SHRI UDAY GOVINDRAO GANAR, Nagpur V. ITO, WARD-5(3), Nagpur

ITA 39/NAG/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2184 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P G MUDLIAR
• Assessee Lawyers: P N WAGHMARE

Judgement Text

1 ITA NO. 39/NAG/2014 . IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.39/NAG/2014. ASSESSMENT YEAR : 2009 - 10. SHRI UDAY GOVINDRAO GANAR, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 5(3), NAGPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI P.N. WAGHMARE. RESPONDENT BY : SHRI S.P.G. MUDLIAR. DATE OF HEARING : 31 - 05 - 2016 DATE OF PRONOUNCEMENT : 2 ND JUNE, 2016 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 05 - 11 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT THE AMOUNT OF RS.11,62,259/ - RECEIVED BY THE ASSES SEE FROM THE GOVERNMENT ON COMPULSORY ACQUISITION OF AGRICULTURAL LAND IS NOT COVERED U/S 10(37) OF THE I.T. ACT. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : RETURN OF INCOME DECLARING INCOME OF RS.5,41,500/ - WAS FILED ON 31.03.2010. DURING THE COURSE OF AS SESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT THE APPELLANT HAD DECLARED GROSS RECEIPTS AMOUNTING TO RS.48,08,316/ - ON ACCOUNT OF ACQUISITION OF 1.42 HECTARES OF LAND SITUATED AT MOUZA SHIVANGAON BY GOVERNMENT FOR MIHAN PURPOSE. THE APPELLANT HAD CLAIM ED EXEMPTION IN 2 ITA NO. 39/NAG/2014 . RESPECT OF CAPITAL GAIN ARISING ON THE SAID PROPERTY U/S.54B ON THE GROUND THAT THE ENTIRE AMOUNT WAS SPENT ON ACQUISITION OF ANOTHER AGRICULTURAL LAND. HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT WITHDREW HIS CLAIM F OR EXEMPTION MADE U/S.54B AND STATED THAT THE SAID FUNDS RECEIVED WERE EXEMPT UNDER THE PROVISIONS OF SECTION 10(37). THE AO EXAMINED THE VARIOUS CONDITIONS THAT WERE REQUIRED TO BE MET BY THE APPELLANT TO BE ELIGIBLE FOR DEDUCTION U/S.10 (37) AND CAME TO THE CONCLUSION THAT THE SAID EXEMPTION U/S.10 (37) WOULD NOT BE AVAILABLE TO THE APPELLANT IN RESPECT OF .54 HECTERES AND .10 HECTORS OF LAND WHICH WAS ACQUIRED BY THE GOVERNMENT FOR RS.11,62,259/ - AND RS.1,60,707/ - RESPECTIVELY. IT WAS FURTHER NOTED BY T HE AO THAT ONE OF THE PRIMARY CONDITIONS FOR ALLOWING DEDUCTION U/S.10 (37) IS THAT THE LAND IN QUESTION SHOULD HAVE BEEN USED FOR AGRICULTURAL PURPOSES FOR A PERIOD OF 2 YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER AND THAT IN RESPECT OF .54 HECTARES OF LAND IT WAS EVIDENT FROM THE 7/12 EXTRACT ITSELF THAT THE LAND HAD BEEN CULTIVATED FOR AGRICULTURAL PURPOSES IN FY 2006 - 07 WHILE THERE WAS NO AGRICULTURAL ACTIVITY CARRIED OUT FOR FY 2007 - 08. IN RESPECT OF .10 HECTARES OF LAND IT WAS NOTED BY THE AO T HAT NO AGRICULTURAL ACTIVITY COULD BE CARRIED OUT AS THE SAID PROPERTY HAD A HOUSE/SHED LOCATED OVER IT AND HENCE WOULD NOT BE ELIGIBLE FOR EXEMPTION U/S.10 (37). 2.1 IT WAS EXPLAINED BY THE APPELLANT BEFORE THE AO THAT THE SAID LAND ADMEASURING .54 HECTA RES WAS ACQUIRED IN THE MONTH OF FEBRUARY 2008 AND HENCE THE LAND WAS NOT AVAILABLE FOR CULTIVATION AND NO AGRICULTURAL INCOME WAS SHOWN DURING THE AY 2009 - 10 AND THAT THOUGH THE LAND WAS SHOW AS PADIT IN 7/12 RECORD AND THE SAME WAS USED FOR GROWING GRA SS AND CATTLE FEEDING. IN RESPECT OF .10 HECTARES OF LAND IT WAS EXPLAINED BY THE APPELLANT THAT THERE WAS CATTLE SHED FOR STAY OF CATTLE AND NEVER USED AS A RESIDENTIAL HOME BY THE APPELLANT. 2.2 THE AO, HOWEVER , DID NOT AGREE WITH THE SUBMISSION MADE BY THE APPELLANT AND WITHDRAW THE CLAIM OF EXEMPTION MADE IN RESPECT OF THE SAID TWO 3 ITA NO. 39/NAG/2014 . PIECES OF LANDS WHICH RESULTED IN ADDITION OF RS.11,62,259/ - AND RS.1,60,707/ - RESPECTIVELY. 3. BEFORE THE LEARNED CIT(APPEALS) , THE APPELLANT HAS REITERATED THE SAME FACTS THAT WERE STATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS STATED THAT IN RESPECT OF .54 HECTARES OF LAND, THE SAME WAS ACQUIRED ON 18 - 02 - 2008 IN FINANCIAL YEAR 2007 - 08 CORRESPONDING TO ASSESSMENT YEAR 2008 - 09 AND HENCE THE USE OF THE SAID LAND IN 7/12 EXTRACT IS SHOWN AS SOYABEAN IN F.Y. 2006 - 07 AND (PADIT) GRASS IN F.Y. 2007 - 08. ALSO IN RESPECT OF .10 HECTARES OF LAND IT WAS SUBMITTED BY THE APPELLANT THAT IT WAS ONLY MEANT FOR CATTLE WHICH IS REGULARLY USE FOR AGRICULTURAL ACTIVITIES AND ALSO FOR STORING CATTLE FODDER AND NOT MEANT FOR RESIDENTIAL PURPOSES AS THE ASSESSEE IS STAYING IN THE HOUSE AT UJJWAL NAGAR. THE LEARNED CIT(APPEALS) HELD AS UNDER : 5 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS OF THE APP ELLANT. IN RESPECT OF .54 HECTARES OF LAND, IT IS EVIDENT THAT THE BASIC CONDITION THAT THE SAID LAND SHOULD HAVE BEEN USED FOR AGRICULTURAL PURPOSES IN THE TWO IMMEDIATELY PRECEDING YEARS BEFORE THE DATE OF TRANSFER HAS NOT BEEN MADE. THE SAID LAND AS PER THE SUBMISSION OF THE APPELLANT WENT INTO ACQUISITION IN THE MONTH OF FEBRUARY,2008 AND THE ONUS IS ON THE APPELLANT TO ESTABLISH THAT THE SAID PIECE OF LAND WAS USED FOR AGRICULTURAL PURPOSES IN FY 2006 - 07 AND FY 2007 - 08. ADMITTEDLY IN FY 2007 - 08, NO AGR ICULTURAL ACTIVITIES WHAT SO EVER WAS CARRIED OUT ON THE SAID PIECE OF LAND. SPONTANEOUS GROWTH ON LAND WITHOUT INTERVENTION OF HUMAN AGENCY IS DEFINITELY NOT AGRICULTURAL INCOME. CONSEQUENTLY I SEE NO INFIRMITY IN THE CONCLUSION OF THE LD. AO THAT THE REC EIPTS ON ACCOUNT OF ACQUISITION OF .54 HECTARES OF LAND WOULD NOT BE ENTITLED TO EXEMPTION U/S 10(37). IN VIEW OF THE SAME THE DISALLOWANCE MADE BY THE LD. AO IN THIS REGARD IS HEREBY UPHELD. 5.1 EVEN IN RESPECT OF .10 HECTARES OF LAND IT IS AN ADMITTED F ACT THAT NO AGRICULTURAL ACTIVITIES HAS BEEN CARRIED OUT IN THE SAID PIECE OF LAND. THERE IS A STRUCTURE LOCATED IN THE SAID PIECE OF 4 ITA NO. 39/NAG/2014 . LAND WHICH IS CLAIMED TO BE USED BY THE APPELLANT FOR STORING CATTLE FODDER AND AGRICULTURAL PRODUCE. IN ANY CASE SUCH USE S OF LAND CANNOT BE HELD TO BE USED FOR AGRICULTURAL PURPOSES. USEAGE OF PIECE OF LAND FOR THE STAY OF CATTLE CANNOT BE EQUATED WITH USEAGE FOR AGRICULTURAL PURPOSES AND HENCE THE APPELLANT WOULD NOT BE ENTITLED TO CLAIM FOR EXEMPTION U/S.10(37) FOR THIS PIECE OF LAND ALSO. 4. AGAINST THE ABOVE ORDER THE ASSESSEE HAS FILED AN APPEAL. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. IN THIS REGARD WE MAY GAINFULLY REFER TO SECTION 10(37) OF THE I.T. ACT WHICH IS AS FOLLOWS: (37) IN THE CASE OF AN ASSESSEE, BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, ANY INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS ARISING FROM THE TRANSFER OF AGRICULTURAL LAND, WHERE - (I) 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; (II) SUCH LAND, DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER WAS BEING USED FOR AGRICULTURAL PURPOSES BY SUCH HINDU UNDIVIDED FAMILY OR INDIVIDUAL OR A PARENT OF HIS; (III) SUCH TRANSFER IS BY WAY OF COMPULSORY ACQUISITION UNDE R ANY LAW, OR A TRANSFER THE CONSIDERATION FOR WHICH IS DETERMINED OR APPROVED BY THE CENTRAL GOVERNMENT OR THE RESERVE BANK OF INDIA; (IV) SUCH INCOME HAS ARISEN FROM THE COMPENSATION OR CONSIDERATION FOR SUCH TRANSFER RECEIV ED BY SUCH ASSESSEE ON OR AFTER THE 1 ST DAY OF APRIL, 2004. EXPLANATION FOR THE PURPOSES OF THIS CLAUSE, THE EXPRESSION COMPENSATION OR CONSIDERATION INCLUDES THE COMPENSATION OR CONSIDERATION ENHANCED OR FURTHER ENHANCED BY ANY COURT, TRIBUNAL OR OTHE R AUTHORITY. 6. WE FIND THAT IN THE PRESENT CASE THE ASSESSEES CLAIM HAS BEEN DENIED ONLY ON THE GROUND THAT FOR FINANCIAL YEAR 2007 - 08 EVIDENCE OF AGRICULTURAL ACTIVITY BEING CARRIED OUT WAS NOT PRODUCED. WE NOTE THAT THE SAID LAND WAS ACQUIRED ON 18 - 02 - 2008. FOR FINANCIAL YEAR 2006 - 07 THE 7/12 EXTRACT SHOWED THE SAME FOR BEING CULTIVATED FOR SOYAB EAN . FOR FINANCIAL YEAR 2007 - 08 IT IS THE CLAIM OF THE ASSESSEE THAT ON 18 - 02 - 2008 THE LAND WAS COMPULSORILY ACQUIRED AND HENCE 5 ITA NO. 39/NAG/2014 . THEREAFTER THE ASSESSEE HAD NO RIGHT TO CULTIVATE THE SAID LAND. FURTHER MORE LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT 7/12 EXTRACTS ARE UPDATED IN AUGUST OF A CALENDAR YEAR. HENCE IT IS THE PLEA OF THE ASSESSEES COUNSEL THAT AFTER THE LAND HAVI NG BEEN ACQUIRED ON 18 - 02 - 2008 IT WAS NOT WITHIN THE ASSESSEES CONTROL TO ENSURE THAT THE ENTRIES IN 7/12 EXTRACT REFLECT THE AGRICULTURAL ACTIVITY DONE PRIOR TO ACQUISITION. 7. UPON CAREFUL CONSIDERATION W E FIND CONSIDERABLE COGENCY IN THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE. ONLY REASON ATTRIBUTED BY THE AUTHORITIES BELOW IN DISALLOWING THE ASSESSEES CLAIM IS THAT FOR FINANCIAL YEAR 2007 - 08 THE 7/12 EXTRACT MENTIONED THE SAID LAND AS PADIT. THERE IS NO DISPUTE THAT IN EARLIER FINANCIAL YEA R THE SAME WAS UNDER CULTIVATION FOR SOYAB EA N . IN VIEW OF THE PRACTICAL POSITION THAT THE SAID LAND WAS ACQUIRED ON 18 - 02 - 2008 AND THE PRACTICE THAT 7/12 EXTRACTS ARE UPDATED IN AUGUST OF CALENDAR YEAR, MENTION OF PADIT IN THE REVENUE RECORDS UNDER THESE C IRCUMSTANCES CANNOT BE TAKEN AS A REASON TO DENY THE ASSESSEE THE EXEMPTION U/S 10(37), WHEN IT IS UNDISPUTED THAT ALL THE OTHER REQUIREMENTS OF ASSESSEES ELIGIBILITY IN THIS REGARD ARE DULY COMPLIED WITH. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND ALLOW THE ASSESSEES APPEAL. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF JUNE, 2016. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 2 ND JUNE, 2016. 6 ITA NO. 39/NAG/2014 . COPY FORWARDED TO : 1. SHRI UDAY GOVINDRAO GANAR, , PLOT NO. 26, PANCHATARA SOCIETY, MANSIH NAGAR, SOMALWADA, NAGPUR - 440015. 2. I.T.O., WARD - 5(3), NAGPUR. 3. C.I.T. III, NAGPUR. 4. CIT(APPEALS), - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.