Harvinder Singh Chawala, Karnal V. ITO, Karnal

ITA 3272/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81507 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: YASHPAL GROVER RIPAN GROVER
• Keywords: Capital asset; Revised return
• Section: 54B; 54F; 10

Judgement Text

ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `C NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO. 3272/DEL/2012 ASSESSMENT YEAR : 2007-08 SHRI HARVINDER SINGH CHAWLA, VS INCOME TAX OFFICER, 876/16, OPP. SHAMNAGAR, WARD-4 , KARNAL. KARNAL. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI YASHPAL GROVER , RIPAN GROVER RESPONDENT BY : MS ASHIMA NEB, SR. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE CIT(A), KARNAL DATED 06.3.2012 IN APPEAL NO.IT/109/KNL/CIT(A)/KNL/2009-10 FOR AY 2007-08. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL:- 1. THAT THE LD. CIT (A) KARNAL HAS GROSSLLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE A.O IN HOLDING, BY CLUBBING THE AMOUNT RECEIVED ON SALE OF TREES, KOTHA KILLA, DERAZAAT, TUBE WELL, TUBEWELL ROOM AND STANDING CROPS WHICH IS AG. INCOME UNDER SECTION 10 (1), IN THE SALE PROCEEDS OF CAPITAL ASSET I,E AG. LAND WITHIN SPECIFIED LIMIT. THOUGH BOTH THE AGREEMENTS ARE SEPERATELY AND INDEPENDENTLY ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 2 EXECUTED WITH THE SAME PARTY AND PAYMENTS ALSO RECEIVED SEPERATELY. THUS THE CLUBBING IS AGAINST THE FACTS OF THE CASE, PROVISION AND SCHEME OF THE INCOME TAX ACT 1961. 2. THAT THE LD. CIT (A) KARNAL HAS GROSSLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE A.O, IN DISALLOWING THE PART UTILIZATION IN PURCHASE OF RES!. HOUSE ENTITLED U/S 54F. 3. THAT THE LD. CIT (A) KARNAL HAS GROSSLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE A.O, IN DISALLOWING EXPENDITURE INCURRED OVER THE YEARS IN THE PLANTATION, NURSING, AND GROWTH OF CLUSTER OF TREES OVER THIS LAND THROUGH MANUAL LABOUR AND CONSTRUCTION OF PAVEMENT, WATERING SYSTEM, KOTHA KILLA, TUBE WELL AND TUBE WELL CONNECTION AMOUNTING TO RS 354500/- ( I,E 2/3R D SHARE OF THE ASSESSEE ). 3. APROPOS THESE GROUNDS, WE HAVE HEARD ARGUMENTS O F BOTH THE PARTIES AND CAREFULLY PERUSED THE RECORD AND RELEVANT MATER IAL PLACED BEFORE US. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE CIT(A) H AS GROSSLY ERRED ON FACTS IN LAW IN CONFIRMING THE ACTION OF THE AO IN HOLDIN G, BY CLUBBING THE AMOUNT RECEIVED ON SALE OF TREES, KOTHA KILLA, DERA ZAAT, TUBEWELL, TUBEWELL ROOM AND STANDING CROPS WHICH IS AGRICULTURAL INCOM E AS PER SECTION 10(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) IN THE SALE PROCEED OF CAPITAL ASSET I.E. AGRICULTURAL LAND SITUATED WITHIN SPECIF IED LIMIT. THE COUNSEL FURTHER SUBMITTED THAT THE AGRICULTURAL LAND AND OT HER ABOVE STATED ITEMS WERE SOLD THROUGH SEPARATE INDEPENDENT AGREEMENTS WITH T HE SAME PARTY AND PAYMENTS WERE ALSO RECEIVED SEPARATELY. LD. COUNSE L FURTHER SUBMITTED THAT ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 3 THE AO CLUBBED THESE ITEMS AGAINST THE FACTS OF THE CASE AS WELL AS THE STATUTORY PROVISIONS OF THE ACT. 4. LD. COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THAT THE CIT(A) ALSO ERRED IN CONFIRMING THE ACTION OF THE AO IN DISALLO WING EXPENDITURE INCURRED OVER THE YEARS IN THE PLANTATION, NURSING AND GROWT H OF CLUSTER OF TREES OVER THIS LAND THROUGH MANUAL LABOUR AND CONSTRUCTION OF PAVEMENT, WATERING SYSTEM, KOTHA KILLA, TUBE WELL AND TUBE WELL CONNEC TION AMOUNTING TO RS.3,54,500/- WHICH WAS 2/3 RD SHARE OF THE ASSESSEE. 5. REPLYING TO THE ABOVE, LD. DR SUPPORTED THE ASSE SSMENT ORDER AS WELL AS IMPUGNED ORDER AND SUBMITTED THAT THE ASSESSEE C ANNOT CLAIM DEDUCTION U/S 54B AND 54F AT THE SAME TIME SPLITTING THE AMOU NT OF LONG TERM CAPITAL GAIN (LTCG). THE DR ALSO POINTED OUT THAT THE AO C OULD NOT GET AN OPPORTUNITY TO VERIFY THE CLAIM OF THE ASSESSEE IN REGARD TO GROUND NO. 3 OF THE ASSESSEE AMOUNTING TO RS.3,54,500 WHICH WAS ALL EGED TO BE MADE ON DEVELOPMENT OF AGRICULTURAL LAND THROUGH MANUAL LAB OUR, CONSTRUCTION OF PAVEMENT, WATERING SYSTEM, KOTHA KILLA, TUBE WELL A ND TUBEWELL CONNECTION. IN THE REJOINDER, LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT IF IT IS FOUND JUST AND PROPER, THEN THE ASSESSEE HAS NO SERIOUS OBJECT ION IF THE ISSUES INVOLVED IN GROUNDS RAISED BY THE ASSESSEE ARE RESTORED TO T HE FILE OF THE AO FOR DE NOVO ADJUDICATION AFTER EXAMINATION AND VERIFICATION OF THE CLAIM OF THE ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 4 ASSESSEE PERTAINING TO THE EXPENSES OF RS. 3,54,500 AND CLAIM OF THE ASSESSEE U/S 54B AND 54F OF THE ACT. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E ARE OF THE CONSIDERED VIEW THAT ALTHOUGH THE AO HAS PASSED ASS ESSMENT ORDER WHICH IS SPREAD OVER 10 PAGES BUT ON CAREFUL READING OF THE SAME, WE FIND THAT THE AO HAS NOT PROPERLY EXAMINED AND VERIFIED THE CLAIM OF THE ASSESSEE IN REGARD TO EXPENSES INCURRED THROUGH MANUAL LABOUR AND OTHER C ONSTRUCTION WORK ON THE AGRICULTURAL LAND. WE ALSO OBSERVE THAT THE ASSESS EE HAS MADE CLAIM OF EXEMPTION U/S 54B AND 54F OF THE ACT WHICH WAS REJE CTED BY THE AO BY OBSERVING THAT THE CLAIM MADE DURING THE COURSE OF ASSESSMENT PROCEEDING WITHOUT ANY REVISED RETURN IS NOT ACCEPTABLE AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS C IT 284 ITR 323 (SC) . THE COUNSEL OF THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT SIMULTANEOUSLY OUT OF TAXABLE AMOUNT OF LONG TERM CAPITAL GAIN WITH THE EXEMPTION U/S 54B O F THE ACT. 7. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E OBSERVE THAT THE AO DENIED CLAIM OF THE ASSESSEE U/S 54F OF THE ACT BY SIMPLY RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA L TD. VS CIT (SUPRA) BUT IN THE SAME DECISION, HONBLE APEX COURT HAS C LARIFIED THAT THE POWERS OF THE TRIBUNAL ARE NOT IMPEACHED BY THE ABOVE DECISION, ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 5 THEREFORE, WE FIND IT APPROPRIATE THAT THE AO SHOUL D EXAMINE AND VERIFY THE CLAIM OF THE CASE FOR DEDUCTION U/S 54F OF THE ACT ON ACCOUNT OF INVESTMENT AND PURCHASE OF HOUSE. WE ALSO FIND IT APPROPRIATE , JUST AND PROPER THAT THE CLAIM OF THE ASSESSEE PERTAINING TO CLAIM OF THE AS SESSEE TOWARDS EXPENDITURE SAID TO BE INCURRED OVER THE YEARS IN THE PLANTATIO N, GROWTH OF CLUSTER OF TREES OVER THE AGRICULTURAL LAND WITH THE HELP OF MANUAL LABOUR AND CONSTRUCTION OF PAVEMENT, WATERING SYSTEM AND TUBEWELL ETC. AMOUNTI NG TO RS. 3,54,500 WHICH WAS 2/3 RD SHARE OF THE ASSESSEE ALSO REQUIRE VERIFICATION AT THE END OF THE AO. ACCORDINGLY, IMPUGNED ORDER IS SET ASIDE A ND ISSUES INVOLVED IN THE GROUND RAISED BY THE ASSESSEE ARE RESTORED TO THE F ILE OF AO WITH AFOREMENTIONED DIRECTION FOR DE NOVO ADJUDICATION BY AFFORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE. NEEDLESS TO SAY THAT THE AO SHALL EXAMINE THE CLAIM OF THE ASSESSEE PERTAINING TO EXE MPTION U/S 54B AND 54F OF THE ACT AND THE AO SHALL EXAMINE AND VERIFY THE CLAIM OF THE ASSESSEE PERTAINING TO EXPENDITURE OF RS.3,54,500 AS PER DET AILS MENTIONED HEREINABOVE. 8. IN THE RESULT, GROUND NO. 1, 2 AND 3 OF THE ASSE SSEE ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES AND WE ALSO MAKE IT CLEAR THAT THE AO SHALL ONLY ADJUDICATE THE ISSUES INVOLVED IN THE GROUNDS OF ASSESSEE WHICH HAVE BEEN RAISED BEFORE THIS TRIBUNAL AND THE MATTER IS RESTORED TO THE FILE OF AO UP TO THIS EXT ENT ONLY. ITA NO. 3272/DEL/2012 ASSTT.YEAR: 2007-08 6 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7.8.2014. SD/- SD/- (S. V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 7 TH JULY, 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR