ITO, CHENNAI V. Amudha Anandh, CHENNAI

ITA 327/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4327 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 06-02-2017
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: DEVANATHAN
• Keywords: Deduction for capital gain; Capital asset
• Section: 143(3); 54B; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.327/MDS./2017 / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, NON CORPORATE WARD-1(1), CHENNAI. VS. M/S.AMUDHA ANANDH , 4,1 ST LINK STREET, CIT COLONY, MYLAPORE, CHENNAI 600 004. [PAN AABPA 2471 Q] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : MR.SUPRIYO PAL, JCIT, DR /RESPONDENT BY : MR.DEVANATHAN, ADVOCATE / DATE OF HEARING : 09 - 05 - 2017 / DATE OF PRONOUNCEMENT : 02 - 06 - 2017 - / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, CHENNA I DATED 25.11.2016 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE IN REVENUES APPEAL IS WITH REGA RD TO DELETION OF DISALLOWANCE MADE U/S.54B OF THE ACT. ITA NO.327/MDS./17 :- 2 -: 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE SOL D AGRICULTURAL LAND AT MELROSAPURAM VILLAGE, SENGUNDRAM CHENGELPAT TALU K AND CLAIMED EXEMPTION UNDER CAPITAL GAINS. THE ASSESSEE HOLD HA LF SHARE IN THE LANDS ALONG WITH OTHER HALF SHARE BELONGS TO MY DAU GHTER MRS.JANANI LAXMI. ACCORDING TO LD.CIT(A), FROM THE ASSESSMENT ORDER D T. 19.12.2011 PASSED U/S. 143(3) R.W.S. 254 IN THE CASE OF SMT. J ANANILAKSHMI, DAUGHTER OF THE APPELLANT, THE OWNER OF THE OTHER HALF-SHARE IN THE LAND AT MEIROSAPURAM VILLAGE, CHENGALPET TALUK, IT IS CLEAR THAT THE FAC TS PERTAINING TO THE USER OF THE LAND SOLD BY THE APPELLANT AND THAT SOLD BY HER DAUGHTER, ARE IDENTICAL. IN BOTH CASES, EUCALYPTUS TREES HAVE BEEN GROWN IN THE LAND AND THIS FACT HAS BEEN CONFIRMED BY THE VILLAGE OFFICER, WHO APPEARED BEFORE THE ASSESSING OFFICER, ASSESSING THE CASE OF JANANILAKSHMI ON 24. 12.2009. THE ASSESSING OFFICER HAS ALSO CONFIRMED THIS FACT VIDE REMAND RE PORTS SUBMITTED TO THE CIT(A) IN THE CASE OF SMT. JANANILAKSHMI. THE ASSES SING OFFICER HAS ALSO CLEARLY STATED IN THE SAID REMAND REPORT THAT THE S MT. JANANILAKSHMI HAS PURCHASED AN IMMOVABLE PROPERTY (AGRICULTURAL LAND) AT MANAMAI VILLAGE, THIRUKAZHUKUNDRAM TALUK, KANCHEEPURAM DISTRICT, VID E DOCUMENT NO. 8554 OF 2007, THAT THE LAND HAS BEEN CLASSIFIED AS PUNJA (CULTIVABLE) LANDS IN SURVEY NO. 291/LCD, MANAMAI VILLAGE AND THAT MANGO TREES AND COCONUT TREES ARE PLANTED IN THAT LAND, THE ASSESSING OFFIC ER HAS THUS CLEARLY CONFIRMED THAT THE IMMOVABLE PROPERTY PURCHASED BY SMT. JANANILAKSHMI COMPLIES WITH THE CONDITION SPECIFIED IN SECTION 54 B OF THE ACT. BASED ON THE SAID REMAND REPORTS, THE CIT(A)VI, CHENNAI, VIDE OR DER IN ITA NO.278/11- ITA NO.327/MDS./17 :- 3 -: 12 DT. 10.1.2013 IN THE CASE OF SMT. JANANILAKSHMI FOR AY 2007-08, HAS CLEARLY HELD THAT THE LANDS AT MELROSAPURAM ARE PUT TO AGRICULTURAL USE. HE HAS ALSO HELD THAT THE ASSESSEE (SMT. JANANILAKSHMI ) IS ELIGIBLE FOR DEDUCTION U/S. 54B OF THE ACT. THE SAID ORDER HAS BEEN UPHELD BY THE HON.BLE ITAT, D BENCH, CHENNAI VIDE ORDER IN ITA NO. 1317/MDS/2013 & C.O.NO. 113/MDS/2015 DT. 24.7.2015 WHEREIN HELD THAT SMT. M .A.JANANILAKSHMI IS ENTITLED FOR CLAIM OF DEDUCTION U/S.54B OF THE ACT WITH RESPECT TO THE CAPITAL GAINS ARISING FROM THE IMPUGNED TRANSACTION OF SALE OF LANDS BY HER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TRIBUNAL IN CO-O WNERS CASE SMT. M.A.JANANILAKSHMI IN ITA NO. 1317/MDS/2013 & C.O.NO . 113/MDS/2015 DT. 24.7.2015 WHEREIN HELD AS FOLLOWS:- 5. ON GOING THROUGH THE ORDER OF COMMISSIONER OF I NCOME TAX (APPEALS), WE FIND THAT CLAIMS OF THE ASSESSEE UNDE R SECTION 54B AND BROKERAGE COMMISSION PAYMENT IN RESPECT OF PURCHASE OF LAND HAVE BEEN ALLOWED BASED ON THE REMAND REPORT SUBMITTED B Y THE ASSESSING OFFICER WHO HAS ACCEPTED THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT AND THE BROK ERAGE COMMISSION PAID IS GENUINE AND IT IS PROVED, THUS T HE SAME IS ELIGIBLE FOR DEDUCTION. COMMISSIONER OF INCOME TAX (APPEALS) WHILE ALLOWING THE CLAIMS OF THE ASSESSEE OBSERVED AS UNDER:- 3. AFTER GOING THROUGH ALL THE RELEVANT DOCUMENTS, ARGUMENTS, REPORTS, THE APPEAL IS ADJUDICATED. FROM THE ABOVE TWO OF THE THORNY ISSUES CONTESTED IN THIS APPEAL HAVE BEEN RE SOLVED BY ENQUIRIES CAUSED BY THE AO DURING THE REMAND PROCEE DINGS. HFIRSTLY THE ADDITIONAL GROUND NO.3 FILED ON 23.11. 2012 WHERE IT IS AGITATED THAT THE CENTRAL GOVERNMENT HAS NO LEGI SLATIVE COMPETENCE TO LEGISLATE ON AGRICULTURAL INCOME WHIC H IS A STATE ITA NO.327/MDS./17 :- 4 -: SUBJECT AND ALSO THAT CONCERNED AMENDMENTS TO IT AC T HAS NO FORCE OF LAW SINCE MANDATORY CONSENT OF THE HON'BLE PRESIDENT IN TERMS OF ARTICLE 274 OF THE CONSTITUTION WAS NOT OBTAINED. IT IS TO BE NOTED HERE THAT THE SAID LEGISLATIVE AMEND MENT U/S 2( 14) IS NOT ABOUT AGRICULTURAL INCOME BUT ONLY AGRIC ULTURAL LANDS. HENCE, THERE IS NO INFRINGEMENT OF STATE SUBJECT BY THE UNION. HENCE, THIS GROUND IS DISMISSED. REST OF THE ADDITI ONAL GROUNDS ARE CONTINUATION OF THE GROUNDS ORIGINALLY FILED. H ENCE, ALL THE GROUNDS ARE ADJUDICATED COMMONLY. EVEN THOUGH THE S ALE PROCEEDS FROM THE SAID AGRICULTURAL LANDS WERE ORIG INALLY CLAIMED AS EXEMPT R.W.S. 2(14), THE APPELLANT HAS M ODIFIED HER CLAIM TO RELIEF U/S 54B. WITH REFERENCE TO THE CLAI M OF THE APPELLANT U/S 54B AS ADDITIONAL GROUND THE AO HAS A CCEPTED THE CLAIM THAT AGRICULTURE HAS BEEN CARRIED OUT IN THE SAID LANDS TO GROW EUCALYPTUS TREES BASED ON THE ENQUIRY WITH THE VAO. THE ADDITIONAL GROUNDS REPRODUCED IN PARA 2 ABOVE W ERE FORWARDED TO THE AO FOR HIS REMARKS AND HER REMARKS ARE EXTRACTED HERE. THE REMAND REPORT CALLED FOR IN THE CASE OF SMT. SMT.JANANI LAKSHMI IS SUBMITTED BELOW: ON VERIFICATION OF THE DOCUMENTS AVAILABLE ON RECOR D, THE FOLLOWING ARE SUBMITTED FOR YOUR KIND CONSIDERATION . PARA NO.1 OF ADDITIONAL GROUNDS: NOT APPLICABLE PARA NO.2: DURING ASSESSMENT PROCEEDINGS THE ITO HA S VERIFIED FROM THE VAO THAT EUCALYPTUS TREES HAVE ACTUALLY BE EN GROWN IN THE SAID LAND. THE CHITTA AND ADANGAL HAVE ALSO BEEN PLACED ON FILE AS PROOF OF THE SAME. HOWEVER THE CLAIM THA T, SALE PROCEEDS OF AGRICULTURAL LAND IS EXEMPT, WAS REJECT ED SINCE THE VAO HAS CERTIFIED THAT THE TRANSFERRED LAND IS WELL WITHIN 3 KMS FROM THE MARAIMALAI NAGAR MUNICIPAL LIMITS. THE ASS ESSEE HAS, IN ADDITION TO HIS PREVIOUS EVIDENCES, A LETTER FRO M THE WATCHMAN AND A PHOTOGRAPH OF THE LAND WITH THE EUCA LYPTUS TREES. PARA NO.3: NOT APPLICABLE. PARA NO.4 : THE ASSESSE' PAID BROKERAGE OF RS. 1 LA KH IN PURCHASE OF AGRICULTURAL LAND AT MANNAMAI VILLAGE VERIFICATION OF THE SAME WAS DONE AND FOUND TO BE I N ORDER. PARA NO.5: FROM THE PAPERS ON RECORD AND FROM THE S TATEMENT OF THE WATCHMAN IT HAS BEEN ASCERTAINED THAT EUCALY PTUS TREES HAS ACTUALLY BEEN GROWN ON THE LAND. THERE HAS BEEN A PERMANENT EMPLOYEE, A WELL AND !MOTOR FOR MAINTENAN CE OF THE SAME. PARA NO.6: THE ASSESSEE HAS CLAIMED SALE OF EUCALYP TUS LEAVES TO THE VILLAGERS. BUT NO PROOF OF THE SAME HAS BEEN PRODUCED. 4. AS CLAIMED BY THE APPELLANT'S AR, EUCALYPTUS TRE ES NOT ONE THAT CAN GROW SPONTANEOUSLY. IT NEEDS CONSTANT NURT URING AND TILLAGE AND GROW AT LEAST FOR THE FIRST TWO YEARS A FTER PLANTATION. ITA NO.327/MDS./17 :- 5 -: EVEN THE PLANTATION HAS TO BE SYSTEMATIC WITH PITS MADE READY AND PLANT THE SAPLINGS IN ROWS FACILITATING INTER C ULTIVATIONAL PRACTICES. THE CLAIM OF THE APPELLANT THAT THE EUCA LYPTUS TREES, AFTER ARE CUTTING, USED IN THE PAPER PULP INDUSTRIE S IS ALSO A FACT. THE REMAND REPORT DATED 19.12.2012 ALSO CONFI RMS THIS AGREEMENT OF THE APPELLANT. HENCE FOR THESE REASONS , IT IS HELD THAT THE LAND IS PUT TO AGRICULTURAL USE FOR CULTIV ATION OF EUCALYPTUS TREES AND HENCE, THE LANDS ARE HELD TO B E AGRICULTURAL LANDS. 5. IN HIS REMAND REPORT VIDE LETTER DATED 06.05.201 0 FURNISHED BY THE ITO, BUSINESS WARD-I(2), THE ISSUE OF USER O F THE LAND PURCHASED LN MANAMAI VILLAGE HAS BEEN DISCUSSED IN DETAIL. IN PARA 5 AND 6 OF THE REMAND REPORT, IT IS ACCEPTED B Y THE AO THAT ON PERUSAL OF ALL THE DETAILS AND DOCUMENTS SU BMITTED BEFORE HIM THAT THE ASSESSEE HAD INVESTED THE PROCE EDS RECEIVED FROM THE SALE OF PROPERTY AT MELROSAPURAM VILLAGE, SENGUNDRAM VILLAGE, CHINGLEPUT TALUK IN A NEW AGRIC ULTURAL LAND BY WAY OF TW REGISTERED DOCUMENTS AT MANAMAI V ILLAGE, THIRUKAZHUKUNDRAM TALUK, KANCHEEPURAM DISTRICT. IT HAS ALSO BEEN NOTICED BY HIM THAT THE SAID LANDS PURCHASED B Y TWO SALE DEEDS ON 29.11.2007 HAVE BEEN QUALIFIED AS 'PUNJA' (CULTIVABLE -LANDFFI1 SURVEY NO.291/1CB, MANAMAI VILLAGE AND TH AT THE SAID PROPERTY WAS FOUND FITTED WITH 5 HP MOTOR, PUMP-SET AND MANGO & COCONUT TREES WERE ALREADY EXISTING IN THE LAND. HENCE, THE AO HAS GIVEN A FINDING THAT THE ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION U/S 54B OF THE ACT. THE AMOU NT INVESTED IN SUCH LANDS U/S 54B COMES TO RS.68,65,172/-. 6. THUS, BY A COMBINED READING OF THE REMAND REPORT S WHEREIN THE FINDINGS WERE GIVEN THAT AGRICULTURE IS CARRIED OUT IN THE LANDS TREATED AS CAPITAL ASSETS AND ALSO IN THE LAN DS PURCHASED AT MANAMAI VILLAGE, THE ASSESSEE IS HELD TO BE ELIG IBLE FOR DEDUCTION U/S.54B OF THE ACT. ACCORDINGLY, ASSESSIN G OFFICER SHALL RECOMPUTE THE CAPITAL GAINS LIABLE FOR TAXATI ON. 7. REGARDING THE ASSESSEE'S CLAIM OF RS. L LAC PAID AS BROKERAGE THE DETAILS FURNISHED FROM MR. ARUNAGIRINATHAN, ADV OCATE, CHENNAI, THE SAME WAS EXAMINED DURING REMAND REPORT . THE SAID' PAYMENT IS FOUND TO BE IN ORDER INFERRING THA T RS.L LAC CLAIMED AS BROKERAGE IS ELIGIBLE FOR DEDUCTION. THE AO IS ALSO DIRECTED TO ALLOW THIS DEDUCTION FROM THE SALE CONS IDERATION. 6. AS COULD BE SEEN FROM THE ABOVE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) THE CLAIMS OF THE ASSESSEE HAV E BEEN ALLOWED BASED ON THE REMAND REPORT SUBMITTED BY THE ASSESSI NG OFFICER, WHO CAUSED THOROUGH ENQUIRIES IN REMAND PROCEEDINGS AND ACCEPTED THAT CLAIMS OF THE ASSESSEE ARE CORRECT. WE ARE UNABLE T O UNDERSTAND WHY ITA NO.327/MDS./17 :- 6 -: THE REVENUE HAS PREFERRED THE APPEAL BEFORE THE TRI BUNAL, WHEN THE ASSESSING OFFICER HIMSELF HAS AGREED THAT CLAIMS OF THE ASSESSEE ARE IN ORDER. THE REVENUE SHOULD NOT FILE AN APPEAL IN A ROUTINE MANNER. IN ANY EVENT, SINCE THE CLAIMS OF THE ASSESSEE HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS, WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DIS MISS THE APPEAL OF THE REVENUE. 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONL Y IN SUPPORT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) A ND AS WE HAVE SUSTAINED THE IMPUGNED ORDER, THE CROSS OBJECTION F ILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND DISMISSED ACCORDIN GLY. 5. IN VIEW OF THE ABOVE ORDER OF TRIBUNAL, WE ARE INCLINED TO DISMISS THE GROUND TAKEN BY THE REVENUE 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON 02 ND , JUNE, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 02 ND , JUNE2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF