ITO, New Delhi V. Sh. Suraj Bhan, Delhi

ITA 3642/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6625 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Section: 45(5); 2(14); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.3642/DEL/2015 ASSESSMENT YEAR : 2007-08 ITO, WARD- 38(2), NEW DELHI. VS. SURAJ BHAN, H. NO.335, VILLAGE AND P.O.- RITHALA, DELHI. PAN : ASSPB 0263 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. K. JAIN, SR.DR RESPONDENT BY : SHRI ANIL KUMAR GUPTA, ADV. DATE OF HEARING : 02-02-2017 DATE OF PRONOUNCEMENT : 28-02-2017 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 18.03.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-13, NEW DELHI, U/S 144 OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT) RELATING TO ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF I NCOME WAS FILED DECLARING INCOME OF RS.72,986/-. THE ASSESSING OFF ICER NOTICED FROM THE RETURN THAT THE ASSESSEE HAD RECEIVED LAND COMPENSA TION OF RS.38,53,088/- FROM LAND ACQUISITION COLLECTOR ON ACCOUNT OF ENHAN CED LAND COMPENSATION/ INTEREST BUT THE SAME WAS NOT OFFERED FOR TAXATION. 2 ITA NO.3642/DEL/2015 ACCORDINGLY, NOTICE U/S 148 WAS ISSUED AND SINCE NO COMPLIANCE WAS MADE, ASSESSMENT U/S 144 WAS COMPLETED BY MAKING AN ADDIT ION OF RS.38,53,088/-. BEFORE LD. CIT(A), THE ASSESSEE HAD, INTER-ALIA, SUBMITTED AS UNDER :- 5.2 DURING APPELLATE PROCEEDING, THE APPELLANT SUBMITTE D THAT, 'THAT THE APPELLANT FULFILS ALL THE CONDITIONS OF S ECTION 1 0(37) AS PER BELOW:- THE APPELLANT IS AN INDIVIDUAL ASSESSEE, WHICH IS V ERY CLEAR FROM HIS NAME, PAN AS WELL AS STATUS IN WHICH ALLEGED ASSESSMENT O RDER HAS BEEN PASSED. THE PAN OF THE ASSESSEE IS ASSPB0263G. THE INCOME RECEIVED BY THE APPELLANT IS CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' IN TERMS OF SECTION 45(5) OF THE INCOME TAX ACT. THE LAND IN QUESTION WAS HEREDITARY AND WAS CULTIVATED BY THE ASSESSEE F OR AGRICULTURE TILL 1982. THE APPELLANT HAS RECEIVED ENHANCED COMPENSATION FR OM UNION OF INDIA THROUGH LAND ACQUISITION COLLECTOR, DELHI AS A RESU LT OF APPELLATE ORDER OF HON'BLE HIGH COURT OF DELHI AND BARE READING OF SEC TION 45(5)(B) CLEARS THAT THE COMPENSATION, PART OF COMPENSATION, ENHANCED CO MPENSATION IS CHARGEABLE UNDER THE HEAD CAPITAL GAINS AND IN TH E YEAR OF ITS RECEIPT. FROM THE COPIES OF DECREETAL ORDERS OF VARIOUS COURTS AS ANNEXED, IT IS CLEAR THAT THE APPELLANT HAS RECEIVED THE ENHANCED COMPENSATIO N AND SO THE AMOUNT RECEIVED TAXABLE UNDER THE HEAD 'CAPITAL GAINS.' THAT THE LAND UNDER CONSIDERATION FALLS UNDER THE A REA OF ROHINI AND IS IN STATE C DELHI AND IS PART OF STATE OF DELHI AND SO SUCH LAND IS SITUATE IN ANY AREA REFERRED TO IN ITEM (A) OR ITEM (B) OF SUB-CLAUSE (III) OF CLAUSE (14) OF SECTION 2. THAT THE LAND UNDER CONSIDERATION WAS USED FOR AGRI CULTURAL PURPOSES ONLY BY THE INDIVIDUAL AND HIS PARENTS AND OTHER FAMILY MEMBERS . WE HAVE PROCURED A COPY OF RECORD OF CROP AND THIS FACT IS AMPLY PROVED THAT LAND WAS US ED FOR AGRICULTURAL PURPOSE BY THE APPELLANT AND HIS FAMIL Y MEMBERS BEFORE ITS ACQUISITION. THAT FROM THE COPY OF DECREETAL ORDERS, IT IS CLEAR THAT THE LAND IN QUES TION WAS COMPULSORILY ACQUIRED BY UNION OF INDIA IN YEAR 1981. THAT FROM THE COPY OF DECREETAL ORDERS, IT IS CLEAR THAT THE INCOME AROSE TO THE APPELLANT IN OCTOBER 2006 AND NOVEMBER 2006, WHICH IS AFTER 1ST APRIL 2004. HENCE THE APPELLANT FULFILS THIS CONDITION O F SECTION 10(37) ALSO. THE INCOME AROSE AS RESULT OF ENHANCEMENT AS PER JU DGMENT OF HON'BLE HIGH COURT OF DELHI IN APPELLANT'S CASE AND SINCE 'ENHANCED COMPE NSATION IS ALSO TO BE TREATED AS 'COMPENSATION' AS PER EXPLANATION TO SECTION 10(37) OF THE ACT. 3 ITA NO.3642/DEL/2015 HENCE, THESE RECEIPTS IN QUESTION DURING FIN YEA R 2006-07 BASICALLY COVER ALL INGREDIENT OF SECTION 10(37) OF THE INCOME TAX ACT, 1961 AND HENCE EXEMPT FROM TAX IN TERMS OF LAW LAID DOWN. FROM THE ABOVE, IT IS CLEAR THAT FIRST PART OF COMP ENSATION REFERRED IN PARA 2.3 I.E. RS. 9, 06,579/- (672730+201819+32030) AS ENHANCED COMPENSA TION, SOLATIUM AND ADDITIONAL AMOUNT ARE CLEARLY WITHIN THE AMBIT OF ABOVE ARE EXEMPT U/S 10(37).' THE APPELLANT ALSO RELIED ON THE DECISION IN THE CA SE OF CIT VS. GHANSHYAM HUF (2009) 315 ITR 1 (SC) AND RAMA BAI & ORS. VS. CIT ( 1990) 181 ITR 400 (SC). 3. LD. CIT(A), AFTER CONSIDERING THE ASSESSEES SUB MISSIONS, HELD THAT THE ENHANCED COMPENSATION WAS IN RESPECT OF AGRICUL TURAL LAND AS PRESCRIBED FOR EXEMPTION U/S 10(37). HE FURTHER OBSERVED THAT AS PER EXPLANATION TO SECTION 10(37), THE ENHANCED COMPENSATION WAS ALSO EXEMPT FROM TAX. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- 1. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.38,53,088/- WHICH HAS B EEN TREATED AS TAXABLE BY THE ASSESSING OFFICER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN TREATING THE LAND UNDER REFERENCE AS AGRICULTURAL L AND, THE SAME BEING WITHIN THE NOTIFIED MUNICIPALITY OF MCD & THEREFORE DOES NOT F ALL WITHIN THE MEANING OF AGRICULTURAL LAND AS DEFINED U/S 2(14) OF THE INCOM E-TAX ACT, 1961. 3. THE APPELLANT CRAVES TO LEAVE, TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 4. LD. DR REFERRED TO SECTION 56(2)(VIII) INSERTED BY THE FINANCE (NO.2) ACT, 2009 W.E.F. 01.04.2010, WHICH READS AS UNDER : - 4 ITA NO.3642/DEL/2015 56. (1) . (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GEN ERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOMES, SHALL BE CH ARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES', NAMELY : . (VIII) INCOME BY WAY OF INTEREST RECEIVED ON COMPEN SATION OR ON ENHANCED COMPENSATION REFERRED TO IN CLAUSE (B) OF SECTION 145A; HE, THEREFORE, SUBMITTED THAT INTEREST RECEIVED BY ASSESSEE IS TAXABLE. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AFOREMENTIONED SECTION IS NOT APPLICABLE IN THIS CASE BECAUSE THE ASSESSMENT YEAR INVOLVED IS ASSESSMENT YEAR 2007-08. 6. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE RECORD OF THE CASE. ADMITTEDLY, THE COMPENSATION H AS BEEN RECEIVED IN FINANCIAL YEAR 2006-07 AND, THEREFORE, LD. DRS CON TENTION OF APPLICABILITY OF SECTION 56(2)(VIII), INSERTED W.E.F. 1.4.10, FOR A. Y. 2007-08 CANNOT BE ACCEPTED AS IT AFFECTS THE SUBSTANTIAL RIGHT OF ASS ESSEE. ADMITTEDLY, THE LAND UNDER CONSIDERATION FALLS UNDER THE AREA OF ROHINI AND WAS IN STATE OF DELHI OR IS PART OF STATE OF DELHI AND, THEREFORE, THIS L AND WAS SITUATED IN ANY AREA REFERRED TO IN ITEM (A) OR ITEM (B) OF SUB-CLAUSE ( III) OF CLAUSE (14) OF SECTION 2. THE LAND ADMITTEDLY WAS USED FOR AGRICULTURAL P URPOSES BY THE INDIVIDUAL AND HIS PARENTS AND OTHER FAMILY MEMBERS. UNDER TH ESE CIRCUMSTANCES, THE 5 ITA NO.3642/DEL/2015 ASSESSEE WAS ENTITLED FOR EXEMPTION U/S 10(37). I DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). 7. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF FEBRUARY, 2017. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED : 28-02-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI