Shri T.N. Rajamohan, CHENNAI V. ACIT, CHENNAI

ITA 2540/CHNY/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5294 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-01-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Additional evidence; Cost of acquisition; Corroborative evidences
• Section: 143(3); 54F; 54; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /.I.T.A. NO. 2540/CHNY/2016 /ASSESSMENT YEAR : 2009-10 SHRI T.N. RAJAMOHAN, NO. 18, 4 TH CROSS STREET, MANDAVELLI, CHENNAI 600 028. [PAN: AGEPR 6390L] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 2, CHENNAI. ( /APPELLANT) ( %&( /RESPONDENT) ASSESSEE BY : SHRI. S. SRIDHAR, ADVOCATE REVENUE BY : SHRI ARV SREENIVASAN, JCIT ) /DATE OF HEARING : 23.01.2018 ) /DATE OF PRONOUNCEMENT : 20.04.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 2, CHENNAI IN ITA NO 344/C IT(A)-2/2013-14 DATED 30.06.2016 FOR ASSESSMENT YEAR 2009-10. :-2-: ITA NO. 2540/CHNY/2016 2. SHRI T.N. RAJAMOHAN , THE ASSESSEE, FILED HIS RE TURN FOR THE A Y, 2009-10 ELECTRONICALLY ON 29.7.2009 ADMITTING A TOT AL INCOME OF RS.1,67,62,236/-, COMPRISING LONG TERM CAPITAL GAIN (LTCG) OF RS.1,64,19,510/- AND RS.3,42,726 INTEREST FROM BANK . THE LTCG HAD ARISEN ON ACCOUNT OF SALE OF 5.23 ACRES OF LAND AT VENGADA MANGALAM VILLAGE, CHENGALPATTU TALUK TO M/S. CASA GRANDS PVT. LTD. FO R RS.4,40,00,000. AGAINSTRS.4,40,00,000/-, HE HAD CLAIMED THE FOLLOW ING: (I) INDEXED COST OF ACQUISITION OF LAND - RS. 6,8 4,804 (II) INDEXED COST OF DEVELOPMENT OF LAND - RS.2,4 3,66,622 (III) DEDUCTION U/S 54F RS. 25,29,064 SINCE THE ASSESSEE DID NOT ADDUCE ANY EVIDENCE IN R ESPECT OF (II) AND (III) ABOVE AT THE TIME OF THE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED THEM, ADDED RS.2,68,95,686/- AND COMPLETED THE ASSESSMENT U/S 143(3) ON 30.12.2011.AGAINST THAT ORDER, THE ASSESSEE FILED A N APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE MADE AN ATTEMPT TO CLAIM THAT THE NATURE OF THE LAND WHICH HE SOLD IS AN AGRICULTURAL LAND AND HENCE IS NOT LIABLE FOR TAXATION ETC BY FILING CERTAIN ADDITIONAL EVIDENCE. THE CIT(A) SOUGHT A REMAND REPORT FROM THE A O. THE AO REPLIED , INTER ALIA, THAT THE ASSESSEE DID NOT COOPERATE IN THE REMAND PROCEEDINGS. IN HIS RETURN, THE ASSESSEE ADMITTED LTCG FROM THE SALE OF THE IMPUGNED LAND. WHEN CONFR ONTED WITH THE DISALLOWANCE OF HIS CLAIMSTOWARDS DEDUCTION OF INDE XED COST OF DEVELOPMENT ETC AT RS. 2.43 CRORES ETC FOR WANT OF EVIDENCE, HE HAS MADE A U-TURN AND :-3-: ITA NO. 2540/CHNY/2016 CLAIMED THAT THE LANDS SOLD ARE AGRICULTURAL LANDS BEFORE THE CIT(A) AND HENCE THIS CLAIM IS CLEARLY AN AFTER-THOUGHT. SINCE THE ASSESSEE DID NOT COOPERATE IN THE REMAND PROCEEDINGS, ON EXAMINATION OF FACTS AND CIRCUMSTANCES OF THIS CASE FROM THE AVAILABLE MATERIAL, CONSIDERING VARIO US CASE LAWS VIZ THE DECISIONS OF THE APEX COURT IN THE CASE OF SARIFABI BI AND COURT OF WARDS 204 ITR 631(SC) & 105 ITR 133(SC) , 136 ITR 621(GUJ) , GOPAL C SHARMA VS CIT 209 ITR 946 ETC, THE AO REPORTED THAT THE IMPUGNED LAND IS NOT AN AGRICULTURAL LAND, THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE TO PROVE THE CLAIM OF EXPENDITURE ON DEVELOPMENT OF LAND EITHER DURING THE ASSESSMENT OR DURING THE REMAND PROCEEDINGS , HE MADE A ROUND ABOUT CLAIM BY AN AFTER- THOUGHT WITH A MOTIVE OF DEPRIVING THE REVENUE OF I TS LEGITIMATE TAXES AND HENCE THE AO REQUESTED THE CIT(A) NOT TO ENTERTAIN ADDITIONAL EVIDENCE ETC. THE CIT(A) FOUND THAT THE APPEAL IS BELATED BY 117 DAYS AND THERE WAS NO CONDONATION PETITION. EVEN THOUGH HE DISMISSED THE APPEAL IN LIMINE, HOWEVER, TAKING INTO ACCOUNT ALL THE FACTS AND CIR CUMSTANCES , THE CIT(A) , INTER ALIA, HELD THAT THE APPELLANT HAS FAILED TO P RODUCE ANY SUPPORTING EVIDENCE TO ESTABLISH THE ACTUAL CARRYING ON OF AGR ICULTURAL OPERATIONS IN THE SAID LANDS. IN OTHER WORDS, AS RIGHTLY POINTED OUT BY THE ASSESSING OFFICER, IN HIS REMAND REPORT, THE ASSESSEE HAS NOT AT ALL DEMO NSTRATED THE USER OF THE LAND FOR AGRICULTURAL PURPOSES, HAVING FAILED TO PR ODUCE DETAILS OF CROP GROWN, YIELD ETC., DESPITE SPECIFIC OPPORTUNITIES GRANTED TO THE ASSESSEE AT THE STAGE OF REMAND PROCEEDINGS. APPLYING THE RATIO OF THE D ECISIONS OF THE APEX COURT :-4-: ITA NO. 2540/CHNY/2016 IN THE CASE OF SARIFABIBI AND COURT OF WARDS(SUPRA) , IT IS CLEAR THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION OF THE CAPIT AL GAINS ARISING FROM THE SALE OF THESE LANDS. THE ASSESSING OFFICER IS JUSTI FIED IN REJECTING THE ASSESSEES CLAIM THAT THE LANDS IN QUESTION ARE AGR ICULTURAL IN NATURE AND BRINGING TO TAX THE CAPITAL GAINS ARISING FROM THE SALE THEREOF. HE IS ALSO JUSTIFIED IN DENYING THE CLAIM OF INDEXED COST OF E XPENDITURE ON DEVELOPMENT OF LAND AMOUNTING TO RS. 2.43 CRORES FOR WANT OF SU PPORTING EVIDENCE. AGGRIEVED, THE ASSESSEE FILED THIS APPEAL . 3. THE AR SUBMITTED THAT THERE ARE TWO GROUNDS, NAM ELY, LACK OF OPPORTUNITY BEFORE DISMISSING THE APPEAL ON THE TEC HNICAL GROUND AND ON MERITS, THE CONFLICT BETWEEN THE RETURN OF INCOME F ILED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE NEW STAND TAKEN FO R COMPLETE TAX EXEMPTION FOR THE SALE OF AGRICULTURAL LANDS, IS TH E CORE ISSUES TO BE DECIDED IN THE PRESENT APPEAL. THE AR PLEADED THAT THE MISTAK E IN THE RETURN IN COMPUTING THE CAPITAL GAINS FOR TAXATION FOR THE SA LE OF AGRICULTURAL LANDS SHOULD BE IGNORED WITH A VIEW TO CONSIDER INDEPENDE NTLY THE FRESH CLAIM FOR FULL EXEMPTION IN THE LIGHT OF THE DECISION OF THE MADRAS HIGH COURT RENDERED IN THE CASE OF M/S MALIND LABORATORIES P LTD. IN T. C.APPEAL NO.878/2014 DATED 18.11.2014. THE MADRAS HIGH COURT HAS RULED ' WHEN AN APPEAL IS AN CONTINUATION OF ORIGINAL ASSESSMENT PROCEEDINGS, TH E TRIBUNAL WAS JUSTIFIED IN RELYING UPON THE DECISION OF THE SUPREME COURT IN R AM LAL V. REVA COAL FIELD :-5-: ITA NO. 2540/CHNY/2016 LTD. AIR 1962 SC 31, WHEREIN IT IS HELD THAT STATE AUTHORITIES SHOULD NOT RAISE TECHNICAL PLEAS IF THE CITIZENS HAVE A LAWFUL RIGHT S. THE TRIBUNAL HAS RIGHTLY OBSERVED THAT THE AUTHORITIES UNDER THE ACT ARE REQ UIRED TO ENSURE THAT ONLY LEGITIMATE TAXES DUE ARE ASSESSED AND COLLECTED '. 3.1 THE AR FURTHER SUBMITTED THAT THE BOMBAY BENCH OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE DECIDED ON 30.09.201 5 IN I.T.A.NO.4806/MUM/2012, 'F' BENCH HAS DEALT WITH SI MILAR ISSUE. IN THE SAID CASE, THE MUMBAI BENCH AFTER NOTICING THE CONDONAT ION OF DELAY IN FILING THE APPEAL BEFORE THE FIRST APPELLATE AUTHORITY CONSIDE RED THE MAINTAINABILITY OF THE ASSESSED SHORT TERM CAPITAL GAINS FOR TESTING T HE NEW FRESH CLAIM FOR TAX EXEMPTION. IN THE SAID CASE, THE ASSESSEE OFFERED T HE SURPLUS FROM THE SALE OF AGRICULTURAL LANDS AS SHORT TERM CAPITAL GAINS AND NOT CLAIMED TAX EXEMPTION BY MISTAKE. THE FRESH CLAIM WAS MADE FOR TAX EXEMPT ION BEFORE THE FIRST APPELLATE AUTHORITY AND THE SAID CLAIM WAS ACCEPTED BASED ON THE CBDT CIRCULAR NO.14(XL- 35) DATED 11.04.1955. CONSIDERIN G THE FACTS, THE MUMBAI BENCH DISMISSED THE DEPARTMENTAL APPEAL IN ACCEPTIN G THE APPROACH OF THE FIRST APPELLATE AUTHORITY. THE JURISDICTIONAL BENC H OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE REPORTED IN 135 ITD 55 (THIRD MEMBER) HAS NOTICED THE WELL SETTLED PRINCIPLE OF JURISPRUDENCE THAT DELIVERY OF JUSTICE SHOULD NOT BE FETTERED BY TECHNICALITIES AND FURTHE R NOTICED ARTICLE 265 OF THE CONSTITUTION OF INDIA AND ACCORDING TO THE SAID ART ICLE, 'TAXES NOT TO BE :-6-: ITA NO. 2540/CHNY/2016 IMPOSED SAY BY AUTHORITY OF LAW - NO TAX SHALL BE L EVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW'. THE JURISDICTIONAL BENCH OF THE INCOME TAX APPELLATE TRIBUNAL HAS ALSO NOTICED THE CBDT CIRCULAR DATED 1 1.04.1955 AND OBSERVED 'THE INCOME TAX DEPARTMENT IS COLLECTING TAX NOT FO R ITSELF. IT IS COLLECTING TAX FOR THE SOVEREIGN STAGE, THAT IS, UNION OF INDIA. U NION OF INDIA HAS A SOVEREIGN AUTHORITY DOES NOT REQUIRE TO LEVY TAX ON AN AMOUNT RETURNED BY MISTAKE. THE SOVEREIGN AUTHORITY DOES NOT WANT TO TAKE ADVANTAGE OF A MISTAKE COMMITTED BY INNOCUOUS ASSESSEE. IT IS NOT THE POLICY OF THE SOVEREIGN STATE TO CRAVE FOR UNDUE ENRICHMENT.' THE BANGALORE BENCH OF THE INCO ME TAX APPELLATE TRIBUNAL IN THE CASE OF IDEAL HOMES CO-OPERATIVE SO CIETY DECIDED ON 7.3.2014 POSED WITH THE SIMILAR SITUATION AND THE INTEREST I NCOME ELIGIBLE FOR TAX EXEMPTION/DEDUCTION BENEFIT U/S 80P(2)(D) OF THE AC T AND SUCH TAX EXEMPTION/DEDUCTION WAS NOT CLAIMED IN THE RETURN O F INCOME. THE ASSESSEE SUPPORTED THE CLAIM IN THE APPELLATE PROCEEDINGS BA SED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF MAHINDRA MILLS REPORTE D IN 243 ITR 56 PLEADED FOR GRANTING THE SAID DEDUCTION WITH A VIEW TO ARRI VE AT THE CORRECT INCOME FOR TAXATION. THE BENCH AFTER REFERRING TO THE SUPREME COURT DECISION NOTICED THAT THE INTEREST INCOME WAS NOT OFFERED FOR TAXATION WH ILE AS A CONSEQUENCE THE CLAIM WAS NOT MADE IN THE RETURN OF INCOME. THE BEN CH EVEN IN SUCH CIRCUMSTANCES GRANTED THE BENEFIT OF THE SAID DEDUC TION AT THE APPELLATE STAGE IN TERMS OF SECTION 80P(2)(D) OF THE ACT. THE DELH I HIGH COURT IN THE CASE OF MR. VIJAY GUPTA DECIDED ON 20.03.2016 REFERRED TO T HE DECISION OF THE :-7-: ITA NO. 2540/CHNY/2016 SUPREME COURT REPORTED IN 261 ITR 367 AND THE APEX COURT IN THE SAID DECISION HAS HELD THAT IF THE ASSESSEE HAS BY MISTA KE OR INADVERTENTLY OR ON ACCOUNT OF IGNORANCE INCLUDED IN HIS INCOME ANY AMO UNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME TAX OR IS NOT THE INCOME WIT HIN THE CONTEMPLATION OF LAW, THE ASSESSEE MAY BRING THE SAME TO THE NOTICE OF REVENUE WHICH IF SATISFIED MAY GRANT THE ASSESSEE NECESSARY RELIEF A ND REFUND THE TAX PAID IN EXCESS IF ANY. FURTHER IN THE SAID DECISION, THE DE LHI HIGH COURT REFERRED TO THE DECISION OF BOMBAY HIGH COURT REPORTED IN 269 ITR P AGE 1 AND IN THE SAID BOMBAY HIGH COURT DECISION IT IS RULED THAT THERE C ANNOT BE ANY ESTOPPEL AGAINST THE STATUTE WHILE ARTICLE 265 OF THE CONSTI TUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDES THAT NO TAX SHALL BE LE VIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. FURTHER IT IS OBSERVED/RULED THAT ACQUIESCENCE CANNOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE IS ENTITLED TO WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. IN THE SAME DEC ISION, THE DELHI HIGH COURT REFERRED TO ANOTHER DECISION OF THE BOMBAY HIGH COU RT REPORTED IN 310 ITR 310 AND WHEREIN IT IS OBSERVED THAT TAX CAN BE COLL ECTED ONLY AS PROVIDED UNDER THE ACT AND IF ANY ASSESSEE UNDER A MISTAKE, MISCONCEPTION OR NOT BEING PROPERLY INSTRUCTED IS OVER ASSESSED, THE REV ENUE UNDER THE ACT IS REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIM ATE TAXES DUE ARE COLLECTED. 3.2 THEREFORE, THE AR SUBMITTED THAT THE CLAIM FOR TAX EXEMPTION FOR THE SALE OF EXEMPTED AGRICULTURAL LANDS UNDER CONSIDERA TION CANNOT BE REJECTED ON TECHNICAL GROUNDS AND IN FACT THE ESSENTIAL DOCUMEN TS TO ESTABLISH AND TO :-8-: ITA NO. 2540/CHNY/2016 FORTIFY THE FRESH CLAIM ARE ALREADY AVAILABLE ON RE CORD AND EXAMINED BY THE ASSESSING OFFICER IN THE REMAND REPORT. THEREFORE, THERE IS ABSOLUTELY NO CASE FOR GIVING CREDENCE TO THE RETURN OF INCOME WHICH A CCORDING TO THE APPELLANT WAS FILED INCORPORATING WRONG COMPUTATION OF LONG T ERM CAPITAL GAINS. THE LETTER OF CONFIRMATION FROM THE APPELLANT WHO IS RE SIDING AT NEW ZEALAND IS OBTAINED AND PLACED ON RECORD TO SUPPORT THE ABOVE FACTS. ON THE CUMULATIVE CONSIDERATION OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ISSUE RELATING TO THE CLAIM OF TAX EXEMPTION FOR THE SALE OF EXEMPTED AGRICULTURAL LANDS MAY BE ADJUDICATED IN FAVOUR OF THE APPELLANT AND THUS RENDER JUSTICE. IN THE EVENT OF THE REJECTION OF THE CLAIM FOR TAX EXEMPTION FOR THE SALE OF EXEMPTED AGRICULTURAL LANDS, THE ISSUE RELATING TO REINVESTMENT IN THE HOUSE PROPERTY ELIGIBLE FOR TAX EXEMPTION/DEDUCTION U/S 5 4F OF THE ACT TO THE EXTENT OF RS.58,72,675/- MAY BE ALLOWED IN THE INTEREST OF JUSTICE. IN FACT, THE REMAND REPORT DATED 23.12.2013, THE ASSESSING OFFIC ER IN THE LAST PAGE ACCEPTED THE ENTITLEMENT OF THE TAX EXEMPTION/DEDUC TION U/S 54F OF THE ACT IN THE LONG TERM CAPITAL GAINS COMPUTATION AND THE FIR ST APPELLATE AUTHORITY HAS NOT CONSIDERED THE SAID ISSUE FOR APPROPRIATE DIREC TION/DECISION IN RELATION THERETO. 4. PER CONTRA, THE DR SUBMITTED THAT THE ASSESSEE IN HIS RETURN ADMITTED LTCG ON SALE OF LAND TO M/S. CASA GRANDS PVT. LTD. FOR RS.4,40,00,000.ON THE SALE CONSIDERATION, HE HAD CL AIMED INDEXED COST OF ACQUISITION OF LAND , INDEXED COST OF DEVELOPMENT O F LAND AND DEDUCTION U/S :-9-: ITA NO. 2540/CHNY/2016 54F . DURING THE ASSESSMENT , THE AO CALLED FOR PAR TICULARS ETC TO EXAMINE THOSE CLAIMS . SINCE THE ASSESSEE DID NOT ADDUCE AN Y EVIDENCE IN RESPECT OF THESE CLAIMS, THE ASSESSING OFFICER DISALLOWED THEM . FOR THE FIRST TIME, AFTER THE COMPLETION OF ASSESSMENT, THE ASSESSEE PLEADED BEFORE THE CIT(A) THAT HE IS NOT LIABLE TO TAX ALTHOUGH HE ADMITTED CERTA IN INCOME AFTER CLAIMING CERTAIN EXPENDITURES. FURTHER, HE HAS NEITHER PRODU CED ANY EVIDENCE OR ANY MATERIAL EITHER BEFORE THE AO NOR BEFORE THE CIT(A) OR BEFORE THIS TRIBUNAL. THE ASSESSEE DID NOT CO OPERATE IN THE REMAND PRO CEEDINGS TOO. ON DUE ANALYSIS OF AVAILABLE MATERIAL AND DUE APPLICATION OF THE APEX COURT AND HIGH COURT RATIOS, THE AO REPORTED TO THE CIT(A) THAT T HE IMPUGNED LAND IS NOT AN AGRICULTURAL LAND, THE ASSESSEE HAS NOT BROUGHT AN Y EVIDENCE TO PROVE THE CLAIM OF EXPENDITURE ON DEVELOPMENT OF LAND EITHER DURING THE ASSESSMENT OR DURING THE REMAND PROCEEDINGS , HE MADE A ROUND ABOUT CLAIM BY AN AFTER- THOUGHT WITH A MOTIVE OF DEPRIVING THE REVENUE OF I TS LEGITIMATE TAXES AND HENCE THE AO REQUESTED THE CIT(A) NOT TO ENTERTAIN ADDITIONAL EVIDENCE ETC.THE CIT (A) ,AFTER TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES UPHELD THE ASSESSMENT. THE DR INVITED OUR ATTENTIO N TO THE FOLLOWING PORTION OF THE ORDER OF THE CIT(A) (II) AS RIGHTLY POINTED OUT BY THE ASSESSING OFFICE R, THE IMPUGNED LANDS HAVE TO BE HELD AS NON-AGRICULTURAL IN NATURE, FOR THE FOLLOWING RE ASONS: (A) THE LAND IS SITUATED IN PROXIMITY TO INDUSTRIAL AREAS LIKE GUDUVANCHERY, VANDALUR ETC., ON ONE SIDE AND TO AREAS ON THE OMR (IT HUB O F CHENNAI) LIKE NAVALUR, SIRUSERI, KELAMBAKKAM ETC. (B) THE LAND IN QUESTION HAS BEEN SOLD TO A RENOWNE D REAL ESTATE COMPANY M/S CASA GRANDE LIMITED, WHO EXPLOITED THE LAND FOR BUILDING VILLAS IN THE PONMAR. :-10-: ITA NO. 2540/CHNY/2016 (C) THE SALE CONSIDERATION FOR 5.23 ACRES IS RS. 4. 4 CRORES, WHICH IS A PRICE NORMALLY OBTAINED IN THE SALE OF BUILDING SITES. (D) THE LAND HAS BEEN SOLD AT AN ASTRONOMICAL PRICE AT WHICH NO BONAFIDE AGRICULTURIST WOULD PURCHASE NOR COULD AFFORD TO PURCHASE FOR GEN UINE AGRICULTURAL OPERATIONS, GIVEN OTHER CONSTRAINTS FACED BY AGRICULTURISTS IN THAT A REA LIKE NON- AVAILABILITY OF ASSURED WATER SUPPLY FOR IRRIGATION, NON-AVAILABILITY OF LA BOUR FOR AGRICULTURAL OPERATIONS IN VIEW OF THE BOOMING ACTIVITY IN THE IT SECTOR IN THE VIC INITY OF THE PLACE AND RAPID INDUSTRIAL GROWTH IN THE NEARBY AREAS ETC. THE ASSESSING OFFICER HAS ALSO RIGHTLY POINTED OUT THAT THE ASSESSEE, HAVING ORIGINALLY OFFERED THE CAPITAL GAINS ARISING FROM THE IMPUGNED LANDS TO CAPITAL GAINS, WHEN CONFRONTED WITH THE POSSIBILITY OF DISALLOWANCE OF CLAIM FOR DEDUCTION OF INDEXED COST OF DEVELOPMENT AMOUNTING TO RS. 2.43 CRORES FOR WANT O F EVIDENCE, HAS MADE A U-TURN AND ONLY THEN CLAIMED THAT THE LANDS ARE AGRICULTUR AL LANDS. I FULLY AGREE WITH THE ASSESSING OFFICER, THAT THIS CLAIM ITSELF IS CLEARL Y AN AFTER-THOUGHT. HENCE, TAKING INTO ACCOUNT, ALL THE AFOREMENTIONED FACTS, IT IS SEEN THAT THE ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE ASSESSEES CL AIM THAT THE LANDS IN QUESTION ARE AGRICULTURAL IN NATURE AND BRINGING TO TAX THE CAPI TAL GAINS ARISING FROM THE SALE THEREOF. THE ASSESSING OFFICER IS ALSO JUSTIFIED IN DENYING THE CLAIM OF INDEXED COST OF EXPENDITURE ON DEVELOPMENT OF LAND AMOUNTING TO RS. 2.43 CRORES FOR WANT OF SUPPORTING EVIDENCE. THE ADDITION MADE BY BRINGING TO TAX THE LONG TERM CAPITAL GAINS OF RS. 2,68,95,686/-, IS UPHELD. 6. IN THE RESULT, THE APPEAL IS DISMISSED. AND SUBMITTED THAT THE ABOVE FACTS AND CIRCUMSTANCE S OF THIS CASE ARE CLEARLY DISTINGUISHABLE WITH REFERENCE TO THE CASES RELIED ON BY THE AR. SO, HE PLEADED TO SUSTAIN THE ORDERS OF THE LOWER AUTHORIT IES. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THE FACT REMAINS THAT THE ASSESSEE FILED HIS RETURN ELECTRONICALLY AND IT IS DULY VERIFIED. THE RELEVANT PORTION OF HIS CO MPUTATION IS EXTRACTED AS UNDER : :-11-: ITA NO. 2540/CHNY/2016 COMPUTATION OF TOTAL INCOME INCOME FROM CAPITAL GAIN (CHAPTER IV E) 1641951 0 LONG TERM CAPITAL GAIN AGRICULTURE LAND 10/10/2008 SALES CONSIDERATION 44000000 LESS: INDEXED COST LAND 684804 F. 1993-94 287100/244*582 LAND DEVELOPMENT- 4665064 F.Y.1993-941955800/244*582 LAND DEVELOPMENT 4238039 F.Y. 1994-95 1886000/259*582 LAND DEVELOPMENT 3431315 F.Y. 1995-961656700/281*582 LAND DEVELOPMENT 2794936 F.Y. 1996-97 14,64700/305*582 LAND DEVELOPMENT 2150411 F. Y. 1997-98 1223000/331*582 LAND DEVELOPMENT 1715656 F.Y. 1998-991034700/351*582 LAND DEVELOPMENT 1464126 F.Y. 1999-2000978600/389*582 LAND DEVELOPMENT 1357235 F.Y. 2000-01 946800/406*582 LAND DEVELOPMENT 1033255 F.Y. 2001-02756300/426*582 LAND DEVELOPMENT 1516585 F.Y. 2002-03 1164800/447*582 ------------ 2505142 6 ------------- 18948574 DEDUCTION U/S 54 2529064 ------------ INCOME FROM CAPITAL GAIN 16419510 INCOME FROM OTHER SOURCES (CHAPTER IV F) 3427 INTEREST FROM BANK 342726 GROSS TOTAL INCOME 1676223 TOTAL INCOME 1676223 ROUND OFF U/S 288A 1676223 TAX DUE 23546 TAX ON LONG TERM CAPITAL GAIN 3283902 TOTAL TAX 3307448 SURCHARGE @ 10% 330745 3638193 EDUCATION CESS 109146 3747339 :-12-: ITA NO. 2540/CHNY/2016 INTEREST U/S 234 A/B/C 213597 3960936 TAX PAYABLE 3960940 0 DEPOSIT U/S 140A MADE ON 14.05.2009 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS D ECLARED LONG TERM CAPITAL GAIN OF RS. 1,64,19,510/- ON THE SALE CONSIDERATIO N OF RS. 4,00,40,000/-. WHILE COMPUTING THE CAPITAL GAIN, HE HAS CLAIMED TH E INDEXED COST OF LAND AT RS. 6,84,804/-. FURTHER, HE HAS CLAIMED HUGE LAND DEVELOPMENT COST FROM FINANCIAL YEAR 1993-94 TO FINANCIAL YEAR 2002-03, I NDEXED THEM AND ARRIVED SUCH INDEXED COST OF LAND DEVELOPMENT AT RS. 2,50,5 1,426/-. HE HAS CLAIMED THIS SUM AGAINST THE SALE CONSIDERATION AND ARRIVED RS. 1,89,48,574/- AS THE CAPITAL GAIN, AGAINST WHICH HE CLAIMED RS. 25,29,06 4/- INVESTMENT IN HOUSE PROPERTY U/S. 54F. THUS, HE HAS ARRIVED THE LONG T ERM CAPITAL GAINS AT RS. 1,64,19,510/-, TO WHICH HE ADDED RS. 3,42,726/- INT EREST FROM BANK AND ARRIVED THE GROSS TOTAL INCOME AT RS. 1,67,62,240/- . ON SUCH INCOME, HE WORKED OUT THE TAX AND INTEREST PAYABLE AT RS. 39,6 0,940/- AND PAID THEM ON 14.05.2009, ALTHOUGH, HE FILED THE RETURN OF INCOME OF 29.07.2009. THE FILING OF A RETURN IN THE FORM PRESCRIBED UNDER SECTION 13 9 IS NOT AN EMPTY FORMALITY. IT ASSUMES IMPORTANCE WHEN THE ASSESSEE HAS PAID TH E SELF ASSESSMENT TAX ON THE ADMITTED INCOME. THE AO WHEN HE CONSIDERS TH AT IT IS NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDER STATED HIS INCOME IN ANY MANNER, HE REQUIRES THE ASSESSEE, BY ISSUE OF A NOT ICE U/S 143(2) , TO PRODUCE :-13-: ITA NO. 2540/CHNY/2016 OR CAUSE TO BE PRODUCED BEFORE HIM ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. IN THIS CASE, THE A O HAS CALLED FOR THE DETAILS OF LAND DEVELOPMENT EXPENSES ETC., WHICH THE ASSESSEE COULD NOT FURNISH AND HENCE HE ADDED RS. 2,68,95,686/- TO THE RETURNED IN COME AND COMPLETED THE ASSESSMENT. AS POINTED OUT EARLIER, AFTER THE COMP LETION OF THE ASSESSMENT, BEFORE THE CIT(A), THE ASSESSEE CLAIMED THAT THE I MPUGNED LAND IS AGRICULTURAL LAND AND HENCE HE IS NOT LIABLE TO PAY THE TAXES. ON THE REMAND PROCEEDINGS ALSO, THE ASSESSEE COULD NOT FURNISH AN Y MATERIAL IN SUPPORT OF HIS PLEA AND HENCE, THE CIT(A) CONFIRMED THE ASSESSMENT . BEFORE US, THE ASSESSEE PLEADS THAT THE CIT(A) IS WRONG IN DISMISS ING THE APPEAL IN LIMINE FOR THE SUBSTANTIAL DELAY OF 117 DAYS IN FILING THE APP EAL FOR FAILING TO SEEK CONDONATION. THE ASSESSEE PLEADS THAT THE DECISION OF THE CIT(A) WITHOUT GIVING HIM AN OPPORTUNITY IS WRONG. SINCE, THE CIT (A) HAS DECIDED THE APPEAL ON MERIT AND THE ISSUES ARE BEING CANVASSED AND CON SIDERED ON MERIT, WE ARE OF THE OPINION THAT THIS ISSUE IS ACADEMIC. ON MER IT, ONCE THE ASSESSEE FILES THE RETURN, DISCLOSES THE BASIS OF RETURN AND PAID THE TAXES, HE CANNOT CLAIM THAT HE HAS COMMITTED A WRONG IN ADMITTING CERTAIN INCOME BEFORE THE APPELLATE AUTHORITY. EVEN THEN, THE ASSESSEE COULD NOT FURNISH ANY MATERIAL OR EVIDENCE AS TO HOW HIS RETURN IS WRONG , WHAT ARE T HE GROUNDS ON WHICH SUCH MISTAKE HAPPENED, THE BASIC MATERIAL ON WHICH SUCH MISTAKE WAS DETECTED ETC. FURTHER, HE COULD NOT SUBSTANTIATE HIS CLAIM EITHER BEFORE THE CIT(A) OR BEFORE US. HENCE, WE DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF THE :-14-: ITA NO. 2540/CHNY/2016 CIT(A), BUT FOR THE CLAIM OF DEDUCTION U/S. 54F. SI NCE, THE FACTS OF THIS CASE ARE PECULIAR AS DETAILED SUPRA, THE CASE LAWS RELIE D ON BY THE AR ARE NOT APPLICABLE TO THE FACTS OF THIS CASE AND HENCE, THE Y ARE NOT DEALT WITH. THOUGH, THE ASSESSING OFFICER HAS POINTED OUT IN TH E REMAND REPORT TO THE CIT(A) THAT THE ONLY RELIEF TO WHICH THE ASSESSEE M AY BE ENTITLED IS THE DEDUCTION U/S. 54F IN RESPECT OF WHICH ADDITIONAL E VIDENCE HAS BEEN ADDUCED BEFORE THE DEPARTMENT FOR THE FIRST TIME DURING APP ELLATE PROCEEDINGS, THE CIT(A) HAS NOT ADDRESSED THIS ISSUE IN HIS ORDER. CONSIDERING THE FACTS AND CIRCUMSTANCES, WE REMIT THIS ISSUE BACK TO THE AO F OR A FRESH EXAMINATION. THE AO AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE SHALL DECIDE THIS ISSUE IN ACCORDANCE WITH LAW. TO THIS EXTENT, THE ASSESSES GROUNDS ARE ALLOWED. 6. IN THE RESULT, THE ASSESSES APPEAL IS PARTLY AL LOWED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF APRIL, 2018 AT CHENNAI. SD/- ( . ) (DUVVURU RL REDDY) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, . /DATED: 20 TH APRIL, 2018 JPV ) %01 21 /COPY TO: 1. (/ APPELLANT 2. %&( /RESPONDENT 3. 4 ) (/CIT(A) 4. 4 /CIT 5. 1% /DR 6. 7 /GF