RAGHUVEER SINGH, Jaipur V. ACIT, Jaipur

ITA 276/JPR/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5160 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DHK
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Capital asset; Cost of acquisition; Competent authority
• Section: 54B; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.599/JP/2012 & 276/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. SHRI RAGHUVIR SINGH VILLAGE : SANJRIYA, TEHSIL : SANGANER, JAIPUR. CUKE VS. THE ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE-7, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AVZPK 0320 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI K.L. MOOLCHANDANI (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10.08.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26/08/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO APPEALS BY THE ASSESSEE, ONE IN QUANTUM P ROCEEDINGS AND OTHER IN PENALTY PROCEEDINGS ARE DIRECTED AGAINST THE TWO SE PARATE ORDERS OF LD. CIT (APPEALS)-III, JAIPUR DATED 22.03.2012 & 20.12.2012 PERTAINING TO ASSESSMENT YEAR 2008-09. FIRST, WE TAKE UP QUANTUM APPEAL IN ITA N O. 599/JP/2012. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ACTION OF THE AO IN HOLDING THAT THE LAND SOLD BY T HE ASSESSEE SITUATED AT VILLAGE SANJARIA, TEHSIL SANGANER IS WI THIN 8 KM OF THE JDA TERRITORY AND THEREBY TREATING THE SAME AS CAPI TAL ASSETS. HE HAS FURTHER ERRED IN NOT PROPERLY INTERPRETING NOTI FICATION NO. 9447 DATED 6.1.1994 IN HOLDING THAT THE GAIN ON SALE OF AGRICULTURE LAND IS LIABLE FOR CAPITAL GAIN TAX. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF COST OF IMP ROVEMENT OF RS. 3,00,000/- INCURRED IN THE YEAR 1985. 2 ITA NO. 599(2)/JP/2012 SHRI RAGHUVIR SINGH 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF EXEMPTION U /S 54B TO THE EXTENT OF RS. 7,80,00,000/- IN RESPECT OF INVESTMEN T IN PURCHASE OF LAND BY HOLDING THAT :- (A) THE ASSESSEE HAS FAILED TO PROVIDE THE GIRDAWARI RE CORD OF LAND PURCHASE TO PROVE THE FACT THAT THE SAME IS AN AGRI CULTURAL LAND. (B) THE PURCHASE OF LAND IS ONLY A COLORABLE TRANSACTIO N AND TRANSFER IS FOUND DEVOID OF MERIT. 4. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT. THE AO FRAMED THE ASSESSMENT U NDER SECTION 144 BY OBSERVING THAT THE NOTICE ISSUED ON 02.09.2010 REMAINED UN-CO MPLIED AND THEREAFTER ON 07.12.2010 FINAL SHOW CAUSE NOTICE WAS ISSUED FIXIN G THE DATE OF HEARING ON 14.12.2010. ON THIS DAY THE ASSESSEE NEITHER ATTEND ED THE HEARING NOR FILED ANY REPLY. THEREFORE, THE AO PROCEEDED TO FRAME THE AS SESSMENT IN THE ABSENCE OF THE ASSESSEE. WHILE FRAMING THE ASSESSMENT, THE AO OBS ERVED THAT THE ASSESSEE HAD SOLD 7.02 HECTARE AGRICULTURAL LAND SITUATED AT VIL LAGE SANJARIYA, TEHSIL SANGANER, JAIPUR FOR A SUM OF RS. 11,50,00,000/- ON 10.07.200 7. THE AO APPLYING THE COST ADOPTED BY THE REGISTRAR, STAMPS ADOPTED RS. 43,596 /- AS COST OF ACQUISITION ON 01.04.1981 AND DECLINING THE DEDUCTION UNDER SECTIO N 54B AND 54F, COMPUTED THE LONG TERM CAPITAL GAIN AT RS. 11,49,56,404/-. THE ASSESSEE AGGRIEVED BY THIS ORDER, PREFERRED AN APPEAL BEFORE LD. CIT (A). AFTE R CONSIDERING THE SUBMISSIONS, THE LD. CIT (A) PARTLY ALLOWED THE APPEAL WHEREBY THE L D. CIT (A) ALLOWED THE CLAIM OF 3 ITA NO. 599(2)/JP/2012 SHRI RAGHUVIR SINGH DEDUCTION UNDER SECTION 54B IN RESPECT OF THE LAND HOLDING IN THE NAME OF MRS. ROOP KANWAR, WIFE OF THE ASSESSEE. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3.1. THE LD. COUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSIONS AS ARE MADE IN THE WRITTEN BRIEF. LD. COUNSEL SUBMITTED THAT THE A UTHORITIES BELOW AS NOT JUSTIFIED IN TAXING THE INCOME UNDER THE HEAD CAPITAL GAINS AS A DMITTEDLY THE LAND IS AGRICULTURAL LAND. THE LD. COUNSEL SUBMITTED THAT AS PER THE NOT IFICATION ISSUED BY THE COMPETENT AUTHORITY DATED 6.1.1994, MUNICIPAL LIMITS OF JAIPU R CITY WAS A DISTANCE OF 8 KM FROM ALL DIRECTIONS. LD. COUNSEL SUBMITTED THAT THE AO HAS NOT MADE ANY ENQUIRY WITH REGARD TO THE FACT WHETHER THIS LAND WAS AN AGRICUL TURAL LAND OR NOT. THE ASSESSEE HAS CONTESTED THE DISTANCE STATING THAT IT IS AN AD MITTED FACT THAT THE DISTANCE OF THE LAND FROM THE MUNICIPAL LIMITS IS MORE THAN 8 KMS A S PER ROADMAP SUBMITTED BY THE WARD INSPECTOR. THE DISTANCE AS SHOWN IN SUCH ROAD MAP HAS NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. THEY HAVE TURNED DOWN SUCH R EPORT MERELY ON THE PLEA THAT THE INSPECTOR IS NOT COMPETENT TO SUBMIT SUCH ROAD MAP. THEY DID NOT HOWEVER, QUESTION THE CORRECTNESS OF THE DISTANCE AS SHOWN I N SUCH ROAD MAP. THUS IT IS AN ADMITTED FACT THAT THE DISTANCE AS PER ROAD MAP IS MORE THAN 8 KM. IT IS IMMATERIAL THAT THE DISTANCE HAS NOT BEEN MEASURED BY THE AUTH ORIZED PERSON AS OPINED BY THE LD. CIT (A). IN ABSENCE OF SPECIFIC AND CATEGORICAL FINDINGS ON THIS FACT, THE CONTENTIONS OF THE APPELLANT COULD NOT BE BRUSHED A SIDE SUMMARILY. IN SUPPORT OF HIS CONTENTION, LD. COUNSEL PLACED RELIANCE ON THE FOLL OWING DECISIONS :- CIT VS. LAL SINGH 195 TAXMAN 420 (P&H) 4 ITA NO. 599(2)/JP/2012 SHRI RAGHUVIR SINGH CIT VS. SANTINDER PAL SINGH 188 TAXMAN 54 (P&H) LAUKIK DEVELOPERS VS. DCIT 105 ITD 657 (MUM.) THE LD. COUNSEL SUBMITTED THAT THE LAND UNDER CONSI DERATION IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III)(B) OF THE ACT AND THE GAIN ON TRANSFER OF SUCH AGRICULTURAL LAND IS, THEREFORE, EXEMPT FROM L ONG TERM CAPITAL GAINS TAX. 3.2. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMI SSIONS. 3.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. FROM THE REPORT, IT IS EVIDENT THAT THE AS SESSMENT WAS FRAMED ON THE BACK OF THE ASSESSEE. THE ASSESSEE WAS NOT GIVEN SUFFICI ENT OPPORTUNITY BY THE AO. THE CONTENTION OF THE ASSESSEE IS THAT THE LAND IN QUES TION IS AN AGRICULTURAL LAND. THIS FACT REQUIRES VERIFICATION AT THE END OF THE AO. TH EREFORE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ASSESSMENT TO THE FILE OF THE AO FOR DENOVO ASSESSMENT. THE AO WILL VERIFY THE CLAIM OF THE AS SESSEE THAT THE LAND IS AN AGRICULTURAL LAND HENCE EXEMPT FROM CAPITAL GAINS T AX. IN THE EVENT, IF THE AO FINDS THAT THE LAND IS SITUATED WITHIN THE PRESCRIBED MUN ICIPAL LIMIT, HE SHOULD DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW. IF THE ASSESSEE IS ENTITLED FOR ANY DEDUCTION AS PER LAW, SAME BE GIVEN. THE ASSESSEE IS DIRECTED TO FU RNISH THE REQUISITE EVIDENCES AS AND WHEN CALLED BY THE AO. THE APPEAL OF THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO. 599(2)/JP/2012 SHRI RAGHUVIR SINGH 4. NOW WE TAKE UP THE APPEAL IN ITA NO. 276/JP/2013 . 4.1. SINCE WE HAVE SET ASIDE THE ORDERS OF THE AUTH ORITIES BELOW IN QUANTUM PROCEEDINGS, THE ORDERS OF THE AUTHORITIES BELOW IN THE PENALTY APPEAL ARE ALSO SET ASIDE TO THE FILE OF THE AO FOR DENOVO DECISION. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26/08/201 6. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 26/08/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAGHUVIR SINGH, JAIPUR. 2. THE RESPONDENT- THE ACIT CIRCLE-7, JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 599(2)/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 599(2)/JP/2012 SHRI RAGHUVIR SINGH