SHRI SUKHLAL DAULAT RATHOD (HUF), Aurangabad V. ACIT, Cir.-2, Aurangabad

ITA 28/PUN/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9867 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-10-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 07-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Capital asset; Opportunity of being heard
• Section: 143(3); 54B; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 28/PN/2009 (ASSESSMENT YEAR: 2004-05) SUKHLAL DAULAT RATHOD L/H SMT SHANTABAI SUKHLAL RATHOD AND SHRI PANKAJ SUKHLAL RATHOD PLOT NO. 13, NEW SHANTINIKETAN AURANGABAD PAN NOT ALLOTTED. .. APPELLANT VS. ASSTT. CIT CIR. 2, AURANGABAD RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING: 19-10-2012 DATE OF PRONOUNCEMENT: 31-10-2012 ORDER PER G.S. PANNU, A.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-AURANGABAD DATED 7-10- 2008 WHICH, IN TURN, HAS ARISEN FROM ORDER DATED 25 -9-2006 PASSED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF T HE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE AS SESSMENT YEAR 2004-05. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL RELATES TO CONFIRMATION OF ACTION OF THE ASSESSING OFFICER IN REJECTING THE CLAIM OF THE ASSESSEE OF EXEMPTION U/S 54B OF THE ACT. TH E LEARNED COUNSEL FOR THE ASSESSEE VIDE HIS LETTER DATED 14-3 -2011 SOUGHT PERMISSION OF THIS BENCH OF THE TRIBUNAL TO RAISE T HE FOLLOWING ADDITIONAL GROUNDS OF APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LAND SOLD WHICH HAS BEEN THE SUBJECT MATTER OF LONG TERM CAPITAL GAIN IS IN EFFECT AN AGRICULTURA L LAND THE SALE/TRANSFER OF WHICH IS EXEMPT UNDER THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LAND WAS AN AGRICULTURAL LAND WITHIN THE ME ANING 2 ITA NO 28/PN/09 SHRI SUKHLAL D RATHOD A.Y. 2004-05 OF SEC. 2(1)(14)(III) OF THE ACT AS IN VIEW OF CLAU SE (A) THE AREA HAS A POPULATION OF LESS THAN TEN THOUSAND AND ALSO IN VIEW OF CL. (B) IS SITUATED BELONG 8 KMS FROM TH E LOCAL LIMITS OF THE AUTHORITIES AND ALSO THE AREA HAS NOT BEEN NOTIFIED UNDER NOTIFICATION ISSUED FOR THE PURPOSE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW AND IN VIEW OF GROUND NO. 1 AND 2 ABOVE, THE SA LE OF AGRICULTURAL LAND IS EXEMPT FROM TAXATION AND LD. C IT(A)S DECISION CONFIRMING THE ACTIONS OF THE AO TO TAX IT AS COVERED BY LONG TERM CAPITAL GAIN PROVISIONS BE QUA SHED. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE GO TO THE ROOT OF THE MATTER AND TH EREFORE, THE SAME BE PERMITTED TO BE RAISED BY THE ASSESSEE. IT WAS POINTED OUT THAT SUCH GROUNDS WERE PERMISSIBLE TO BE RAISED AS THEY INVOLVE A POINT OF LAW AND WERE RELEVANT FOR THE PURPOSE OF DETERMI NING ASSESSEES TAX LIABILITY AND IN VIEW OF THE JUDGMENT OF HONBL E SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC) THE SAME WAS LIABLE TO BE ADMITTED FOR ADJ UDICATION. 4. IN ORDER TO APPRECIATE THE PLEA OF THE ASSESSEE FOR ADMISSION OF THE AFORESTATED ADDITIONAL GROUNDS OF APPEAL, TH E FOLLOWING BACKGROUND IS RELEVANT. THE ASSESSEE IS A HINDU UN DIVIDED FAMILY (FOR SHORT HUF) WHICH FILED A RETURN OF INCOME FOR A.Y. 2004-05, INTER ALIA, DECLARING CAPITAL GAIN FROM SALE OF AGRICULTU RAL LANDS AT GANDHELI AND BIDKIN IN MAHARASHTRA. THE SALE CONSIDERATION WAS RS. 35,88,780/- AND THE ASSESSEE CLAIMED DEDUCTION U/S 54B OF THE ACT OF RS. 15,80,000/- AND U/S 54F OF THE ACT OF RS. 6, 78,662/- ON HAVING PURCHASED LAND FOR BEING USED FOR AGRICULTURAL PURP OSES AND A ROW HOUSE RESPECTIVELY. SUCH A CLAIM WAS DENIED BY THE ASSESSING OFFICER AND ALSO BY THE CIT(A) AGAINST WHICH, THE A SSESSEE IS IN FURTHER APPEAL BEFORE US. 3 ITA NO 28/PN/09 SHRI SUKHLAL D RATHOD A.Y. 2004-05 5. BY WAY OF THE ADDITIONAL GROUNDS OF APPEAL, WHIC H WERE HITHERTO NOT RAISED BEFORE THE LOWER AUTHORITIES, A SSESSEE CONTENDS THAT THE LAND SOLD WAS AN AGRICULTURAL LAND WITHIN THE MEANING OF SEC. 2(14)(III) OF THE ACT AND WHICH WAS SITUATED IN AN AREA HAVING POPULATION OF LESS THAN 10,000 AND WAS ALSO LOCATED BEYOND 8 KMS. FROM THE LOCAL LIMITS OF THE MUNICIPAL AUTHORITIES AND THEREFORE, IN TERMS OF SUB-CLAUSE (A) AND (B) OF SEC. 2(14)(III) OF THE ACT, IT WAS NOT TO BE CONSIDERED AS A CAPITAL ASSET. IT IS THEREFO RE, SOUGHT TO BE MADE OUT THAT THE INCOME FROM SUCH SALE WAS EXEMPT. THE LEARNED COUNSEL HAS POINTED OUT THAT THE LOCATION OF THE AG RICULTURAL LAND SOLD HAS BEEN CLEARLY MENTIONED IN THE ASSESSMENT ORDER ITSELF. WE HAVE PERUSED THE ASSESSMENT ORDER AND FIND THAT THE ASSE SSING OFFICER HAS BROUGHT OUT THE ADDRESS OF THE LAND IN QUESTION AND HAS ALSO CARRIED OUT VERIFICATION EXERCISE WITH REGARD TO 7/ 12 EXTRACTS, ETC. THE ONLY POINT NOW SOUGHT TO BE RAISED BY THE ASSES SEE IS WITH REGARD TO THE FACTORS ENUMERATED IN SEC. 2(14)(III) (A) AND 2(14)(III)(B) OF THE ACT ON THE BASIS OF WHICH IT IS CLAIMED THAT THE LAND FALLS OUTSIDE THE DEFINITION OF A CAPITAL ASSET AND BEI NG AGRICULTURAL LAND, THE SALE THEREOF IS EXEMPT FROM TAXATION. IN OUR C ONSIDERED OPINION, THE ISSUE NOW BEING RAISED GOES TO THE ROOT OF THE MATTER RELATING TO DETERMINATION OF TAX LIABILITY OF THE ASSESSEE. TH E ISSUE INVOLVED IS PRIMARILY AN APPLICATION OF PROVISION OF LAW AND BE ING A BONAFIDE CLAIM, WE FIND NO JUSTIFICATION FOR NOT PERMITTING THE ASSESSEE TO RAISE THE SAME FOR THE FIRST TIME BEFORE THE TRIBUNAL. TH OUGH THE LEARNED DR HAS OBJECTED TO THE ADMISSION OF THE SAID GROUND S OF APPEAL ON THE GROUND THAT THE SAME WERE NOT RAISED BEFORE THE LOWER AUTHORITIES, IN OUR CONSIDERED OPINION, THE ISSUE I S LIABLE TO BE ADMITTED, INASMUCH AS IT INVOLVES AN APPLICATION OF EXISTING PROVISIONS OF LAW AND IS RELEVANT TO DETERMINE THE ULTIMATE TAX LIABILITY OF THE ASSESSEE AND THE PARITY OF REASONI NG LAID DOWN IN THE 4 ITA NO 28/PN/09 SHRI SUKHLAL D RATHOD A.Y. 2004-05 CASE OF NATIONAL THERMAL POWER CO. LTD. (SUPRA) SUP PORTS THE ASSESSEES PLEA FOR ADMISSION OF SUCH GROUNDS OF AP PEAL. 6. SO HOWEVER, SUCH AN ISSUE WAS NOT BEFORE THE LOW ER AUTHORITIES, WE THEREFORE, DEEM IT FIT AND PROPER T O SET ASIDE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WH O SHALL EXAMINE THE PLEA OF THE ASSESSEE AFTER ALLOWING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THEN ADJUDICATE AFRESH IN ACCORDANCE WITH LAW. PERTINENTLY, WITH REGARD TO THE MATTERS RAISE D IN THE IMPUGNED ORDERS, WE HAVE NOT MADE ANY OBSERVATION AS THE IMP UGNED ADDITIONAL GROUNDS OF APPEAL GOES TO THE ROOT OF TH E MATTER. THEREFORE, IT WILL BE IN THE FITNESS OF THINGS THAT THE SUBJECT MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER IN ITS ENTIRETY. 7 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES AS ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2012. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 31 ST OCTOBER 2012 ANKAM COPY TO:- 1. ASSESSEE 2. DEPARTMENT 3. THE CIT (A) AURANGABAD 4. THE CIT- AURANGABAD 5. THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T. A.T., PUNE. BY ORDER //TRUE COPY// SR. P.S. I.T.A.T., PUNE