ITO 31(2)(4), MUMBAI V. NARENDRA SHANTILAL SHAH, MUMBAI

ITA 3724/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8359 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIR HARIOM TULSAIN
• Assessee Lawyers: ARJU GARODIA
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3724/MUM./2015 ( ASSESSMENT YEAR : 2011 - 12 ) ITO 31(2)(4), ROOM NO. 704, C - 11, PRATYAKSHKAR BHAVAN, BKC BANDRA MUMBAI 400 051 . APPELLANT V/S NARENDRA SHANTILAL PARIKH 304 TRIUMPH ESTATE WESTERN EXPRESS HIGHWAY, GOR E GOAN (E) MUMBAI 400 063 PAN AACPP7818B . RESPONDENT ASSESSEE BY : MS. ARJU GARODIA REVENUE BY : SHIR. HARIOM TULSAIN DATE OF HEARING 22.02.2017 DATE OF ORDER 24.02.2017 O R D E R PER: SHAMIM YAHYA THIS APPEAL ABOVE REVENUE IS DIRECTED AGAINST ORDER OF LEARNED CIT - A DATED 24/3/2015, AND PERTAINS TO ASSESSMENT YEAR 2011 12. 2. THE GROUNDS OF APPEAL READ AS UNDER; 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 97,66,866/ - MADE NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 2 ON ACCOUNT OF LONG TERM CAPITAL GAIN IGNORING THE FACT THAT THE TOWN PLANNER, VODODARA URBAN DEVELOPMENT AUTHORITY HAS SUBMITTED THAT THE LAND SOLD BY THE ASSESSEE IS FAILING WITHIN THE LIMITS OF VADODARA URBAN DEVELOPMENT AUTHORITY AND IT IS LOCATED AROUN D 6 KM AWAY FROM THE VADODARA MUNICIPAL LIMIT. IT IS ALSO SUBMITTED BY VUDA THAT AS PER THE SECOND REVISED DEVELOPMENT PLAN OF AUTHORITY, THE LAND IS FAILING UNDER THE RESIDENTIAL ZONE R - 2. THE APPELLANT RAYS THAT THE ORDER OF THE CIT - A BE SET ASIDE AND MA TTER MAY DECIDE D ACCORDINGLY TO LAW. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD NEW GROUND WHICH MAY BE NECESSARY. 3. BRIEF FACTS OF THE CASE AS UNDER; I) THE APPELLANT FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,51,088. THROUGH THE AIR REPORT, THE AO WAS INFORMED THAT THE APPELLANT SOLD A PLOT OF LAND AT MOJECHANSAD VIDE SALE DEED DATED 03.03.2011 FOR A TOTAL CONSIDERATION OF RS.1 CRORE. THE APPELLANT SUBMITTED THAT IT WAS AN AGRICULTURAL LAND SOLD IN AY 2012 - 13 FOR WHIC H ADVANCE OF RS.48.50 LACS WAS RECEIVED IN AY 2011 - 12. THE APPELLANT ALSO SUBMITTED A COPY OF THE AGREEMENT WITH THE AO. THE AO CALLED FOR INFORMATION FROM VADODRA URBAN DEVELOPMENT AUTHORITY (VUDA) WHEREIN IT WAS MEN TIONED THAT THE LAND WAS FALLING WITH T HE LIMITS OF VUDA OUTSIDE THE VMSS LIMIT AND IS LOCATED AROUND 6 KMS AWAY FROM NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 3 VADODRA MUNICIPAL LIMITS. AS PER THE SECOND REVISED DEVELOPMENT PLAN OF THE AUTHORITY, THIS LAND WAS FALLING UNDER THE RESIDENTIAL ZONE R - 2. THE AO OBSERVED THAT THE CERTIFICATE OF TALATHI ONLY REFERRED THAT THE LAND IS APPROX 16 KMS FROM VADODRA BUT DOES NOT MENTION THE DISTANCE FROM THE LOCAL LIMIT OF MUNICIPALITY. FURTHER , THE APPELLANT ALSO FAILED TO SUBMIT THE PROOF REGARDING WHETHER THE POPULATION OF 3293 AS MENTIONED IN TH E CERTIFICATE OF CHANSAD GRAM PANCHAYAT WAS AS PER THE LAST PRECEDING CENSUS. THE APPELLANT HAS GOT AN APPRECIATION OF HUNDRED TIMES WITHIN A SPAN OF 15 YEARS WHICH ONLY HAPPENS IN THE CASE OF URBAN LAND. THUS, RELYING ON THESE OBSERVATIONS, THE AO CONCLUD ED THAT THE LAND SOLD IN QUESTION IS NOT AN AGRICULTURAL LAND AS PER SECTI ON 2( 14) ( III) AND HENCE, THE LONG TERM CAPITAL GAINS ARISING ON THE SAME OF RS.97,66,886 IS TAXABLE. 4. UPON ASSESSEES APPEAL LD. CIT - A DELETED THE ADDITION HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, IMPUGNED ASSESSMENT ORDER AND THE MATER IAL AVAILABLE ON RECORD AND THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT WHICH HAVE BEEN ADMITTED AS PER RULE 46A. AS PER SECTION 2(14)( III), AN AGRICULTURAL LAND IS CONSIDERED TO BE A LAND WHICH IS NOT WITHIN 8 NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 4 KMS FROM THE LOCAL LIMITS OF MUNICIPALITY OR EQUIVALENT AUTHORITY AND THE POPULATION OUGHT TO BE LESS THAN 10000 AS PER THE LAST PRECEDING CENSUS FIGURES WHICH ARE PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR. THE APPELLANT HAS SUBMITTED THE LETTER OF TALATHI OF CHANSAD GRAM PANCHAYAT WHO HAS CERTIFIED THAT THE POPULATION IS ONLY 3293. FURTHER, THE APPELLANT ALSO SUBMITTED THE LETTER DATED 30.01.2014 FROM EXECUTIVE ENGINEER, CITY ROAD, BUILDING DEPARTMENT, VADODRA WHO HAS TESTIFIED THAT CHANSAD LAND IS OUTSIDE THE MUNICIPAL LIMITS. THE APPELLANT ALSO SUBMITTED THE FOLLOWING IN SUPPORT OF HIS CLAIM THAT THE ROAD DISTANCE OF CHANSAD LAND IS MORE THAN 8 KMS FROM BOUNDARIES OF VADODARA MUNICIPALITY - A) CERTIFICATE DATED 28.01.2011 OF TALATHI, CHANSAD GRAM PANCHAYAT 28.01.2011; B) LETTER DATED 30.01.2014 OF EXECUTIVE ENGINEER OFFICE, CITY ROAD AND BUILDING \ DEPARTMENT, VADODARA; C) CERTIFICATE DATED 05.02.2014 OF SENIOR DE PARTMEN T TRANSPORT OFFICER, GUJARAT STATE ROAD HIGHWAYS CORPORATION DATED 05.02.2014; AND D) ARCHITECT CERTIFICATE DATED 25.02.2015 FOUNDED ON A MAP ISSUED BY VUDA [9.5 KMS]. NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 5 ON A PERUSAL OF ALL THESE DOCUMENTS WHICH ARE ISSUED FROM THE VARIOUS AUTHO RITIES, IT CAN BE SAFELY CONCLUDED THAT THE CHANSAD LAND SOLD BY THE APPELLANT IS BEYOND 8 KM FROM THE BOUNDARIES OF VADODRA MUNICIPALITY. THE APPELLANT HAS ALSO OBTAINED THE CLARIFICATION FROM THE VUDA VIDE LETTER DATED 20.01.2014 THAT ROAD DISTANCE IS NOT AVAILABLE ON RECORDS AND 6 KM IS BASED ON SCALING OF LINEAR DISTANCE. VUDA, IN FACT, REQUESTED THE APPELLANT VIDE LETTER DATED 25.02.2015 TO CONTACT EXECUTIVE ENGINEER OFFICE, CITY ROAD AND BUILDING DEPARTMENT, VADODRA FOR A CERTIFICATE AUTHENTICATING DISTANCE MEASURED IN TERMS OF APPROACH ROAD FORM THE LIMITS OF BARODA MUNICIPALITY TO CHARISAD LAND. THUS, THE RELIANCE PLACED BY THE AO ON THE VUDA LETTER CANNOT BE CONSIDERED. THE APPELLANT FURTHER SUBSTANTIATED THAT THE RESIDENTIAL ZONE WAS CREATED W. E.F. 18.01.2012 PRIOR TO WHICH IT WAS A AGRICULTURE ZONE IN CONFORMITY WITH THE LETTER. DATED 31.01.2015 ISSUED BY VUDA. THE APPELLANT HAD SOLD THE LAND VIDE THE SALE AGREEMENT DATED 03.03.2011 AND FULL AND FINAL CONSIDERATION WAS RECEIVED ON 19.10.2011 MU CH BEFORE CHANSAD LAND WAS CONVERTED INTO RESIDENTIAL ZONE ON 18.01.2012. CONSIDERING ALL THE FACTS AND THE DOCUMENTS SUBMITTED BY THE APPELLANT, I AM OF THE VIEW THAT THE CHANSAD LAND SOLD BY THE NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 6 APPELLANT IS AN AGRICULTURAL LAND AND HENCE, GAINS ARISIN G ON THE SAME IS NOT TAXABLE. ACCORDINGLY, I DIRE5T THE AO TO DELETE THE ADDITIONS MADE OF RS.97,66,886 AS LONG TERM CAPITAL GAINS. 5. AGAINST THE ABOVE ORDER REVENUE IS AN APPEAL BEFORE US. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LD. DR, SUBMITTED THAT LD. CIT - A HAS ADMITTED ADD ITIONAL EVIDENCES AND GRANTED RELIEF TO THE ASSESSEE ON THE BASIS OF THOSE ADDITIONAL DOCUM ENT S. S HE SUBMITTED THAT LD. CIT - A HAS NOT GRANTED OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL DOCUMENT. HENCE S HE SUBMITTED THAT THERE IS GROSS VIOLATION OF R ULE 46 A. H ENCE SHE PLEADED THAT THE MATTER BE RESTORED TO FILE OF THE AO TO EXAMINED THE ADDITIONAL DOCUMENT/EVIDENCES AND DECIDED ACCORDINGLY. 6. PER CONTRA LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE IS NO SPECIFIC GROUNDS RAISED BY THE REVENUE REG ARDING VIOLATION OF RULE 46 A. T HOUGH HE DIDNT DISPUTE THAT ADDITIONAL EV IDENCES ON THE BASIS OF WHICH LD. CIT - A HAS GRANTED RELIEF WERE NOT BEFORE THE ASSESSING OFFICER. LD. COUNSEL SUBMITTED THAT THE LD. CIT - A HAS PASSED A PROPER ORDER AFTER DULY APPRECIATING THE NECESSARY EVIDENCES. 7. UPON CAREFUL CONSIDERATION WE NOTE TH AT THE ADDITIONAL DOCUMENTS/EVIDENCES ON THE BASIS OF WHICH LD. CIT - A HAS GRANTED RELIEF WERE ALL OBTAIN ED AFTER THE DATE OF ASSESSMENT ORDER. HENCE IT IS NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 7 CLEAR THAT THE S E DOCUMENT EVIDENCES WERE NOT BEFORE THE ASSESSING OFFICER. LD. CIT - A HAS NOT FOLLO WED THE PRESCRIPTION OF RULE 46 A OF GIVING THE ASSESSING OFFICER AN OPPORTUNITY TO EXAMINE OF COMMENT UPON THE SAME. WE FIND THAT HONBLE APEX COURT IN THE CASE OF KAPOOR CHAND SHRIMAL 131 ITR 451 HAD EXPOUNDED THAT AN APPELLATE AUTHORITY HAS THE JURISDIC TION AS WELL AS DUTY TO CORRECT ALL ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE, IF NECESSARY APPROPRIATE DIRECTION TO THE AUTHORITY AGAINST WHOSE DECISION THE APPEAL IS PREFERRED TO DISP OSE OFF THE WHOLE OR ANY PART OF THE MATTER AFRESH, UNLESS F O R BIDDEN FROM DOING SO BY THE STATUTE. IN ACCORDANCE WITH THE ABOVE CASE LAW WE CONSIDER IT APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE ADDITIONAL D OCUMENTS/EVIDENCES PRODUCE BEFORE THE LD. CIT - A. N EEDLESS TO ADD ASSESSEE SHOULD BE GRANTED PROPER OPPORTUNITY OF BEING HEARD. NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 8 IN THE RESU LT THIS APPEAL BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 . 02.2017 SD/ - SD/ - SANJAY GARG SHAMIM YAHIYA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 24 .02.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER NISHANT VERMA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI NARENDRA SHANTILAL PARIKH ITA NO. 3724/MUM./2015 9 DATE INITIAL 1. DRAFT DICTATED ON 22 .02.2017 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22 .02.2017 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23 .02.2017 SR.PS 6. DATE OF PRONOUNCEMENT 24 .02.2017 SR.PS 7. FILE SENT TO THE BENCH CLERK 24 .02.2017 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER