Asst.CI.T., Mangalore V. Sri. K. Mohammed Althaf, Mangalore

ITA 43/BANG/2015

• Counselvise Citation: 4321114 RSA 2015
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 14-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR P K SRIHARI
• Keywords: Capital asset
• Section: 143(3); 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER A ND SHRI JASON P.BOAZ, ACCOUNTANT MEMBER ITA NO. 43 / BANG/20 15 (ASSESSMENT YEAR: 20 1 0 - 11 ) ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), MANGALORE. APPELLANT VS. SHRI K.MOHAMMED ALTHAF, PARTNER: MUKKA SEA FOODS INDUSTRIES, TRINITY COMPLEX, ATTAVAR, MANGALORE . RESPONDENT APPELLANT BY: NONE. RESPONDENT BY: DR.P.K.SRIHARI, ADDL. CIT(DR) DATE OF HEARING : 20/0 5/2015 DATE OF PRONOUNCEMENT: 02 /0 6 /2015 O R D E R PER SMT.P.MADHAVI DEVI, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), MYSORE, DATED 14/11/2014 FOR THE ASSESSMENT YEAR 2010 - 11. THE GROUNDS RAISED BY THE REV ENUE ARE AS UNDER: 1) THE ORDER OF THE LD.CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2) THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT THE AGRICULTURAL LAND DOES NOT FALL WITHIN THE AMBIT OF A CAPITAL ASSET DEFINED U/S 2(14) AND THEREFORE, THE PRO VISIONS OF SECTION 2(47)(V) AND SECTION 53A OF THE TRANSFER OF PROPERTY ACT CANNOT BE BROUGHT TO BEAR ITA NO . 43 /BANG/20 1 5 SHRI K.MOHAMMED ALTHAF PAGE 2 OF 5 ON THE SALE OF AN AGRICULTURAL LAND. 3) FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDERS OF LD.CIT(A) MAY BE SET AS IDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 31/1/2011 FOR THE RELEVANT ASSESSMENT YEAR DECLARING TOTAL INCOME OF RS.19,08,370/ - . DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT], VARIOUS DETAILS WERE CALLED FOR AND THE ASSESSEE FURNISHED THE SAME. THE ASSESSING OFFICER (AO) HAD INFORMATION THAT DURING THE FINANCIAL YEAR 2009 - 10 RELEVANT TO ASSESSMENT YEAR 2010 - 11, THE ASSESSEE HAD SOLD A PROPERTY. ON VERIFICATION OF THE RETURN OF INCOME, THE AO NOTICED THAT THE ASSESSEE HAD NOT DISCLOSED ANY INCOME UNDER THE HEAD CAPITAL GAINS . THEREFORE, INFORMATION WAS CALLED FOR FR OM THE SUB REGISTRAR , MOODABIRDRI VIDE OFFICE LETTER DATED 12/10/2012 IN RESPONSE TO WHICH THE SUB REGISTRAR VIDE LETTER DATED 26/10 / 2012 FURNISHED THE COPY OF THE SALE DEED. ON VERIFICATION OF THE SAME, THE AO NOTICED THAT THE ASSESSEE HAD, ALONG WITH SHR I K.ABDUL RAZAK, SOLD A NON - AGRICULTURAL PROPERTY FOR A TOTAL CONSIDERATION OF RS.13,08,000/ - VIDE SALE DEED EXECUTED ON 21/01/2010 AT MOODABIDRI. IN THIS CONNECTION, THE ASSESSEE WAS REQUIRED TO FURNISH THE EXPLANATION AS TO WHY NO CAPITAL GAINS WAS REFL ECTED IN HIS RETURN OF INCOME. VIDE REPLY DATED 11/12/2012, ASSESSEE ITA NO . 43 /BANG/20 1 5 SHRI K.MOHAMMED ALTHAF PAGE 3 OF 5 SUBMITTED THAT HE, ALONG WITH HIS FATHER, HAVE SOLD AGRICULTURAL PROPERTY JOINTLY OWNED BY THEM IN KILENJUR VILLAGE IN MOODABIDRI WHICH WAS PURCHASED BY THEM VIDE SALE DEED DATED 15/3/20 07. COPY OF THE PURCHASE DEED WAS ALSO ENCLOSED WITH THE REPLY. IT WAS SUBMITTED THAT THE ENTIRE PROPERTY OF 10.66 ACRES WAS TRANSFERRED BY THEM TO THE PURCHASER AS PER AGREEMENT DATED 05/11/2009 AND THE TOTAL SALE CONSIDERATION FOR SALE WAS RS.50,08,000 / - OF WHICH RS.20 LAKHS WAS PAID BY THE PURCHASER ON THE SAME DAY I.E. 05/11/2009 AND THE PURCHASER HAD TAKEN FULL POSSESSION OF THE PROPERTY AND REGISTERED 8.28 ACRES OF THE AGRICULTURAL PROPERTY VIDE SALE DEED DATED 19/11/2009. SUBSEQUENTLY, THE PURCHAS ER, ON HIS OWN ACCORD AND AS PER TERMS OF THE AGREEMENT CONVERTED 1.88 ACRES OF AGRICULTURAL LAND FOR NON - AGRICULTURAL PURPOSE ON 07/01/20 1 0 WHICH WAS REGISTERED ON 21/01/2010. THEREFORE, ACCORDING TO THE ASSESSEE, PROPERTY SOLD BY THEM WAS AGRICULTURAL P ROPERTY AND THEREFORE NO TAXABLE CAPITAL GAIN HAS ARISEN THERE - FROM. THE AO WAS, HOWEVER NOT CONVINCED WITH THE ARGUMENTS OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAS CONVERTED AGRICULTURAL LAND TO NON - AGRICULTURAL USE BEFORE SALE AND THEREFORE IT CEASE S TO AGRICULTURAL LAND AND IS LIABLE TO PAY TAX ON CAPITAL GAINS. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO, AFTER CONSIDERING THE ISSUE AT LENGTH, HAS OBSERVED THAT THE AGREEMENT OF SALE ENTERED INTO BY THE ASSESSEE WAS FOR ITA NO . 43 /BANG/20 1 5 SHRI K.MOHAMMED ALTHAF PAGE 4 OF 5 SALE OF AGRICULTURAL PROPERTY AND SUBSTANTIAL SALE CONSIDERATION WAS RECEIVED ON THE SAME DATE. POSSESSION WAS ALSO HANDED OVER OF THE ENTIRE LAND AS PER THE AGREEMENT. HE FURTHER OBSERVED THAT THE AGREEMENT DATED 15/11/2009 CANNOT BE DOUBTED BECAUSE THE PAYMENT WAS RECEIVED THROUGH CHEQUE AND THEREFORE THERE WAS TRANSFER OF PROPERTY BY VIRTUE OF SEC.53A OF THE ACT AND HENCE THERE WAS NO CAPITAL GAIN LIABLE IN HIS HANDS. 4. AGGRIEVED BY THE RELIEF GIVEN BY THE CIT(A), REVENUE IS IN APPEAL BEFOR E US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO. NONE APPEARED FOR THE ASSESSEE IN SPITE OF SERVICE OF NOTICE ON THE ASSESSEE. THEREFORE, AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE EX - PARTE QUA THE ASSE SSEE, WE PROCEED TO DISPOSE OF THE APPEAL AS UNDER ON THE BASIS OF THE MATERIAL ON RECORD : THERE IS NO DOUBT THAT THE ASSESSEE, ALONG WITH HIS FATHER, HAD ENTERED INTO AN AGREEMENT OF SALE DATED 05/11/2009 AND THE PROPERTY ON SUCH DATE WAS AGRICULTURAL LAN D. IT IS ALSO NOT DISPUTED THAT SUBSTANTIAL PORTION OF THE SALE CONSIDERATION WAS PAID ON THE SAME DATE AND POSSESSION OF THE ENTIRE PROPERTY WAS HANDED OVER. IT IS ALSO NOT IN DISPUTE THAT 8.28 ACRES OF LAND WAS REGISTERED AS AGRICULTURAL PROPERTY VIDE SALE DEED DATED 19/11/2009 AND 1.88 ACRES OF LAND WAS CONVERTED FOR NON - AGRICULTURAL PURPOSES ON 07/01/2010 WHICH WAS REGISTERED ITA NO . 43 /BANG/20 1 5 SHRI K.MOHAMMED ALTHAF PAGE 5 OF 5 ON 21/01/2010. THEREFORE, THE AGREEMENT OF SALE IS FOR AGRICULTURAL LAND AND CONVERSION OF AGRICULTURAL TO NON - AGRICULTURAL LA ND OF A PORTION OF THE ABOVE LAND IS AT THE BEHEST OF THE PURCHASER. THEREFORE, IN THE HANDS OF THE ASSESSEE, IT WAS AGRICULTURAL PROPERTY AND SALE HAD BEEN COMPLETED BY VIRTUE OF RECEIPT OF SUBSTANTIAL SALE CONSIDERATION AS WELL AS HANDING OVER OF POSSES SION. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO REBUT THE ABOVE FINDING OF THE CIT(A) WITH ANY EVIDENCE TO THE CONTRARY. THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 6. I N THE RESULT, THE REVENUE S APPEA L IS DISMISSED. PRON OUNCED IN THE OPEN COURT ON THE 2 ND JUNE , 201 5 . S D/ - S D/ - (JASON P BOAZ ) ( SMT. P.MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER EKSRINIVASULU COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITA T, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE