Guru Foundations(propreitor:Shri S Narayanan)), Chennai V. Commissioner of Income Tax(Appeals)-7, Chennai

ITA 44/CHNY/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9603 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 23-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Opportunity of being heard; Capital Gains

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 44/CHNY/2021 िनधाᭅरण वषᭅ /Assessment Year:2012-13 Shri S.Narayanan, Prop: M/s. Guru Foundations, No.5, Periya Salai, Ashok Nagar, Chennai – 600083. PAN: ABTPN 1534A vs. The Income Tax Officer, Non-Corporate Ward-14(1), Chennai (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri N.R. Krishnamoorthy, FCA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri AR.V. Sreenivasan, Addl.CIT स ु नवाई कȧ तारȣख/Date of Hearing : 07.07.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 07.07.2022 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-7, Chennai in ITA No.84(T- 14)/CIT(A)-7/2015-16 dated 26.06.2019. The assessment was framed by the Income Tax Officer, Non-Corporate Circle-14(1), 2 ITA No.44/Chny/2021 Chennai for the assessment year 2012-13 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 27.03.2015. 2. At the outset, the ld.AR for the assessee took us through the order of CIT(A) and stated that the CIT(A) dismissed the appeal simply affirming the order of AO without discussing on facts of the case. He also stated that the CIT(A) has not provided sufficient opportunity of being heard. He drew our attention to the decision of CIT(A), which reads as under:- “Issue 1: In Ajesh Kr.Agarwal vs CIT, the Rajasthan hon’ble High Court has held that what is to be considered for availing the benefit of Sec.10(37) is that the land in question should have been put to agricultural use by the assessee for the proceeding 2 years. The high court also observed that since assessee was unable to show any evidence for expenditure for sowing of crops or revenue generated by selling the agricultural produce, there was a clear finding of fact which clearly showed that the assessee was not entitled to the benefit of Sec.10(37) of the Act. A perusal of the A.O’s order in para 2 which has been reproduced supra shows that a clear finding of fact that no agricultural activity was carried out in the proceedings 2 years as required by sec 10(37). The case laws relied upon by the appellant are distinguishable on facts and do not apply to the facts and appellant’s case. Hence, A.O.’s order needs no interference and the addition made on this ground stands sustained and appellant’s appeal on this grounds fails and is hereby dismissed.” 3 ITA No.44/Chny/2021 Issue:2 Sec.2(14) defined the term “Capital asset”. It provides an inclusive definition of capital asset. As per Sec.2(14), capital asset does not include agirucultural lands in India within its ambit. But all agricultural lands in India are not out of the scope of capital asset such as – agricultural lands within the jurisdiction of a municipality or Cantonment Board having a population of 10,000 or more. The A.O in her order has clearly made a finding of fact that the impugned land is classified as “Residential class-I, Type-I and that it is situated within the limits of Mamallapuram Town Planning. Therefore, the land in question does not quality to be an “agricultural land”, the sale which is liable for exemption from capital gains. A.O’s order needs no interfere and appellant once again fails on this ground and liable to be dismissed. 3. When these facts were confronted to ld. Senior DR, he could not controvert the same. 4. After hearing both the sides and going through the order of CIT(A), we noted that the CIT(A) simply affirmed the order of AO without providing sufficient opportunity of being heard by a non- speaking order. Therefore, we set aside the order of CIT(A) and remand the matter back to her file for fresh consideration and for passing a speaking order after allowing reasonable opportunity of being heard to the assessee. The assessee is also directed to file relevant evidences as and when called for, by the CIT(A). 4 ITA No.44/Chny/2021 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 7 th July, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 7 th July, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.