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

ITA 3559/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3638 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A: NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3559/DEL /2014 ASSESSMENT YEAR: 2010-11 ACIT, CIRCLE, REWARI. VS SHRI BRIJ KISHORE BHARGAVA, THROUGH L/H SHRI PRAMOD BHARGAVA, C/O M/S KAUSHAL KISHORE KANWAR KISHORE, GUR BAZAR, REWARI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT JAIN, SR. DR RESPONDENT BY : MS SOUMYA SINGH, ADVOCATE DATE OF HEARING: 29.11.2017 DATE OF PRONOUNCEMENT : 31.01.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. AGGRIEVED BY THE ORDER DATED 04.04.2014 IN APPEAL NO.143/2013-14 PASSING BY THE COMMISSIONER OF INCOM E TAX (APPEAL) [IN SHORT CIT(A)], ROHTAK FOR 2010-11 AS SESSMENT 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 A DDITION OF RS. 1,61,63,406/- MADE BY THE AO UNDER THE HEAD LONG TE RM CAPITAL GAINS BY DISALLOWING EXEMPTION CLAIMED BY T HE ASSESSEE U/S 10(37). THE LD CIT(A) DELETED THIS ADD ITION ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 2 WITHOUT APPRECIATING THE FACTS NARRATED IN DETAIL I N THE ASSESSMENT ORDER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN TREATING TH E GAIR MUMKIN LAND AS AGRICULTURAL LAND WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, D ELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 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 SHARE IN AN EXTENT OF 51 KANAL 10 MARLA OF AGRI CULTURAL LAND WHICH IS A CAPITAL ASSET WITHIN THE MEANING OF SECT ION 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 CATEGORIZED A S GAIR MUMKIN & 36 KANAL 1 MARLA WAS CATEGORIZED AS CHAH I BY THE REVENUE AUTHORITIES. ASSESSEE RECEIVED THE COMPENSA TION BUT THE ORIGINALLY AWARDED COMPENSATION WAS ENHANCED TWICE. FOR THE AY 2010-11, HE FILED THE RETURN OF INCOME ON 28.07.201 0 DECLARING A TOTAL INCOME OF RS.2,00,86,970/- WHICH HE REVISED O N 04.03.2011 WITH THE INCOME OF RS.3,62,50,380/-. THE ASSESSEE F URTHER REVISED THE INCOME ON 09.01.2013, STATING HIS INCOM E AS RS.2,00,86,970/-. DURING THE PROCEEDINGS U/S 143(3) OF THE ACT, ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 3 THE AO FOUND THAT DURING THE RELEVANT YEAR, THE ASS ESSEE RECEIVED THE ENHANCED COMPENSATION OF RS.1,61,63,406/- AND I NTEREST 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 ACCOR DING 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 SECOND GROUND IS THAT SINCE THE LAND IN THIS CASE W AS ACQUIRED BY THE HUDA IN THE YEAR 1993 AND THE ORIGINAL COMPENSA TION WAS RECEIVED BEFORE 01.04.2004, AS SUCH, 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 T HE ACT COULD BE ALLOWED. ON THIS PREMISE, AN AMOUNT OF RS.1,61,6 3,406/- WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. 3. IN THE APPEAL PREFERRED BY THE ASSESSEE, LD.CI T(A) BASING ON THE CERTIFICATE ISSUED BY THE PATWARI, FOUND THAT T HE REVENUE AUTHORITIES CERTIFIED THAT THE GAIR MUMKIN LAND H AS BEEN CLASSIFIED AS AGRICULTURAL LAND WHERE THERE ARE WEL LS, WATER CHANNELS AND WATER STORAGE TANK, AND SINCE THE LAND OF THE ASSESSEE THAT WAS ACQUIRED BY THE HUDA ABUTS AND CO NTAGIOUS TO THE AGRICULTURAL LAND WHERE CULTIVATION IS BEING CA RRIED OUT INDICATING THAT THERE ARE WELLS, WATER CHANNELS AND WATER STORAGE ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 4 TANK, THIS PARTICULAR GAIR MUMKIN LAND ALSO FALLS WITHIN THE AMBIT OF AGRICULTURAL LAND AND IS, THEREFORE, ENTIT LED TO THE BENEFIT OF SECTION 10(37) OF THE ACT. HE FURTHER 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 COMPUL SORILY ACQUIRED ON OR AFTER 01.04.2004 AND SINCE THE ASSES SEE RECEIVED THE ENHANCED COMPENSATION AFTER 01.04.2004, IT CANN OT BE SAID THAT THE BENEFIT U/S 10(37) IS NOT AVAILABLE TO THE ASSESSEE. REVENUE CHALLENGES THIS FINDING IN THIS APPEAL. 4. LD. SR.DR HEAVILY RELIES UPON THE ORDER OF THE AO AND SUBMITS THAT IN VIEW OF THE FACT THAT THE REVENUE A UTHORITIES CLASSIFIED 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 1 0(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 COM PENSATION LONG PRAYER TO 01.04.2004 AS SUCH EVEN THE ENHANCED COMPENSATION AS TO RELATE BACK TO THE DATE OF ORIGI NAL COMPENSATION THEREBY STANDS OUT OF CONSIDERATION U/ S 10(37) OF THE ACT. PER CONTRA, IT IS THE ARGUMENT OF THE LD.A R THAT WHEREVER THE IRRIGATION FACILITIES LIKE WELLS, WATER CHANNEL S, WATER STORAGE ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 5 TANK IS AVAILABLE OR THE CULTIVATION IS GOING ON EV EN THE GAIR MUMKIN LAND ARE CLASSIFIED AS AGRICULTURAL LAND BY THE REVENUE AUTHORITIES AND THAT IS THE REASON WHY BASING ON TH E CERTIFICATE ISSUED BY THE REVENUE OFFICER, LD.CIT(A) CONCLUDED THAT THE LAND OF THE ASSESSEE WAS ALSO AN AGRICULTURAL LAND INASM UCH AS CULTIVATION WAS BEING CARRIED OUT IN SUCH LAND WHIC H NOT POSSIBLE WITHOUT THE PRESENCE OF THE IRRIGATION FACILITIES. NEXTLY, HE SUBMITS THAT IN SO FAR AS THAT PART OF THE COMPENSA TION THAT WAS RECEIVED AFTER 01.04.2004 IN RESPECT OF CAPITAL ASS ETS WITHIN THE MEANING OF SECTION 2(14)(III) OF THE ACT, BENEFIT O F 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 MADE BY THE AR. SUB SECTION (37) HAS BEEN INSERTED W.E.F 1.4.2005 TO PROVIDE RELIEF IN RESPECT OF COMP ULSORY ACQUISITION OF AGRICULTURAL LAND, BEING CAPITAL ASS ET AS DEFINED IN SECTION 2(14)(III) WHEREIN THE COMPENSAT ION OR ENHANCED COMPENSATION HAS BEEN RECEIVED ON OR AFTER 01.04.2004. IT DOES NOT STIPULATE THAT EXEMPTION IS AVAILABLE ONLY WHEN THE AGRICULTURAL LAND IS COMPUL SORILY ACQUIRED ON OR AFTER 01.04.2004. IT IS NOT IN DISPU TE 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 CONCERNED THAT THE GA IR MUMKIN LAND IS AN AGRICULTURAL LAND WHERE THERE WER E WELLS, WATER CHANNELS AND WATER STORAGE TANK. THIS LAND ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 6 ABUTS THE LAND WHERE CULTIVATION IS CARRIED OUT AND IS CONTIGUOUS TO IT. NO CULTIVATION CAN BE CARRIED OUT WITHOUT HAVING THESE NECESSITIES. HENCE, THE GAIR MUMKIN LA ND ALSO FALLS 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 PROVISION OF SECTION 10(37) ARE APPLICABLE TO THE AMOUNT RECE IVED BY THE ASSESSEE AFTER 01.04.2004 IN RESPECT OF THE GAIR M UMKIN LANDS WHICH THE REVENUE OFFICIAL CERTIFIED TO BE THE AGRI CULTURAL LANDS IN VIEW OF THE IRRIGATION FACILITIES AVAILABLE, AND TH E BENEFIT OF SECTION 10(37) OF THE ACT IS AVAILABLE IN SUCH CASES. FURTH ER, RELIANCE WAS PLACED ON CHURA RAM VS. ITO [2011] 10 TAXMANN.COM 3 4 [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 DECISION REFERRED TO ABOVE, WE ARE CONVINCED THAT THE REASON ING GIVEN BY THE LD.CIT(A IS IMPECCABLE TO GRANT RELIEF TO THE A SSESSEE AND THERE ARE NO GROUNDS TO INTERFERE WITH THE SAME. WE , THEREFORE, UPHOLD THE ORDER OF THE LD.CIT(A) AND FIND THAT THE APPEAL IS LIABLE TO BE DISMISSED. WE ACCORDINGLY DISMISS THE SAME. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ITA NO. 3559/DEL/2014 ASSESSMENT YEAR 2010-11 7 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2018. SD/- SD/- (B.P. JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31ST JANUARY, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR