SCL Enterprises P. Ltd., CHENNAI V. ITO, Coimbatore

ITA 265/CHNY/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9435 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K RAGHU

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !, # !$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.265/CHNY/2017 & '& / ASSESSMENT YEAR : 2012-13 M/S SCL ENTERPRISES P. LTD., R-305, PURVA BLUEMONT, TRICHY ROAD, SINGANALLUR, COIMBATORE 641 005. PAN : AAJCS 7009 P V. THE INCOME TAX OFFICER, CORPORATE WARD 3, COIMBATORE. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI K. RAGHU, FCA +,)* - . / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT / - 0# / DATE OF HEARING : 27.11.2019 12' - 0# / DATE OF PRONOUNCEMENT : 02.01.2020 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 1, COIMBA TORE, DATED 26.10.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI K. RAGHU, THE LD. REPRESENTATIVE FOR THE AS SESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD 2 I.T.A. NO.265/CHNY/17 TO ASSESSMENT OF CAPITAL GAIN ON SALE OF AGRICULTUR AL LAND. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE HAS SOLD 1 ACRE 29.480 CENTS TO M/S VANTON HOSPITALITY PVT. LTD., NEW DELH I FOR A TOTAL CONSIDERATION OF 2.25 LAKHS. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER T HAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND IN THE STATE OF KE RALA, THEREFORE, EXEMPTED FROM TAXATION. HOWEVER, THE ASSESSING OFF ICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE AS SESSEE COULD NOT ESTABLISH THAT THE LAND IN QUESTION IS AN AGRICULTU RAL LAND. THE LD. REPRESENTATIVE SUBMITTED THAT THE LAND IN QUESTION IS REGISTERED AS PURAYIDAM WHICH MEANS IT IS A DRY LAND. THE REVE NUE AUTHORITIES CLASSIFIED THAT THE LAND IS A DRY LAND. ON A QUERY FROM THE BENCH, THE LD. REPRESENTATIVE CLARIFIED THAT THE ASSESSEE- COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND NOT CULT IVATION. HOWEVER, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE DECLARED AGRICULTURAL INCOME IN THE EARLIER YEARS I N THE RETURNS OF INCOME WHICH WAS ACCEPTED BY THE REVENUE AUTHORITIE S EVEN THOUGH CULTIVATION / AGRICULTURE IS NOT ONE OF THE OBJECTS OF THE COMPANY. ON A QUERY FROM THE BENCH, WHEN THE LAND WAS CLASSIFIED AS DRY LAND, WHAT IS THE SOURCE OF IRRIGATION? THE LD. REPRESENTATIVE 3 I.T.A. NO.265/CHNY/17 SUBMITTED THAT THE ASSESSEE CULTIVATED COCONUT TREE S. IN THE STATE OF KERALA, COCONUT TREES DO NOT REQUIRE ANY IRRIGAT ION. HENCE, THE COCONUT TREES WERE CULTIVATED. IT WILL GROW ON ITS OWN IN VIEW OF CONTINUOUS RAIN FALL IN THE STATE OF KERALA. THE L D. REPRESENTATIVE PLACED HIS RELIANCE ON THE DECISION OF COCHIN BENCH OF THIS TRIBUNAL IN SHRI M.J. THOMAS V. DCIT IN ITA NO.224/COCH/2011 DATED 06.06.2014 AND SUBMITTED THAT IN THE STATE OF KERAL A, THERE WAS NO RECORD FOR CULTIVATION OTHER THAN THE PAYMENT OF PR ESCRIBED TAX AND AGRICULTURE LABOUR WELFARE TAX. ACCORDING TO THE L D. REPRESENTATIVE, THE ASSESSEE CONTRIBUTED TO THE AGRICULTURAL LABOUR DRS WELFARE FUND AND ALSO PAYING REVENUE TAX AS AGRICULTURAL LA ND WHICH IS EVIDENT FROM THE BASIC TAX REGISTER. 3. ON THE CONTRARY, SHRI AR. SRINIVASAN, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE LAND IN QUESTION WAS CLASSIFIED AS RESIDENTIAL LAND IN THE SALE DEED EXECUTED BY TH E ASSESSEE ITSELF. MOREOVER, THE ADDL. TEHSILDAR HAS CONFIRMED THAT TH ERE WAS NO AGRICULTURAL ACTIVITY IN THE AREA. ACCORDING TO TH E LD. D.R., THE ASSESSEE HAS PURCHASED THREE PIECES OF LAND TO MAKE IT A LARGE EXTENT OF 1.29 ACRES. THE EARLIER OWNER, FROM WHOM THE LAND WAS PURCHASED BY THE ASSESSEE, WAS HOLDING THE SAME AS RESIDENTIAL 4 I.T.A. NO.265/CHNY/17 PLOT AND NOT AS AGRICULTURAL LAND. ACCORDING TO TH E LD. DR, ON THE DATE OF PURCHASE OF THE LAND BY THE ASSESSEE, IT WA S RESIDENTIAL LAND, THEREFORE, IT WOULD CONTINUE TO BE RESIDENTIA L LAND EVEN ON THE DATE OF SALE OF LAND BY THE ASSESSEE. ACCORDING TO THE LD. D.R., THERE WAS NO AGRICULTURAL SERVICE CONNECTION AND NO WATER PUMP SET. THERE WAS NO WELL FOR IRRIGATION. MERELY BECAUSE S OME COCONUT TREES WERE PLANTED IN THE LAND WHICH IS COMMON IN T HE ENTIRE KERALA, ACCORDING TO THE LD. REPRESENTATIVE, THE LAND CANNO T BE CLASSIFIED AS AGRICULTURAL LAND. 4. REFERRING TO THE DECISION OF COCHIN BENCH OF THI S TRIBUNAL, THE LD. DR POINTED OUT THAT NO DOUBT IT APPEARS THA T THE STATE GOVERNMENT WAS NOT MAINTAINING ANY CULTIVATION RECO RD IN THE STATE OF KERALA. HOWEVER, THE VILLAGE ADMINISTRATIVE OFF ICER HAS CERTIFIED THAT THE SUBJECT LAND BEFORE THE COCHIN BENCH OF TH IS TRIBUNAL WAS UNDER CULTIVATION. THEREFORE, THIS TRIBUNAL FOUND THAT THE CERTIFICATE GIVEN BY THE VAO, WHO PERSONALLY ACQUAINTED WITH LA ND, MAY BE ONE OF THE FACTORS TO BE TAKEN INTO CONSIDERATION TO DE TERMINE WHETHER THE LAND WAS AGRICULTURAL LAND OR NOT. IN THIS CAS E, ACCORDING TO THE LD. D.R., THE ADDL. TEHSILDAR HAS CATEGORICALLY CER TIFIED THAT THE LAND 5 I.T.A. NO.265/CHNY/17 IN QUESTION IS NOT SUBJECTED TO CULTIVATION AT ALL. THEREFORE, ACCORDING TO THE LD. DR, THE ASSESSEE HAS NO MERIT AT ALL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE REGISTERED DOCUMENT EXECUTED BY THE ASSESSEE, ADMITTEDLY, THE SUBJECT LAND WAS DESCRIBED AS RESIDENTIAL PROPERTY. WHEN THE ASSESSEE ITSELF DESCRIBED THE PROPERTY AS RESIDENTIAL PROPERTY IN T HE SALE DEED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR THE PURPOSE OF INCOME TAX, IT CANNOT BE CLAIMED AS AGRICULTURAL LAND. IT IS NOT IN DISPUTE THAT IN THE SALE DEED EXECUTED BY THE ASSESSEE IN FAVOUR OF M/S VANTON HOSPITALITY PVT. LTD., IT WAS SHOWN AS RESIDENTIAL PROPERTY. AS RIGHTLY SUBMITTED BY THE LD. DR, MERELY BECAUSE SOME COCONU T TREES WERE PLANTED ON THE LAND, IT CANNOT BE CONSTRUED AS AGRI CULTURAL PROPERTY. AS RIGHTLY SUBMITTED BY THE LD. DR, IT IS VERY COMM ON TO HAVE COCONUT TREES AROUND THE RESIDENTIAL HOUSES IN THE STATE OF KERALA. MOREOVER, RAIN FALL IN THE STATE OF KERALA IS MORE WHEN COMPARED TO OTHER NEIGHBOURING STATES. THEREFORE, NOT MUCH OF IRRIGATION IS REQUIRED FOR PLANTING COCONUT TREES AROUND THE RESI DENTIAL PROPERTY. THE ADDL. TEHSILDAR HAS CERTIFIED THAT THE LAND IN QUESTION IS DRY LAND AND NO CULTIVATION WAS MADE. IN VIEW OF THE ADMITT ED FACT BY THE 6 I.T.A. NO.265/CHNY/17 ASSESSEE IN THE REGISTERED SALE DEED AS RESIDENTIAL LAND, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE LAND CANNOT BE NOW CLAIMED AS AGRICULTURAL LAND BY THE ASSESSEE. MORE OVER, THE BUSINESS OF THE ASSESSEE-COMPANY IS REAL ESTATE AND NOT CULTIVATION. IN SUCH CIRCUMSTANCES, THIS TRIBUNAL DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND JANUARY, 2020 AT CHENNAI. SD/- SD/- (. !) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 2 ND JANUARY, 2020 KRI. - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A)-1, COIMBATORE 4. PRINCIPAL CIT- 1, COIMBATORE 5. 69 +0 /DR 6. :& ; /GF.