Mrs. Satwinder Kaur, Mohali V. ITO, Mohali

ITA 296/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80949 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI. T.R. SOOD, ACCOUNTANT MEMBER ITA NO.296/CHD/2012 ASSESSMENT YEAR: 2008-09 MRS SATWINDER KAUR, VS. THE ITO, WARD-6(3), MOHALI MOHALI PAN NO. AKCPK6116D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 17.09.2014 DATE OF PRONOUNCEMENT : 08.10.2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28.12.2011 OF CIT (APPEALS), CHANDIGARH. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 36,28,118/- ON ACC OUNT OF ALLEGED CAPITAL GAINS ON SALE OF AGRICULTURAL LAND WHICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THE SUBMISSION MADE BEFORE HIM IN THE CORRECT PERSPECTI VE WHEREBY IT WAS EXPLAINED THAT THE LAND SOLD WAS NOT A CAPITAL 2 ASSET ATTRACTING THE INCIDENCE OF CAPITAL GAINS TAX AND AS SUCH THE ADDITION UPHELD IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLD ING THE ADDITION OF RS. 2,59,195/- MADE ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT WHICH IS ARBITRARY AND UNJUSTIFIED . 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SOL D CERTAIN LANDS WHICH WAS STATED TO BE AGRICULTURAL LAND. THE DETAILS OF THE LAND SOLD ARE NOTED VIDE PARA 5.1, WHICH ARE AS UNDER:- SR. NO. DATE OF SALE AREA OF LAND DESCRIPTION OF LAND AMOUNT TYPE OF LAND 1. 31.08.2007 2 KANAL 12 MARLA J.S. NAGAR, MACHHIWARA 15,60,000/- RESIDENTIAL 2. 31.08.2007 8 MARLA J.S. NAGAR, MACHHIWARA 2,40,000/- RESIDENTIAL` 3. 14.02.2008 1 KANAL 16 MARLA J.S. NAGAR, MACHHIWARA 14,58,000/- RESIDENTIAL 4. 15.02.2008 14 MARLA J.S. NAGAR, MACHHIWARA 5,67,000/- RESIDENTIAL 5. 05.03.2008 3 KANAL 4 MARLA J.S. NAGAR, MACHHIWARA 5,40,000/- CHAHI/NEHRI/AABI TOTAL 43,65,000/- 4. FROM THE ABOVE THE ASSESSING OFFICER INFERRED TH AT LAND WAS CLEARLY BEING SHOWED AS RESIDENTIAL AS PER THE REVENUE RECORD, TH EREFORE, CANNOT BE TREATED AS AGRICULTURAL LAND. IN RESPONSE TO THE QUERY THE AS SESSEE SUBMITTED THE GIRDAWARI OF LAND BEFORE THE SALE WHICH SHOWED THAT THE SAME WAS NOT CONVERTED INTO COMMERCIAL PROPERTY. THE ASSESSING OFFICER DID NOT ACCEPT THE SAME BECAUSE ON THE BACK SIDE OF THE SALE DEED IT WAS CLEARLY NOTED THAT LAND IS RESIDENTIAL. HE REFERRED TO THE DECISION OF HON'BLE SUPREME COURT I N SARIFABIBI MOHMED IBRAHIM VS. CIT 204 ITR 631 (SC) . FROM THE SALE DEED OF THE LAND AT S.NO.3, ITEM 9 OF THE SALE DEED IT WAS CLEARLY STATED THAT LAND WAS R ESIDENTIAL. IN VIEW OF THESE 3 FACTS, THE SALE WAS CONSIDERED TO BE NON-AGRICULTUR AL LAND AND SUBJECTED TO LONG TERM CAPITAL GAIN TAX AND THE LONG TERM CAPITAL GAI N WAS COMPUTED AT RS. 36,28,118/-. 5. ON APPEAL, IT WAS MAINLY SUBMITTED THAT SECTION 2(14) CLEARLY PRESCRIBED THAT THE LAND COULD BE CONSIDERED AS NON-AGRICULTUR AL ONLY IF IT WAS SITUATED IN A PARTICULAR LOCATION AS DEFINED IN THE SECTION. SINC E LAND WAS NOT LOCATED IN THE PARTICULAR LOCATION AS PRESCRIBED UNDER THE SECTION , THE SAME COULD NOT BE TREATED AS AGRICULTURAL LAND. FURTHER, IT WAS SUB MITTED THAT ASSESSEE HAD ALREADY FILED COPY OF THE GIRDAWARI SHOWING AGRICULTURAL OP ERATIONS WERE DONE AND IN THIS REGARD RELEVANT WRITTEN SUBMISSIONS AS EXTRACT ED BY THE LD. CIT(A) WHICH ARE REPRODUCED BELOW:- THAT THE ASSESSEE HAS ALSO SUBMITTED A COPY OF GIR DAWARI OF LAND SHOWING THAT THE ASSESSEE HAS BEEN CARRYING ON AGRI CULTURAL OPERATIONS ON THE LAND AND LAND HAS BEEN USED FOR A GRICULTURAL OPERATIONS BY THE ASSESSEE BEFORE SALE OF LAND. A C OPY OF GIRDAWARI IS PLACED AT ANNEXURE-III. THAT THE STATUS OF LAND EVEN ON THE DATE OF SUBMISSION OF GIRDAWARI IN THE MONTH OF DECEMBER , 2010 IS STILL AGRICULTURAL WHICH IS CLEARLY ESTABLISHED BEYOND DO UBT FROM THE COPY OF GIRDAWARI SUBMITTED BEFORE THE ASSESSING OF FICER AND THE COPY OF THE SAME IS ALSO PLACED BEFORE YOUR HONOUR. THAT IT IS FURTHER REITERATED ON BEHALF OF THE ASSE SSEE THAT SHE HAS NOT DEVELOPED THE AFORESAID LAND FOR ANY COMMERCIAL USE OR NO PLOTTING HAS BEEN DONE IN ANY MANNER, HENCE THE STA TUS OF LAND WHEN IT WAS SOLD BY THE ASSESSEE WAS AGRICULTURAL LAND. THE EVIDENCE ON WHICH THE ASSESSING OFFICER HAS REALIZED IS NOT TEN ABLE; HENCE THE PROVISION MAKE AGRICULTURAL LAND AN ASSET IS NOT AP PLICABLE TO THE LAND OF THE ASSESSEE. THE JUDGMENT CITED BY THE LEA RNED OFFICER I.E. SARIFABIBI MOHMED IBRAHIM AND OTHERS VS COMMISSIONE R OF INCOME TAX (SUPREME COURT ) ITR 214 P 631 RELATES TO THE S ALE OF AGRICULTURAL LAND WITHIN THE MUNICIPALITY LIMIT OF SURAT AND AT A DISTANCE OF ONE KILOMETER FROM THE SURAT RAILWAY ST ATION; THE LAND WAS NOT CULTIVATED FROM 1965-66 UNTIL IT WAS SOLD I N 1969; THE APPELLANTS HAD ENTERED INTO AN AGREEMENT WITH A HOU SING CO- 4 OPERATIVE SOCIETY TO SELL THE LAND FOR CONSTRUCTION OF HOUSES, THEY HAD APPLIED IN JUNE, 1968 AND MARCH 1969, FOR PERMI SSION TO SELL THE LAND FOR NON-AGRICULTURAL PURPOSES AND SOON AFT ER OBTAINING PERMISSION THEY EXECUTED THE SALE DEEDS IN MAY 1969 AND THE LAND WAS SOLD AT RATE OF RS. 23 PER SQUARE YARD AND THE PURCHASING SOCIETY COMMENCED CONSTRUCTION OPERATIONS WITHIN TH REE DAYS OF PURCHASE. ON A CONSIDERATION OF THE CONTENDING FACT ORS THE HIGH COURT HELD THAT THE LAND WAS NOT AGRICULTURAL LAND AND TAX WAS LEVIABLE ON THE CAPITAL GAINS ARISING FROM THE TRAN SFER. AND THE SAME JUDGMENT WAS CONFIRMED BY THE HONBLE SUPREME COURT. THIS JUDGMENT CITIED BY THE LEARNED ASSESSING OFFIER IS NOT APPLICABLE IN THE MATTER OF THE ASSESSEE AS THE FACTS OF THE CASE IS ENTIRELY DIFFERENT. THE LAND SOLD BY THE ASSESSEE IS AN AGRI CULTURAL LAND OUTSIDE THE MUNICIPAL LIMIT HENCE IT IS NOT COVERED BY THE JUDGMENT CITIED BY THE LEARNED ASSESSING OFFICER. THE LEARNE D OFFICER HAS DISCUSSED IN THE ORDER THAT HE HAS RECEIVED THE FAR AD OF THE AGRICULTURAL LAND AS WELL AS THE COPY OF THE GIRDAW ARI SUBMITTED BY THE ASSESSEE. THAT THE ASSESSEE HAS NOT OBTAINED TH E CONVERSION OF LAND USE NOR ANY DEVELOPMENT WORK WAS CARRIED OUT B Y HER ON THE AGRICULTURAL LAND. THEREFORE I PRAY BEFORE YOU HONO UR THAT THE ORDER PASSED BY THE LEARNED OFFICER IS BAD IN LAW, ILLEGAL AND DESERVE TO BE QUASHED. 6. THE LD. CIT(A) AFTER EXAMINING THESE SUBMISSIONS DECIDED THE ISSUE AGAINST THE ASSESSEE VIDE PARA 3.3, WHICH IS AS UND ER:- I HAVE CONSIDERED THE SUBMISSION OF THE LD. LD. CO UNSEL FOR THE ASSESSEE FOR THE APPELLANT. THE TYPE OF LAND WAS MENTIONED AS RESID ENTIAL ON THE BACK SIDE OF THE FIRST PAGE OF THE SALE DEEDS PERTAINING TO SALE OF LAND AND SO THESE LANDS HAVE BEEN TREATED AS CAPITAL ASSETS AND CAPITAL GAIN TAX H AS BEEN LEVIED BY THE ASSESSING OFFICER. AS PE THE PROVISIONS OF SECTION 2(14)(III) OF THE ACT ARE EXCLUDED FROM THE DEFINITION OF CAPITAL ASSET. THUS, THE INTENTION OF LEGISLATURE WAS NOT TO EXCLUDE ANY OF THE RESIDENTIAL LANDS FROM THE DEFINITION OF CAPITAL ASSET. IN THE SALE DEED, THE TYPE OF THESE LANDS HAS BEEN MENTIONED AS RESI DENTIAL, MEANING THEREBY THAT THESE LANDS HAVE BEEN SOLD AS RESIDENTIAL LANDS A ND SO CAPITAL GAIN TAX WAS LEVIABLE ON THESE SALES. THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE CAPITAL GAIN TAX ON THESE SALES AND ADDITION MADE OF RS. 36,28,1 18/- ON THIS ACCOUNT IS UPHELD. GROUND OF APPEAL NO. 2 IS DISMISSED. 5 7. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). HE ALSO REFERRED TO THE DEF INITION OF AGRICULTURAL LAND. IT WAS ALSO SUBMITTED THAT LAND WAS NEVER CONFRONTE D INTO NON-AGRICULTURAL USE BEFORE THE SALE. 8. ON THE OTHER HAND, LD. DR STRONGLY RELIED ON THE ORDER OF CIT(A). 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT ASSESSING OFFICER AS WELL AS LD. CIT(A) HAS NOT EXAMINED THE GIRDAWARI A ND FARD OF THE LAND. IF LAND WAS USED FOR AGRICULTURAL PURPOSE AND IS NOT LOCATE D IN THE AREA AS PROVIDED IN SECTION 2(14) THEN SUCH LAND SHOULD NOT HAVE BEEN T REATED AS CAPITAL ASSET. THIS ISSUE HAS NOT BEEN EXAMINED AND, THEREFORE, IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMAND THE MATTE R BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE F ARD AS WELL AS GIRDAWARI OF THE LAND AND THEN DECIDE THE ISSUE IN ACCORDANCE WI TH LAW. 10. IN THE RESULT, APPEAL IS ALLOWED OF STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.10.2014. SD/- SD/- (BHAVNESH SAINI) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08/10/2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR