ACIT, Rewari V. Sh. Kanwar Kishore Bhargava, Rewari

ITA 3558/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3789 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASHANT BHARGAVA
• Assessee Lawyers: SAMPURNANAND
• Keywords: Capital asset; Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SH.N.K.SAINI, ACCOUNTANT MEMBER AND SH.K.N.CHARY, JUDICIAL MEMBER ITA NO. 3558/DEL/2014 (ASSESSMENT YEAR: 2010 -11) APPELLANT BY SH. SALIL KAPOOR & SH. PRASHANT BHARGAVA, ADV. RESPONDENT BY SH. SAMPURNANAND, SR.DR DATE OF HEARING 28 .0 9 .2017 DATE OF PRONOUNCEMENT 20 . 1 0.2017 ORDER PER K.N.CHARY, JUDICIAL MEMBER AGGRIEVED BY THE ORDER DATED 04.04.2014 IN APPEAL NO.142/2013-14 PASSING BY THE COMMISSIONER OF INCOME TAX (APPEAL) [IN SHORT CIT(A)], ROHTAK FOR 2010-11 ASSESSMENT YEAR, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.1,61,6 3,407/- MADE BY THE AO UNDER THE HEAD LONG TERM CAPITAL GAINS BY DISALLOWI NG EXEMPTION CLAIMED BY THE ASSESSEE U/S 10(37). THE LD. CIT(A) DELETED TH IS ADDITION WITHOUT APPRECIATING THE FACTS NARRATED IN DETAIL IN THE AS SESSMENT ORDER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN TREATING THE GAIR MUMKIN LAND A S AGRICULTURAL LAND WITHOUT APPRECIATING THE FACTS OF THE CASE. ACIT, CIRCLE, REWARI. VS KANWAR KISH O RE BHARGAVA, C/O-M/S. SHREE NATH OPTICIANS, 27/13, BHARGAVA MARKET, NEW BAWAL CHOWK, REWARI. PAN-AAXPB5111A (APPELLANT) (RESPONDENT) ITA NO. 3558/DEL/2014 2. RELEVANT FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY, HOUSE PROPERTY, PROFIT & GAINS FROM BUSINESS AND INCOME FROM OTHER SOURCES. ASSESSEE IS ENTITLED FOR 1/3 SH ARE IN AN EXTENT OF 51 KANAL 10 MARLA OF AGRICULTURAL LAND WHICH IS A CAPITAL A SSET WITHIN THE MEANING OF SECTION 2(14)(III) OF THE ACT, WAS ACQUIRED BY HUDA IN THE YEAR 1993 AND OUT OF THIS EXTENT OF LAND, 15 KANAL 09 MARLA WAS CATEGORI ZED AS GAIR MUMKIN & 36 KANAL 1 MARLA WAS CATEGORIZED AS CHAHI BY THE REVENUE AUTHORITIES. ASSESSEE RECEIVED THE COMPENSATION BUT THE ORIGINALLY AWARDE D COMPENSATION WAS ENHANCED TWICE. FOR THE AY 2010-11, HE FILED THE R ETURN OF INCOME ON 28.07.2010 DECLARING A TOTAL INCOME OF RS.2,00,86,9 70/- WHICH HE REVISED ON 04.03.2011 WITH THE INCOME OF RS.3,62,50,380/-. TH E ASSESSEE FURTHER REVISED THE INCOME ON 09.01.2013, STATING HIS INCOME AS RS. 2,00,86,970/-. DURING THE PROCEEDINGS U/S 143(3) OF THE ACT, THE AO FOUND THA T DURING THE RELEVANT YEAR, THE ASSESSEE RECEIVED THE ENHANCED COMPENSATION OF RS.1,61,63,406/- AND INTEREST OF RS.3,83,46,020/- AND CLAIMED U/S 10(37) OF THE ACT WHICH THE AO DENIED THAT ON TWO GROUNDS. FIRST ONE IS THAT ACC ORDING TO AO THE GAIR MUMKIN CAN BE USED NEITHER FOR AGRICULTURAL NOR HOUSING PURPOSES AS SUCH IT IS NOT QUALIFIED U/S 10(37) OF THE ACT. THE SEC OND GROUND IS THAT SINCE THE LAND IN THIS CASE WAS ACQUIRED BY THE HUDA IN THE Y EAR 1993 AND THE ORIGINAL COMPENSATION WAS RECEIVED BEFORE 01.04.2004, AS SUC H, IN VIEW OF THE FACT THAT SECTION 10(37) OF THE ACT WAS INSERTED IN THE INCOM E TAX ACT, 1961 W.E.F 01.04.2005, NO EXEMPTION U/S 10(37) OF THE ACT COUL D BE ALLOWED. ON THIS PREMISE, AN AMOUNT OF RS.1,61,63,406/- WAS ADDED BA CK TO THE INCOME OF THE ASSESSEE. ITA NO. 3558/DEL/2014 3. IN THE APPEAL PREFERRED BY THE ASSESSEE, LD.CIT( A) BASING ON THE CERTIFICATE ISSUED BY THE PATWARI, FOUND THAT THE R EVENUE AUTHORITIES CERTIFIED THAT THE GAIR MUMKIN LAND HAS BEEN CLASSIFIED AS AGRICULTURAL LAND WHER E THERE ARE WELLS, WATER CHANNELS AND WATER STORAGE T ANK, AND SINCE THE LAND OF THE ASSESSEE THAT WAS ACQUIRED BY THE HUDA ABUTS AN D CONTAGIOUS TO THE AGRICULTURAL LAND WHERE CULTIVATION IS BEING CARRIE D OUT INDICATING THAT THERE ARE WELLS, WATER CHANNELS AND WATER STORAGE TANK, THIS PARTICULAR GAIR MUMKIN LAND ALSO FALLS WITHIN THE AMBIT OF AGRICULTURAL L AND AND IS, THEREFORE, ENTITLED TO THE BENEFIT OF SECTION 10(37) OF THE ACT. HE FUR THER HELD THAT THERE IS NO STIPULATION UNDER LAW THAT THE EXEMPTION U/S 10(37) OF THE ACT IS AVAILABLE ONLY WHEN THE AGRICULTURAL LAND IS COMPULSORILY ACQUIRED ON OR AFTER 01.04.2004 AND SINCE THE ASSESSEE RECEIVED THE ENHANCED COMPENSATI ON AFTER 01.04.2004, IT CANNOT BE SAID THAT THE BENEFIT U/S 10(37) IS NOT A VAILABLE TO THE ASSESSEE. REVENUE CHALLENGES THIS FINDING IN THIS APPEAL. 4. LD. SR.DR HEAVILY RELIES UPON THE ORDER OF THE A O AND SUBMITS THAT IN VIEW OF THE FACT THAT THE REVENUE AUTHORITIES CLASS IFIED 15 KANAL AND 09 MARLA OF THE LAND OF THE ASSESSEE AS GAIR MUMKIN LAND, AS PER TEXTS GAIR MUMKIN LAND IS FIT FOR CULTIVATION, IT IS NOT ELIGIBLE FOR EXEMPTION U/S 10(37) OF THE ACT. HE ALSO SUBMITTED THAT THE TRANSFER OF PROPERTY TOO K PLACE IN THE YEAR 1993 AND THE ASSESSEE RECEIVED THE AWARDED COMPENSATION LONG PRAYER TO 01.04.2004 AS SUCH EVEN THE ENHANCED COMPENSATION AS TO RELATE B ACK TO THE DATE OF ORIGINAL COMPENSATION THEREBY STANDS OUT OF CONSIDERATION U/ S 10(37) OF THE ACT. PER CONTRA, IT IS THE ARGUMENT OF THE LD.AR THAT WHEREV ER THE IRRIGATION FACILITIES LIKE WELLS, WATER CHANNELS, WATER STORAGE TANK IS A VAILABLE OR THE CULTIVATION IS ITA NO. 3558/DEL/2014 GOING ON EVEN THE GAIR MUMKIN LAND ARE CLASSIFIED AS AGRICULTURAL LAND BY THE REVENUE AUTHORITIES AND THAT IS THE REASON WHY BASI NG ON THE CERTIFICATE ISSUED BY THE REVENUE OFFICER, LD.CIT(A) CONCLUDED THAT T HE LAND OF THE ASSESSEE WAS ALSO AN AGRICULTURAL LAND INASMUCH AS CULTIVATION W AS BEING CARRIED OUT IN SUCH LAND WHICH NOT POSSIBLE WITHOUT THE PRESENCE OF THE IRRIGATION FACILITIES. NEXTLY, HE SUBMITS THAT IN SO FAR AS THAT PART OF THE COMPE NSATION THAT WAS RECEIVED AFTER 01.04.2004 IN RESPECT OF CAPITAL ASSETS WITHI N THE MEANING OF SECTION 2(14)(III) OF THE ACT, BENEFIT OF SECTION 10(37) OF THE ACT IS AVAILABLE. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD. VIDE PARAGRAPH 6, THE LD.CIT(A) OBSERVED AS FOLLOWS:- 6. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MA DE BY THE AR. SUB SECTION (37) HAS BEEN INSERTED W.E.F 1.4.2005 TO PR OVIDE RELIEF IN RESPECT OF COMPULSORY ACQUISITION OF AGRICULTURAL LAND, BEING CAPITAL ASSET AS DEFINED IN SECTION 2(14)(III) WHEREIN THE COMPENSATION OR ENHA NCED COMPENSATION HAS BEEN RECEIVED ON OR AFTER 01.04.2004. IT DOES NOT STIPU LATE THAT EXEMPTION IS AVAILABLE ONLY WHEN THE AGRICULTURAL LAND IS COMPULSORILY ACQ UIRED ON OR AFTER 01.04.2004. IT IS NOT IN DISPUTE THAT THE ASSESSEE RECEIVED THE ENHANCED COMPENSATION DURING THE YEAR UNDER CONSIDERATION I.E. AFTER 01.40.2004. IT IS ALSO A FACT THAT GAIR MUMKIN LAND HAS BEEN CERTIFIED BY THE PATWARI CONCE RNED THAT THE GAIR MUMKIN LAND IS AN AGRICULTURAL LAND WHERE THERE WERE WELLS , WATER CHANNELS AND WATER STORAGE TANK. THIS LAND ABUTS THE LAND WHERE CULTI VATION IS CARRIED OUT AND IS CONTIGUOUS TO IT. NO CULTIVATION CAN BE CARRIED OU T WITHOUT HAVING THESE NECESSITIES. HENCE, THE GAIR MUMKIN LAND ALSO FALL S WITHIN THE AMBIT OF AGRICULTURAL LAND AND IS THEREFORE, ENTITLED TO THE BENEFIT OF 10(37) OF THE IT ACT. 6. FURTHER IN CASE OF A CO-OWNER OF THE LAND, A CO- ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.2635/DEL/2014 HOLD THAT THE PROV ISION OF SECTION 10(37) ARE APPLICABLE TO THE AMOUNT RECEIVED BY THE ASSESSEE A FTER 01.04.2004 IN RESPECT OF THE GAIR MUMKIN LANDS WHICH THE REVENUE OFFICIAL CERTIFIED TO BE TH E AGRICULTURAL LANDS IN VIEW OF THE IRRIGATION FACILI TIES AVAILABLE, AND THE BENEFIT OF SECTION 10(37) OF THE ACT IS AVAILABLE IN SUCH CASE S. FURTHER, RELIANCE WAS PLACED ON CHURA RAM VS. ITO [2011] 10 TAXMANN.COM 34 [CHD.] . ITA NO. 3558/DEL/2014 7. ON A CAREFUL CONSIDERATION OF THE FACTS OF THIS CASE IN THE LIGHT OF THE OBSERVATION OF THE CO-ORDINATE BENCH IN THE DECISIO N REFERRED TO ABOVE, WE ARE CONVINCED THAT THE REASONING GIVEN BY THE LD.CIT(A IS IMPECCABLE TO GRANT RELIEF TO THE ASSESSEE AND THERE ARE NO GROUNDS TO INTERFE RE WITH THE SAME. WE, THEREFORE, UPHOLD THE ORDER OF THE LD.CIT(A) AND FI ND THAT THE APPEAL IS LIABLE TO BE DISMISSED. WE ACCORDINGLY DISMISS THE SAME. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER, 2017. SD/- SD/- (N.K.SAINI) (K.N.CHAR Y) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* DATE:- 20.10.2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR ITAT NEW DELHI