Dr.Mampilly Antony, Cochin V. DY.Director of Income tax, Ernakulam

ITA 250/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2614 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 11-10-2012
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Assessee Lawyers: C B M WARRIER
• Keywords: Capital asset; Opportunity of being heard; Period of limitation; Assessment record; Time period of passing order; Reason to believe; Reassessment proceedings
• Section: 143(3); 54B; 147; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.250/COCH/2012 ASSESSMENT YEAR :2007-08 DR. MAMPILLY ANTONY, LYSSLYN, AMMANKOVIL ROAD, ERNAKULAM, KOCHI-682011 [PAN:AGKPA 7422Q] VS. THE DEPUTY DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION), KOCHI. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI C.B.M. WARRIER, CA REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR AND SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 07/02/2013 DATE OF PRONOUNCEMENT 12/04/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 09 TH AUGUST 2012 PASSED BY THE LD. CIT(A)-III, KOCHI AND IT RELATES TO THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS URGED BY THE ASSESSEE GIVE RISE TO T HE FOLLOWING ISSUES:- (A) WHETHER THE ASSESSMENT UNDER CONSIDERATION IS V ALID, SINCE THE COPY OF THE ASSESSMENT ORDER ISSUED TO THE ASSESSEE WAS NOT SIG NED BY THE ASSESSING OFFICER. (B) WHETHER THE RE-OPENING OF THE ASSESSMENT U/S. 147 IS VALID IN LAW, SINCE NO ORIGINAL ASSESSMENT ORDER WAS PASSED ON THE ORIGINA L RETURN OF INCOME FILED BY THE ASSESSEE AND FURTHER THERE WAS NO ESCAPEMENT OF INCOME. (C) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDI NG THAT THE PROPERTY SOLD BY THE ASSESSEE IS NOT AGRICULTURAL LAND. (D) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DISA LLOWING THE COST OF IMPROVEMENT CLAIMED ON THE PROPERTY SOLD AMOUNTING TO RS. 3,51 ,448/-. I.T.A. NO. 250/COCH/2012 2 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS A NON-RESIDENT AND IS A PRACTISING OPHTHALMOLOGIST. HE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 31-03-2008 ADMITTING THE TAXABLE I NCOME OF RS. 7,44,950/-. IN THE STATEMENT ACCOMPANYING THE RETURN OF INCOME, THE AS SESSEE DECLARED LONG TERM CAPITAL GAIN OF RS. 15,25,378/- ON SALE OF A RESIDENTIAL PR OPERTY AND CLAIMED THE SAME AS EXEMPT U/S 54 OF THE ACT, AS HE HAD INVESTED A SUM OF RS. 42,09,750/- ON PURCHASE OF ANOTHER RESIDENTIAL PROPERTY. THE ASSESSEE FURTHER DECLARED SHORT TERM CAPITAL GAIN OF RS. 24,16,120/- ON SALE OF AN AGRICULTURAL LAND AND CLAIMED THE SAME TO BE EXEMPT. SUBSEQUENTLY, THE ASSESSING OFFICER RE-OPENED THE A SSESSMENT BY ISSUING NOTICE UNDER SEC. 148 OF THE ACT. THE ASSESSING OFFICER HELD TH AT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 54(1) OF THE ACT IN RESPECT OF THE L ONG TERM CAPITAL GAIN. THE ASSESSING OFFICER ALSO HELD THAT THE SHORT TERM CAPITAL GAIN EARNED ON SALE OF LAND IS ALSO NOT EXEMPT, SINCE THE ASSESSEE DID NOT CARRY OUT ANY AG RICULTURAL OPERATION IN THE SAID LAND. WHILE COMPUTING THE TOTAL INCOME, THE ASSESSING OFF ICER DID NOT CONSIDER THE CLAIM OF IMPROVEMENTS MADE IN THE LANDS SOLD. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A), BUT COULD NOT SUCCEED. HENC E THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. IT IS PERTINENT TO NOTE THAT THE ASSESSEE DI D NOT URGE BEFORE US THE ISSUE RELATING TO THE REJECTION OF EXEMPTION U/S 54 OF THE ACT AND HENCE THE SAID ISSUE HAS ATTAINED FINALITY BY THE ORDER PASSED BY LD CIT(A). 5. BESIDES THE ISSUES URGED ON MERITS, THE ASSE SSEE HAS ALSO URGED TWO LEGAL GROUNDS BEFORE US. HENCE, WE PREFER TO ADJUDICATE THE LEGA L GROUNDS INITIALLY. THE FIRST LEGAL GROUND URGED BY THE ASSESSEE IS THAT THE COPY OF TH E ASSESSMENT ORDER SERVED UPON HIM WAS NOT SIGNED BY THE ASSESSING OFFICER AND HEN CE, THE ENTIRE ASSESSMENT HAS TO BE TREATED AS INVALID. IN THIS REGARD, THE LD. COU NSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING CASE LAW:- (A) VIJAY CORPORATION VS. INCOME-TAX OFFICER, (201 2) (50 SOT 33) (MUM.) (B) SMT. KILASHO DEVI BURMAN AND OTHERS V S. CIT, (219 ITR 214) (SC). (C) KALYANKUMAR RAY VS. CIT, (191 ITR 634) (SC). I.T.A. NO. 250/COCH/2012 3 IN THIS REGARD, THE ASSESSEE HAS ALSO FILED AN ADDI TIONAL GROUND WHEREIN IT IS CONTENDED THAT THE ASSESSMENT IS BARRED BY LIMITATION SINCE N O VALID ASSESSMENT ORDER IS SERVED ON THE ASSESSEE BEFORE THE EXPIRY OF THE LIMITATION PE RIOD. 5. THE LD. DR, HOWEVER, SUBMITTED THAT THE NOTIC E OF DEMAND ISSUED TO THE ASSESSEE U/S.156 OF THE ACT WAS DULY SIGNED BY THE ASSESSING OFFICER AND THE COPY OF THE ASSESSMENT ORDER ISSUED TO THE ASSESSEE WAS INADVER TENTLY OMITTED TO BE SIGNED. THE LD D.R FURTHER SUBMITTED THAT THE ORIGINAL ASSESSME NT ORDER AVAILABLE IN THE ASSESSMENT RECORD WAS DULY SIGNED BY THE ASSESSING OFFICER. T HE LD D.R FURTHER SUBMITTED THAT THE ASSESSEE IS SERVED WITH ONLY A COPY OF THE ASSESSME NT ORDER AND HENCE ABSENCE OF SIGNATURE IN THAT COPY SHALL NOT INVALIDATE THE ASS ESSMENT ORDER. 6. SINCE THE LD D.R SUBMITTED THAT THE ORIGINAL ASS ESSMENT ORDER WAS SIGNED BY THE ASSESSING OFFICER, THE LD. DR WAS DIRECTED TO PRODU CE THE ASSESSMENT RECORD BEFORE THE BENCH. THE LD COUNSEL FOR THE ASSESSEE WAS ALLOWED AN OPPORTUNITY TO INSPECT THE ASSESSMENT RECORD. ON EXAMINATION OF THE ASSESSMENT RECORD, WE NOTICE THAT THE ORIGINAL ASSESSMENT ORDER WAS FOUND SIGNED BY THE A SSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE ALSO CONFIRMED THE FACT OF AVAILAB ILITY OF THE SIGNATURE OF THE ASSESSING OFFICER ON THE ORIGINAL ASSESSMENT ORDER. THUS, IT TRANSPIRES THAT THE ASSESSING OFFICER HAS INADVERTENTLY FAILED TO SIGN THE COPY OF THE AS SESSMENT ORDER, WHICH WAS SERVED UPON THE ASSESSEE. 7. NOW THE QUESTION THAT ARISES FOR OUR CONSIDE RATION IS WHETHER THE NON-SIGNING OF THE COPY OF ASSESSMENT ORDER WOULD INVALIDATE THE O RIGINAL ASSESSMENT ORDER, WHEN THE ORIGINAL ORDER WAS DULY SIGNED. THE LD A.R HAS PLA CED STRONG RELIANCE ON THE CASE LAW CITED ABOVE TO CONTEND THAT THE ABSENCE OF SIGNATUR E IN THE COPY OF THE ASSESSMENT ORDER WOULD ALSO INVALIDATE THE ASSESSMENT. WE HA VE CAREFULLY GONE THROUGH THE CASE LAW RELIED UPON BY LD A.R. IN THE CASE OF VIJAY CO RPORATION (SUPRA), THE MUMBAI BENCH OF THE TRIBUNAL DECIDED THE ISSUE BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SMT. KAILASHO DEVI BURMAN (REFERRED SU PRA). HOWEVER, IN THE CASE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL, THE FINDING GIVEN BY THE TRIBUNAL WAS THAT THE I.T.A. NO. 250/COCH/2012 4 ASSESSING OFFICER DID NOT DISPUTE THE FACT THAT THE ORDER OF ASSESSMENT WAS NOT SIGNED, MEANING THEREBY EVEN THE ORIGINAL ASSESSMENT ORDER WAS NOT SIGNED BY THE CONCERNED ASSESSING OFFICER. IN THE CASE OF SMT. KAILASHO DE VI BURMAN AND OTHERS (REFERRED SUPRA), THE HONBLE SUPREME COURT HAS OBSERVED AS U NDER @ PAGE 220:- THE HIGH COURT DID NOT GIVE DUE IMPORTANCE TO THE FACT THAT UPON THE RECORD PRODUCED BY THE REVENUE BEFORE THE TRIBUNAL THERE W AS NO SIGNED ASSESSMENT ORDER NOR A SIGNED ASSESSMENT FORM. THUS, IN THE SAID CASE ALSO, THE ASSESSMENT RECORD DID NOT CONTAIN SIGNED ASSESSMENT ORDER. IN THE CASE OF KALYANKUMAR RAY (SUPRA), THE QUESTION THAT AROSE BEFORE THE HONBLE APEX COURT WAS WHETHER THE ASSESSMENT ORDER ITSELF SHOULD CONTAIN THE CALCULATIONS OF TAX, INTEREST ETC OR NOT. IN THE C ASE OF KALYANKUMAR RAY (SUPRA), THE HONBLE SUPREME COURT REFERRED TO THE DECISION REND ERED BY HONBLE CALCUTTA COURT IN THE CASE OF SUSHIL CHANDRA GHOSE VS. ITO (1959)(35 ITR 379) AND THE RELEVANT OBSERVATIONS OF HONBLE APEX COURT ARE EXTRACTED BE LOW:- IN SUSHIL CHANDRA GHOSE VS. ITO (1959) 35 ITR 379 (CAL), THE ASSESSEE WAS SERVED APART FROM THE ASSESSMENT ORDER, WITH A COPY OF THE FORM KNOWN AS I.T.N.S. 150 WHICH WAS NOT SIGNED BY THE INCOME TAX OFFICER BUT THE COURT UPHELD THE ASSESSMENT BECAUSE THE ORIGINAL THEREOF HAD BEE N DULY SIGNED. THE HONBLE SUPREME COURT ALSO CONSIDERED THE SIGNI FICANCE OF FORM I.T.N.S. 150 (INCOME TAX COMPUTATION FORM OR FORM FOR ASSESSM ENT OF TAX/REFUND) AND OBSERVED AS UNDER:- WE ARE UNABLE TO SEE WHY THIS DOCUMENT, WHICH IS A LSO IN WRITING AND WHICH HAS RECEIVED THE IMPRIMATUR OF THE INCOME TAX OFFICER, SHOULD NOT BE TREATED AS PART OF THE ASSESSMENT ORDER IN THE WIDER SENSE IN WHICH THE EXPRESSION HAS TO BE UNDERSTOOD IN THE CONTEXT OF SECTION 143(3). A COMBINED READING OF BOTH THE OBSERVATIONS WOULD S HOW THAT THE FORM I.T.N.S. 150 WAS CONSIDERED BY THE HONBLE SUPREME COURT AS PART OF THE ASSESSMENT ORDER AND IF THE ORIGINAL OF THE SAME WAS SIGNED BY THE ASSESSIN G OFFICER, THEN THE ABSENCE OF SIGNATURE IN THE COPY OF THE ORDER, WHICH WAS SERVE D UPON THE ASSESSEE, WOULD NOT INVALIDATE THE ASSESSMENT. I.T.A. NO. 250/COCH/2012 5 8. AT THIS STAGE, WE MAY GAINFULLY REFER TO THE OBSERVATIONS MADE BY THE HONBLE SUPREME COURT IN THE CASE OF KALYANKUMAR RAY, REFER RED SUPRA AT PAGE 638. IT WILL BE APPRECIATED THAT ONCE THE ASSESSMENT OF THE TOTAL INCOME IS COMPLETE WITH INDICATIONS OF THE DEDUCTIONS, REBATES, RELIEF S AND ADJUSTMENTS AVAILABLE TO THE ASSESSEE , THE CALCULATION OF THE NET TAX PAYAB LE IS A PROCESS WHICH IS MOSTLY ARITHMETICAL BUT GENERALLY TIME-CONSUMING. IF, THE REFORE, THE INCOME-TAX OFFICER FIRST DRAWS UP AN ORDER ASSESSING THE TOTAL INCOME AND INDICATING THE ADJUSTMENTS TO BE MADE, DIRECTS THE OFFICE TO COMPUTE THE TAX P AYABLE ON THAT BASIS AND THEN APPROVES IT, EITHER IMMEDIATELY OR SOME TIME LATER, NO FAULT CAN BE FOUND WITH THE PROCESS, THOUGH IT IS ONLY WHEN BOTH THE COMPUTATION SHEETS ARE SIGNED OR INITIALLED BY THE INCOME-TAX OFFICER THAT THE PROCESS DESCRIBED IN SEC. 143(3) WILL BE COMPLETE . 9. IN THE INSTANT CASE, THE LD A.R, AFTER EXAM INATION OF THE ASSESSMENT RECORD, HAS CONFIRMED THAT THE ASSESSING OFFICER HAS DULY SIGNE D THE ORIGINAL ASSESSMENT ORDER. ACCORDINGLY, IN VIEW OF THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF KALYANKUMAR RAY (SUPRA) AND THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUSHIL CHANDRA GHOSE (SUPRA), WE MAY SAFELY CONCLUD E THAT THE STATUTORY REQUIREMENT HAS BEEN DULY COMPLIED WITH BY THE ASSESSING OFFICE R. FURTHER, IT IS PERTINENT TO NOTE THAT THE NOTICE OF DEMAND SERVED UPON THE ASSESSE E BORE THE SIGNATURE OF THE ASSESSING OFFICER. HENCE, THE ABSENCE OF SIGNATURE IN THE COPY OF THE ASSESSMENT ORDER WOULD NOT VITIATE THE ASSESSMENT. ACCORDINGLY, WE FIND NO MERIT IN THE CONTENTIONS RAISED BY THE ASSESSEE ON THIS ISSUE AND ACCORDINGL Y, REJECT THE SAME. CONSEQUENTLY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE ON EXP IRY OF LIMITATION PERIOD ALSO FAILS. 10. THE NEXT ISSUE URGED BY THE ASSESSEE IS ABOUT V ALIDITY OF RE-OPENING OF INSTANT ASSESSMENT U/S. 147 OF THE ACT. ACCORDING TO THE A SSESSEE, THE REOPENING IS BAD SINCE THE ASSESSING OFFICER HAS FAILED TO PASS THE ASSESS MENT ORDER ON THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE. WE FIND THAT THIS CO NTENTION OF THE ASSESSEE IS NOT IN ACCORDANCE WITH THE DECISION RENDERED BY THE HONBL E SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD., 291 ITR 500 WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT THE ASSESSING OFFICER I S FREE TO INITIATE PROCEEDINGS UNDER SEC. 147 SO LONG AS THE INGREDIENTS OF SEC. 147 ARE FULFILLED AND FAILURE TO TAKE STEPS U/S. I.T.A. NO. 250/COCH/2012 6 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERL ESS TO INITIATE REASSESSMENT PROCEEDINGS EVEN WHEN AN INTIMATION U/S. 143(1) HAD BEEN ISSUED. 11. THE ASSESSEE ALSO CONTENDS THAT THERE IS NO ESCAPEMENT OF INCOME AND HENCE THE REASSESSMENT NOTICE IS BAD IN LAW. HOWEVER, ON A PERUSAL OF THE ASSESSMENT ORDER, WE NOTICE THAT THE ASSESSING OFFICER HAS POINTED OU T THAT (A) THE ASSESSEE HAS CLAIMED INDEXATION BENEFIT WHILE COMPUTING THE SHORT TERM C APITAL GAIN, (B) THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SEC. 54 OF THE ACT IS NOT IN ORDER AND (C) THE LAND ON WHICH SHORT TERM CAPITAL GAIN WAS CLAIMED WAS ONLY A VACANT LAND AND NOT AN AGRICULTURAL LAND. ALL THESE REASONS CITED BY THE ASSESSING OFFICER CUMULATIVELY SHOW THAT THE AO HAD REASON TO BELIEVE THAT THERE WAS ES CAPEMENT OF INCOME. HENCE, IN OUR VIEW, THE ASSESSING OFFICER WAS JUSTIFIED IN INITIA TING RE-ASSESSMENT PROCEEDINGS AND ACCORDINGLY, WE REJECT THE GROUNDS RAISED BY THE AS SESSEE IN THIS REGARD. 12. THE NEXT ISSUE IS WHETHER THE LAND SOLD BY THE ASSESSEE IS AN AGRICULTURAL LAND OR NOT. THE LAST ISSUE RELATING TO THE DISALLOWANCE O F CLAIM OF COST OF IMPROVEMENT IS ALSO CONNECTED TO THE ABOVE SAID ISSUE. THE ASSESSEE CL AIMED THAT THE LAND SOLD BY HIM IS AN AGRICULTURAL LAND. HOWEVER THE SAID CONTENTION WAS REJECTED BY BOTH THE TAX AUTHORITIES. THE ASSESSING OFFICER HAS SUMMARISED THE BASIS OF HIS FINDING AS UNDER IN PARAGRAPH 7 OF THE ASSESSMENT ORDER. 7. IN THE LIGHT OF THE ABOVE DISCUSSION, I HOLD TH AT THE LAND WAS NOT AN AGRICULTURAL LAND AND HENCE, CANNOT BE EXCLUDED FOR M THE EXPRESSION CAPITAL ASSET AS PROVIDED UNDER SUB-CLAUSE (III) OF CLAUSE (14) OF SEC. 2 OF THE INCOME TAX ACT. FOR SUCH A FINDING, THE FOLLOWING POINTS HAVE BEEN CUMULATIVELY CONSIDERED. (A) THE LAND IN QUESTION IS LOCATED TO HIGHLY DEVEL OPED AREA WHERE THE I.T. PARK, LUXURY HOUSING PROJECTS AND INDUSTRIES OF NATIONALL Y REPUTED BUILDINGS WELL-LAID ROADS ARE LOCATED; (B) THE LAND WAS TRANSFERRED FOR NON-AGRICULTURAL P URPOSE; (C) NO AGRICULTURAL OPERATIONS WERE CARRIED OUT FOR THE LAST MORE THAN THREE DECADES; I.T.A. NO. 250/COCH/2012 7 (D) THE INTENTION OF THE ASSESSEE IN ACQUIRING THE LAND CANNOT BE SAID TO BE FOR GENUINE AGRICULTURAL PURPOSES; THE ASSESSEE IS NOT AN AGRICULTURIST; (E) THE MOTIVE FOR PURCHASING THE LAND WAS ONLY TO EARN GAINS ON FETCHING HIGHER VALUE; (F) THERE IS NO EVIDENCE TO PROVE THAT ANY AGRICULT URAL ACTIVITIES ON A REGULAR AND ORGANISED WAY WERE CARRIED OUT; (G) PHYSICAL CHARACTERISTICS, SURROUNDING SITUATION AND USE OF LANDS IN THE ADJOINING DO NOT INDICATE THAT THE LAND WAS AGRICUL TURAL; (H) THE AMOUNT OF CONSIDERATION FOR WHICH THE LAND WAS SOLD CLEARLY INDICATES THAT NO AGRICULTURIST COULD AFFORD SUCH PRICE AS TH E PROPERTY COULD NOT YIELD AGRICULTURAL PRODUCE OF SUCH VALUE. 13. FURTHER THE ASSESSING OFFICER HAS STATED IN THE REMAND REPORT THAT AN INSPECTOR OF INCOME TAX EXAMINED THE LAND RECORDS ON 13.06.2012 AND HE HAS GIVEN A REPORT THAT THE IMPUGNED LAND WAS SHOWN AS PURAYIDOM, WHICH M EANS RESIDENTIAL PURPOSE LAND IN MALAYALAM LANGUAGE. DURING THE COURSE OF HEARING , THE LD A.R, HOWEVER, DISPUTED THE SAID INTERPRETATION AND SUBMITTED THAT THE COCO NUT GROVE IS CALLED THENGIN PURAYIDOM IN MALAYALAM LANGUAGE AND HENCE THE WORD PURAYIDOM CANNOT BE CONSTRUED AS RESIDENTIAL PURPOSE LAND AS INTERPRE TED BY THE ASSESSING OFFICER. 14. THE PERTINENT POINT TO BE NOTED HERE IS THAT THE SALE OF IMPUGNED LAND HAS TAKEN PLACE IN JULY, 2006 AND THE INSPECTOR OF INCOME TAX HAS VERIFIED THE LAND RECORDS IN JUNE, 2012, I.E., AFTER A GAP OF SIX YEARS. FURTHE R THE COPIES OF SAID LAND RECORDS WERE NOT PRODUCED BEFORE US AND IT IS ALSO NOT CLEAR WHE THER THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO EXAMINE THE SAME. ON THE CONTRARY, THE ASSESSEE HAS FURNISHED COPIES OF BASIC TAX REGISTER PERTAINING TO THE IMPUGNED LANDS, WHEREIN THEY HAVE BEEN DESCRIBED AS DRY LAND. THUS, THERE IS APPARENT C ONTRADICTION BETWEEN BOTH THE PARTIES WITH REGARD TO THE NATURE OF LAND. 15. WE NOTICE THAT THE ASSESSING OFFICER HAS GI VEN MORE IMPORTANCE TO THE FACT THAT THE PURCHASER OF LAND HAS USED IT FOR CONSTRUCTING VILLAS, I.E., NON-AGRICULTURAL PURPOSES. I.T.A. NO. 250/COCH/2012 8 IN OUR VIEW, THE USER OF LAND BY THE SELLER IS REQU IRED TO BE CONSIDERED IN ORDER TO DETERMINE THE CHARACTER OF THE LAND AND THE NATURE OF USE OF THE LAND BY THE BUYER MAY NOT BE RELEVANT. 16. WE NOTICE FROM THE PAPER BOOK FILED BY THE ASSESSEE THAT HE HAS FURNISHED FOLLOWING DOCUMENTS ALSO IN SUPPORT OF HIS CLAIM TH AT HE CARRIED ON AGRICULTURAL OPERATIONS IN THESE LANDS:- (A) COPY OF CERTIFICATE FROM AGRICULTURAL OFFICER DATED 14.10.04. (B) COPY OF CERTIFICATE FROM ASSISTANT ENGINEER, EL ECTRICAL SECTION (C) COPIES OF ELECTRICITY BILLS. (D) VILLAGE OFFICER CERTIFICATE REGARDING OWNERSH IP (E) INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEE T FOR AGRICULTURAL ACTIVITIES FOR THE YEAR ENDING 31.3.2004, 31.3.2005, 31.3.2006 AND FOR THE PERIOD ENDING ON 26.07.2006. (F) CONSENT LETTER DATED 03.07.2006 OF SHRI BALAK RISHNAN. (G) RESIGNATION LETTER DATED 10.01.2008 FROM SABU . (H) AFFIDAVITS FROM SHRI P.V.SABU, SHRI P.K.MOHAM MED AND SHRI P.E.MOHAMMED. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS COM MENTED THAT THE CERTIFICATES GIVEN BY AGRICULTURAL OFFICER AND VILLAGE OFFICER DO NOT SHOW THAT THE ASSESSEE WAS CARRYING ON AGRICULTURAL ACTIVITIES. HOWEVER, WE NOTICE THAT THE ASSESSING OFFICER DID NOT MAKE ANY COMMENT ON THE INCOME AND EXPENDITURE ACCOUNT AND O THER CERTIFICATES OBTAINED BY THE ASSESSEE FROM VARIOUS RELATED PERSONS. 17. BEFORE US, THE LD A.R SUBMITTED THAT IF THE SALE OF AGRICULTURAL LAND IS CONSIDERED AS NOT EXEMPT, THEN THE ASSESSEE SHOULD BE GIVEN DE DUCTION U/S 54B OF THE ACT IN RESPECT OF THE RUBBER ESTATE PURCHASED BY HIM. WE NOTICE THAT THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO EXAMINE THIS CLAIM AS HE HAD HELD THAT THE IMPUGNED LAND WAS NOT AN AGRICULTURAL LAND. 18. ALL THESE DISCUSSIONS SHOW THAT THE ISSUES RELATING TO THE NATURE OF LAND AND THE CLAIM OF EXEMPTION U/S 54B, IF ANY, HAVE NOT BEEN P ROPERLY EXAMINED BY THE TAX I.T.A. NO. 250/COCH/2012 9 AUTHORITIES. AS STATED EARLIER, THE ASSESSING OFFI CER AS WELL AS THE LD CIT(A) HAS PLACED MORE RELIANCE ON THE REPORT OF THE INSPECTOR OF INC OME TAX AND THE DEVELOPMENT WORK CARRIED OUT BY THE PURCHASER OF LAND. ACCORDINGLY, IN VIEW OF THE LACUNAE POINTED OUT ABOVE, IN OUR VIEW, ALL THESE ISSUES REQUIRE FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE O RDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO EXAMINE THE ISSUES AFRESH AND TAKE APPROPRIATE DECISION IN ACCO RDANCE WITH LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 12-04-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12TH APRIL, 2013 GJ COPY TO: 1.DR. MAMPILLY ANTONY, LYSSLYN, AMMANKOVIL ROAD, ERN AKULAM, KOCHI-682011 2.THE DEPUTY DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION), KOCHI. 3.THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, KOCH I. 4.THE COMMISSIONER OF INCOME-TAX, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN I.T.A. NO. 250/COCH/2012 10