Sh. Naresh Kumar, Jagadhari V. ITO, Yamunanagar

ITA 367/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2720 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Keywords: Capital asset; Additional evidence; Fair market value; Reassessment proceedings
• Section: 54B; 2(14); 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.367/CHD/2017 (ASSESSMENT YEAR : 2007-08) SH.NARESH KUMAR, VS. THE INCOME TAX OFFICER, VILLAGE SUDHAL, WARD 2, JAGADHARI. YAMUNA NAGAR. PAN: BQUPK4845C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOYAL, CA RESPONDENT BY : MS.GEETINDER MANN, SR.DR DATE OF HEARING : 31.07.2018 DATE OF PRONOUNCEMENT : 10.08.2018 ORDER PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S), PANCHKULA DATED 5.8.2016 RELATING TO ASSESSMENT YEA R 2007-08. THE SOLE ISSUE IN THE PRESENT APPEAL PERTAINS TO TAXABILITY OF CAPITAL GAINS EARNED BY THE ASSESSEE ON SALE OF LAND OWNED BY HIM. 2. BRIEFLY STATED THE AO PASSED ASSESSMENT ORDER U /S 147 R.W.S 144 OF THE ACT MAKING ADDITION OF CAPITAL GAI N EARNED BY THE ASSESSEE, AMOUNTING TO RS. L,04,44,875/- , ON LAND SOLD BY HIM. THE ASSESSING OFFICER HAD INFORMATIO N THAT THE ASSESSEE, SH. NARESH KUMAR S/O SH. GURMUKH SINGH, V ILLAGE SUDHAL. TEHSIL JAGADHRI, YAMUNA NAGAR, HAD SOLD HIS LAND ITA NO.367/CHD/2017 A.Y.2007-08 2 MEASURING 39 KANAL 6 MARLA TO M/S BHAGIRATI REALTOR PVT. LTD., NEW DELHI, MARFAT SH. ANIL KUMAR FOR RS.2,13, 93,937/- THROUGH A REGISTERED SALE DEED DATED 25.08.2006 AND HAD EARNED LONG TERM CAPITAL GAINS BECAUSE THE LAND SOL D WAS WITHIN THE AMBIT OF CAPITAL ASSETS AS PER PROVISION S OF SECTION 2(14) OF THE ACT, AS DISTANCE OF LAND SOLD BY THE ASSESSEE WAS WITHIN 8 KM FROM THE MUNICIPAL LIMIT O F JAGADHRI. INFORMATION REGARDING FAIR MARKET VALUE O F LAND DURING THE YEAR 1981-82 WAS CALLED BY ASSESSING OFF ICER FROM THE SUB REGISTRAR, JAGADHRI, WHICH WAS APPLIE D FOR COMPUTING THE LONG TERM CAPITAL GAIN AND SINCE THE ASSESSEE HAD NOT DISCHARGED TAX LIABILITY ON THE LONG TERM C APITAL GAINS, THE ASSESSING OFFICER RECORDED REASONS TO BE LIEVE THAT LONG TERM CAPITAL GAIN EARNED DURING THE IMPUGNED ASSESSMENT YEAR HAD ESCAPED ASSESSMENT. THEREAFTER REASSESSMENT PROCEEDINGS WERE INITIATED BUT THE ASS ESSEE DID NOT COMPLY WITH ANY OF THE NOTICES SERVED. THE ASSE SSING OFFICER THEREAFTER PROCEEDED TO FRAME THE ASSESSME NT ON THE BASIS OF INFORMATION IN HIS POSSESSION. HE NOTED TH AT THE ASSESSEE HAS RECEIVED RS.1,06,96,969/-( L / 2 SHARE OF RS.2,13,93,937/-) ON THE SALE OF HIS LAND, AND AFT ER GIVING CREDIT OF INDEX COST OF RS.2,53,094/-, FOR THE SAID LAND AS ON 01.04.1981 , COMPUTED THE LONG TERM CAPITAL GAIN EA RNED BY THE ASSESSEE AT RS.1,04,44, 875/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE AND ASSESSED UNDER THE HEAD LONG TERM CAPITAL GAIN. ITA NO.367/CHD/2017 A.Y.2007-08 3 3. BEFORE THE LD.CIT(APPEALS), THE ASSESSEE CLAIMED THAT THE PROPERTY BELONGED TO HUF OF THE ASSESSEE BEING ANCESTRAL PROPERTY. THE LD.CIT(APPEALS) AFTER CONSIDERING THE FACTS ON RECORD THAT THE SALE DEED MENTIONED ASSESSEE IN HIS INDIVIDUAL CAPACITY, THAT THE AMOUNT OF SALE CONSID ERATION WAS RECEIVED IN THE INDIVIDUAL BANK ACCOUNT OF THE ASSESSEE, THAT NO OBJECTION WAS RAISED TO THE ISSUE OF NOTICE IN THE NAME OF THE INDIVIDUAL ASSESSEE , THAT NO RETURN SH OWING CAPITAL GAIN IN THE HANDS OF THE HUF WAS FILED , NO COPY OF MUTATION WAS FILED IN THE NAME OF HUF OF THE ASSES SEE AND FURTHER ON NOTING THAT ON INHERITANCE OF PROPERTY F ROM FATHER IT DOES NOT DEVOLVE TO THE HUF, REJECTED THIS PLEA OF THE ASSESSEE THAT THE CAPITAL GAIN WAS TO BE ASSESSED I N THE HANDS OF THE ASSESSEES HUF AND THE APPEAL OF THE A SSESSEE WAS, THEREFORE, DISMISSED. 4. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING FOLLOWING GROUNDS: 1. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS IN REOPENING THE ASSESSMENT U/S 148. 2. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND FA CTS IN CONFIRMING AN ADDITION OF RS.1,04,44,875/- BEING LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURE LAND MEASURING 39 KANAL 6 MARLA FOR A CONSIDERATION OF RS.1,06,96,9697- IN THE INDIVIDUAL HANDS OF ASSESSEE WHEREAS THE LAND IN QUESTION WAS AN HUF PROPERTY. 3. THAT LEARNED CIT (APPEALS) HAS ERRED IN LAW AND F ACTS IN ADOPTING INDEXED COST OF LAND VALUED ON THE BASIS OF LAND VALUE ON 1-4-1981 AT RS. 2,52,094/-. ITA NO.367/CHD/2017 A.Y.2007-08 4 4. THAT LEARNED CIT (APPEALS) HAS ERRED IN LAW AND FA CTS IN CONFIRMING THE AO ACTION BY NOT ALLOWING THE BEN EFIT OF IMPROVEMENT COST OF LAND. 5. THAT LEARNED CIT (APPEALS) HAS ERRED IN LAW AND FA CT IN NOT ALLOWING THE DEDUCTION U/S 54B/54F AS PER THE PROVISIONS OF LAW. 6. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR TO SUBSTITUTE THE ABOVE GROUNDS OF APPEAL EITHER BEFOR E OR AT THE TIME OF HEARING OF CASE. 5. AT THE OUTSET LD.COUNSEL FOR THE ASSESSEE STATED THAT IDENTICAL ISSUE WHICH AROSE IN THE CASE OF HIS BROT HER SH.VIRENDER KUMAR, WHO WAS OWNER OF HALF OF THE LAN D SOLD, HAD BEEN DECIDED BY THE ITAT IN ITS ORDER IN ITA NO.1322/CHD/2017 DATED 20.03.18. COPY OF THE ORDER WAS PLACED BEFORE US. DRAWING ATTENTION TO THE SAME LD. COUNSEL FOR THE ASSESSEE STATED THAT IN THE SAID CASE ADDIT IONAL EVIDENCES OF PURCHASE OF AGRICULTURAL LAND WERE FI LED BEFORE THE ITAT IN SUPPORT OF THE ASSESSES CLAIM OF EXEM PTION U/S 54B/54F OF THE ACT, WHICH HAD BEEN ADMITTED BY THE ITAT TAKING NOTE OF THE STATEMENT OF THE ASSESSEE ON OAT H THAT THE SAME COULD NOT BE FILED EARLIER ON ACCOUNT OF THE I GNORANCE OF THE ASSESSEE, BEING AN AGRICULTURIST WHO HAD NEV ER FILED RETURNS IN THE PAST AND HAD ACTED ON THE ADVICE OF AN ADVOCATE THAT NO TAX WAS LEVIABLE ON THE CAPITAL GA IN EARNED SINCE THE LAND WAS NOT A CAPITAL ASSET BEING LOCATE D OUTSIDE MUNICIPAL LIMITS. OUR ATTENTION WAS DRAWN TO THE RE LEVANT FINDINGS OF THE ITAT AT PARA 6 OF ITS ORDER AS UNDE R: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT IN THE FA CTS OF THE PRESENT CASE, THE ASSESSEE RECEIVED SALE CONSIDERATIO N OF RS. 1,06,96,969/- AND THE ASSESSEE DID PUT-FORTH THE CLAIM B EFORE THE CIT(A) THAT AFTER THE DEMISE OF HIS FATHER SHRI GURMUKH SINGH WHO HAD INHERITED THE LAND FROM SHRI BAKHTAWAR SINGH WHEREIN AT TIMES THE NAME OF THE FATHER OF SHRI GURM UKH ITA NO.367/CHD/2017 A.Y.2007-08 5 SINGH, THE NAME OF SHRI DES RAJ HAS WRITTEN AS HE WA S HIS BIOLOGICAL FATHER AS SHRI GURMUKH SINGH HAD BEEN ADOP TED BY SHRI BAKHTAWAR SINGH WHO IN-TURN HAD INHERITED THE LAN D FROM HIS FATHER SHRI MARU RAM IN 1965 AS PER THE ASSESSM ENTS MADE. THE CORRECTNESS OF THESE IS NOT BEING DECIDED IN THE PRESENT PROCEEDINGS. THE FACT REMAINS THAT RELATED ISSUES ARE STATED TO BE ADDRESSED IN THE APPEAL OF SHRI NARESH KUMAR, I.E. THE CASE OF THE BROTHER OF THE ASSESSEE IN 2007-0 8 ASSESSMENT YEAR ON WHICH RELIANCE HAS BEEN PLACED BY THE CIT(A). IT IS NOT KNOWN WHETHER THE RELIEF UNDER SECTI ON 54B WAS AN ISSUE THEREIN OR NOT. THE FRESH EVIDENCES WHI CH THE ASSESSEE SEEKS TO FILE IN THE PRESENT PROCEEDINGS WH ICH CONSISTS OF COPY OF PURCHASE OF LAND 98 KANAL 19 MARL A FOR RS. 43,29,063/- (PAGE 19-23), COPY OF PURCHASE OF LAND 605 KANAL FOR RS. 2,80,59,238/- (PAGE 24-33) AND COPY OF PURCHASE OF LAND AND AGREEMENT TO SELL FOR RS. 1,13,42,650 /- ( PAGE 34-42). THE FRESH EVIDENCES IN THE LIGHT OF THE DECISION OF THE HIGH COURT IN THE CASE OF TEXT HUNDRED INDIA PVT . LTD. IS ADMITTED AND THE ISSUE IS RESTORED BACK TO THE FILE O F THE AO WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCO RDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNIT Y OF BEING HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT IN TH E PRESENT CASE ALSO THE LIMITED PRAYER WAS THE SAME T HAT THE ASSESSEE BE ALLOWED TO FILE ADDITIONAL EVIDENCES CO NSISTING OF EVIDENCES OF PURCHASE OF LAND ,PLACED AT PAPER BOOK SR.NO.6- 8 IN SUPPORT OF ITS CLAIM OF EXEMPTION U/S 54B/54F OF THE ACT, ON ACCOUNT OF THE SAME. LD.COUNSEL FOR THE ASS ESSEE STATED THAT ITS PRAYER WAS SUPPORTED BY COPY OF AFF IDAVIT PLACED AT PAPER BOOK PAGE NO.4. OUR ATTENTION WAS D RAWN TO THE AFFIDAVIT WHICH READ AS UNDER: 1. THAT I AM AN AGRICULTURIST AND AGRICULTURE OPERATIO NS IS MY ONLY SOURCE OF INCOME. THAT DURING THE YEAR 1-4- 2006 TO 31-3-2007.IHADSOLDMYJOINTANCESTRAL LAND HELD IN THE NAME OF NARESH KUMAR AND VIRENDER KUMAR MEASURING 39 KANAL 06 MARIA TO BHAGIRATHI REALTORS PRIVATE LIMITED FOR A CONSIDERATION OF RS.2,13,93,937/- ON 25-8-2006. 2. THAT I HAVE NOT FILED MY INCOME TAX RETURNS AS NO INCO ME WAS CHARGEABLE TO TAX AS PER MY UNDERSTANDING. THAT ON RECEIPT OF NOTICES FROM INCOME TAX DEPARTMENT I SOUG HT ADVICE FROM ADVOCATE WHO WAS PRACTICING IN CIVIL COUR TS ADVISED THAT AS THE LAND WHICH HAD BEEN SOLD BY ME ITA NO.367/CHD/2017 A.Y.2007-08 6 IS OUTSIDE LIMITS AND IS USED FOR AGRICULTURE OPERATI ONS AND THE SALE OF THE SAME DO NOT ATTRACT ANY INCOME TAX. 3. THAT I HAD INVESTED RS.1,01,74,126/- IN PURCHASE OF OTHE R AGRICULTURE LAND PURSUANT TO SALE OF AGRICULTURE LAN D IN QUESTION DETAILED IN PARA 1 ABOVE. 4. THAT I SHOULD BE ALLOWED TO FILE SALE DEED AND AGREEMENT S WHICH WERE NOT FILED EARLIER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 7. LD.COUNSEL FOR THE ASSESSEE STATED THAT THE ISS UE BEING IDENTICAL TO THAT OF HIS BROTHER IT WAS SQUARELY CO VERED BY THE ORDER OF THE ITAT IN THE CASE OF THE BROTHER SH .VIRENDER KUMAR. 8. THE LD. DR FAIRLY CONCEDED THAT THE ISSUE AND FA CTS IN THE PRESENT CASE WERE IDENTICAL TO THE FACTS IN THE CASE OF SHRI VIRENDER KUMAR (SUPRA) WHO, IT WAS ADMITTED BY THE LD. DR, WAS THE BROTHER OF THE ASSESSEE, WHO HAD INHERI TED HALF SHARE OF THE PROPERTY WHICH WAS SOLD BY BOTH OF THE M. 9. IN VIEW OF THE ADMITTED POSITION THAT THE ISSUE AND FACTS IN THE PRESENT CASE ARE IDENTICAL TO THAT IN THE CA SE OF SHRI VIRENDER KUMAR (SUPRA), WHICH HAS BEEN DECIDED BY T HE I.T.A.T. IN ITA NO.1322/CHD/2017 DATED 20.3.2018 ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE AND THEREAFTER RESTORING THE ISSUE BACK TO THE ASSESSIN G OFFICER FOR ADJUDICATION, THE SAID DECISION, WE HOLD, APPLI ES SQUARELY TO THE PRESENT CASE ALSO. ACCORDINGLY WE ADMIT THE ADDITIONAL EVIDENCES IN THE PRESENT CASE ALSO AND RESTORE THE ISSUE TO THE ASSESSING OFFICER WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPOR TUNITY OF HEARING TO THE ASSESSEE. ITA NO.367/CHD/2017 A.Y.2007-08 7 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH AUGUST, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH