ITO, NCW - 1 (5), CHENNAI V. MS. ESTHER JASPER, CHENNAI

ITA 2856/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1137 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 14-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: NITHYA SANKARAN
• Keywords: Capital asset; Capital Gains
• Section: 54F; 147; 63; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN , ACCOUNTANT MEMBER ITA NO S . 2855 & 2856 /CHNY/ 20 19 ASSESSMENT YEAR S : 20 09 - 10 & 2010 - 11 INCOME TAX OFFICER, NON - CORPORATE WARD 1 (5), R.NO.304, WANAPARTHY BLOCK, 3 RD FLOOR, 121, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034 VS. M S. ESTHER JASPER, NEW NO.42, OLD NO.30, 3 RD MAIN ROAD, R.A. PURAM, CHENNAI 600 028. [PAN: A GEPS 4809F ] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. VIJAYA PRABHA, ADDL. CIT /RESPONDENT BY : MS. NITHYA SANKARAN, C.A. / DATE OF HEARING : 27 .05. 2020 / DATE OF PRONOUNCEMENT : 27 .05. 2020 / O R D E R PER GEORGE MATHAN, JUDICIAL MEM BER : TH ESE ARE APPEAL S FILED BY THE REVENUE AGAINST THE ORDER S OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 2 , CHENNAI IN I . T . A NO S .58 & 57/CIT(A) - 2/2018 - 19 DATED 30.07.2019 FOR THE ASSESSMENT YEAR 20 09 - 20 10 AND 2010 - 2011 . ITA NO S . 2855 & 2856 /CHNY/20 19 : - 2 - : 2 . MS . VIJAYA PRABHA, AD DITIONAL CIT REPRESENTED ON BEHALF OF THE REVENUE AND MS. NITHYA SANKARAN , CHARTERED ACCOUNTANT REPRESENTED ON BEHALF OF THE ASSESSEE . 3 . IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING COMMON GROUNDS FOR BOTH THE ASSESSMENT YEARS: I. THE LEARN ED CIT(A) ERRED IN HOLDING THE LONG TERM CAPITAL GAIN OF RS.7.35 CRORES , ON TRANSFER OF LAND HOLDING THAT THE LANDS TRANSFERRED ARE AGRICULTURAL LANDS, IGNORING THAT THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE PERFORMED ANY AGRICULTURAL OPERATIONS NOR HAD THE ASSESSEE RETURNED ANY AGRICULTURAL INCOME FROM THE SAID LANDS FOR ANY OF THE PR EVIOUS ASSESSMENT YEARS. II. THE LEARNED CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE, WHEN PROOF OF CULTIVATION, PURCHASE OF SEEDS AND SAPLINGS PAYMENT OF LABOUR CH ARGES, PRESENCE OF WATER SOURCES, ELECTRICITY CONNECTION (IN CASE OF BOREWELL) ETC., HAVE NOT BEEN ESTABLISHED BY THE ASSESSEE. III. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE TRANSFERRED LAND WAS AGRICULTURAL LAND AND NOT LIABLE FOR CAPITAL GAINS TAX, WHEN THE HONBLE SUPREME COURT IN THE CASE OF STATE OF UTTAR PRADESH VS. NAND KUMAR A GARWAL AND OTHERS, REPORTED AT AIR 1988 476 (SC) HAS HELD THAT MERE CATEGORIZATION AS AGRICULTURAL LAND IN REVENUE RECORDS WOULD NOT SUFFICE AND UNLESS THE LAND IS ACTUALLY CUL TIVATED, THE BENEFIT HAS TO BE DENIED. IV. THE LEARNED CIT(A) ERRED IN GRANTING RELIEF BY TREATING THE OBVIOUS REAL ESTATE TRANSACTION BETWEEN THE ASSESSEE AND A COMPANY ENGAGED IN DEVELOPING REAL ESTATE, AS TRANSFER OF AGRICULTURAL LANDS, WHEREAS THE ACTUAL INTENTION BEHIND THE TRANSACTION IS ONLY DEVELOPMENT OF THE LAND FOR COMMERCIAL PURPOSES. V. THE LEARNED CIT(A) ERRED IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONBLE ITAT IS CORRECT IN GRANTING EXEMPTION, BY TREATING THE LANDS TRANSACTED AS AGRICULTU RAL LANDS, WHEREAS THE LEGISLATIVE INTENTION BEHIND GRANTING EXEMPTION TO AGRICULTURAL LAND TRANSACTIONS ARE WITH A VIEW TO PROMOTING AGRICULTURAL ACTIVITIES AND TO PREVENT CONVERSION OF AGRICULTURAL LANDS INTO COMMERCIAL LANDS / PROPERTIES AND SUCH INTENT IONS ARE OPENLY DEFEATED BY THE ASSESSEE IN THIS CASE. ITA NO S . 2855 & 2856 /CHNY/20 19 : - 3 - : VI. THE LEARNED CIT(A) ERRED CONSIDERING THE CIRCUMSTANCES OF THE CASE, ON GRANTING RELIEF AGAINST THE RATIONALE OF THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF PR. CIT - 6 VS. A. LALICHAN I N TAX CASE APPEAL NO.504 OF 2018 DELIVERED ON 11.10.2018. VII. THE LEARNED CIT(A) ERRED CONSIDERING THE CIRCUMSTANCES OF THE CASE, ON GRANTING RELIEF AGAINST THE RATIONALE OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CWT VS. OFFICER IN CHARGE (C OURT OF WARDS) PAIGAH (1976) 105 ITR 133 (SC). VIII. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE LANDS TRANSACTED ARE AGRICULTURAL LANDS, WHEN THE TRANSACTION OF THE ASSESSEE FAILS IN MAJORITY OF THE TESTS AS LAID DOWN BY THE HONBLE APEX COURT IN THE CASE O F SARIFA BIBI MOHAMMAD IBRAHIM & OTHERS (1993) 204 ITR 631 (SC). 4. IT WAS SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSEE HAD SOLD 14 ACRES OF LAND , WHICH WAS CLASSIFIED AS RESIDENTIAL LAND. IT WAS A SUBMISSION THAT THE LEARNED C IT(A) HAD ALLOWED THE ASSESSEES APPEAL BY SIMPLY FOLLOWING THE ORDER OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE 263 MATTER, WHEREIN THE TRIBUNAL HAD ERRONEOUSLY HELD THAT THE LA NDS SOLD WERE AGRICULTURAL LANDS . IT WAS A SUBMISSION BY THE LEARNED DE PARTMENTAL REPRESENTATIVE THAT THE ORDER OF THE TRIBUNAL HOLDING THAT THE LANDS SOLD WERE AGRICULTURAL LANDS , IS LIABLE TO BE REVERSED AND THE LEARNED CIT(A) HAVING NOT PASSED A DETAILED ORDER ON AN INDEPENDENT APPRECIATION OF THE FACTS, THE ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE REVERSED. 5. IN REPLY, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT ORIGINALLY THE ASSESSMENTS HAD BEEN COMPLETED U/S.143(3) READ WITH ITA NO S . 2855 & 2856 /CHNY/20 19 : - 4 - : SECTION 147 OF THE ACT , WHEREIN THE ASSESSING AUTHORITY HAD BROUGHT TO TAX THE LO NG TERM CAPITAL GAINS IN RESPECT OF THE SAID LANDS. IT WAS A SUBMISSION THAT IN THE 263 PROCEEDINGS, THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAD DENIED THE ASSESSEES CLAIM OF THE DEDUCTION U/S.54F. IT WAS A SUBMISSION THAT BOTH THE ISSUES CAME U P FOR HEARING BEFORE THE TRIBUNAL . I N I.T.A. NOS.2883 & 2884/CHNY/2017 FOR THE ASSESSMENT YEARS 2009 - 2010 AND 2010 - 2011, THE TRIBUNAL HAD HELD THAT THE LAND HELD AND SOLD BY THE ASSESSEE IS AGRICULTURAL LAND SATISFYING THE CONDITIONS STIPULATED IN U/S.2( 14)(III) OF THE INCOME TAX ACT, 1961 AND THEREFORE , WAS NOT EXIGIBLE FOR LONG TERM CAPITAL GAINS. CONSEQUENTLY, THE TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO DELETE THE LONG TERM CAPITAL GAINS ASSESSED IN THE HANDS OF THE ASSESSEE. FURTHER, THE TRIB UNAL IN ITS ORDER IN I.T.A. NOS.2040 & 2041/CHNY/2018 WHICH WAS AGAINST THE ORDER PASSED U/S.263 BY THE COMMISSIONER OF INCOME TAX , HAD HELD THAT AS THE LANDS WHICH HAD BEEN SOLD BY THE ASSESSEE WITH RE SPECT TO BOTH THE ASSESSMENT YEARS , WERE AGRICULTURAL LAND S , THEREFORE , THE SAME WAS NOT EXIGIBLE FOR LONG TERM CAPITAL GAINS. CONSEQUENT TO THE ORDER , THE ISSUE OF NON - APPLICABILITY OF THE PROVISIONS OF SECTION 54F HELD THAT THE ORDER PASSED BY U/S .2 63 WAS INFRUCTUOUS. IT WAS A SUBMISSION THAT AS THE ORDER U/S.263 NO MORE SURVIVE S , THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ANNULLING THE ASSESSMENT ORDER ITA NO S . 2855 & 2856 /CHNY/20 19 : - 5 - : U/S.143(3) READ WITH SECTION 263 BY THE ASSESSING OFFICER WAS LIABLE TO BE UPHELD. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. 7. A PERUSAL OF THE PRESENT AP PEALS FILED BY THE REVENUE SHOW THAT THE SAME IS OUT OF THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) QUASHING THE ASSESSMENT ORDER PASSED A S CONSEQU ENT TO AN ORDER PASSED U/S.263 BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX - 1, CHENNAI. A PERUSAL OF THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN ASSESSEE FOR THE ASSESSMENT YEAR S 2009 - 2010 AND 2010 - 2011 IN I.T.A. NOS.2040 & 2041/CHNY/2 018 DATED 30.05.2019 CLEARLY SHOWS THAT THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAS CATEGORICALLY HELD THAT IN VIEW OF ITS FINDINGS IN THE SE APPEALS IN RELATION TO THE ASSESSMENT PASSED U/S.143 READ WITH SECTION 147, WHEREIN THE LANDS SOLD BY THE ASSESSEE H AS BEEN HELD TO BE AGRICULTURAL LANDS AND CONSEQUENTLY NOT LIABLE FOR TAXATION UNDER THE H EAD, CAPITAL GAINS , T HE QUESTION OF ALLOW ABILITY OF THE DEDUCTION APPLICABLE TO THE LEVY O F CAPITAL GAINS NO MORE SURVIVE S AND ON THIS GROUND HAD TREATED THE ORDER PASSED U/S .2 63 BY THE PRINCIPAL COMMISSIONER OF INCOME TAX - 1, CHENNAI I S ITA NO S . 2855 & 2856 /CHNY/20 19 : - 6 - : INFRUCTUOUS . THE PRESENT APPEAL CLEARLY IS AGAINST THE ASSESSMENT ORDER PASSED AS A CONSEQUENCE TO THE ANNULLED ORDER PASSED U/S.263 . A S THE ORDER U/S.263 HAS BEEN ANNULLED , THE CONS EQUENTIAL ASSESSMENT ORDER CANNOT SURVIVE. THIS BEING SO, WE FIND NO ERROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) QUASHING THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S . 263 OF THE INCOME TAX ACT, 1961. 8 . IN THE RESULT, THE APPEAL S OF THE REVENUE IN I.T.A. NO S . 2855 & 2856 /CHNY/20 19 STANDS DISMISSED . OR DER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY , 2020 IN CHENNAI. SD/ - ( . ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER / CHENNAI, / DATED: 27 TH MAY , 2020 IA, SR. PS SD/ - ( ) (GEORGE MATHAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF