DCIT, New Delhi V. Mahender Yadav, New Delhi

ITA 4069/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4218 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L DIHANA
• Assessee Lawyers: H G MALIK
• Keywords: Cost of acquisition
• Section: 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI B.C.MEENA, AM ITA NO. 4069/DEL/2009 A.Y. 2006-07 DCIT, CIRCLE 21(1), F-2 VS. SHRI MAHENDER YADAV VIKAS BHAWAN R/O 360, SAME PUR BADLI NEW DELHI DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.L.DIHANA, CIT(DR) RESPONDENT BY : SH. HG MALIK, ADV. O R D E R PER B.C.MEENA, ACCOUNTANT MEMBER THIS IS THE APPEAL FILED BY REVENUE AGAINST THE OR DER PASSED BY THE CIT (A)-XXII, NEW DELHI DATED 16.7.09. 2. THE GROUNDS OF APPEAL READ AS UNDER. 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION MADE BY THE A.O. BY DISALLOWING THE CLAIM OF EXEMPTION U /S 10(37) OF THE I.T.ACT, IN RESPECT OF COMPENSATION RECEIPT OF RS. 2,38,98,3 40/-. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION MADE BY THE A.O. BY DISALLOWING THE CLAIM OF DEDUCTION U/S 54B OF THE IT ACT, IN RESPECT OF SALE OF AGRICULTURAL LAND FOR RS. 29.70 LAKHS AND RS. 10 LAKHS. 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN ALLO WING EXEMPTION U/S 10(37) OF THE ACT TO THE ASSESSEE WITHOUT HAVING FU RNISHED ANY ITA 4069/DELHI/2009 PA GE 2 OF 6 SHRI MAHENDER YADAV DOCUMENTS/FACTS FOR JUSTIFICATION THAT THE SAID LAN D WAS USED FOR AGRICULTURAL ACTIVITIES. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AL L OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND ADD ANY OTHER GROUND OF APPEA L. 2. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE AN INDIVIDUAL FURNISHED THE RETURN OF INCOME FOR A.Y. 2006-07 ON 30.3.07 DECLARING TOTAL INCOME OF RS. 12,40,555/-. THE ASSESSEE ALSO DECLARED INCOME FROM AGRICULTURE AND THE SAME WAS ALSO AGGREGATED TO HIS TAXABLE INCOME FOR THE PURPOSE OF CALCULATING TAX. 3. GROUND NO. 3 AND 4 ARE GENERAL IN NATURE AND DOE S NOT REQUIRE ANY ADJUDICATION. 4. IN GROUND NO.1 THE ISSUE INVOLVED IS THE TAXABI LITY OF COMPENSATION RECEIVED BY ASSESSEE FROM THE LAND ACQUISITION COLL ECTOR (NW), KANIJHAWALA, DELHI IN RESPECT OF LAND COMPULSORILY ACQUIRED. ASSESSEE CLAIMED EXEMPTION U/S 10(37) OF THE INCOME TAX ACT . THE A.O. DOUBTED THE CLAIM ON THE BASIS THAT THE CONDITION FOR CLAIM ING EXEMPTION U/S 10(37) OF THE INCOME TAX ACT ARE NOT FULFILLED. TH E LAND WAS BEING USED FOR AGRICULTURE DURING THE TWO PRECEDING YEARS HAS NOT BEEN ESTABLISHED AND HE DISALLOWED THE CLAIM. THE LD.CIT(A) CONSIDE RED THE ISSUE AND HELD THAT THE LAND WHICH WAS ACQUIRED WAS AGRICULTURAL LAND. IT WAS CLASSIFIED AS AGRICULTURAL LAND IN THE REVENUE RECO RDS FOR WHICH CIT(A) ITA 4069/DELHI/2009 PA GE 3 OF 6 SHRI MAHENDER YADAV RELIED ON THE JAMA BANDHI OF THE LAND FOR F.Y. 198 9-90. CIT(A) HELD THAT THE ASSESSEE WAS CARRYING AGRICULTURAL ACTIVITY ON THE LAND SINCE 1989-90 AND THE LAND WAS USED FOR AGRICULTURE IN THE IMMEDI ATE PRECEDING TWO YEARS. CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10(37) OF THE ACT. 5. THE LD.D.R. RELIED ON THE AOS ORDER AND LD.A.R. RELIED ON THE ORDER OF CIT(A). AFTER HEARING BOTH THE SIDES ON THE ISS UE WE FIND THAT THE ASSESSEE FURNISHED A COPY OF KHASRA GIRDWARI IN RES PECT OF THE ACQUIRED LAND. THE LAND WAS RECORDED AS AGRICULTURAL LAND I N THE GOVERNMENT RECORDS. THE ASSESSEE HAS ALSO SHOWN AGRICULTURE INCOME IN THE RETURNS OF INCOME. THE SAME HAVE BEEN ASSESSED AS AGRICULT URAL INCOME. THIS FACT ESTABLISHED THAT THESE LANDS WERE USED FOR P URPOSE OF AGRICULTURE. THE CONDITION FOR CLAIMING EXEMPTION U/S 10(37) OF THE INCOME TAX ACT ARE FULFILLED. THE RECORDS FILED SHOWS THAT THE L AND WAS ACTUALLY BEING USED FOR AGRICULTURAL PURPOSES. THE REVENUE HAS FA ILED TO BRING ANYTHING ADVERSE TO THE FINDING THAT THE LAND WAS NOT USED F OR AGRICULTURAL PURPOSES IN THE IMMEDIATE TWO PRECEDING YEARS. T HE ASSESSEE HAS DECLARED AGRICULTURAL INCOME WHICH HAS BEEN CONSIDE RED FOR WORKING OUT THE TAXABILITY OF THE ASSESSEE. THE REVENUE HAS AL SO FAILED TO BRING ON RECORD ANY ADVERSE MATERIAL TO ESTABLISH THAT THE L AND WAS NEVER ACTUALLY BEEN USED FOR AGRICULTURAL PURPOSES OR HAS NEVER B EEN PLOUGHED RATHER THE GOVERNMENT RECORDS SHOW THAT THE LAND WAS PUT T O AGRICULTURAL USE ITA 4069/DELHI/2009 PA GE 4 OF 6 SHRI MAHENDER YADAV AND IT WAS BEING USED FOR AGRICULTURE. AGAINST THI S BACKGROUND AND FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE LD.C IT(A) HAS RIGHTLY DELETED THE ADDITION AND WE DISMISS THIS GROUND OF REVENUES APPEAL. 6. IN GROUND NO. 2 THE ISSUE INVOLVED IS CLAIM OF D EDUCTION U/S 54B OF THE I.T.ACT IN RESPECT OF SALE OF AGRICULTURAL LAN D FOR RS. 29.70 LAKHS AND RS. 10 LAKHS. DURING THE RELEVANT YEAR THE ASSESSE E SOLD TWO AGRICULTURAL LANDS AT VILLAGE KHAMPUR AND VILLAGE BUDHPUR ON WHI CH LONG TERM CAPITAL GAIN AMOUNTING TO RS. 30,01,488/- WAS SHOWN BY THE ASSESSEE AGAINST WHICH THE ASSESSEE HAD PURCHASED NEW AGRICU LTURAL LAND ON 15.1.2006 FOR AN AMOUNT OF RS. 30,06,750/-. THE AS SESSEE CLAIMED EXEMPTION FROM LONG TERM CAPITAL GAIN U/S 54B OF TH E I.T.ACT IT WAS CLAIMED THAT WHOLE OF THE AMOUNT OF LONG TERM CAPI TAL GAIN ARISES ON ACCOUNT OF SALE OF AGRICULTURAL LAND HAD BEEN INVES TED IN NEW AGRICULTURAL LAND THEREFORE THE SAME WAS EXEMPT U/ S 54B OF THE ACT. IN SUPPORT OF THE CLAIM, THE ASSESSEE HAD FURNISHED DO CUMENTS IN THE FORM OF KHASRA GIRDAWARI TO SHOW THAT THE AGRICULTURAL L ANDS SOLD BY THE ASSESSEE WERE USED FOR THE PURPOSE OF AGRICULTURE I N THE TWO IMMEDIATE PRECEDING YEARS. THE CAPITAL GAIN ARISING ON SALE OF SUCH LANDS STOOD INVESTED IN PURCHASE OF NEW AGRICULTURAL LAND WITHI N PERMITTED PERIOD THEREFORE THE ASSESSEE WAS ENTITLED TO DEDUCTION U/ S 54B OF THE I.T.ACT. THE ASSESSEE ALSO FURNISHED CONFIRMATION FROM THE S ELLER OF THE LAND TRI NETRA MOTORS P.LTD. FROM WHOM THE LAND WAS PURCHAS ED. IT WAS ALSO SUBMITTED THAT THE ASSESSEE ALSO GIVEN SOME INTERE ST FREE ADVANCES TO TRI ITA 4069/DELHI/2009 PA GE 5 OF 6 SHRI MAHENDER YADAV NETRA MOTORS P.LTD. AND THE SALE PROCEEDS OF THE LA ND STOOD ADJUSTED FROM HIS ACCOUNT WITH TRINETRA MOTORS P.LTD. THE A .O. DOUBTED THAT NO PRUDENT MAN WOULD GIVE ADVANCE AS INTEREST FREE TO A COMPANY. HE ALSO SUSPECTED THAT THE ADVANCE WAS MORE THAN THE COST OF THE LAND AND IT WAS ALSO NOTED BY HIM THAT THERE IS NO CORRELATION BETWEEN THE ACTUAL PRICE AND ADVANCE GIVEN. HE ALSO DOUBTED THAT THER E IS ANOTHER PAYMENT BY OTHER PERSON MADE TO M/S TRINETRA MOTORS. FINAL LY THE LD.D.R. RELIED ON THE ORDER OF AO AND LD.A.R. RELIED ON THE ORDER OF LD.CIT(A). 7. AFTER HEARING BOTH THE SIDES WE FIND THAT THE AS SUMPTION U/S 54B OF THE ACT IS AVAILABLE IN RESPECT OF THE CAPITAL G AIN ARISING ON SALE OF AGRICULTURAL LAND WHEN THE SAME IS INVESTED IN PURC HASE OF OTHER AGRICULTURE LAND. TO SATISFY THIS CONDITION THAT THE ASSESSEE HAS TO PURCHASE NEW AGRICULTURAL LAND. THE LAND WHICH WA S SOLD WAS USED FOR AGRICULTURE IN THE IMMEDIATELY PRECEDING TWO YEARS BY THE ASSESSEE. THE ASSESSEE PURCHASED ANOTHER LAND WITHIN THE PERIOD O F TWO YEARS FROM THE DATE OF TRANSFER OF ORIGINAL LAND. A.O. DOUBTED B Y SOME PRESUMPTION AND ASSUMPTION THAT HOW SO MUCH INTEREST FREE ADVA NCES MADE BY THE ASSESSEE. HE ALSO DOUBTED THAT HOW THE ASSESSEE MA DE MORE MONEY THAN THE PURCHASE COST OF THE LAND AND WHY THERE WA S ANOTHER PAYMENT BY ANOTHER PERSON. WE HOLD THAT THE REVENUE HAS FA ILED TO PIN POINT ANY DISCREPANCY IN THE CLAIM OF ASSESSEE. THE LAND WHI CH WAS SOLD BY ASSESSEE WAS AGRICULTURAL LAND WHICH WAS BEING USED FOR AGRICULTURE IN ITA 4069/DELHI/2009 PA GE 6 OF 6 SHRI MAHENDER YADAV THE JUST PRECEDING YEARS BY THE ASSESSEE. THE LAND WAS ALSO SHOWN AS AGRICULTURE LAND IN GOVERNMENT RECORDS. AS A FACT THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND FROM TRINETRA MOTORS P. LTD. THUS THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN OF RS. 30,01,488/- ON THE SALE OF TWO AGRICULTURAL LANDS WHICH HAS BEEN SUBSE QUENTLY INVESTED IN THE PURCHASE OF NEW AGRICULTURAL LAND IN THE PERMIT TED TIME LIMIT. CONSIDERING ALL THESE FACTS AND ASPECTS WE HOLD THA T THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE SUSTAIN ORDER O F LD.CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENU E STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2011. SD/- SD/- (RAJPAL YADAV) (B .C.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST APRIL, 2011 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR 6.GUARD FILE BY ORDER DY. REGISTRAR // TRUE COPY //