ACIT, Agra V. Shri Shanti Swaroop Goyal, Agra

ITA 292/AGR/2003

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0373 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-09-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 09-07-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Cost of acquisition; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.292/AGR/2003 ASST. YEAR: 1996-97 A.C.I.T. 1, AGRA. VS. SHRI SHANTI SWAROOP GOY AL PROP. M/S. AGRA OIL & GENERAL INDUSTRIES, HATHRAS ROAD, AGRA. (PAN/GIR : S-708/DC/BPR). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR, JR. D.R. RESPONDENT BY : SHRI PANKAJ GARGH, ADVOCATE ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 31.03.2003 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.9,94,000/- MADE ON ACCOUNT OF LONG TERM CAPIT AL GAIN ON SALE OF LAND IGNORING THE PROVISIONS OF SECTION 49 OF THE I.T. A CT, 1961 AND ALSO IGNORING THE FACT THAT LAND CAME INTO THE OWNERSHIP OF ASSESSEE IN 1988 WHILE HE MADE CALCULATION ON THE BASIS OF PRESUMPTIVE FIGURES SIN CE 1981. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO GIVE ANY EVIDENCE REGARD ING THE COST OF ACQUISITION BY THE PREVIOUS OWNER, WHICH IS IMPORTANT FOR DETERMIN ATION OF CAPITAL GAIN IN THE CASES COVERED BY THE PROVISIONS OF SEC. 49 OF THE I .T. ACT, 1961. 3 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.1,15,000/- TREATING IT AS AGRICULTURAL INCOME IG NORING THE ORDER OF THE ITAT IN THE CASE OF THE ASSESSEE FOR THE A.Y. 1990-01. 2 2. THE BRIEF CASE OF THE CASE ARE THAT DURING THE Y EAR THE ASSESSEE SOLD THE ANCESTRAL LAND AT KOSI KALAN DETAILED AS UNDER :- I) 2.69 ACRES VIDE SALE DEED DATED 02.11.1995 FOR R S.4,97,000/- II) 2.69 ACRES VIDE SALE DEED DATED 03.11.1995 FOR RS.4,97,000/-. 3. THE ASSESSEE CLAIMED THAT THE SAID LAND HAS COME TO THE ASSESSEE FROM HIS FATHER THROUGH HIS WILL. SHRI RATAN LAL GOYAL WHO HAS PURCHASED L AND MEASURING 22.10 ACRES. HE EXPIRED ON 16.11.1988. THE LAND WAS ACQUIRED BY LATE SHRI LAL A RATAN LALJI PRIOR TO 1980 AND FOR THIS KHATA AND KHATAUNI FOR 1390 FASLI, AS REFERRED TO IN THE SALE DEED, WERE FILED. THERE IS DIFFERENCE OF 593 YEARS IN FASLI YEAR AS COMPARED TO CALENDAR YEAR. ON THE BASIS OF THE COST INDEX APPLIED BY THE ASSESSEE THERE WAS NO CAPITAL GAIN. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE COULD NOT PROVE THAT THE LAND WAS OWNED BY SHRI RATAN LAL JI PRIOR TO 1980 AND HE ACCORDINGLY WORKED OUT THE WHOLE CONSIDERATION OF RS.9,94,000/- AS THE CAPITAL GAIN. THE ASSESSEE WAS HAVING THE POWER OF ATTORNEY ON BEHALF OF HIS SISTER SMT. SHEE LAWATI IN RESPECT OF LAND AT KOSI KALAN WHICH WAS ALSO SOLD FOR RS.4,36,600/-. THE ASSESSEES AC COUNTANT BY MISTAKE CREDITED 1/4 TH OF THE SALE PROCEEDS FROM THE SAID LAND IN THE CAPITAL ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, ADDED RS.1,09,150/- AS CAPITAL GAIN IN A SSESSEES HAND BUT SUBSEQUENTLY THE ASSESSING OFFICER RECTIFIED THE ASSESSMENT ORDER AND MADE THE ADDITION OF THE SALE CONSIDERATION IN RESPECT OF THIS LAND OF RS.4,36,600/- INSTEAD OF RS.1,09,15 0/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION IN RESPECT OF RS.9,94,000/- AND RS.4,36,600/-. 3 4. THE LD. D.R. BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND POINTED OUT THAT THE ASSESSEE SINCE DID NOT FILE AN Y PROOF THAT THE LAND WHICH WAS RECEIVED BY HIM ON THE DEATH OF HIS FATHER WAS ACQUIRED BY HIS FATH ER PRIOR TO 1980. SIMILARLY, IN RESPECT OF THE CAPITAL GAIN ARISING ON THE SALE OF THE LAND BELONG ING TO SMT. SHEELAWATI, IT WAS CONTENDED THAT THE ASSESSEE HIMSELF HAS CREDITED 1/4 TH SHARE OF SALE PROCEEDS IN HIS CAPITAL ACCOUNT AS H IS INCOME. THEREFORE, THE ASSESSING OFFICER WAS CORRECT IN LAW IN ADDING THE SAME. 5. LD. A.R., ON THE OTHER HAND, DRAWN OUR ATTENTION TOWARDS THE SALE DEED AS WELL AS PAGE NOS.35 & 36 OF THE PAPER BOOK TO PROVE THAT THE LAN D WAS BEQUEATHED TO THE ASSESSEE ON THE DEATH OF HIS FATHER AND THE KHATA & KHATAUNI WHICH IS AVA ILABLE AT PAGE NOS.35 TO 36 RELATES TO 1385 TO 1390 FASLI I.E. YEAR PRIOR TO 01.04.1980 AS FASLI E ACH IS 590 YEARS BACK TO THE CALENDAR YEAR. THIS CLEARLY PROVES THAT THE LAND WAS OWNED BY THE ASSES SEE PRIOR TO 1980 AND, THEREFORE, THE FAIR MARKET VALUE AS ON 01.04.1981 WILL BE TAKEN FOR THE PURPOSE OF COMPUTATION OF THE CAPITAL GAIN. THE COST OF INDEX WILL BE APPLIED TO THE SAID VALUE . IN RESPECT OF ADDITION OF THE SALE PROCEEDS OF THE LAND BELONGING TO ASSESSEES SISTER SMT. SHEELA WATI, IT WAS POINTED OUT THAT THE ASSESSEE WAS HOLDING THE POWER OF ATTORNEY ON HER BEHALF. THE L AND BELONGS TO HER AND THE ASSESSEE HAS NOTHING TO DO WITH THE SALE CONSIDERATION. THE SAL E CONSIDERATION WAS DULY PAID BY THE ASSESSEE TO HER SISTER AND FOR THIS ATTENTION WAS DRAWN TOWA RDS THE FINDING GIVEN BY THE CIT(A). THE CAPITAL GAIN, IF ANY, ARISES CAN BE ASSESSED ONLY I N THE HANDS OF THE OWNER NOT IN THE HANDS OF THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE HAVE GONE THROUGH THE ORDER OF THE CIT(A) AS WEL L AS COPY OF THE SALE DEED AND THE KHATA AND 4 KHATAUNI WHICH RELATE FOR THE PERIOD FASLI 1385 TO 1390, COPY OF WHICH ARE AVAILABLE IN PAPER BOOK. IT IS NOT DISPUTED BY THE LD. D.R. THAT THE IMPUGNED LAND SOLD BY THE ASSESSEE WAS BEQUEATHED TO THE ASSESSEE FROM HIS FATHER ON THE D EATH I.E. ON 16.11.1988. THE ASSESSING OFFICER HAS ASSESSED THE TOTAL SALE CONSIDERATION T O BE THE INCOME OF THE ASSESSEE AND TOOK THE VIEW THAT THE COST OF ACQUISITION TAKEN BY THE ASSE SSEE OF 1981 IS NOT PROPER AS THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE REGARDING THE COST OF WH ICH THE LAND WAS ORIGINALLY ACQUIRED BY HIS FATHER. EVEN THE ASSESSEE HAS NOT FILED ANY PURCHA SE DEED OF HIS FATHER OR MODE OF ACQUISITION OR DATE OF ACQUISITION OF THE LAND BY HIS FATHER. WE NOTED FROM PAGES 35 & 36 OF THE PAPER BOOK WHICH CONTAINS COPY OF THE KHATAUNI IN RESPECT OF L AND SITUATED AT KOSI KALAN, PARGNA TEHSIL CHHATA, DISTRICT MATHURA THAT THE SAID KHATA & KHAT AUNI RELATES TO THE FASLI YEAR 1385 TO 1390 AND THE NAME OF THE LAND HOLDER HAS BEEN SHOWN AS S HRI RATAN LAL. COPIES OF THESE KHATA AND KHATONIES AS CERTIFIED WERE ALSO FILED BEFORE THE C IT(A) AS IS APPARENT FROM PAGE NO.4 OF THE APPELLATE ORDER. THIS IS A FACT THAT FASLI YEAR IS 593 YEAR BACK TO ENGLISH CALENDAR YEAR. ON THIS BASIS, IN OUR OPINION, IT IS PROVED THAT THE FATHER OF THE ASSESSEE LATE SHRI RATAN LALJI WAS OWNING THE LAND AS ON 01.04.1981 WHOSE FAIR MARKET VALUE H AS TO BE TAKEN INTO ACCOUNT AFTER GIVING EFFECT TO THE COST OF INDEX FOR THE PURPOSE OF COMPUTATION OF THE CAPITAL GAIN TO BE COMPUTED UNDER SECTION 48 OF THE INCOME-TAX ACT, 1961 READ WITH SE CTION 55(2)(B)(II) OF THE ACT. IN VIEW OF THIS FACT, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) WHEN HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY TAKING TH E FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AFTER APPLYING COST OF ACQUISITION INDEX THERETO FOR THE PURPOSE OF WORKING OF THE CAPITAL GAIN. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE. 5 7. SO FAR THE ADDITION OF RS.4,36,600/- IS CONCERNE D, THIS IS NOT DENIED THAT THE ASSESSEE WAS HOLDING THE POWER OF ATTORNEY ON BEHALF OF HIS SIST ER IN RESPECT OF THE LAND SOLD AND THE LAND WAS SOLD BY HIM ON BEHALF OF HIS SISTER AS POWER OF ATT ORNEY HOLDER. THE LAND, IN FACT, BELONGS TO THE SISTER OF THE ASSESSEE WHICH IS NOT DENIED BY THE R EVENUE. THE LAND WAS RECEIVED BY HIS SISTER FROM HER MOTHER SMT. SAMBHU DEVI, INHERITED AND THE MUTATION WAS EFFECTED IN HER NAME IN THE REVENUE RECORD. THE ASSESSEE WAS MERELY ACTING ON BEHALF OF HIS SISTER AS HER AGENT BEING THE POWER OF ATTORNEY HOLDER. HE DID NOT OWN THE LAND. IN CASE, ANY CAPITAL GAIN ARISES ON THE SALE OF SUCH LAND WHICH IS NOT OWNED BY THE ASSESSEE AND OV ER WHICH THE ASSESSEE DOES NOT HAVE ANY RIGHT WHATSOEVER EXCEPT DESIGNATION. IN OUR OPINIO N, THE CAPITAL GAIN ARISING AS SALE OF SUCH LAND CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. I T CAN BE ASSESSED ONLY IN THE HANDS OF THE RIGHTFUL OWNER. IN OUR OPINION, IT IS NOT A FIT CA SE WHICH WARRANTS OUR INTERFERENCE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.4,36,600/ -. WE, ACCORDINGLY, CONFIRM THE ORDER OF THE CIT(A). THUS, GROUND NOS.1 & 2 TAKEN BY THE REVENU E STAND DISMISSED. 8. GROUND NO.3 RELATES TO THE DELETION OF THE ADDIT ION OF RS.1,15,000/- WHICH WAS RETURNED BY THE ASSESSEE AS AGRICULTURAL INCOME. AT THE OUT SET, THE LD .A.R. POINTED OUT THAT SIMILAR INCOME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER DURING T HE A.Y. 1998-99. DURING THE A.Y. 1998-99 THE ASSESSEE HAS RETURNED AGRICULTURAL INCOME OF RS .1,27,886/- BEING THE INCOME ARISING ON THE SALE OF TREES. IN THE A.Y. UNDER CONSIDERATION ALS O THE ASSESSEE HAS RECEIVED A SUM OF RS.1,15,000/- ON SALE OF TREES WHICH WERE PLANTED, WATERED AND CULTURED BY THE ASSESSEE IN THE VACANT LAND BEHIND THE MILL PREMISES. INCOME IS PU RELY AN AGRICULTURAL INCOME. THE TREES WERE GROWN ON THE LAND USED FOR AGRICULTURAL PURPOSES. THE A.O. WAS NOT CORRECT IN ASSESSING IT AS INCOME FROM OTHER SOURCES. THE LD. D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ALONG WITH THE ORDER OF THE CIT(A). WE NOTED THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER DURING THE A.Y. 1998-99 ON THE SAME FACTS. THE ASSESSEE HAS CARRIED OUT THE BASIC OPERATION FOR THE CULTIVATION OF THE TREES. THERE IS CLEAR CUT FINDING GIVEN BY THE CIT(A) THAT TREES WERE NOT WILD GROWTH. THE TREES WERE DULY PL ANTED. CERTAIN EXPENSES WERE INCURRED IN PURCHASING THE PLANTS. THE BASIC OPERATIONS WERE D ULY CARRIED OUT BY THE ASSESSEE SO AS TO QUALIFY THE INCOME FROM THE LAND TO BE THE AGRICULTURAL INC OME AS PER THE PROVISIONS OF SECTION 2(1) OF THE ACT. THE HONBLE SUPREME COURT IN THE CASE OF CIT, WEST BENGAL, CALCUTTA VS. RAJA BENOY KUMAR SAHAS ROY, 32 ITR 466 AT PAGE 467 (HEAD NOTES ) MENTIONED AS UNDER :- AGRICULTURE COMPRISES WITHIN ITS SCOPE THE BASIC A S WELL AS THE SUBSEQUENT OPERATIONS DESCRIBED ABOVE REGARDLESS OF THE NATURE OF THE PRODUCTS RAISED ON THE LAND. THESE PRODUCTS MAY BE GRAIN OR VEGETABLE OR FRUITS WHICH ARE NECESSARY FOR THE SUSTENANCE OF HUMAN BEINGS, INCLU DING PLANTATIONS AND GROVES, OR GRASS OR PASTURE FOR THE CONSUMPTION OF BEASTS O R ARTICLES OF LUXURY, SUCH AS BETEL, COFFEE, TEA, SPICES, TOBACCO, OR COMMERCIAL CROPS LIKE COTTON, FLAX, JUTE, HEMP, INDIGO. ALL THESE ARE PRODUCTS RAISED FROM T HE LAND BUT THE TERM AGRICULTURE CANNOT BE CONFINED MERELY TO THE PRODUCTION OF GRAI N AND FOOD PRODUCTS FOR HUMAN BEINGS AND BEASTS; IT MUST BE UNDERSTOOD AS C OMPRISING ALL THE PRODUCTS OF THE LAND WHICH HAVE SOME UTILITY EITHER FOR CONSUMP TION OR FOR TRADE AND COMMERCE AND WOULD ALSO INCLUDE FOREST PRODUCTS SUC H AS TIMBER AND SAL AND PIYASAL TREES, CASUARINA PLANTATIONS, TENDU LEAVES AND HORRA NUTS. 10. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLED GE BY THE LD. D.R. NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A) ESPECIALLY WH EN THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE AGRICULTURAL INCOME ON THE SALE OF TREES SHOWN BY THE ASSESSEE IN THE SUBSEQUENT YEAR I.E. A.Y. 1998-99. NO COGENT MATERIAL OR EVIDENCE WAS B ROUGHT TO OUR KNOWLEDGE WHICH MAY PROVE THAT THE FACTS INVOLVED IN THE A.Y. 1998-99 ARE DIF FERENT FROM THE IMPUGNED A.Y. UNDER THESE 7 FACTS AND CIRCUMSTANCES, WE CONFIRM THE ORDER OF TH E CIT(A). ACCORDINGLY, GROUND NO.3 STANDS DISMISSED. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE STAN DS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20.10.2010) SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 20 TH OCTOBER, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY