ACIT, Salem V. R.Mahadevan, Salem

ITA 3393/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4301 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 29-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2016
• Court: TRIBUNAL
• Department Lawyers: MILIND MADHUKAR BHUSARI
• Assessee Lawyers: G BASKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , . , ! BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3393/MDS/2016 /ASSESSMENT YEAR: 2010-11 & CO NO.14/MDS/2017 THE ACIT/DCIT, CENTRAL CIRCLE, NO.3, GANDHI ROAD, SALEM-7. VS. SHRI R. MAHADEVAN, NO.4/303, PANJUKALAIPATTU, OMALUR, SALEM 636 455. [PAN: AJFPM 0030 Q ] ( % /APPELLANT) ( &'% /RESPONDENT) % ( / APPELLANT BY : MR.MILIND MADHUKAR BHUSARI, CIT &'% ( /RESPONDENT BY : MR.G. BASKAR, ADV. ( /DATE OF HEARING : 29.05.2017 ( /DATE OF PRONOUNCEMENT : 29.05.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.3393/MDS/2016 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1 8, CHENNAI, IN ITA NO.387/14-15 DATED 27.09.2016 FOR THE AY 2010-11 AN D CO ITA NO.3393/MDS/2016 & CO NO.14/MDS/2017 :- 2 -: NO.14/MDS/2017 IS A CROSS-OBJECTION FILED BY THE AS SESSEE IN THE REVENUES APPEAL NO.3393/MDS/2016 FOR THE AY 2010-1 1. 2. SHRI MILIND MADHUKAR BHUSARI, CIT REPRESENTED ON BEHALF OF THE REVENUE AND SHRI G. BASKAR, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN RESPECT OF THE REVENUES APPEAL, IT WAS SUBMI TTED BY THE LD.CIT/DR THAT THE ASSESSEE IS AN INDIVIDUAL PROPRI ETOR OF M/S.RAJAMANIKAM TEXTILES. IT WAS A SUBMISSION THAT THERE WAS A SEARCH ON ONE SHRI K.V.P. BALASUBRAMANIAM ON 10.01.2012. I T WAS A SUBMISSION THAT DURING THE COURSE OF THE SEARCH A COPY OF SALE AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE AND SHRI K.V.P. BALASUBRA MANIAM WAS FOUND AND SEIZED. AS PER THE SALE AGREEMENT, AN AREA OF 4.60 ACRES OF AGRICULTURAL LAND WAS SHOWN TO HAVE BEEN SOLD BY TH E ASSESSEE TO SHRI K.V.P. BALASUBRAMANIAM FOR A SALE CONSIDERATION GUI DELINE OF WHICH WAS RS.1,09,25,000/-. IT WAS A SUBMISSION THAT THE AO BROUGHT TO TAX THE SAID TRANSACTION AS GIVING RISE TO ADVENTURE IN THE NATU RE OF BUSINESS. IT WAS A SUBMISSION THAT THE ASSESSEE HAD OTHER AGRICULTURAL LANDS ALSO FROM WHICH AGRICULTURAL INCOME HAD BEEN SHOWN AND IN RESPECT O F THE SAID AGRICULTURAL LANDS SOLD NO AGRICULTURAL INCOME WAS SHOWN. IT WA S A SUBMISSION THAT THE RATE FOR THE LAND WAS FIXED AT PER CENT BASIS R ATHER THAN PER ACRE AS DONE IN AGRICULTURAL TRANSACTIONS. IT WAS A FURTHE R SUBMISSION THAT THE TRANSACTION WAS CARRIED OUT WITH SHRI K.V.P. BALASU BRAMANIAM WHO WAS A ITA NO.3393/MDS/2016 & CO NO.14/MDS/2017 :- 3 -: REAL ESTATE DEALER. IT WAS ALSO A SUBMISSION THAT THE LAND WAS VERIFIED BY THE INSPECTOR WHO HAD REPORTED THAT THE LAND WAS IN PLOTS. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD HELD THAT THE LAN D WAS AGRICULTURAL LAND AND RELYING ON THE FACT THAT THE LAND REVENUE IN RE SPECT OF SAID LAND WAS SHOWN AS AN AGRICULTURAL LAND AND ALSO CHITTA/ADANG AL COPIES OF THE LAND SHOWN AS AGRICULTURAL LAND AND THE CERTIFICATE ISSU ED BY THE REVENUE AUTHORITIES SPECIFIED THAT THE LAND WAS AGRICULTURA L LAND AND SITUATED ABOUT 7 KMS AT KALIPATTY VILLAGE, OMLAUR TALUK, SALEM DIS TRICT AND THE POPULATION OF THE VILLAGE IN 2009 WAS ABOUT 9200, THE LD.CIT(A ) HAS TREATED THE TRANSACTION AS THE SALE OF THE AGRICULTURAL LAND EX EMPT FROM CAPITAL GAINS. HE VEHEMENTLY SUPPORTED THE ORDER OF THE AO. IT WA S A PRAYER THAT THE ORDER OF THE LD.CIT(A) BE REVERSED. 4. IN REPLY, THE LD.AR VEHEMENTLY SUPPORTED THE ORD ER OF THE LD.CIT(A). HE DREW OUR ATTENTION TO PAGE NO.44 OF THE PAPER BOOK WHICH WAS A COPY OF THE CERTIFICATE ISSUED BY VILLAGE ADM INISTRATIVE OFFICER (IN SHORT VAO) THAT THE LAND SOLD WAS AGRICULTURAL LA ND AND WAS SITUATED ABOUT 7 KMS FROM OMLAUR AND THE POPULATION OF THE V ILLAGE IN 2009 WOULD HAVE BEEN ABOUT 9200. HE ALSO DREW OUR ATTENTION T O PAGE NO.36 TO 40 OF THE PAPER BOOK WHICH WAS A COPIES OF THE DETAILED L AND ASSESSMENT AS PER THE REVENUE RECORDS WHICH SHOW AS AGRICULTURAL LAND AND WHICH ALSO SHOWED AGRICULTURAL OPERATIONS HAVING BEEN DONE ON THE SAME. IT WAS A SUBMISSION THAT THE VERIFICATION AS DONE BY THE INS PECTOR WAS MUCH AFTER THE SALE OF THE LAND I.E. SOMETIME DURING 2014, WHE REIN THE PLOTS HAVE ITA NO.3393/MDS/2016 & CO NO.14/MDS/2017 :- 4 -: BEEN DEMARCATED. IT WAS A SUBMISSION THAT THE ASSE SSEE HAS SOLD THE AGRICULTURAL LAND. THE ASSESSEE WAS NEITHER INVOLV ED IN THE CONVERSION OF THE LAND NOR IN THE PLOTTING OF THE SAME. THE ASSE SSEE HAD RECEIVED A GOOD PRICE FOR HIS AGRICULTURAL LAND AND CONSEQUENT LY HAD SOLD THE AGRICULTURAL LAND FOR THE BEST PRICE AVAILABLE. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE UPHELD. IT WAS A FURTHER SUBMISSION THAT HE DID NOT WISH TO PRESS THE CROSS- OBJECTION AND DECIDED TO WITHDRAW THE SAME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS TH E ASSESSEE DID NOT DESIRE TO PRESS THE CROSS-OBJECTION, THE CROSS-OBJE CTION FILED BY THE ASSESSEE STANDS DISMISSED AS NOT PRESSED. 6. IN RESPECT OF THE REVENUES APPEAL, IT IS NOTICE D THAT THE ASSESSEE IS HOLDING OTHER AGRICULTURAL LANDS AS HAS BEEN ACCEPT ED BY THE AO. THUS, IT CANNOT BE SAID THAT THE ASSESSEE IS IN THE BUSINESS OF BUYING AND SELLING AGRICULTURAL LAND. IT IS ALSO AN ADMITTED FACT THA T THE ASSESSEE HAS AGRICULTURAL INCOME AND THE SAME HAS ALSO BEEN DISC LOSED. JUST BECAUSE THE ASSESSEE WAS NOT DERIVING AGRICULTURAL INCOME F ROM THE LANDS SOLD WILL NOT ALTER THE CHARACTER OF THE LAND SOLD. IN FACT, THE LAND REVENUE RECORDS CLEARLY SHOW THE SAID LANDS WHICH HAVE BEEN SOLD AR E CLEARLY AGRICULTURAL LANDS ALSO. THE CERTIFICATE ISSUED BY THE VAO REMA INS UNDISPUTED. THE VAO HAS ALSO CERTIFIED THAT THE SAID LAND WAS USED EARLIER FOR AGRICULTURAL ACTIVITIES. THIS BEING SO, AS IT IS NOTICED THAT T HE CONDITIONS REQUIRED IN ITA NO.3393/MDS/2016 & CO NO.14/MDS/2017 :- 5 -: SEC.2(14)(III)(A) OF THE ACT WHICH CLEARLY COMPLIED WITH IN RESPECT OF THE LAND SOLD, THE SALE OF THE SAID LAND CANNOT BE HELD TO GIVE RISE TO CAPITAL GAINS NOR CAN BE TREATED AS INCOME CHARGEABLE TO TA X IN THE HANDS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE FINDINGS OF THE LD.CIT(A) ON THIS ISSUE STANDS CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MAY, 2017, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 29 TH MAY, 2017. TLN ( &12 32 /COPY TO: 1. % /APPELLANT 4. 4 /CIT 2. &'% /RESPONDENT 5. 2 & /DR 3. 4 ( ) /CIT(A) 6. /GF