AFZAL AMIRALI PATEL, MUMBAI V. DCIT RG 4(1), MUMBAI

ITA 3265/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8116 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Section: 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA, (JM) . . , , ./I.T.A. NO.3265/MUM/2013 ( / ASSESSMENT YEAR : 2009-10) SHRI AFZAL AMIRALI PATEL, AGA ALI MANOR, AGA HALL, NESBIT ROAD, MAZAGAON, MUMBAI-400010 / VS. THE DY. COMMISSIONER OF INCOME TAX, RANGE 4(1), MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ! ./PAN/GIR NO. :AADPP9246L ' / APPELLANT BY SHRI VIJAY MEHTA # ' /RESPONDENT BY SHRI PITAMBAR DAS $ % # &' / DATE OF HEARING : 11.8.2014 () # &' /DATE OF PRONOUNCEMENT : 17.10.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 19.2.2013 PASSED BY LD CIT(A)-8, MUMBAI AND IT RELA TES TO THE ASSESSMENT YEAR 2009-10. 2. AT THE TIME OF HEARING, THE LD COUNSEL APPEARING FOR THE ASSESSEE DID NOT PRESS GROUND NO.2 AND HENCE THE SAME IS DISMISSED A S NOT PRESSED. THE REMAINING GROUNDS GIVE RISE TO FOLLOWING ISSUES:- (A) WHETHER THE LAND SOLD BY THE ASSE SSEE IS AGRICULTURAL LAND OR NOT. (B) WHETHER THE LD CIT(A) WAS JUSTIFIED IN REJE CTING THE CLAIM FOR EXEMPTION U/S 54 OF THE ACT CLAIMED BY TH E ASSESSEE. 3. THE FACTS RELATING TO THE ABOVE SAID ISSUES ARE STATED IN BRIEF. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD A PLOT FOR A SUM OF RS.66,02,750/-. I.T.A. NO.3265/MUM/2013 2 THE ASSESSEE OFFERED THE GAIN ARISING THERE FROM AS LONG TERM CAPITAL GAINS, BY TAKING THE SALE CONSIDERATION AS RS.65.00 LAKHS ON THE PLEA THAT HE DID NOT RECEIVE THE BALANCE AMOUNT OF CONSIDERATION. BEFOR E THE ASSESSING OFFICER, THE ASSESSEE DID NOT FURNISH THE COPY OF PURCHASE DEED AND ALSO COULD NOT FURNISH THE DATES OF PURCHASE OF PLOT. HENCE, THE ASSESSIN G OFFICER TREATED THE GAIN AS SHORT TERM CAPITAL GAIN. EVEN THOUGH THE ASSESSEE HAD OFFERED THE GAIN ARISING ON SALE OF PLOT FOR TAXATION, YET HE CONTENDED BEFO RE THE AO THAT THE IMPUGNED LAND WAS AN AGRICULTURAL LAND AND HENCE THE GAINS A RISING THERE FORM IS EXEMPT. THE AO REJECTED THE SAID CLAIM, AS THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT HE CARRIED ON ANY AGRICULTURAL ACTIVITY T HEREON. THE VIEW TAKEN BY THE ASSESSING OFFICER WAS CONFIRMED BY LD CIT(A). 3.1 THE ASSESSEE HAD ALSO SOLD A RESIDENTIAL FL AT AND COMPUTED LONG TERM CAPITAL GAIN AT RS.8,57,635/-. IN THE RETURN OF IN COME, HE OMITTED TO CLAIM DEDUCTION U/S 54 OF THE ACT IN RESPECT OF A NEW HOU SE PURCHASED BY HIM. EVEN THOUGH HE MADE THE CLAIM FOR DEDUCTION U/S 54 OF TH E ACT BEFORE LD CIT(A), YET THE FIRST APPELLATE AUTHORITY REJECTED THE SAME ON THE GROUND THAT THE ASSESSEE HAD OMITTED TO MAKE THE SAID CLAIM IN HIS RETURN OF INCOME AND ALSO BEFORE THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE HAS FIL ED THIS APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. SO FAR AS THE CLAIM FOR DEDUCTION U/S 54 OF THE ACT, WE ARE O F THE VIEW THAT THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTION TO WHICH HE IS L EGITIMATELY ENTITLED TO. WE GET SUPPORT FOR THIS VIEW FROM THE CIRCULAR NO.14(X L-35) DATED 11.4.1955, WHEREIN THE CBDT HAD DIRECTED THE ASSESSING OFFICER S TO GUIDE THE ASSESSEE IN RESPECT OF RELIEFS AND EXEMPTIONS. DURING THE COU RSE OF HEARING, THE LD D.R ALSO AGREED THAT THIS MATTER MAY BE SENT BACK TO THE FIL E OF THE ASSESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH TH E DIRECTION TO EXAMINE THIS ISSUE AFRESH AFTER AFFORDING NECESSARY OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LA W. 5. THE NEXT ISSUE RELATES TO THE CHARACTER OF THE LAND SOLD BY THE ASSESSEE. AS NOTICED EARLIER, THE ASSESSEE HIMSELF HAD OFFERE D THE GAINS ARISING ON SALE OF I.T.A. NO.3265/MUM/2013 3 LAND FOR TAX IN THE RETURN OF INCOME FILED BY HIM. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CHANGED HIS ST AND AND CONTENDED THAT IT WAS AN AGRICULTURAL LAND. IN SUPPORT OF THIS CONTE NTION, THE ASSESSEE PLACED HEAVY RELIANCE ON THE RECITALS MADE IN THE SALE AG REEMENT AND ALSO THE LAND TAX RECEIPTS/ REVENUE RECORDS. 6. HOWEVER, A PERUSAL OF THE ORDER PASSED BY LD CIT(A) WOULD SHOW THAT THE ASSESSEE HAS BEEN, ALL THROUGH, DECLARING THIS ASSE T AS A PLOT IN HIS BOOKS OF ACCOUNT. FURTHER, THE ASSESSEE HIMSELF HAS ADMITTE D BEFORE THE LD CIT(A) (PARAGRAPH 2.6) THAT HE DID NOT CARRY ON ANY AGRIC ULTURAL ACTIVITY AS IT WAS A BARREN LAND. NOW THE QUESTION THAT ARISES IS WHETH ER A LAND CAN BE CLASSIFIED AS AGRICULTURAL LAND MERELY BECAUSE IT WAS SHOWN SO IN THE REVENUE RECORDS. 7. THERE SHOULD NOT BE ANY DISPUTE THAT ALL THE L ANDS CANNOT BE CHARACTERIZED AS AGRICULTURAL LAND, MEANING THEREBY AN AGRICULTU RAL LAND IS A SPECIES OF THE LAND MASS. WHAT DISTINGUISHES AN AGRICULTURAL LAND FROM OTHER LANDS IS ITS CONNECTION WITH AGRICULTURAL PURPOSE AND USER, I.E. , THE LAND SHOULD HAVE BEEN USED OR INTENDED TO BE USED BY THE ASSESSEE FOR AGR ICULTURAL PURPOSE. HENCE, MERELY BECAUSE A LAND COULD BE PUT TO USE FOR AGRIC ULTURAL ACTIVITIES SHALL NOT MAKE THE SAME AS AGRICULTURAL LAND. SIMILARLY, THE MERE POSSIBILITY OF USER OF LAND FOR AGRICULTURAL PURPOSES BY A FUTURE OWNER WO ULD NOT ALSO MAKE IT AN AGRICULTURAL LAND. WE FIND SUPPORT FOR THESE VIEWS FROM THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF COURT OF WARD, PAIGAH (1976)(105 ITR 133). HENCE, THE CONTENDING PARTIES SHOULD BRING S OME MATERIAL ON RECORD TO SHOW THAT THERE IS A CONNECTION BETWEEN THE LAND AN D ITS USE OR INTENDED USE FOR AGRICULTURAL PURPOSES. IN OUR VIEW, THE ENTRIES MA DE IN REVENUE RECORD ARE ONLY PRIMA FACIE EVIDENCE AND NOT CONCLUSIVE PROOF. 8. IN THE INSTANT CASE, WE HAVE SEEN THAT THE ASS ESSEE HIMSELF HAS ADMITTED THAT IT WAS A BARREN LAND. FURTHER THE ASSESSEE HA S FAILED TO FURNISH ANY MATERIAL TO SHOW THAT HE USED OR INTENDED TO USE THE SAME FO R AGRICULTURAL PURPOSES. UNDER THESE SET OF FACTS, WE DO NOT FIND ANY INFIRM ITY IN THE DECISION OF THE TAX AUTHORITIES IN HOLDING THAT THE IMPUGNED LAND WAS N OT AN AGRICULTURAL LAND. ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A) ON TH IS ISSUE. I.T.A. NO.3265/MUM/2013 4 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17TH OCT , 2014. () $ * +, 17TH OCT, 2014 ) # -% . SD SD ( / VIVEK VARMA) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER $ % MUMBAI: 17TH OCT,2014. . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ /& ( ) / THE CIT(A)- CONCERNED 4. $ /& / CIT CONCERNED 5. 0- &1 , ' 1 , $ % / DR, ITAT, MUMBAI CONCERNED 6. -2 3% / GUARD FILE. 4 $ / BY ORDER, TRUE COPY 5 (ASSTT. REGISTRAR) ' 1 , $ % /ITAT, MUMBAI