Munilakkanna (HUF), Bangalore V. ITO, Bangalore

ITA 288/BANG/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9372 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR N
• Assessee Lawyers: S R KIRON
• Keywords: Capital asset; Additional evidence; Corroborative evidences
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE S HRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER I.T . A. NO. 288 /BANG/20 16 (ASSESSMENT YEAR : 20 08 - 09 ) MUNILAKKANNA (HUF), NO.E - 72, HEMMIGEPURA, VIDYAPETHA POST, BANGALORE SOUTH, BANGALORE - 560 060 . . APPELLANT. PAN AAKHM 6404J VS. INCOME TAX OFFICER, WARD 9(1), BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI S.R. KIRON, C.A. R E SPONDENT BY : SHRI VIJAY KUMAR, N, ADDL. CIT (D.R) DATE OF H EARING : 14.09.2016. DATE OF P RONOUNCEMENT : 23 .09. 201 6 . O R D E R PER SHRI VIJAY P AL RAO, J .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT.23.12.2015 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2008 - 09. 2 IT A NO. 288 /BANG/201 6 2. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS : 3 IT A NO. 288 /BANG/201 6 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SOLD AGRICULTURAL LAND IN S.NO.37/1 TO THE EXTENT OF 3 ACRES 15 GUNTAS A ND IN SURVEY NO.42/1 TO THE EXTENT OF 1 ACRE 20 G UNT AS IN HEMMIGGEPURA VILLAGE, BANGALORE SOUTH TALUK , BANGALORE VIDE REGISTERED DOCUMENT DT.31.8.2007 AND DT.18.7.2007 RESPECTIVELY FOR A TOTAL CONSIDERATION OF RS.1.95 CRORES. THE ASSESSEE DID NOT OFFER THE CAPITAL GAINS TO TAX ON THIS SALE TRANSACTION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE CAPITAL GAINS SHALL NOT BE TAXED ON THESE TRANSACTIONS. THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT THE LAND IS SITUATED IN A VILLAGE HAVING POPULATION OF LESS THAN 10,0 00 AND ALSO 20 KMS AWAY FROM BANGALORE. THEREFORE THE SAID AGRICULTURAL LAND DO NOT CONSTITUTE CAPITAL ASSET AND CONSEQUENTLY CAPITAL 4 IT A NO. 288 /BANG/201 6 GAINS. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND FOUND THAT AS PER THE GAZETTEE NOTIFICAT ION OF GOVT. OF KARNATAKA DT.16.1 .2007 VIDE NOTIFICATION NO.GOK NO.UDD 92 MNY 2006 OF HEMMIGEPURA GRAM PANCHAYAT WHICH IS LISTED IN SCHEDULE A OF THE SAID NOTIFICATION WAS INCLUDED IN THE AREA OF BANGALORE MAHANAGAR PALIKE W.E.F. 16.1.2007. THEREFORE THE LAND SITUATED AT THIS VILLAGE SOLD AFTER 16.1.2007 HAS TO BE CONSIDERED AS CAPITAL ASSET AS PER SECTION 2(14) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND CAPITAL GAINS ON THE SAID SALE OF AGRICULTURAL LAND IS TAXABLE TO CAPITAL GAINS. ACCORDIN GLY, THE ASSESSING OFFICER ASSESSED THE CAPITAL GAINS OF RS.1,94,27,472. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE CIT(APPEALS) AND ALSO RAISED AN ADDITIONAL GROUND THAT THE LAND IN QUESTION WAS TRANSFERRED BY THE ASSESSEE VIDE JOINT DEVEL OPMENT AGREEMENT (JDA) DT.31.10.2015 AND THEREFORE AS ON THE DATE OF JDA, THE LAND IN QUESTION WAS AN AGRICULTURAL LAND AND COULD NOT BE ASSESSED TO CAPITAL GAINS. THE ASSESSEE SOUGHT TO FILE ADDITIONAL EVIDENCE IN THE FORM OF JDA DT.31.10.2005 BEFORE TH E CIT (APPEALS). THE CIT (APPEALS) DID NOT ACCEPT 5 IT A NO. 288 /BANG/201 6 THE REQUEST OF THE ASSESSEE TO FILE THE ADDITIONAL EVIDENCE AND CONSEQUENTLY DISMISSED THE APPEAL OF THE ASSESSEE. 4. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT PRIOR TO THE SALE DEED DT.18.7.2007 AND 31.8.2007, THE ASSESSEE WAS HAVING JDA WHICH WAS REDUCED TO WRITING ON 31.10.2015 AND THEREFORE IN VIEW OF THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. T.K. DAYALU (2011) 202 TAXMAN 531 WH EN THE POSSESSION OF THE LAND IN QUESTION WAS HANDED OVER ON THE DATE OF JDA THEN IT CONSTITUTE TRANSFER AS PER THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE HAS FURTHER SUBMITTED THAT EVEN THE ASSESSING OFFICER HAS NOT AFFORDED AN APPROPRIATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO PLACE THE ENTIRE RECORD AND DETAILS BEFORE THE ASSESSING OFFICER. HE HAS REFERRED THE DATE OF HEARING BEFORE THE ASSESSING OFFICER AS 29.12.2011 AND 30.12.2011 WHEREAS THE ASSESSING OFF ICER HAS PASSED THE ASSESSMENT ORDER ON 30.12.2011 ITSELF. THEREFORE THE ASSESSEE WAS NOT GIVEN A PROPER OPPORTUNITY TO PRESENT ITS CASE ALONG WITH THE RELEVANT RECORD. HENCE THE LEARNED AUTHORISED REPRESENTATIVE HAS PLEADED THAT THE MATTER MAY BE SET A SIDE TO THE RECORD OF THE 6 IT A NO. 288 /BANG/201 6 ASSESSING OFFICER FOR CONSIDERING THE JDA DT.31.10.2015 ON THE ISSUE OF TAXABILITY OF THE CAPITAL GAINS ARISING FROM SALE OF AGRICULTURAL LAND IN QUESTION. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION DT.29.7.201 6 OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF A BUNCH OF APPEALS IN ITA NOS.655 TO 657/BANG/2014 IN THE CASE OF SRI MUNIHANUMAIAH & OTHERS VS. CIT (A) AND SUBMITTED THAT THIS TRIBUNAL IN AN IDENTICAL CASE OF SALE OF AGRICULTURAL LAND IN THE SA ME VILLAGE HAS SET ASIDE THE ISSUE TO THE RECORD OF THE ASSESSING OFFICER FOR VERIFICATION OF THE DOCUMENT AND PARTICULARLY THE JDA AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUB MITTED THAT THE JDA IN QUESTION IS AN AFTER THOUGHT DOCUMENT MANUFACTURED BY THE ASSESSEE AS IT WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. FURTHER THE ASSESSEE HAS NOT PRODUCED THE OTHER SUPPORTING EVIDENCE TO SHOW THE GENUINENESS AND VERACITY OF THE JDA IN QUESTION. THE CIT (APPEALS) HAS REJECTED THE ADMISSION OF ADDITIONAL EVIDENCE BY CONSIDERING ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7 IT A NO. 288 /BANG/201 6 6. WE HAVE CONSIDERED THE RIVAL SUBMISS IONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE LIMITED GRIEVANCE RAISED BY THE ASSESSEE BEFORE US IS THE NON - ADMISSION OF ADDITIONAL EVIDENCE BY THE CIT (APPEALS) PROPOSED TO BE ADDUCED BY THE ASSESSEE IN THE SHAPE OF JDA DT.31.10.2005. THE CIT (AP PEALS) HAS DECLINED TO ADMIT THIS ADDITIONAL EVIDENCE AS IT IS NOT A REGISTERED DOCUMENT AND FURTHER THE ASSESSEE HAS EXECUTED THE SALE DEED IN FAVOUR OF THE SAME PERSON AND THEREBY TRANSFERRED THE LAND IN QUESTION ONLY BY WAY OF SALE DEED EXECUTED IN THE MONTH OF JULY, 2007 AND AUG., 2007. THOUGH THE CIT (APPEALS) HAS DOUBTED THE VERACITY OF THE JDA AND CONSEQUENTLY CLAIM OF THE ASSESSEE THAT THE TRANSFER TOOK PLACE AS ON THE DATE OF JDA HOWEVER SINCE THIS DOCUMENT WAS NOT ADMITTED AS AN ADDITIONAL EVID ENCE BY THE CIT (APPEALS) THEREFORE IT IS NOT APPROPRIATE TO EXPRESS ANY VIEW ON THE MERITS OF THE ISSUE AND PARTICULARLY ON THE CONTENTS AND FACTS BASED ON THE JDA DT.31.10.2005. THEREFORE, IF ON VERIFICATION AND EXAMINATION OF THE RECORD AS WELL AS OTHE R RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE IT IS FOUND THAT THE JDA IS GENUINE DOCUMENT AND THE ASSESSEE HANDED OVER THE POSSESSION OF THE LAND IN QUESTION AS ON THE DATE OF JDA THEN IN VIEW 8 IT A NO. 288 /BANG/201 6 OF THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. T.K.DAYALU (SUPRA), THE TRANSFER OF THE LAND DEEMED TO BE COMPLETED ON THE DATE OF JDA. THE CO - ORDINATE BENCH OF THIS TRIBUNAL WHILE DEALING WITH AN IDENTICAL ISSUE PERTAINING TO AGRICULTURE LAND SITUATED IN THE SAME VILLAGE NAMELY HEMMIG GEPURA, KENGERI HOBLI, BANGALORE HAS SET ASIDE THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER IN PARAS 6 & 7 AS UNDER : 9 IT A NO. 288 /BANG/201 6 WE FIND THAT THE PURCHASER OF THE AGRICULTURE LAND IN THE SAID CASE IS SAME AS IN THE CASE BEFORE US. THEREFORE WITHOUT EX PRESSING ANY VIEW ON THE MERITS OF THE CASE AND FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH, WE SET ASIDE THE ISSUE TO THE RECORD OF THE ASSESSING OFFICER TO EXAMINE THE GENUINENESS OF THE JDA AS WELL AS THE NATURE OF THE PROPERTY WHETHER IT CAN BE TRE ATED AS CAPITAL ASSET AS PER SECTION 2(14) OF THE ACT AND THEN DECIDE THE MATTER IN ACCORDANCE WITH LAW. 10 IT A NO. 288 /BANG/201 6 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23RD DAY OF SEPT., 201 6 . SD/ - ( S. JAYARAMAN ) ACCOUNTANT MEMBER SD/ - ( VIJAY PAL RAO ) JUDICIAL MEMBER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE