Sh, Amarjeet Singh, Ambala V. CIT, Panchkula

ITA 298/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80898 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Capital asset; Cost of acquisition; Assessment record; Capital receipt
• Section: 143(3); 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.298 /CHD/2014 ASSESSMENT YEAR : 2009-10 SH.AMARJEET SINGH, VS. THE C.I.T., 177, KARDHAN ROAD, PANCHKULA. VILL.MOHRA, AMBALA. PAN: BQZPS2702R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL RESPONDENT BY : DR.AMARVEER SINGH, DR DATE OF HEARING : 27.08.2014 DATE OF PRONOUNCEMENT : 17.09.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX, PANCHKULA DATED 28.2.20 14 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST THE ORDER PASSED UN DER SECTION 263(1) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRE D IN LAW AND FACTS IN HOLDING THAT ASSESSMENT ORDER U/S 143(3) DATED 28.1 2.2011 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE U/S. 263(1) AS FAR AS SALE OF MITTI FROM AGRICULTURE LAND OWNED BY ASSESSEE AMOUNTING RS. 12 ,60,600/- WAS NOT TAXED UNDER INCOME FROM OTHER SOURCES. 2. THE LEARNED CIT, PANCHKULA HAS ERRED IN LAW AND FACTS IN INVOKING JURISDICTION U/S 263 WHEN THE A.O. HAS THOROUGHLY E XAMINED THE ISSUE OF TAXABILITY OF SALE OF MITTI DURING THE COURSE OF AS SESSMENT PROCEEDINGS AND HAS CHOSEN NOT TO TAX SALE OF MITTI AS PER PROVISIO NS OF INCOME TAX ACT. 2 3. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR TO SUBSTITUTE THE ABOVE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF H EARING OF CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT IN THE CASE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 28.12. 2011 AND TOTAL INCOME OF RS.1,17,000 PLUS AGRICULTURAL INCOME OF R S.6,77,000/-. ON THE PERUSAL OF THE RECORD IT WAS NOTED THAT THE ASS ESSING OFFICER HAD TREATED MITTI SALE OF RS.12,60,600/- AS AGRICULTURA L RECEIPTS AND THE SAME WAS NOT BROUGHT TO TAX. IN VIEW THEREOF, THE PROV ISIONS OF SECTION 263 OF THE ACT WERE INITIATED BY ISSUING SHOW CAUSE NOT ICE. THE PLEA OF THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX WAS THAT COMPLETE DETAILS OF THE SALE OF MITTI TO M/S AJAY CONSTRUCTI ON CO. FOR RS.12,60,600/- WERE FURNISHED AND THE SAME WERE EXA MINED BY THE ASSESSING OFFICER. THE SECOND PLEA OF THE ASSESSE E BEFORE THE COMMISSIONER OF INCOME TAX WAS THAT THE SAID RECEIP TS WERE CAPITAL RECEIPTS AND THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS.6,77,000/-, WHICH WAS ACCEPTED. ANOTHER PLEA R AISED BY THE ASSESSEE WAS THAT THE SALE OF MITTI WAS FROM AGRICULTURAL LA ND WHICH WAS LOCATED BEYOND 8 KM FROM THE MUNICIPAL LIMITS OF AMBALA AND AS SUCH WAS NOT CAPITAL ASSET. THE COMMISSIONER OF INCOME TAX REJ ECTING THE PLEA OF THE ASSESSEE HELD THAT THE INCOME WAS TAXABLE AS IN COME FROM OTHER SOURCES UNDER SECTION 56 OF THE ACT. REJECTING TH E CLAIM OF THE ASSESSEE THAT THE ASSESSING OFFICER HAD TAKEN VIEW DIFFERENT FROM THE COMMISSIONER IT WAS HELD BY THE COMMISSIONER OF INC OME TAX THAT IN FACT NO VIEW HAD BEEN TAKEN BY THE ASSESSING OFFICE R AND NO FINDING WAS GIVEN, WHICH WAS SUSTAINABLE IN LAW. THE COMMISSI ONER OF INCOME TAX HELD THE ASSESSMENT PASSED BY THE ASSESSING OFFICER TO BE BOTH ERRONEOUS AND PREJUDICAL TO THE INTEREST OF THE REVENUE AND W AS CANCELLED UNDER SECTION 263(1) OF THE ACT. THE ASSESSING OFFICER WAS DIRECTED TO RE- FRAME THE ASSESSMENT IN ACCORDANCE WITH LAW KEEPING IN VIEW THE 3 DISCUSSION MADE IN THE ORDER. 4. THE ASSESSEE IS IN APPEAL AGAINST THE SAID FINDI NG OF THE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE VEHE MENTLY SUBMITTED THAT THE COMMISSIONER OF INCOME TAX HAD ERRED IN ST ATING THE INCOME TO BE AN AGRICULTURAL INCOME WHERE IT WAS NOT AGRICULT URAL INCOME. FURTHER IT WAS NEVER ASSESSED AS AGRICULTURAL INCOM E AND WAS NOT ASSESSABLE AS AGRICULTURAL INCOME AS LAND FROM WHIC H MITTI WAS TAKEN WAS BEYOND 8 KM FROM THE MUNICIPAL LIMITS AND WAS THUS NOT CAPITAL ASSET. ANOTHER PLEA RAISED BY THE LEARNED A.R. FOR THE ASS ESSEE THAT THE EXTRACTION OF MITTI WAS DEPLETION OF LAND VALUE. THE SALE PROCEED OF MITTI COULD BE ASSESSED AS INCOME FROM CAPITAL GAIN UNDER SECTION 45 OF THE ACT. IT WAS VEHEMENTLY STRESSED BY THE LEARNE D A.R. FOR THE ASSESSEE THAT THE INCOME WAS THE CAPITAL RECEIPT AN D WAS NOT FROM OTHER SOURCES. THE LEARNED A.R. FOR THE ASSESSEE PLACE D RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN A.R.KRISHNAMUR THY & ANOTHER VS. CIT [176 ITR 417 (SC)]. 5. THE LEARNED D.R. FOR THE REVENUE BROUGHT OUR ATT ENTION TO THE COMPUTATION OF INCOME FILED BY THE ASSESSEE AT PAGE 1 OF THE PAPER BOOK IN WHICH IN ADDITION TO THE AGRICULTURAL INCOME OF RS.6,77,000/-, INCOME FROM SALE OF MITTI WAS DECLARED AS AGRICULTURAL INC OME OF RS.12,60,600/-. THE LEARNED D.R. FOR THE REVENUE FURTHER POINTED OU T THAT THERE WERE CASH DEPOSITS IN THE BANK ACCOUNT AND THE ASSESSING OFFICER EXAMINED THE SOURCE OF CASH DEPOSITS BUT DID NOT EXAMINE THE NATURE OF THE RECEIPTS AND FAILED TO CONSIDER THE ASSESSABILITY OF THE SAI D RECEIPTS. WITH REGARD TO THE PLEA OF THE ASSESSEE THAT HE SALE OF MITTI REDUCES THE COST OF THE ASSET,IT WAS POINTED OUT BY THE LEARNED D.R. FO R THE REVENUE THAT THERE IS NO MERIT IN THE SAID PLEA AS THE MITTI IN NO WAY COULD BE CAPITAL ASSET AND DEFINITION UNDER SECTION 2(24) OF THE ACT WAS IF THE ASSESSEE 4 HAD RECEIVED SOME INCOME AND IS NOT ASSESSABLE UNDE R ANY CLAUSE, THE SAME TO BE ASSESSED INCOME FROM OTHER SOURCES. TH E RELIANCE OF THE ASSESSEE IN A.R.KRISHNAMURTHY & ANOTHER VS. CIT (SU PRA) WAS HELD MIS- PLACED AS THE FACTS WERE DISTINGUISHABLE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION T O INVOKING OF JURISDICTION UNDER SECTION 263 OF THE ACT. THE AS SESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,17, 000/- AND THE ASSESSEE HAD CLAIMED AGRICULTURAL INCOME OF RS.6,77 ,000/-. THE COPY OF THE COMPUTATION OF INCOME IS PLACED AT PAGE 1 OF TH E PAPER BOOK. THE PERUSAL OF THE SAID STATEMENT REFLECTS THE AGRICULT URAL INCOME, MITTI SALE OF RS.12,60,600/- WAS DECLARED BY THE ASSESSEE IN T HE SAID COMPUTATION ITSELF. HOWEVER, THE TAX WAS PAID ON TOTAL INCOME OF RS.1,17,000/- AND THE INCOME RECEIVED ON SALE OF MITTI WAS NOT CONSID ERED FOR TAX COMPUTATION AS THE TOTAL TAX PAYABLE IN THE HANDS O F THE ASSESSEE WAS NIL. THE SAID COMPUTATION OF INCOME WAS ACCEPTED BY THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 143(3) OF THE ACT D ATED 28.12.2011 I.E. ASSESSING THE INCOME AT RS.1,17,000/- AND AGRICULTU RAL INCOME AT RS.6,77,000/-. THE COMMISSIONER OF INCOME TAX ON PERUSAL OF THE ASSESSMENT RECORD NOTED THAT THE ASSESSING OFFICER HAD TREATED THE RECEIPT FROM MITTI SALE AS AGRICULTURAL INCOME AND NOT BROUGHT THE SAME TO TAX. THE COMMISSIONER OF INCOME TAX THUS ISSU ED SHOW CAUSE NOTICE TO THE ASSESSEE ON THE FOLLOWING GROUNDS : I) IT IS NOTICED THAT YOU HAD RETURNED INCOME FRO M ONE TRUCK U/S 44AE AND FROM OTHER TRUCK UNDER THE HEAD BUSINESS. AGRICULTU RAL INCOME FROM 8.5 ACRES OF LAND WAS SHOWN AT RS.6,77,000/-. FURTHER, AN INCOME OF RS. 12,60,600/- FROM SALE OF 'MITTI' FROM FIELDS HAS AL SO BEEN SHOWN, BUT THE SAME WAS CLAIMED AS AGRICULTURE INCOME FROM 'MITTI' SALE . II) THE ASSESSING OFFICER HAS ERRED IN TREATING TH E SALE FROM 'MITTI 1 AMOUNTING TO RS. 12,60,600/- AS AGRICULTURE INCOME. THE SALE FROM 5 EXTRACTING 'MITTI' FROM FILED IS TAXABLE UNDER, .TH E HEAD OTHER SOURCES AS LEASE RENTAL/ROYALTY INCOME. 7. IN REPLY THE ASSESSEE MADE THE FOLLOWING SUBMISS IONS : 1. WITH REFERENCE TO NOTICE U/S 263 WHEREIN IT WAS RIGHTLY OBSERVED BY YOUR HONOR THAT 'MITTI SALE' OF RS. 12,60,600/- WAS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. YOUR HONOR HAS RIGHTLY OBSERVED THAT AGRICU LTURE INCOME OF RS.6,77,000/- WAS DECLARED IN THE RETURN OF INCOME, THAT DURING T HE COURSE OF ASSESSMENT PROCEEDINGS COMPLETE DETAILS OF SALE OF MITTI TO AJ AY CONSTRUCTION CO. FOR RS. 12,60,600/- WAS FURNISHED AND THE SAME WAS EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN DETAIL AND TO THE SATISFACTION OF AS SESSING OFFICER. 2. WITH REFERENCE TO YOUR OBSERVATION THAT SALE OF MIT TI OF RS. 12,60,600/- WAS DECLARED AS AGRICULTURE INCOME BY THE ASSESSEE IN T HE RETURN OF INCOME, IT IS SUBMITTED THAT IN THE RETURN OF INCOME AGRICULTURAL ! INCOME OF RS.6,77,000/- WAS DECLARED AND ALSO ASSESSED BY A0 AT RS. 6,77,00 0/- AND THE AMOUNT OF RS. 12,60,600/- BEING SALE OF SOIL IS DECLARED IN T HE RETURN OF INCOME BUT THE SAME AMOUNTS TO A CAPITAL RECEIPT AND NEVER DECLARE D AS AGRICULTURE INCOME. 3. WITH REFERENCE TO YOUR OBSERVATION ABOUT TAXABILITY OF 'SALE OF MITTI' FROM FIELD AS INCOME FROM OTHER SOURCES, IT IS SUBMITTED THAT THE AMOUNT WAS DISCLOSED IN THE COMPUTATION OF INCOME AS RECEIPT; OF EXEMPTED INCOME BEING SALE OF MITTI OF AN AGRICULTURAL LAND WHICH IS NOT REGARDED AS A CAPITAL ASSETS. IT IS SUBMITTED THAT LAND UNDER CONSIDERATION IS LO CATED BEYOND 8 KM OF MUNICIPAL LIMITS OF AMBALA AND AS SUCH NOT REGARDED AS A CAPITAL ASSET. A COPY OF THE CERTIFICATE FROM TEHSILDAR AMBALA IS AT TACHED AS PER ANNEXURE-I. 4. IT IS FURTHER CLARIFIED THAT AS PER SETTLED AND EXP RESS PROVISION OF LAW 'SALE OF MITTI' CAN BE REDUCED FROM THE COST OF LAND OR LEAN BE ASSESSED AS SALE OF CAPITAL ASSET AND EVENTUALLY BE TAXED UNDER INCOME FROM CAPITAL GAIN. THE MATTER WAS DISCUSSED AT LENGTH DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ISSUE HAS BEEN DECIDED AFTER DUE CONSIDERATION. THIS FACT IS QUIET EVIDENT FROM THE ASSESSMENT ORDER AT PAGE 1 WHEREIN AT HAST LINE IT WAS SPECIFICALLY MENTIONED THAT 'THE ASSESSEE HAS ALSO SOLD THE MIJT TI OF HIS FIELDS/LAND TO M/S AJAY CONSTRUCTION CO. FOR RS. 12,60,600/-.' IT IS N OT A CASE THAT THIS ISSUE OF SALE OF MITTI WAS NOT AVAILABLE BEFORE AO AND HAS N OT BE CONSIDERED BY HIM AT THE TIME OF ASSESSMENT. 5. THAT ANY PART SALE OF A CAPITAL ASSET WILL GO TO RE DUCE THE VALUE OF CAPITAL ASSET THE ASSESSEE CAN BEST BE SAID TO BE EITHER RE ALIZING HIS CAPITAL ASSET OR REDUCING THE MARKET VALUE OF HIS CAPITAL ASSET BY S ELLING ITS CONSTITUENTS BY DISMEMBERING THE LAND. 6. THE POSITION CAN BEST BE EXPLAINED BY AN EXAMPLE TH AT IN CASE ONE PERSON PURCHASE ONE GENERATOR WITH CANOPY AND THE COST OF THIS CAPITAL ASSET WAS A COMPOSITE COST AND IF ASSESSEE SELL CANOPY IT WILL BE REDUCED FORM THE COST OF GENERATOR AND UNDER ANY CIRCUMSTANCES IT CANNOT BE HELD TO BE INCOME FROM OTHER SOURCES. THIS ISSUE HAS BEEN DECIDED IN THE C ASE OF PARAS MATHEW VS. DEPUTY COMMISSIONER OF INCOME TAX 136 TTJ 612 (COCH .) 8. THE COMMISSIONER OF INCOME TAX ON PERUSAL OF THE SUBMISSIONS MADE BY THE ASSESSEE OBSERVED AS UNDER: (A) THE ASSESSEE HAS RELIED UPON THE JUDGMENT IN T HE; CASE OF PARAS MATHEW VS. DEPUTY COMMISSIONER OF INCOME TAX AS REPORTED IN 13 6 TTJ 612 (COCH.) IN WHICH IT HAS BEEN HELD THAT 'REGARDING RECEIPT OF THE SALE O F SOIL AS INCOME FROM OTHER SOURCES, THE ISSUE IS PARI MATERIAL WITH THAT QUA THE SALE O F TREES. THE SALE OF SOIL AND RUBBLES WAS ONE OF THE FACTS NOTED BY IT AT IN ARRIVING AT FINDING OF FACT OF THE ASSESSEE BEING 6 ENGAGED IN THE REALIZATION OF CAPITAL ASSET, SELLIN G ITS CONSTITUENTS BY DISMEMBERING THE LAND. IT WAS THEREFORE, HELD TO BE A TAXABLE RECEIP T UNDER SECTION 2(24)(VI) R.W.S. 45 OF THE ACT, ALBEIT ENTITLED TO, SIMILARLY A REDUCTI ON TOWARDS THE COST OF ITS ACQUISITION.' THE FACTS OF THE CASE ARE DISTINGUISHABLE AND AS SU CH, CASE LAW REFERRED BY THE ASSESSEE IS ALSO NOT HELPING HIM. MOREOVER,, IN THE SAID JUDGMENT, THE HON'BLE ITAT HAS CLEARLY HELD THAT THE INCOME IS TAXABLE UNDER S ECTION 2(24)(VI) R.W.S. 45. WHEREAS IN THE CASE OF THE ASSESSEE, THE LAND HAS NEITHER B EEN TRANSFERRED NOR ITS REALISABLE VALUE HAS BEEN REDUCED. IT IS A CLEAR CASE OF INCOME EARN ED FROM THE LAND, WHICH IS TAXABLE AS 'INCOME FROM OTHER SOURCES' UNDER SECTION 56 OF THE INCOME TAX ACT. (B) REGARDING THE SECOND CONTENTION THAT THE ORDER PASSED BY THE A.O. IS NOT ERRONEOUS, THE SAME IS ONCE AGAIN WITHOUT MERIT. TH IS IS NOT A CASE WHERE TWO VIEWS WERE POSSIBLE AND THE A.O. HAS TAKEN A VIEW DIFFERE NT FROM THAT OF THE COMMISSIONER. IN FACT, NO VIEW WAS TAKEN BY THE A.O. AND NO FINDINGS WERE GIVEN, WHICH IS NOT SUSTAINABLE IN LAW. THE A.O. HAS ACCEPTED THE VERSI ON OF THE ASSESSEE WITHOUT MAKING ANY ENQUIRIES. ORDERS PASSED WITHOUT APPLICATION OF MIND HAVE ALSO BEEN HELD BY THE HON'BLE COURT TO BE ERRONEOUS ORDERS. IN THE PR ESENT CASE, IT IS CLEAR THAT THE A.O. FAILED TO APPLY HIS MIND AND HE NOT ONLY MADE AN INCORRECT APPRECIATION OF FACTS BUT ALSO FAILED TO APPLY THE CORRECT LAW. 9. THE COMMISSIONER OF INCOME TAX WAS OF THE VIEW T HAT THE ASSESSING OFFICER IN THE PRESENT CASE HAD FAILED TO MAKE NECESSARY ENQUIRIES WHILE FRAMING THE ASSESSMENT UNDER SECTIO N 143(3)OF THE ACT AND CONSEQUENTLY THE ASSESSMENT ORDER PASSED IN THE CASE WAS BOTH ERRONEOUS AND PREJUDICAL TO THE INTEREST OF THE REV ENUE. THE ASSESSEE IS AGGRIEVED BY THE SAID OBSERVATION OF THE COMMISSION ER OF INCOME TAX AND HENCE THE PRESENT APPEAL. IT IS AN ADMITTED P OSITION THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED RS.12,60,600/- ON SALE OF MITTI. THE ASSESSING OFFICER WHILE EXAMIN ING THE BANK ACCOUNT OF THE ASSESSEE IN WHICH THERE WERE CASH DEPOSITS, HAD ASKED FOR THE SOURCE OF THE SAID CASH DEPOSITS. HOWEVER, THE AS SESSING OFFICER FAILED TO MAKE ANY ENQUIRIES AS TO THE NATURE OF THE RECEI PTS AND TAXABILITY OF THE RECEIPTS. MERELY BECAUSE CERTAIN INFORMATION WAS COLLECTED BY THE ASSESSING OFFICER, DOES NOT ESTABLISH THAT THE ASSE SSING OFFICER HAD TAKEN A VIEW ON THE ISSUE. THE LEARNED A.R. FOR THE ASSESSEE HAD VEHEMENTLY ARGUED THAT THE PROVISIONS OF SECTION 26 3 OF THE ACT WERE NOT TO BE APPLIED. HOWEVER, AT THE CLOSE OF THE HEARI NG IT WAS PLEADED BY THE LEARNED A.R. FOR THE ASSESSEE THAT THE SALE OF MITTI AT BEST COULD BE INCLUDED AS INCOME FROM CAPITAL GAINS BUT NOT INCOM E FROM OTHER SOURCES. UNDER THE PROVISIONS OF SECTION 263 OF THE ACT WHERE THE 7 COMMISSIONER OF INCOME TAX FINDS THE ORDER PASSED B Y THE ASSESSING OFFICER TO BE ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEN HE IS ENTITLED TO INVOKE HIS JURISDIC TION UNDER SECTION 263 OF THE ACT. IN THE FACTS OF THE PRESENT ASSESSEE WHERE THE ASSESSING OFFICER THOUGH HAD MADE PRELIMINARY ENQUIRIES AS TO THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT BUT HAD FAILED TO ADDR ESS THE ISSUE OF ASSESSABILITY OF SUCH CASH RECEIPTS IN THE HANDS OF THE ASSESSEE, THE INVOKING OF JURISDICTION BY THE COMMISSIONER OF INC OME TAX UNDER SECTION 263 OF THE ACT IS VALID. 10. WE FIND MERITS IN THE INHERENT JURISDICTION INV OKED BY THE COMMISSIONER OF INCOME TAX ONCE THE ASSESSING OFFIC ER IS CONFRONTED WITH THE SO-CALLED RECEIPTS, THEN THE NATURE AND T HE TAXABILITY HAD TO BE CONSIDERED BY THE ASSESSING OFFICER BEFORE COMPLETI NG THE ASSESSMENT. THE ASSESSING OFFICER HAS FAILED TO MAKE PROPER ENQ UIRIES IN THE CASE AND CONSEQUENTLY THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND THE SAME HAD RESULTED IN LOSS OF REVE NUE, WHICH IS PREJUDICAL TO THE INTEREST OF THE REVENUE. UPHOLD ING THE ORDER OF THE COMMISSIONER OF INCOME TAX, WE RESTORE THE ISSUE BA CK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ASSESSABILITY OF TH E SAID RECEIPTS AFTER MAKING NECESSARY ENQUIRIES. HOWEVER, WE EXPUNGE THE FINDINGS OF THE COMMISSIONER OF INCOME TAX THAT THE SAID RECEIPTS A RE INCLUDIBLE AS INCOME FROM OTHER SOURCES. ANOTHER ASPECT TO BE KEPT IN MIND IS THAT THE LEARNED A.R. FOR THE ASSESSEE AT THE CONCLUSION OF HEARING HAD ADMITTED THAT THE SAID RECEIPTS AT BEST COULD BE AS SESSED IN THE HANDS OF THE ASSESSEE AS INCOME FROM CAPITAL GAINS. 8 11. IN THE CASE OF A.R.KRISHNAMURTHY & ANOTHER VS. CIT (SUPRA) THE ASSESSEE WAS A BODY OF INDIVIDUALS, PURCHASED TWO P IECES OF LAND IN 1966 AT A PRICE OF RS.27,600. IN 1970 IT GRANTED A MIN ING LEASE TO A PRIVATE COMPANY TO EXTRACT CLAY FOR A PERIOD OF 10 YEARS AT A PREMIUM OF RS.5 LACS IN ADDITION TO PAYMENT OF ROYALTY. THE INCOM E-TAX OFFICER DETERMINED A SUM OF RS.4,82,960 AS LONG-TERM CAPITA L GAINS AFTER DETERMINING 5/8 THS OF THE PRICE OF THE LAND AS COST OF ACQUISITION O F THE LEASEHOLD INTEREST. THE APPELLATE ASSISTANT COMMIS SIONER CONFIRMED THE ASSESSMENT BUT ALLOWED DEDUCTION OF THE ENTIRE PRIC E OF THE LAND. THE TRIBUNAL, ON APPEAL, CONFIRMED THE ORDER OF THE APP ELLATE ASSISTANT COMMISSIONER AND THE HIGH COURT, ON A REFERENCE, HE LD THAT THE RIGHT CONFERRED ON THE LESSEE WAS A CAPITAL ASSET AND T HERE WAS A TRANSFER OF A CAPITAL ASSET FOR A CONSIDERATION OF RS.5 LAKHS. ON APPEAL IT WAS HELD: HELD, AFFIRMING THE DECISION OF THE HIGH COURT, TH AT THE GRANT OF THE MINING LEASE WAS TRANSFER OF A CAPITA L ASSET WITHIN HE MEANING OF SECTION 45 OF THE INCOME-TAX ACT, 196 1. THE COST OF ACQUISITION OF THE LAND WOULD INCLUDE THE COST OF ACQUISITION OF THE MINING RIGHT UNDER THE LEASE AND THE DATE OF AC QUISITION OF THE FREEHOLD RIGHTS. THE AMOUNT PAID BY THE APPELLANT TO PURCHASE THE LAND WAS FOR ACQUIRING A BUNDLE OF RIGHTS IN THE LA ND INCLUDING THE RIGHT TO GRANT A LEASE. THE COST OF ACQUISITION HA D TO BE APPORTIONED IN EACH CASE ON THE BASIS OF EVIDENCE. THE DETERMINATION OF THE COST OF THE RIGHT TO EXCAVATE CLAY IN THE LAND IN TERMS OF MONEY MIGHT BE DIFFICULT BUT WAS NONE T HE LESS OF A MONEY VALUE AND THE BEST VALUATION POSSIBLE HAD TO BE MADE. 12. FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT FOR TH E ABOVE THINGS THE HON'BLE APEX COURT WAS CONCERNED WITH THE ISSUE OF GRANT OF LEASE WHICH CAN BE TREATED AS CAPITAL ASSET. HOWEVER, TAKING OUT MITTI BY A THIRD PERSON WITHOUT GRANTING A LEASE CANNOT BE CALLED A CAPITAL ASSET. THEREFORE, IN OUR OPINION THIS CANNOT BE TREATED AS A CASE OF TRANSFER OF CAPITAL ASSET. THE ASSESSING OFFICER SHALL DETERMI NE THE NATURE OF RECEIPTS AND THE HEAD OF INCOME UNDER WHICH THE SAI D RECEIPT IS 9 CHARGEABLE TO TAX, AFTER MAKING NECESSARY ENQUIRIES . THE GROUND OF APPEAL RAISED BY THE ASSESSEE ARE THUS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17 TH SEPTEMBER, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH