LEILA TRADING LTD, PALGHAR V. PR CIT 3, THANE

ITA 3562/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9917 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MEENA LD DR
• Assessee Lawyers: HARI OM TULSYAN LD
• Keywords: Capital asset
• Section: 143(3); 263

Judgement Text

ITA NO 3562/MUM/2017 LEILA TRADING LIMITED ASSESSMENT YEAR 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3562/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) LEILA TRADING LIMITED (CIN : U70100MH2004PLC149662) GUT NO.123 VILLAGE-BATEGAON, BOISAR(E), TAL PALGHAR DISTT. PALGHAR 401501 / VS. PRINCIPAL COMMISSIONER OF INCOME TAX-3 6 TH FLOOR, A WING ROOM NO.2 ASHAR IT PARK ROAD NO.16Z WAGLE INDUSTRIAL ESTATE THANE -400 604 ./ ./PAN/GIR NO. AABCL-1067-A ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : HARI OM TULSYAN, LD. AR REVENUE BY : R.P.MEENA, LD. DR (CIT) / DATE OF HEARING : 22/08/2017 / DATE OF PRONOUNCEMENT : 06 /09/2017 ITA NO 3562/MUM/2017 LEILA TRADING LIMITED ASSESSMENT YEAR 2012-13 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTESTS INVOCATION OF REVISIONAL JURISDICT ION U/S 263 BY LD. PRINCIPAL COMMISSIONER OF INCOME-TAX [PCIT], THANE VIDE ORDER DATED 27/03/2017. 2. THE FACTS LEADING TO THE SAME ARE THAT THE A SSESSEE, BEING RESIDENT CORPORATE ASSESSEE DERIVING INCOME FROM HOUSE PROPERTY, WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 27/02/2015 A T RETURNED FIGURES OF RS.1,69,610/-. 3. SUBSEQUENTLY, THE SAID ASSESSMENT WAS SUBJECTED TO EXERCISE OF REVISIONAL JURISDICTION U/S 263 BY LD. PCIT VIDE SHOW CAUSE NOTICE DATED 10/03/2017 ON THE PREMISES THAT THE ASSESSEE RECEIV ED A SUM OF RS.129.59 LACS ON SALE OF LAND CLAIMED TO BE THE AGRICULTURAL LAND AND HENCE EXCLUDIBLE FROM THE AMBIT OF CAPITAL ASSETS U/S 2(14). HOWEVER, IT WAS NOTED THAT THE ASSESSEE DID NOT CARRY OUT ANY A GRICULTURAL ACTIVITIES AND FURTHER AS PER RULES PREVAILING IN THE STATE, T HE LAND COULD NOT BE HELD BY NON-FARMERS AND PRIOR PERMISSION IS REQUIRED FOR A COMPANY TO D O FARMING IN THE STATE OF MAHARASHTRA. IT WAS FURTHER NOTED THAT THE ASSESSEE DID NOT FURNISH ANY EVIDENCE OF SAID PERMI SSION AND THEREFORE, THE LD. AO ERRED IN ACCEPTING THE SAME AS AGRICULTU RAL LAND. THE LD. PCIT FURTHER OPINED THAT THE SAID INCOME CONSTITUTE D SHORT TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AND THEREFORE, THE QU ANTUM ORDER, ITA NO 3562/MUM/2017 LEILA TRADING LIMITED ASSESSMENT YEAR 2012-13 3 BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, WAS LIABLE TO BE SET-ASIDE FOR FRESH ADJUDICATION. 4. HOWEVER, THE ASSESSEE CONTENDED THAT DURING QUAN TUM ASSESSMENT PROCEEDING, IT SUCCESSFULLY DEMONSTRATED THAT THE SAID LAND WAS RURAL AGRICULTURAL LAND AND HENCE EXEMPT. THE ASSESSEE FURTHER CONTENDED THAT IT SUPPLIED SALE / PURCHASE DOCUMENT S OF THE LAND , COPY OF 7/12 EXTRACTS, COPY OF MAPS ETC. TO SUBSTANTIATE HIS CLAIM IN THIS REGARD AND THE LD. AO WITH DUE APPLICATION OF MIND WAS SAT ISFIED WITH THE CLAIM OF THE ASSESSEE AND HENCE, THE EXERCISE OF REVISION AL JURISDICTION WAS NOT WARRANTED FOR. 5. HOWEVER, NOT CONVINCED, LD. PCIT NOTED THAT NO E VIDENCES WERE SUBMITTED BY ASSESSEE TO SUPPORT CARRYING OUT OF AG RICULTURAL OPERATIONS AND NO EXPENSES ON THAT ACCOUNT WERE DEBITED IN THE PROFIT & LOSS AND FURTHER, THE NECESSARY PERMISSIONS ETC. REQUIRED IN THIS REGARD WERE NEITHER FURNISHED NOR EXAMINED BY LD. AO. FINALLY, PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS ON THE SUBJECT OF A GRICULTURAL INCOME, THE LD. PCIT SET ASIDE THE QUANTUM ORDER WITH DIREC TIONS TO LD.AO FOR FRESH ASSESSMENT AFTER CONDUCTING DETAILED INQUIRIE S REGARDING THE CLAIM OF THE ASSESSEE THAT THE LAND WAS AGRICULTURAL LAND . AGGRIEVED BY THE SAME, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR ASSESSEE [AR] REITERATED THE CONTENTIONS AS RAISED BEFORE LD. PCIT AND PRIMARILY ARGUED THAT CO MPLETE DETAILS / EXPLANATIONS WERE FURNISHED BY THE ASSESSEE DURING QUANTUM ASSESSMENT AND LD. AO WITH DUE APPLICATION OF MIND ACCEPTED THE CLAIM OF THE ASSESSEE AND THEREFORE, THE INVOCATION OF SE CTION 263 WAS NOT ITA NO 3562/MUM/2017 LEILA TRADING LIMITED ASSESSMENT YEAR 2012-13 4 JUSTIFIED. OUR ATTENTION HAS BEEN DRAWN TO THE SUBM ISSIONS MADE BY THE ASSESSEE DURING QUANTUM ASSESSMENT. 7. PER CONTRA, LD. DR SUPPORTED THE STAND OF LD. PC IT AND DREW OUR ATTENTION TO THE FACT THAT CERTAIN VITAL ASPECTS ON THE ISSUES WERE COMPLETELY MISSED OUT BY LD. AO. THE ASSESSEE COULD NOT PROVE CARRYING OUT OF ANY AGRICULTURAL OPERATIONS ON THE LAND AND NO EXPENDITURE ON THAT ACCOUNT, WHATSOEVER, WAS DEBITE D IN THE PROFIT & LOSS ACCOUNT. FURTHER, THE APPLICABLE PERMISSIONS W ERE NEVER FURNISHED BY THE ASSESSEE AND THEREFORE, THERE WAS NON-APPLIC ATION OF MIND BY LD. AO ON THE ISSUE AND HENCE, INVOCATION OF JURISDICTI ON WAS PERFECTLY JUSTIFIED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AFTER PERUSING THE ASSESSEES S UBMISSION DURING QUANTUM ASSESSMENT, WE FIND THAT THOUGH THE ASSESSE E HAD FURNISHED PURCHASE / SALE DOCUMENTS OF THE LAND, COPY OF 7/12 EXTRACTS AND COPY OF MAP ETC., HOWEVER, NO EVIDENCES WERE FURNISHED TO P ROVE CARRYING OUT OF ANY AGRICULTURAL OPERATIONS AND FURTHER, AS RIGHTLY OBSERVED, PRIMA FACIE, NO EXPENSES ON THAT ACCOUNT WERE DEBITED IN THE PRO FIT & LOSS ACCOUNT. FURTHER, THE ASSESSEE, AS PER THE OPINION OF LD. PC IT, REQUIRED PERMISSION OF THE STATE GOVERNMENT TO CARRY OUT THE AGRICULTURAL OPERATIONS AND THE LAND IN THE STATE COULD NOT BE H ELD BY THE NON- FARMERS. THIS VITAL ASPECT WAS NEVER RAISED NOR EXA MINED / DISCUSSED BY LD. AO DURING QUANTUM ASSESSMENT AND FURTHER, NO SU BMISSIONS WERE MADE BY ASSESSEE IN THAT REGARD. HENCE, THE LD. AO, IN OUR OPINION, HAS COMPLETELY MISSED OUT THIS VITAL ASPECT OF THE TRAN SACTION AND RIGHTLY ITA NO 3562/MUM/2017 LEILA TRADING LIMITED ASSESSMENT YEAR 2012-13 5 BEEN SUBJECTED TO REVISIONAL JURISDICTION. AT THIS STAGE, WE ARE REQUIRED TO EXAMINE WHETHER THE TWIN CONDITIONS VIZ. ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE FULFILLED OR NOT AND THE SAME, IN THE PRESENT CASE, HAS PRIMA FACIE BEEN FULFILLED AND THEREFORE, WE UPHELD THE INVOCATION OF REVISIONAL JURISDICTION BY LD. PCIT. FURTHER, WE FIND THAT THE FACTS OF THE CASE ARE SQUARELY COVERED BY SUB-CLAUS E (A) OF NEWLY INSERTED EXPLANATION-2 W.E.F. 01/06/2015 WHICH CREA TES A DEEMING FICTION THAT THE ORDER PASSED BY THE ASSESSING OFFICER SHAL L BE DEEMED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE IF THE SAME IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHI CH SHOULD HAVE BEEN MADE AND THEREFORE, WE HAVE NO HESITATION IN DISMIS SING ASSESSEES APPEAL. 9. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06 . 09.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. #&. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI