Iqbal Singh, Chandigarh V. ITO, Mohali

ITA 340/CHANDI/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4379 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA SR DR
• Keywords: Capital asset; Source of fund; Valuation report; Set aside
• Section: 54F; 2(14); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER ./ ITA NO. 340/CHD/2017 / ASSESSMENT YEAR : 2009-10 SHRI IQBAL SINGH, HOUSE NO. 737/A, ARYA COLLEGE ROAD, SECTOR 9, CHANDIGARH. VS THE ITO, WARD 6(4), MOHALI. ./ PAN NO. : CKJPS3056Q / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : NONE # ! ' / REVENUE BY : SMT. CHANDERKANTA, SR.DR $ % ! & / DATE OF HEARING : 22.01.2019 '()* ! & / DATE OF PRONOUNCEMENT : 15.03.2019 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 22.12.2016 OF CIT(A)-2, CH ANDIGARH PERTAINING TO 2009-10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) - 2, CHANDIGARH IS DEFECTIVE BOTH IN LAW AND FACTS OF TH E CASE. 2. THAT THE LD. CIT (A) - 2, CHANDIGARH IS UNJUSTIFIED IN UPHOLDING THE RE-ASSESSMENT FRAMED U/S 147 R.W.S. 148 OF THE I.T. ACT, 1961 BY THE LD. ASSESSING OFFICER WHICH IS BAD IN LAW AS THE RE ASONS RECORDED WERE ON THE BASIS OF INCOMPLETE VERSION OF NOTIFICA TION WITHOUT ANY PROOF AND PROPER SATISFACTION. 3. THAT THE LD. CIT (A) - 2, CHANDIGARH IS UNJUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER REGARDING ADDITION OF RS.30,62,489/- UNDER THE HEAD LONG TERM CAPITAL GAI NS AS THE AGRICULTURAL LAND SOLD BY THE APPELLANT IS NOT A CA PITAL ASSET U/S 2(14) OF THE I.T. ACT, 1961 BEING BEYOND THE NOTIFIED LIM ITS. THIS ADDITION IS UNCALLED FOR AND DESERVES TO BE DELETED. 4. THAT THE LD. CIT (A) - 2, CHANDIGARH IS UNJUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER REGARDING ADDITION OF RS.30,62,489/- UNDER THE HEAD LONG TERM CAPITAL GAI NS AS THE LD. ASSESSING OFFICER HAS APPLIED HIS OWN FAIR MARKET V ALUE OF THE LAND AS ON 01-04-1981 INSTEAD OF THE VALUE TAKEN BY THE APP ELLANT ON THE BASIS OF VALUATION REPORT CERTIFIED BY A GOVERNMENT APPRO VED QUALIFIED VALUER. THIS ADDITION IS UNCALLED FOR AND DESERVES TO BE DELETED. 5. THAT THE LD. CIT (A) - 2, CHANDIGARH IS UNJUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER AS THE VALUE OF THE OL D BUILDING CONSTRUCTED ON THE AGRICULTURAL LAND SOLD AS CERTIFIED BY A GOVERN MENT APPROVED QUALIFIED VALUER HAS BEEN IGNORED DURING ASSESSMENT PROCEEDIN GS. THIS ADDITION IS UNCALLED FOR AND DESERVES TO BE DELETED. ITA 340/CHD/2017 A.Y. 2009-10 PAGE 2 OF 5 6. THAT ANY OTHER GROUND MAY KINDLY BE ALLOWED TO BE T AKEN AT THE TIME OF APPEAL WITH DUE PERMISSION. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT WAS DEEMED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PART E QUA THE ASSESSEE APPELLANT ON MERITS AFTER HEARING THE LD. SR.DR. 3. GROUND NO. 1 RAISED IN THE PRESENT APPEAL IS GENERAL IN NATURE IN AS MUCH AS THE ISSUES RAISED THEREIN ARE ELABORATED IN GROU ND NOS. 2 TO 5. ACCORDINGLY, IT REQUIRES NO SPECIFIC ADJUDICATION. QUA GROUN D NO. 2 IT IS SEEN THAT THE SAID GROUND HAS NOT BEEN AGITATED BEFORE THE CIT(A) AND IN THE ABSENCE OF ANY INFIRMITY HAVING BEEN POINTED OUT, SAID GROUND IS DISMISSED . 4. THE RECORD SHOWS THAT THE ASSESSEE ASSAILED THE AD DITION OF RS. 30,63,489/- MADE BY THE AO WHO RELYING ON THE INFORMATION HAD NOTICED THAT DESPITE HAVING SOLD LAND, THE ASSESSEE HAD NOT DISCLOSED C APITAL GAINS IN THE RETURN OF INCOME. AS A RESULT THEREOF, RE-ASSESSMENT PRO CEEDINGS WERE INITIATED BY HIM U/S 147 OF THE ACT. THE AO TOOK NOTE O F THE FACT THAT THE ASSESSEE HAD SOLD HIS LAND IN VILLAGE BALLO MAJRA TO M/S HAM IR REAL ESTATE PVT. LTD. ALONGWITH OTHERS. THE LAND WAS STATED TO BE SIT UATED WITHIN 1 KM ON THE LEFT HAND SIDE OF MOHALI-KHARAR ROAD AND BEING OF THE VIEW THAT IT WAS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE IN COME TAX ACT, THE AO OBTAINED PHOTO COPIES OF 5 SALE DEEDS FROM REGISTRARS OFFICE, ROPAR OF SALES MADE DURING THE PERIOD 1980-81 IN THE AREA OF THE SAID VILLAGE AND CALCULATED LONG TERM CAPITAL GAIN OF THE SHARE OF THE ASSES SEE AT 36.90% AND AFTER ALLOWING DEDUCTION U/S 54F OF THE ACT, HE BROUGHT TO TAX THE BALANCE LONG TERM CAPITAL GAIN OF RS. 30,62,489/-. 5. THE ASSESSEE AS PER SUBMISSIONS ADVANCED BEFORE THE CIT(A) STATED THAT HIS VALUATION REPORT FOR THE VALUE OF LAND AND BUILT UP HOUSE AS ON 01.04.1981 WAS A RELEVANT MATERIAL WHICH THE AO SHOULD HAV E CONSIDERED, WHICH WAS FILED ALONGWITH THE ITR ON THE SAID AGRICULTURAL LAN D. IT WAS AGITATED THAT THE ASSESSEE HAD FURTHER CONSTRUCTED TH E HOUSE IN 1987-88 AND THE AO HAD IGNORED THE VALUE OF CONSTRUCTION IN THE COMP UTATION OF CAPITAL GAIN. 6. THE CIT(A) CONSIDERING THE EVIDENCES DISMISSED THE CLA IM HOLDING THAT THE EVIDENCE RELIED UPON FOR LOCATION OF THE SPECIFIC PROPERT Y NAMELY THE REPORT OF THE PATWARI IS AN AFTER-THOUGHT. HE FURTHER HE LD THAT THE EVIDENCE SUPPORTING THE CLAIM OF CONSTRUCTION HAVING BEEN CARRIED O UT DURING THE PERIOD 1987-88 WAS NOT RELIABLE AND CONSEQUENTLY THE AD MISSION OF THE SAID ITA 340/CHD/2017 A.Y. 2009-10 PAGE 3 OF 5 EVIDENCE ITSELF WAS DECLINED. IT IS FURTHER SEEN THAT THE LD . CIT(A) ALSO HELD THAT THE FRESH EVIDENCE RELIED UPON COULD NOT BE ADMITTED AS THE ASS ESSEE HAD NOT MADE ANY REQUEST FOR ADMISSION OF FRESH EVIDENCE IN T ERMS OF RULE 46A OF THE ITAT RULES, 1963. 7. THE LD. SR.DR WAS HEARD QUA THE NATURE OF ASSESSEE'S SOURCES OF INCOME. IT WAS AGREED THAT THE ASSESSEE APPEARS TO B E AN AGRICULTURIST. QUA THE ISSUE AS TO WHETHER THE VALUATION OF LAND IS TO BE BA SED ON THE SALE INSTANCES FOR THE SPECIFIC PERIOD AS OPPOSED TO VALUATION C ARRIED OUT BY AN EXPERT, THE LD. SR.DR THOUGH PLACED RELIANCE UPON THE ORD ER, HOWEVER, COULD NOT MAKE OUT ANY ARGUMENT OR OFFER ANY JUSTIFICATION AS T O WHY SINCE THE REGISTERED VALUERS REPORT RELIED UPON BY THE ASSESSEE WAS TO BE DISCARDED, THE ISSUE WAS NOT REFERRED TO THE DVO. 8. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL ON RECO RD. ON A PERUSAL OF THE RECORD I FIND THAT THE IMPUGNED ORDER CAN NOT BE UPHELD. THE REASONS FOR COMING TO THE SAID CONCLUSION SHALL BE ELABORAT ED HEREINAFTER. FIRST AND FOREMOST, IT IS WELL SETTLED THAT THE DISPUTE ON THE LOCATION AND DISTANCES OF A SPECIFIC PROPERTY ESSENTIAL FOR DETERMINING THE VALUATION OF THE PROPERTY IT CANNOT BE OVER EMPHASIZED THAT IT NECESSAR ILY HAS TO BE DECIDED ON THE BASIS OF LAND REVENUE RECORDS. IT IS WELL SETTLED THAT IN CASE OF DISPUTE BETWEEN THE TAX AUTHORITIES AND THE ASSESSEE, T HE LAST WORD ON SUCH AN ISSUE HAS TO BE THE WORD OF THE LAND REVENUE AUTHO RITIES. THE FACT THAT SOME EVIDENCE PURPORTEDLY OF A PATWARI IS FILED AT A LATER DATE ON ACCOUNT OF THE DELAY ITSELF CANNOT BE DISCARDED AS THERE CAN BE NO DEBATE THAT THE EVIDENCE IS NOT ONLY RELEVANT BUT IS ALSO CRUCIAL FOR DETE RMINING THE ISSUE UNDER CONSIDERATION. I AM OF THE VIEW THAT IDEALLY IT SHOU LD HAVE BEEN SOUGHT FOR BY THE TAX AUTHORITIES THEMSELVES. WITHOUT COMMENTING UPON ITS CORRECTNESS AND COMPLETENESS, THE EVIDENCE I HOLD COULD NOT HAVE BEEN OUTRIGHTLY DISCARDED AS AN AFTERTHOUGHT. THE SPECIFIC SIT UATION/LOCATION OF A PROPERTY AT A RELEVANT POINT OF TIME IS NOT A FACT WHICH T HE ASSESSEE CAN CREATE. IN ORDER TO ADDRESS THE CORRECTNESS OF FACTS AS CANVASSED BY THE ASSESSEE, THE ONLY ACCEPTABLE EVIDENCE IS THE EVIDENCE/R EPORT OF THE LAND REVENUE AUTHORITIES. IN CASE THE VERSION OF TRUTH CANVAS SED BY WAY OF EVIDENCE BY THE ASSESSEE IS TO BE DISTURBED, THEN APPRO PRIATE ENQUIRIES/INFORMATION ETC. CAN BE SOUGHT FROM THE LAND REV ENUE AUTHORITIES. A FACT IS A CONCRETE REALITY WHICH NO AMOUNT OF REASONING CAN CHANGE AND CANNOT BE CREATED. SPECIFIC EVIDENCE OF THE LOCATION OF THE PROPERTY QUA THE ITA 340/CHD/2017 A.Y. 2009-10 PAGE 4 OF 5 ISSUE HAS TO BE DECIDED IN ACCORDANCE WITH LAW AND THE REPORT, IF ANY PLACED BY THE ASSESSEE IS DIRECTED TO BE CONSIDERED APPROPRIAT ELY AND IN CASE IT IS FOUND TO BE NOT RELIABLE OR FOUND WANTING, THE TAX AUTHO RITIES HAVE SUFFICIENT POWERS THEMSELVES TO CALL FOR THE REPORT FROM THE RELEVAN T LAND REVENUE AUTHORITY AND CONFRONT THE SAME TO THE ASSESSEE BEFORE DECIDING THE ISSUE IN ACCORDANCE WITH LAW. 8.1 IT WOULD ALSO BE APPROPRIATE TO REFER TO SOME RELEVAN T FACTS NOTICED IN THE EXERCISE OF DECISION MAKING POWERS EXERCISED BY THE LD. CIT(A). IT IS SEEN THAT ADMITTEDLY FRESH EVIDENCE BY WAY OF A VALUATION REPO RT WAS FILED BEFORE THE CIT(A) WITHOUT A PROPER APPLICATION. I DO NOT FIND ANY REASON O N RECORD AS TO WHY THE SAID AUTHORITY FAILED TO RESPONSIBLY ADVISE THE TAX PAYER TO COME BY WAY OF A PROPER APPLICATION. ALL ASSESSEES DO NOT NEC ESSARILY HAVE THE BENEFIT OF EXPERT LEGAL ADVICE BUT ALL TAX ADMINISTRATORS, IT IS PRESUMED, HAVE BEEN SUFFICIENTLY EQUIPPED BY THE STATE TO ENSURE THAT THE POWERS EXERCISED ON ITS BEHALF ARE RESPONSIBLY EXERCISED. THE STATE EXPEC TS THE TAX ADMINISTRATORS TO ACT FAIRLY AND COMPETENTLY IN THE PERFO RMANCE OF THEIR FUNDAMENTAL AND ONEROUS DUTY TO COLLECT TAXES ON ITS BEH ALF. HOWEVER, IT IS WELL SETTLED AND NON NEGOTIABLE THAT THE TAXES SO TO BE COLLECTED NEED TO SATISFY THE TOUCHSTONES OF JUST AND DUE TAXES. TH E WORD JUST PRESUPPOSES FAIRNESS IN THE ACTIONS OF THE TAX ADMINISTRATORS W HO ARE ACTING FOR AND ON BEHALF OF THE GOVERNMENT OF INDIA. THE MIND SET NEEDS TO BE RE- ORIENTED TO CONSCIOUSLY ACKNOWLEDGE THAT THE DUTY AND POWER TO COLLECT TAXES IS NOT BEING EXERCISED ON BEHALF OF AN ALIEN FOREIGN POWER IN A COLONIAL STATE WHO MAY HAVE NEEDED TO FILL ITS COFFERS BY SUBJECTING ITS CO LONIES TO THE ARBITRARY ACTIONS. THE POWER IS EXERCISED ON BEHALF OF THE STATE AND PRE- SUPPOSES THAT IT IS EXERCISED RESPONSIBLY AND FAIRLY. 8.2 IN TODAYS DIGITAL WORLD, TAX COMPLIANCES NECESSARILY H AVE INCREASED, WITH BANKS, LAND REVENUE AUTHORITIES BEING INTEGRATED WITH TAX AUTHORITIES. HOWEVER, THE BENEFIT OF ACTUAL AND COMPLETE KNOWLEDGE OF FIN ANCIAL NUANCES AND TAXING STATUTES COUPLED WITH COMPUTER LITERACY HAS R EMAINED RESTRICTED TO A LARGE EXTENT ONLY TO A FEW EXPERTS. THE TAX AUTH ORITIES CONSTITUTE SOME OF THESE FEW ELITES WHO HAVE BEEN EQUIPPED BY THE STATE BY PROVIDING TRAINING AND COURSES IN ORDER TO HONE THE SKILL AND COMPETENCE W ITH THE USE OF CUTTING EDGE TECHNOLOGY. I AM OF THE VIEW THAT THE RASH ATTITUDE OF ADOPTING THE DANGEROUS POLICY AND PHILOSOPHY OF US AGAINST THEM IN A FREE NATION IS TO BE STRONGLY REPELLED AND CRUSHED. THE IGNORANCE AND HE LPLESSNESS OF THE ITA 340/CHD/2017 A.Y. 2009-10 PAGE 5 OF 5 MASSES WHO ARE REQUIRED TO ADDRESS THE VALUES OF THEIR INHERITED PROPERTY, SALES ETC. OF AGRICULTURAL LANDS ETC. BEFORE THE TAX AUTHORIT IES GLARINGLY STAND OUT AS EVERY DAY EXAMPLES OF SOME FAILURE AND MALAISE. THE TAX ADMINISTRATION IS NOT EXPECTED TO COLLECT TAXES BASED ON THE IGNORANCES OF THE ASSESSEE BUT IS EXPECTED TO ENSURE THAT IN THE DISCHAR GE OF THEIR DUTIES AND RESPONSIBILITIES, THE CITIZENS ON BEHALF OF WHOM THE TAX ADMIN ISTRATION FUNCTIONS ARE ADVISED, COUNSELED AND GUIDED TOWARDS TAX COMPLIANCES . 8.3 IN THE FACTS OF THE PRESENT CASE, THE EVIDENCE OF EX ACT LOCATION OF THE LAND AND THE VALUE THEREOF BASED ON A VALUATION REPORT A DMITTEDLY WAS RELEVANT AND CRUCIAL FOR DECIDING THE ISSUE AND KNOWING ITS RELEVANCE, THE ASSESSEE IDEALLY SHOULD HAVE BEEN ADVISED TO COME BY WA Y OF A PROPER APPLICATION. THE FACT THAT THE ASSESSEE WAS A FARMER AGR ICULTURIST AND THUS, MAY NOT HAVE HAD THE BENEFIT OF A PROPER LEGAL ADVICE AT THE ASSESSMENT STAGE CANNOT BE RULED OUT. IN A FAIR EXERCISE OF POWER, THE SA ID OPPORTUNITY SHOULD HAVE BEEN GIVEN BY THE LD. CIT(A). IN THE EVENTUALITY THE VALUE BASED ON THE VALUATION REPORT WAS TO BE UPSET, THE MATTER SHOULD HA VE BEEN REFERRED TO THE DVO AND NOT ARBITRARILY DECIDED. 8.4 ACCORDINGLY, IN VIEW OF THE DETAILED REASONS GIVEN HEREI NABOVE, THE EVIDENCE IS DIRECTED TO BE ADMITTED AND IN CASE IT IS FOUND TO BE INSUFFICIENT OR INCOMPLETE, THE LD. CIT(A), IT IS DIRECTED SHALL CALL FOR FURTHER E VIDENCES IF SO DEEMED NECESSARY AND CONFRONT THESE TO THE ASSESSEE BEFORE PASSING AN ORDER IN ACCORDANCE WITH LAW. 8.5 WITH THE ABOVE DIRECTIONS/OBSERVATIONS, THE IMPUGNED ORDER IS SET ASIDE ON THE ISSUES AGITATED IN GROUND NOS. 3 TO 5 BACK TO THE FILE OF THE LD. CIT(A) DIRECTING HIM TO PASS A SPEAKING ORDER IN ACCORDAN CE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEA RD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.2019. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER