Virvati Devi, Bulandshahr V. ITO, Ward-3(3), Bulaandshahr

ITA 264/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4744 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR JIWANI
• Assessee Lawyers: SANDEEP SARAF
• Keywords: Capital asset; Competent authority
• Section: 54F; 2(14); 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C/SMC, NEW DELHI) BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO:- 264/DEL/2018 ( ASSESSMENT YEAR: 2009-10) VIRVATI DEVI, BULANDSHAHR. PAN NO.-AYXPD4884A VS. COMMISSIONER OF INCOME TAX (APPEALS), GZB/ALIGARH. APPELLANT RESPONDENT ASSESSEE BY : SH. SANDEEP SARAF, ADV. REVENUE BY : SH. VIJAY KUMAR JIWANI, SR. DR DATE OF HEARING : 07.08.2018. DATE OF PRONOUNCEMENT : 10/08/2018. ORDER PER: BHAVNESH SAINI, JM THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) ALIGARH, DATED 19.09.2017 FOR ASSESSMENT YEAR 2009- 10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO HA D INFORMATION THAT THE ASSESSEE HAD SOLD AN IMMOVABLE PROPERTY DURING THE RELEVANT PREVIOUS YEAR. AFTER MAKING PRELIMINARY INQUIRY IN THIS REGARD, PROCEEDINGS WER E INITIATED BY ISSUING A NOTICE U/S 148 2 ITA NO.-264/DEL/2018. VIRVATI DEVI. OF THE ACT ON 17.03.2016. IN RESPONSE, THE ASSESSE E FILED RETURN OF INCOME ON 30.05.2016 DECLARING NIL INCOME AND AGRICULTURE INC OME OF RS. 50,000/-. THE AO INITIATED THE SCRUTINY PROCEEDINGS AND AFTER DISCUS SING THE MATTER WITH THE LD. COUNSEL FOR THE ASSESSEE, THE AO COMPUTED LONG-TERM CAPITAL GAIN OF RS. 49,45,757/- AND ALLOWED EXEMPTION U/S 54F AMOUNTING TO RS. 13,48,43 2/-. THUS, THE ASSESSMENT WAS COMPLETED BY DETERMINING NET CAPITAL GAIN OF RS. 35 ,97,325/-. 2.1 THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER AN D THE ADDITIONS BEFORE THE LD. CIT(A). THE ASSESSEE SUBMITTED THAT SHE IS AN AGRI CULTURIST AND SOLD AGRICULTURE LAND AND AGRICULTURE ACTIVITY WAS DONE ON THE LAND AT TH E TIME OF TRANSFER OF AGRICULTURAL LAND. IT WAS ALSO SUBMITTED THAT AT THE TIME OF HEARING B EFORE THE AO, THE ASSESSEE SUBMITTED ALL THE DOCUMENTS RELATING TO AGRICULTURAL LAND I.E . JOT CHANKBANDI, KHASRA AND KHATAUNI AND OTHER DOCUMENTS WHICH PROVED THAT WHEN LAND WAS SOLD, AGRICULTURAL ACTIVITIES WERE DONE ON THE SAME LAND. THE PURCHASER HAS PURCHASED THE LAND FOR INDUSTRIAL PURPOSE BUT ASSESSEE HAS NOT SOLD THE LAND AS INDUSTRIAL PL OT. IN THE AGREEMENT, IT WAS NOT RECORDED AS INDUSTRIAL PLOT. THE LD. CIT(A), HOWEV ER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND REJECTED THE CLAIM OF THE ASSESSEE OF TRANSFER OF AGRICULTURE LAND. THE ASSESSEE MADE AN ALTERNATE CLAIM THAT SHE PURCHASED AGRICULTURAL LAND OUT OF THE CONSIDERATION OF TRANSFER OF LAND, THEREFORE, SUCH BENEFIT MAY BE ALLOWED. THE LD. CIT(A) DIRECTED THE AO TO VERIFY THE CLAIM OF THE A SSESSEE AND ALLOW AS PER LAW. THE FINDINGS OF LD. CIT(A) IN PARA 5.2 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER:- 3 ITA NO.-264/DEL/2018. VIRVATI DEVI. 5.2 DECISION THE APPELLANT IS CLAIMING THAT THE LAND SOLD BY HER WAS AN AGRICULTURAL LAND WHICH IS NOT A CAPITAL ASSETS AS PER THE DEFINITION GIVEN SECTION 2(14). HOWEVER, THE AO HAS CHARGED CAPITAL GAIN TAX WITHOUT VERIFYING T HIS CLAIM OF THE APPELLANT. 1 HAVE CONSIDERED ALL THE DOCUMENTS THAT ARE AVAILABLE BEF ORE ME. IT IS SEEN THAT INITIALLY ON 09.01.2009, THE APPELLANT HAD SIGNED AN AGREEMENT T O SELL WITH THE PURCHASER NAMELY M/S ARSHIYA INTERNATIONAL LTD. AND RECEIVED PART CONSIDERATION OF RS. 44,62,500/- OUT OF THE TOTAL CONSIDERATION OF RS. 5 1,00,000/-. IT IS TO BE NOTED THAT THIS AGREEMENT TO SELL WAS MADE WITHOUT TRANSFERRIN G THE POSSESSION. ON PAGE 11 OF THE AGREEMENT THE FOLLOWING IS RECORDED:- FROM THE ABOVE, IT IS CLEAR THAT THE POSSESSION WAS NOT TRANSFERRED AT THE TIME OF AGREEMENT TO SELL. AFTER THAT VIDE ORDER DATED 26.0 2.2009, THE SDM CHANGED THE LAND USE AND DECLARED THE LAND AS NON AGRICULTURAL. THEREAFTER, THE SALE DEED WAS REGISTERED ON 24.03.2009. THEREFORE, IT CAN BE SEEN THAT WHEN THE SALE DEED WAS SIGNED AND THE TRANSACTION OF SALE OF LAND WAS COMP LETED, THE LAND HAD ACQUIRED THE CHARACTER OF NON AGRICULTURAL LAND. HENCE, ON THE D ATE OF SALE THE LAND IN QUESTION WAS NOT AN AGRICULTURAL LAND. THEREFORE, THE SAME W OULD QUALIFY TO BE CONSIDERED AS CAPITAL ASSETS U/S 2(14) OF THE IT ACT. CAPITAL GAI N ON TRANSFER OF SUCH CAPITAL ASSETS SHOULD NECESSARILY BE CHARGED UNDER THE INCOME TAX ACT. THEREFORE, IN MY OPINION, THE AO WAS FULLY JUSTIFIED IN CHARGING THE CAPITAL GAIN ON SALE OF THE LAND IN QUESTION. THE AO HAS COMPUTED LTCG OF RS. 49,45,757 /- AND THE APPELLANT HAS NOT INDICATED ANY MISTAKE IN THE CALCULATION. THEREFORE , THE CAPITAL GAIN COMPUTATION IS TAKEN TO BE CORRECT. THE APPELLANT HAS CLAIMED THAT SHE HAD PURCHASED AGRICULTURAL LAND OUT OF THE CONSIDERATION SHE RECEIVED FOR SELL ING THE LAND ON WHICH CAPITAL GAIN HAS BEEN DETERMINED. SHE IS CLAIMING THAT DUE BENEF IT FOR PURCHASE OF SUCH AGRICULTURAL LAND SHOULD BE ALLOWED. THE APPELLANT HAS FURNISHED COPY OF THE PURCHASE DEED WHICH SHOWS THAT SHE PURCHASED AGRICU LTURAL LAND OF RS. 27,00,000/- ON 29.08.2009. THE AO IS BEING DIRECTED TO VERIFY T HE CLAIM OF THE PURCHASE AND ALLOW BENEFIT OF SUCH PURCHASE IN ACCORDANCE WITH T HE PROVISIONS OF THE INCOME TAX ACT. TO THIS EXTENT, THESE GROUNDS OF APPEAL MAY B E CONSIDERED AS PARTLY ALLOWED. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERS TO PB 22 WHICH IS COPY OF THE SALE DEED AND PB 45 WHICH IS COPY OF JOTCHAKBANDI AAKAR (KHATAUNI) CER TIFICATE 4 ITA NO.-264/DEL/2018. VIRVATI DEVI. AND SUBMITTED THAT AGRICULTURAL ACTIVITIES WERE DON E AT THE TIME OF SALE OF PROPERTY IN QUESTION. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND MATE RIAL AVAILABLE ON RECORD, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE ASSESSEE CLAIMED TO HAVE SOLD THE AGRICULTURAL LAND. THE LD. CIT(A) NOTED THAT INITI ALLY THE ASSESSEE HAD ENTERED INTO THE AGRICULTURE TO SELL WITH THE PURCHASER NAMELY M/S A RSHIYA INTERNATIONAL LTD. AND RECEIVED PART CONSIDERATION. IT WAS NOTED IN THE A GREEMENT TO SELL THE SAME IS EXECUTED WITHOUT TRANSFERRING THE POSSESSION. THE COPY OF T HE SALE DEED DATED 24.03.2009 SHOWS THAT THE PROPERTIES IN QUESTION HAVE BEEN REF ERRED AS INDUSTRIAL PLOT FOR INDUSTRIAL PURPOSES. IN THE SALE DEED, IT IS ALSO MENTIONED THAT THE PLOT UNDER SALE HAVE BEEN DECLARED AS INDUSTRIAL AREA BY KHURJA DEVELOPM ENT AUTHORITY AS PER MASTER PLAN. 5.1 THE LD. CIT(A) CORRECTLY NOTED THAT POSSESSION OF THE PROPERTY IN QUESTION WAS NOT TRANSFERRED AT THE TIME OF AGREEMENT TO SALE. AFTER THE AGREEMENT TO SALE THE SDM VIDE ORDER DATED 26.02.2009 CHANGED THE LAND USE AN D DECLARED THE LAND AS NON- AGRICULTURAL. THE SALE DEED DATED 24.03.2009 WAS RE GISTERED THEREAFTER. IT IS THEREFORE CLEAR THAT THE SALE TRANSACTION WAS COMPLETED ON EX ECUTION OF THE SALE DEED AND AT THAT TIME THE LAND HAD ACQUIRED THE CHARACTER OF NON-AGR ICULTURAL LAND. THUS, ON THE DATE OF SALE, THE LAND IN QUESTION WAS NOT AN AGRICULTURAL LAND. THE SAME WOULD QUALIFY TO BE CONSIDERED AS CAPITAL ASSETS U/S 2(14) OF THE IT AC T. THE LD. COUNSEL FOR THE ASSESSEE 5 ITA NO.-264/DEL/2018. VIRVATI DEVI. DID NOT DISPUTE THE FINDINGS OF THE FACT RECORDED B Y THE LD. CIT(A) AND REPRODUCED ABOVE. HE HAS MERELY CONTENDED THAT THE JOT CHANKB ANDI DOCUMENT SHOWS IT WAS AN AGRICULTURAL LAND. THIS DOCUMENT IS NOT RELEVANT O N THE FACE OF THE FINDINGS OF FACT RECORDED ABOVE. THE SALE DEED IN QUESTION IS EXECU TED BY THE ASSESSEE AND IS DOCUMENT PRODUCED BY THE ASSESSEE. THE ASSESSEE IS THEREFORE BOUND BY THE CONTENTS OF THE REGISTERED SALE DEED. THE AGREEMENT TO SALE HAS NO RELEVANCE TO THE MATTER IN ISSUE ON EXECUTION OF THE REGISTERED SALE DEEDS. S INCE PRIOR TO SALE OF THE PROPERTY IN QUESTION, IT WAS DECLARED AS INDUSTRIAL PLOT BY THE COMPETENT AUTHORITY, THEREFORE, IT COULD NOT ASSUME THE CHARACTER OF AGRICULTURE LAND. SINCE INDUSTRIAL PLOT WAS SOLD BY THE ASSESSEE, THEREFORE, IT WAS CORRECTLY CONSIDERE D AS CAPITAL ASSETS FOR THE PURPOSE OF COMPUTING LONG-TERM CAPITAL GAIN. IN THE ABSENCE OF ANY SERIOUS CHALLENGE TO THE FINDINGS OF THE FACTS RECORDED BY THE LD. CIT(A), N O INTERFERENCE IS CALLED FOR IN THE MATTER. WE CONFIRM THE FINDINGS OF FACT RECORDED B Y THE LD. CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/8/2018 SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.08.2018 POOJA/- 6 ITA NO.-264/DEL/2018. VIRVATI DEVI. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO.-264/DEL/2018. VIRVATI DEVI. DATE OF DICTATION 07/8/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09/8/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 10/8/2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 10/8/2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 10 /8/2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 8 ITA NO.-264/DEL/2018. VIRVATI DEVI.