K. Pondurai, CHENNAI V. DCIT, Tambaram

ITA 3469/CHNY/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5042 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J PRABHAKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.3469/MDS/2016 & '& / ASSESSMENT YEAR : 2011-12 SHRI K. PONDURAI, C/O SHRI J. PRABHAKAR, CHARTERED ACCOUNTANT, RESIDENCY APARTMENTS, 245, T.T.K. ROAD, ALWARPET, CHENNAI - 600 018. PAN : AAEPP 8065 A V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, TAMBARAM RANGE, TAMBARAM. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI J. PRABHAKAR, CA +,)* - . / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT / - 0' / DATE OF HEARING : 23.11.2017 12' - 0' / DATE OF PRONOUNCEMENT : 10.01.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -10, CHENN AI, DATED 30.11.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS REJEC TION OF CLAIM OF EXEMPTION ON SALE OF PROPERTY. 2 I.T.A. NO.3469/MDS/16 3. SHRI J. PRABHAKAR, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD HIS AGRICULTURAL L AND TO THE EXTENT OF 16.69 ACRES AT PERIYAVELLIKKADU VILLAGE OF CHEYY AR TALUK, KANCHEEPURAM DISTRICT TO M/S BGR BOILERS PVT. LTD. ON 13.09.2010, FOR A TOTAL CONSIDERATION OF 5,00,70,000/-. ACCORDING TO THE LD. REPRESENTATIVE, THE AGRICULTURAL LAND WAS PURCHASED BY THE ASSESSEE IN THE YEAR 2006 ALONG WITH A MOTOR PUMP SET WITH E LECTRICITY SERVICE CONNECTION FOR AGRICULTURE. THE ASSESSEE CULTIVATE D MANGO TREES ON THE LAND. PLACING RELIANCE ON THE PHOTOGRAPHS AVAI LABLE AT PAGES 17-19 OF THE PAPER-BOOK, THE LD. REPRESENTATIVE SUB MITTED THAT IT IS EVIDENT THAT THE ASSESSEE HAD CULTIVATED MANGO TREE S. REFERRING TO PAGES 23-26 OF THE PAPER-BOOK, THE LD. REPRESENTATI VE SUBMITTED THAT THESE ARE ALL COPIES OF EXTRACT OF THE VILLAGE ACCOUNT NO.2, WHICH IS OTHERWISE KNOWN AS ADANGAL. ACCORDING TO THE LD. REPRESENTATIVE, THIS VILLAGE ACCOUNT NO.2 CLEARLY S HOWS THAT THE ASSESSEE HAS CULTIVATED MANGO TREES. IT ALSO DISCL OSED THE AVAILABILITY OF MOTOR PUMP SET TO IRRIGATE THE MANG O TREES. ACCORDING TO THE LD. REPRESENTATIVE, THIS EXTRACT OF ADANGAL WAS FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCE EDING. HOWEVER, IT WAS NOT CONSIDERED EITHER BY THE ASSESS ING OFFICER OR 3 I.T.A. NO.3469/MDS/16 BY THE CIT(APPEALS). ACCORDING TO THE LD. REPRESEN TATIVE, WHILE REFERRING TO THE BILL PRODUCED FOR REPAIRING DRIP I RRIGATION SYSTEM, THE ASSESSING OFFICER FOUND IN THE REMAND REPORT THAT T HE MANGO TREES WERE PLANTED ONLY AFTER THE SALE OF LAND FOR THE PU RPOSE OF GETTING EXEMPTION. ACCORDING TO THE LD. REPRESENTATIVE, TH E BILL AVAILABLE BEFORE THE ASSESSING OFFICER IS ONLY FOR THE PURPOS E OF PURCHASING CERTAIN MATERIAL FOR REPAIRING THE EXISTING DRIP IR RIGATION SYSTEM. THE DRIP IRRIGATION SYSTEM WAS ALREADY IN USE, THEREFOR E, ACCORDING TO THE LD. REPRESENTATIVE, THE OBSERVATION MADE BY THE CIT (APPEALS) AND THE ASSESSING OFFICER THAT THE MANGO TREES WERE PLA NTED ONLY AFTER THE SALE OF THE PROPERTY FOR THE PURPOSE OF CLAIMIN G EXEMPTION IS NOT CORRECT. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE REMAND PROCEEDING, THE ASSESSING OFFICER FOUND THAT THE MA TERIALS REQUIRED FOR DRIP IRRIGATION WERE PURCHASED IN JANUARY, 2010 , THEREFORE, HE CONCLUDED THAT THE MANGO TREES WERE PLANTED ONLY AF TER THE SALE OF THE LAND FOR CLAIMING EXEMPTION. ON A QUERY FROM T HE BENCH WHETHER THE ADANGAL EXTRACT NOW FILED BY THE ASSESS EE IN THE PAPER- BOOK WAS AVAILABLE BEFORE THE ASSESSING OFFICER DUR ING THE REMAND 4 I.T.A. NO.3469/MDS/16 PROCEEDING? THE LD. D.R. VERY FAIRLY SUBMITTED THA T THERE WAS NO REFERENCE ABOUT ADANGAL EXTRACT EITHER IN THE REMAN D PROCEEDING OR IN THE ORDER OF THE CIT(APPEALS). ACCORDING TO THE LD. D.R., THE LAND IN QUESTION IS DRY LAND. IT IS FOR THE ASSESSEE TO ESTABLISH THAT THE ASSESSEE HAD CULTIVATED THE LAND. WHEN THE MATERIA L AVAILABLE ON RECORD INDICATES PURCHASE OF ITEMS FOR IRRIGATION I N JANUARY, 2010, ACCORDING TO THE LD. D.R., IT CANNOT BE SAID THAT T HE ASSESSEE HAD CULTIVATED THE MANGO TREES EARLIER, THEREFORE, THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE LAND IN QUESTION IS NOT AN A GRICULTURAL LAND. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE ARISES BEFORE THIS TRIBUNAL IS WHETHER THE LAND SOLD BY TH E ASSESSEE IS AGRICULTURAL LAND OR NOT? NO DOUBT, THE LAND IS CL ASSIFIED AS DRY LAND. IT IS NOT IN DISPUTE THAT EVEN THE DRY LAND CAN BE USED FOR AGRICULTURAL ACTIVITIES. THE INCOME-TAX ACT REFERS AGRICULTURAL LAND FOR THE PURPOSE OF CLAIMING EXEMPTION ON SALE. 6. IN THE STATE OF TAMIL NADU, NO LAND IS CLASSIFIE D AS AGRICULTURAL LAND. IT IS A FACT THAT THE LANDS ARE CLASSIFIED AS WET LAND, DRY LAND AND LAND BELONGING TO GOVERNMENT SUCH AS PARAMBOKE LAND, NATHAM , ETC. IN THIS CASE, THE LAND IN QUESTION IS CLASS IFIED AS 5 I.T.A. NO.3469/MDS/16 DRY LAND. IF THE DRY LAND IS USED FOR CULTIVATIO N ACTIVITIES, THEN SUCH A LAND CAN BE CONSTRUED AS AGRICULTURAL LAND UNDER THE INCOME-TAX ACT. IN THE CASE BEFORE US, THE ADANGAL EXTRACT FI LED BY THE ASSESSEE SHOWS THE EXISTENCE OF MOTOR WITH WELL. T HE ADANGAL EXTRACT DISCLOSES THE EXISTENCE OF MANGO TREES ON T HE LAND. THEREFORE, IT IS OBVIOUS THAT THE ASSESSEE HAD CULT IVATED THE MANGO TREES. PLACING RELIANCE ON THE COPY OF THE BILL AV AILABLE ON RECORD, THE DEPARTMENT CLAIMS THAT THE MATERIALS FOR DRIP I RRIGATION SYSTEM WERE PURCHASED ONLY IN JANUARY, 2010, THEREFORE, TH E ASSESSEE COULD NOT HAVE CULTIVATED THE LAND EARLIER. HOWEVE R, THE ASSESSEE CLAIMS THAT THE BILL AVAILABLE ON RECORD REFERS TO THE MATERIALS PURCHASED FOR REPAIRING THE EXISTING DRIP IRRIGATIO N SYSTEM AND NOT FOR ESTABLISHMENT OF NEW DRIP IRRIGATION SYSTEM. 7. BE THAT AS IT MAY, FOR THE PURPOSE OF DECIDING W HETHER THE LAND IS USED FOR CULTIVATION ACTIVITIES OR NOT, THE ADANGAL EXTRACT PLAYS AN IMPORTANT ROLE. THE ADANGAL EXTRACT IS MA INTAINED BY THE VILLAGE ADMINISTRATIVE OFFICER AT THE VILLAGE LEVEL UNDER THE DIRECT SUPERVISION OF HEAD QUARTER DEPUTY TEHSILDAR OF CON CERNED TALUK. THE VILLAGE ADMINISTRATIVE OFFICER IS EXPECTED TO G O AROUND THE VILLAGE AND TAKE THE CULTIVATION ACCOUNT INCLUDING STANDING TREES AND 6 I.T.A. NO.3469/MDS/16 AVAILABILITY OF IRRIGATION FACILITIES ON THE LAND. THIS RECORD IS FURTHER SUPERVISED BY THE HEAD QUARTERS DEPUTY TEHSILDAR. THE INFORMATION COLLECTED BY THE VILLAGE ADMINISTRATIVE OFFICER AT THE VILLAGE LEVEL WILL BE USED BY THE STATISTICAL COMMI TTEE FOR THE PURPOSE OF ESTIMATING THE FOOD PRODUCTION AT TALUK LEVEL, DISTRICT LEVEL, STATE AND NATIONAL LEVEL. THEREFORE, THE VI LLAGE ACCOUNT NO.2 OR ADANGAL EXTRACT MAINTAINED BY THE VILLAGE ADMINI STRATIVE OFFICER IS THE BASIC DOCUMENT TO PROVE THE CULTIVATION MADE BY ANY INDIVIDUAL IN THE STATE OF TAMIL NADU. OTHER THAN THE VILLAGE ACCOUNT NO.2 OR ADANGAL EXTRACT, NO DOCUMENT WOULD BE AVAILABLE FOR ESTABLISHING CULTIVATION OF CROP AFTER THREE OR FOUR YEARS. THEREFORE, THIS ADANGAL EXTRACT CANNOT BE IGNORED. 8. THE ADANGAL EXTRACT, EVEN THOUGH CLAIMS TO BE FI LED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF REMAND P ROCEEDING AND BEFORE THE CIT(APPEALS), IT WAS NOT CONSIDERED BY E ITHER OF THE AUTHORITIES. AS RIGHTLY SUBMITTED BY THE LD. D.R., THERE WAS NO REFERENCE ABOUT THE ADANGAL EXTRACT EITHER IN THE R EMAND REPORT OR IN THE FIRST APPELLATE ORDER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADANGAL EXTRACT BEING THE BASIC DOCUMENT, WHICH PROVES THE CULTIVATION, NEEDS TO BE EXAMINED BY THE ASSESS ING OFFICER. 7 I.T.A. NO.3469/MDS/16 SINCE THE ASSESSING OFFICER AND THE CIT(APPEALS) HA VE NOT CONSIDERED THE ADANGAL EXTRACT MAINTAINED BY THE VI LLAGE ADMINISTRATIVE OFFICER WHICH IS THE BASIC DOCUMENT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE O F THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE TH E MATTER AFRESH IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, INCL UDING THE ADANGAL EXTRACT / VILLAGE ACCOUNT NO.2, AND THEREAFTER DECI DE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASO NABLE OPPORTUNITY TO THE ASSESSEE. IT IS OPEN TO THE ASSESSING OFFIC ER TO CONDUCT ENQUIRY AS HE DEEM FIT. 9. WITH THE ABOVE OBSERVATION, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 10 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE DECEMBER, 2017. KRI. 8 I.T.A. NO.3469/MDS/16 - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-10, CHENNAI-34 4. PRINCIPAL CIT- 7, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.