ACIT, New Delhi V. Shri Ram Kishan, New Delhi

ITA 399/DEL/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5810 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Cost of acquisition
• Section: 143(3); 54B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 399/DEL/2010 ASSESSMENT YEAR : 2005-06 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-27(1), ROOM NO.218, D-BLOCK, VIKAS BHAWAN NEW DELHI. VS. SHRI RAM KISHAN, VILLAGE & PO SAMALKHA, DELHI. PAN NO.ARKPK4393H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.K. LAL, SR. D.R. RESPONDENT BY : SHRI GAUTAM JAIN ORDER PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT(A) DATED 14.11.2009 FOR ASSESSMENT YEAR 200 5-06. 2. GROUND OF APPEAL READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN DELETING THE ADDITION OF RS.3 CRORES WITHOUT GIVING FINDINGS ON SUBSTANTIVE QUESTION OF LAND USAGE. 3. IMPUGNED ASSESSMENT ORDER IS PASSED U/S 144 OF I NCOME-TAX ACT, 1961(ACT) IN WHICH THE INCOME OF THE ASSESSEE HAS B EEN ASSESSED AT RS.3 CRORES ON THE BASIS OF AIR INFORMATION RECEIVE D BY THE ASSESSING OFFICER FROM THE CIT(CIB), DELHI VIDE REFERENCE NO.CIT(CIB) /DELHI/GSL10985. AS ON ITA NO.399/DEL/2010 2 THE SCHEDULED DATE OF HEARING, NOBODY ATTENDED AND NO REPLY WAS FILED, THEREFORE, THE ASSESSING OFFICER TREATED THE SAID AMOUNT AS IN COME OF THE ASSESSEE. 4. IN THE APPEAL FILED BEFORE THE CIT(A), IT WAS FO UND THAT ASSESSEE WAS ONE OF THE 33 CO-OWNERS OF AN AGRICULTURAL LAND SITUATE D AT SAMALKHA, WHICH WAS SOLD ON 3.12.2004 FOR A CONSIDERATION OF RS.6 CRORES. IT WAS ALSO FOUND THAT ASSESSEE WAS ENTITLED TO 1/36 TH SHARE IN THE ENTIRE SALE CONSIDERATION OF RS.6 CRO RES WHICH WAS AMOUNTING TO RS.16,66,667/-. THE LD. CIT(A) HA D CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER AND FOLLOWING FACTS WERE FOUND TO BE ANALYSED FROM THE SAID REPORT:- I) THE APPELLANT HAS SOLD AN AGRICULTURAL LAND, A C APITAL ASSET, ALONG WITH 32 CO-OWNERS AT VILLAGE SAMALKHA, DELHI ON 3.12.2004. II) THE SAID AGRICULTURAL LAND WAS SOLD FOR A TOTAL CONSIDERATION OF RS.6,00,00,000/- (RS.6 CRORES). THIS SALE CONSIDERA TION HAS TO BE DIVIDED AMONGST 33 CO-OWNERS IN ACCORDANCE WITH THEIR SHARE IN THE PROPERTY. THE SALE DEED FOR THE LAND SOLD BY THE APPELLANT ALONG WITH OTHER CO-OWNERS WAS EXECUTED I N TWO PARTS OF RS.3.00 CRORES EACH. III) ONLY 1/36 TH PART OF TOTAL SALE CONSIDERATION OF RS.6 CRORES I. E. RS.16,66,667/- IS ATTRIBUTABLE TO THE ASSESSEE. IV) IN THE SUBSEQUENT YEAR, THE APPELLANT ALONG WIT H HIS TWO BROTHERS HAS INVESTED THE SAID SALE PROCEEDS IN PUR CHASE OF THE AGRICULTURAL LAND FOR A TOTAL CONSIDERATION OF RS.3 7,50,000/- PLUS STAMP DUTY. THE SHARE OF THE APPELLANT IN THE INVES TMENT COMES TO RS.13,25,000/- IN ORDER TO CLAIM EXEMPTION U/S 5 4B OF THE ACT. ITA NO.399/DEL/2010 3 V) THE CASE OF SHRI SATYA NARAYAN VATS, S/O SHRI ME HAR CHAND, ONE OF THE 33 CO-OWNERS, FOR ASSESSMENT YEAR 2005- 06 WAS COMPLETED U/S 143(3) BY THE DAO-46/ INCOME TAX OFFI CER, WARD 34(4), NEW DELHI. IN THE SAID ASSESSMENT ORDER, TH E ASSESSING OFFICER HAS ACCEPTED THE ABOVE MENTIONED UNDISPUTED FACTS AND ASSESSED AT NIL INCOME. VI) THE CIT(A), XXII, NEW DELHI HAS ALSO ACCEPTED T HE ABOVE FACTS WHILE DECIDING THE APPEALS IN OTHER CO-OWNERS, NAME LY SHRI RAM NIWAS (A.NO. 204/07-08), SHRI VIJAY KUMAR (A.NO.205 /07-08), SMT. BUDHO (A. NO. 207/07-08). 5. IT WAS THE CASE OF THE ASSESSEE THAT AS THE AGR ICULTURAL LAND WAS SOLD AND AGAINST THE SALE CONSIDERATION ANOTHER AGRICULTURAL LAND WAS PURCHASED, THEREFORE, THE ASSESSEE WAS ENTITLED TO GET DEDUCTI ON U/S 54B OF THE ACT AND, THEREFORE, NO INCOME AS SUCH WAS ASSESSABLE IN THE HANDS OF THE ASSESSEE AS CAN BE SEEN FROM THE ANALYSIS OF REPORT. IT WAS ALS O THE SUBMISSION OF THE ASSESSEE THAT IN THE CASES OF ANOTHER CO-OWNERS, TH E CLAIM OF NIL INCOME WAS ACCEPTED BY THE DEPARTMENT EITHER BY WAY OF ORDER P ASSED U/S 143(3) OF THE ACT OR BY WAY OF AN APPEAL FILED BEFORE THE CIT(A). HO WEVER, CONSIDERING ALL THESE SUBMISSIONS, LD. CIT(A) HAS OBSERVED IN PARA 3.3 OF HIS ORDER THAT THE FACT TO BE VERIFIED IS WHETHER THE LAND SOLD WAS ACTUALLY USED FOR AGRICULTURAL PURPOSES BY THE ASSESSEE OR HIS PARENTS IN TWO YEARS IMMEDIATEL Y PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE FOR CLAIMING DEDUCTIO N U/S 54B OF THE ACT AND THE ASSESSEE WAS DIRECTED TO SUBMIT SUCH REQUISITE EVID ENCE IN THE FORM OF REPORT FROM THE RESPECTIVE REVENUE AUTHORITIES/PATWARI, WH O OFFICIALLY MAINTAINS THE ACTUAL LAND RECORDS IN THE SHAPE OF GIRDAWARI. THU S HE HAS RESTORED THE MATTER ITA NO.399/DEL/2010 4 BACK TO THE FILE OF THE ASSESSING OFFICER FIRSTLY T O DETERMINE THE USER OF AGRICULTURAL LAND FOR AGRICULTURAL PURPOSES BY THE ASSESSEE OR H IS PARENTS IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE OF SALE AND FURTHER FOR THE PURPOSE OF DETERMINING THE COST OF ACQUISITION AS ON 1.4.1981. HE HAS DIR ECTED THE ASSESSING OFFICER TO ADOPT CIRCLE RATE FIXED BY THE GOVERNMENT FOR STAMP DUTY PURPOSES FOR THAT AREA OR THE AVERAGE OF SALE PRICE PREVAILING IN THAT ARE A, WHICHEVER WAS HIGHER AND THEN TO DETERMINE THE INCOME UNDER THE HEAD CAPITAL GAINS AND DEDUCTION U/S 54B WAS DIRECTED TO BE ALLOWED SUBJECT TO FULFILLIN G THE CONDITIONS LAID DOWN IN THAT SECTION. THE DEPARTMENT IS AGGRIEVED AND HENCE RAI SED THE ABOVE-MENTIONED GROUND OF APPEAL. 6. IT WAS SUBMITTED BY THE LD. D.R. THAT LD. CIT(A) WAS WRONG IN SETTING ASIDE THE MATTER TO THE ASSESSING OFFICER AS, ACCORDING T O THE LD. D.R., NO SUCH POWER IS VESTED IN THE CIT(A) AS PER PROVISIONS OF STATUT E AS EXISTING FOR THE RELEVANT ASSESSMENT YEAR. HE THUS PLEADED THAT LD. CIT(A) W AS NOT RIGHT IN REMITTING THE MATTER BACK TO THE ASSESSING OFFICER AND HE SHOULD HAVE DETERMINED THE ISSUE AT HIS LEVEL. 7. ON THE OTHER HAND, THE LD. A.R. SUBMITTED THAT A SSESSMENT AS SUCH HAS NOT BEEN SET ASIDE BY LD. CIT(A) AND, THEREFORE, WH ILE REFERRING TO CERTAIN ISSUES TO THE FILE OF THE ASSESSING OFFICER, THE CIT(A) DI D NOT ACT IN CONTRAVENTION OF THE PROVISIONS OF THE ACT AND HIS ORDER SHOULD BE UPHEL D. HE ALSO INFORMED THAT ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE CIT(A). ITA NO.399/DEL/2010 5 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. SECTION 251(1)(A) REGULATES THE POWERS OF THE CIT(A) WHERE THE APPEAL IS AGAINST AN ORDER OF ASSESSMENT. HIS POWER UNDER THAT PROVISION IS TO CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT . FOR THE SAKE OF CONVENIENCE, THE SAID PROVISION IS REPRODUCED HEREU NDER:- 251(1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. IT MAY BE MENTIONED HERE THAT THESE PROVISIONS ARE APPLICABLE FROM 1.6.2001 AS THE POWER TO SET ASIDE AS GIVEN EARLIER WAS OMITTED BY THE FINANCE ACT, 2001. IN THE LIGHT OF AFOREMENTIONED PROVISION, IT HAS TO BE SEEN WHETHER IN THE PRESENT CASE LD. CIT(A) HAS RIGHTLY SET ASIDE THE ISSUE. F OR THAT PURPOSE, IT WILL BE RELEVANT TO REPRODUCE PARA 3.3 OF THE ORDER OF LD. CIT(A) AS UNDER:- 3.3. AS PER THE ABOVE COMPUTATION OF INCOME, THE APPELLANT HAS SHOWN THAT THERE IS NO LIABILITY OF CAPITAL GAINS T AX ON THE SALE OF AGRICULTURAL LAND. BUT THE FACT REMAINS TO BE VERIF IED IS THAT WHETHER THE LAND SOLD WAS ACTUALLY USED FOR AGRICULTURAL PU RPOSES BY THE APPELLANT OR HIS PARENT IN TWO YEARS IMMEDIATELY PR ECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE FOR CLAIMING DEDUC TION U/S 54B OF THE ACT. TO VERIFY THIS ASPECT, THE APPELLANT IS DI RECTED TO SUBMIT THE REQUISITE EVIDENCE IN THE FORM OF REPORT FROM THE R ESPECTIVE REVENUE AUTHORITIES/PATWARI, WHO OFFICIALLY MAINTAINS THE A CTUAL LAND USE RECORD (GIRDAWARI). FOR DETERMINING THE COST OF AC QUISITION AS ON 1.4.1981, THE ASSESSING OFFICER MAY TAKE THE CIRCLE RATE FIXED BY THE GOVT. FOR STAMP DUTY PURPOSES FOR THAT AREA OR THE AVERAGE OF SALE ITA NO.399/DEL/2010 6 PRICE PREVAILING IN THAT AREA, WHICHEVER IS HIGHER. ACCORDINGLY, THE INCOME UNDER THE HEAD CAPITAL GAINS MAY BE WORKED O UT. THE DEDUCTION U/S 54B OF THE ACT, IF ALL CONDITIONS ARE FULFILLED, SHALL BE ALLOWED. 9. THE ABOVE DIRECTIONS OF LD. CIT(A), IF READ WITH THE PROVISIONS OF SECTION 251(1)(A), THEN IT WILL BE CLEAR THAT HE HAS NOT CO NFIRMED, REDUCED, ENHANCE OR ANNULLED THE ASSESSMENT BUT PRACTICALLY HE HAS REST ORED THE ISSUE TO BE DETERMINED BY THE ASSESSING OFFICER. THEREFORE, SU CH RESTORATION IS NOT PERMITTED BY THE EXPRESS PROVISION OF THE STATUTE. 10. FINDING FORCE IN THE ARGUMENTS OF THE LD. D.R., WE CONSIDER IT JUST AND PROPER TO DIRECT THE LD. CIT(A) TO GET REPORT FROM THE ASSESSING OFFICER ON THE ISSUES WHICH HAVE BEEN DIRECTED TO BE VERIFIED AND THEN TO DECIDE THE APPEAL FILED BY THE ASSESSEE ACCORDING TO THE FACTS VERIFI ED AND AS PER PROVISIONS OF LAW. WE DIRECT ACCORDINGLY. THE ISSUE RAISED BY THE REV ENUE IS RESTORED BACK TO THE FILE OF THE CIT(A) IN THE MANNER AFORESAID. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2010. SD/- SD/- ( R.C. SHARMA ) ( I.P. BANSAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.3.2010 VSK ITA NO.399/DEL/2010 7 COPY TO: 1. APPELLANT-REVENUE 2. RESPONDENT-ASSESSEE 3. CIT (A) 4. CIT 5. DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR