. PALKAR IN ITA NO.2476/PUN/2017 HAVE UPHELD THE OR DER OF LD.CIT(A) WHEREBY HE HAD UPHELD THE ORDER OF AO. IN T HE PRESENT CASE, WE THEREFORE FOR THE REASONS CITED HEREINABOVE WHILE DECID ING THE APPEAL IN CASE OF DILIP J. PALKAR (SUPRA) AND FOR SIMILAR REASONS, DIS MISS THE GROUNDS OF ASSESSEE. THUS, THE APPEAL OF ASSESSEE IN ITA NO.2477/PUN/2017 IS DISMISSED. 8 ITA NOS.2476 & 2477/PUN/2017 11. TO SUM UP, BOTH THE APPEALS OF ASSESSEES ARE DIS MISSED. ORDER PRONOUNCED ON 29 TH DAY OF MARCH, 2019. SD/- SD/ - ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 29 TH MARCH, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, KOLHAPUR. PR. CIT-2, KOLHAPUR. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.