ITO, Sonepat V. Sh. Satinder Kumar, Sonepat

ITA 4415/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91010 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 05-05-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 22-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: PI YUSH KUMAR
• Keywords: Rejection of books of accounts; Capital asset; Depreciation; Reasonable cause
• Section: 54B

Judgement Text

ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 4415/DEL/2013 ASSESSMENT Y EAR: 2010-11 INCOME TAX OFFICER, VS SHRI SATINDER KUMAR, WARD-3, SONEPAT. H.NO.171, SECTOR-14, SONEPAT. (PAN: ALMPK0349K) (APPELLANT) (RESPON DENT) APPELLANT BY: SHRI B.R.R. KUMAR SR. DR RESPONDENT BY: S/SHRI GAUTAM JAIN, ADV. & PI YUSH KUMAR, ADV. O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAIN ST THE ORDER OF THE CIT(A), ROHTAK DATED 1.5.2013 IN APPEAL NO. 547/RTK /12-13 FOR AY 2011-12. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING TH E ADDITION OF RS. 21,44,399/- MADE BY THE A.O. BY REJECTING THE B OOKS OF ACCOUNT AND ESTIMATING THE NET PROFIT @ 5% OF THE T URNOVER AS THE ASSESSEE FAILED TO PRODUCE ANY RELEVANT DETAILS OF OPENING AND CLOSING STOCK AND ALSO ANY SUSTAINABLE EVIDENCE IN SUPPORT OF THE ENTRIES CONTAINED IN THE BOOKS OF ACCOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING TH E ADDITION OF ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 2 RS. 6,41,287/- MADE BY THE A.O. ON ACCOUNT OF CAPIT AL GAIN' ON THE SALE OF TRUCK AS THE ASSESSEE COULD NOT PRODUCE ANY SUSTAINABLE DOCUMENTARY EVIDENCE IN RESPECT OF PURC HASE/SALE OF TRUCK DURING ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING TH E ADDITION OF RS. 11,54,243/- MADE BY THE A.O. BY WITHDRAWING THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 10(37) OF THE INCOME-TA X ACT, 1961 AS THE ASSESSEE COULD NOT PRODUCE ANY SUSTAINABLE DOCU MENTARY EVIDENCE IN SUPPORT OF HIS CLAIM DURING ASSESSMENT PROCEEDINGS. GROUND NO. 1 2. APROPOS GROUND NO.1, LD. DR SUBMITTED THAT THE C IT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION MADE BY THE AO B Y REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ESTIMATING THE NET PRO FIT @5% OF THE TURNOVER AS THE ASSESSEE FAILED TO PRODUCE ANY RELEVANT DETAILS OF OPENING AND CLOSING STOCK AND ALSO ANY SUSTAINABLE EVIDENCE IN SUPPORT OF THE ENTRIES CONTAINED IN THE BOOKS OF ACCOUNTS. REPLYING TO THE ABOVE, LD. COUN SEL OF THE ASSESSEE SUPPORTED THE IMPUGNED ORDER AND SUBMITTED THAT THE AO REJECT ED THE BOOKS OF ACCOUNTS OF THE ASSESSEE WITHOUT ANY GOOD AND REASONABLE CAUSE AS THE ASSESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS WHICH WERE DU LY AUDITED BY THE STATUTORY AUDITORS. LD. COUNSEL POINTED OUT THAT NO DEFECTS OR DISCREPANCIES WERE NOTED BY THE AO IN THE BOOKS OF ACCOUNTS SUBMITTED BEFORE HIM AND THE AO RESORTED TO REJECTION OF BOOKS OF ACCOUNTS ONLY ON THE GROUN D THAT THE RELEVANT DETAILS OF OPENING AND CLOSING STOCK HAVE NOT BEEN FURNISHED. LD. COUNSEL HAS DRAWN OUR ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 3 ATTENTION TOWARDS PAPER BOOK PAGE NO. 40 TO 47 AND SUBMITTED THAT DETAIL OF STOCK STATEMENT ALONG WITH OPENING STATEMENT AS ON 1.4.2009 AND CLOSING STOCK AS ON 31.3.2010 WERE SUBMITTED BEFORE THE AO WHICH WERE TOTALLY IGNORED WHILE REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE. L D. DR HAS NOT DISPUTED THIS FACT THAT THE DETAILS FILED AT PAGE 40 TO 47 OF THE PAPER BOOK OF THE ASSESSEE WERE VERY WELL BEFORE THE AO DURING ASSESSMENT PROCEEDIN GS. THIS FACT HAS ALSO BEEN NOTED BY THE CIT(A) IN PARA 5 OF THE IMPUGNED ORDER WHILE DEMOLISHING THE CONCLUSION OF THE AO ON REJECTION OF BOOKS OF ACCOU NTS. 3. FROM OPERATIVE PART IN PARA 5 AT PAGE 3 OF THE I MPUGNED ORDER, WE FURTHER OBSERVE THAT THE CIT(A) RIGHTLY HELD THAT THE REJEC TION OF BOOKS OF ACCOUNTS BY THE AO WAS NOT SUSTAINABLE AND THE ACTION OF THE AO IN ESTIMATING THE NET PROFIT AT 5% AS PER SECTION 44AF OF THE INCOME TAX ACT, 19 61 (FOR SHORT THE ACT) WAS MISPLACED AND MISCONCEIVED AS THIS PROVISION RELATE S TO RETAIL BUSINESS HAVING TURNOVER OF LESS THAN RS.40 LAKH PER ANNUM. THE CI T(A) ALSO NOTED THAT THE ESTIMATION OF PROFIT AT 5% OF TOTAL TURNOVER IS NOT IN THE LINE OF GP DECLARED BY THE ASSESSEE IN AY 2007-08 OF 0.72% AND IN AY 2009- 10 OF 1.71% OF THE TOTAL TURNOVER. THEREFORE, WE ARE UNABLE TO SEE ANY VALI D REASON TO INTERFERE WITH THE IMPUGNED ORDER ON THIS ISSUE AND WE UPHOLD THE SAME . FINALLY, GROUND NO. 1 OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 4 GROUND NO.2 4. APROPOS GROUND NO.2, LD. DR SUBMITTED THAT THE C IT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 6,41,2 87/- MADE BY THE A.O. ON ACCOUNT OF CAPITAL GAIN' ON THE SALE OF TRUCK AS TH E ASSESSEE COULD NOT PRODUCE ANY SUSTAINABLE DOCUMENTARY EVIDENCE IN RESPECT OF PURCHASE/SALE OF TRUCK DURING ASSESSMENT PROCEEDINGS. SUPPORTING THE ASSE SSMENT ORDER, LD. DR POINTED OUT THAT IN PARA 3 OF THE ASSESSMENT ORDER, THE AO RIGHTLY HELD THAT THE CLAIM OF PURCHASE OF TRUCK HAS BEEN MADE BY THE AS SESSEE FOR THE SOLE PURPOSE OF CIRCUMVENTING PAYMENT OF TAX ON CAPITAL GAIN ON SALE OF THE ONLY TRUCK IN HIS INVENTORY OF FIXED ASSETS. LD. DR VEHEMENTLY CONTE NDED THAT THE CLAIM OF PURCHASE OF TRUCK WAS BASELESS, FRIVOLOUS AS THE PA YMENT OF SAID PURCHASE WAS MADE IN CASH ON 20.8.2009 AMOUNTING TO RS.7,05,000 AND DURING MORE THAN 8 MONTHS OF THE RELEVANT FINANCIAL YEAR, THE ASSESSEE DID NOT GET IT TRANSFERRED AND REGISTERED IN HIS NAME, THEREFORE, SAID TRANSACTION OF PURCHASE OF TRUCK IS A SHAM TRANSACTION WHICH WAS RIGHTLY REJECTED BY THE AO. LD. DR VEHEMENTLY CONTENDED THAT THE CIT(A) DELETED THE ADDITION WITH OUT ANY SUSTAINABLE REASON AND BY WRONGLY MENTIONING THAT THE AO HAS NOT DISPU TED THE PRICE PAID FOR THE TRUCK. LD. DR ALSO CONTENDED THAT THE REASONS RECOR DED BY THE AO FOR REJECTING THE CLAIM OF PURCHASE OF TRUCK ARE SUSTAINABLE AND HENCE, IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE AO ON THIS IS SUE. ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 5 5. LD. COUNSEL OF THE ASSESSEE SUPPORTED THE IMPUGN ED ORDER AND SUBMITTED THAT THE CLAIM OF PURCHASE OF TRUCK CANNOT BE REJEC TED AT THE THRESHOLD MERELY ON THE BASIS THAT THE PAYMENT HAS BEEN MADE IN CASH AN D THE SAID PURCHASED VEHICLE COULD NOT BE TRANSFERRED AND REGISTERED IN THE NAME OF ASSESSEE. LD. COUNSEL FURTHER SUBMITTED THAT AS THE TRUCK WAS PURCHASED F ROM THE CONCERN IN WHICH THE ASSESSEE HAD BENEFICIAL INTEREST, THEREFORE, IT WAS NOT CONSIDERED NECESSARY TO GET IT TRANSFERRED IN THE NAME OF THE ASSESSEE IMMEDIAT ELY AFTER PURCHASE AND MERELY BECAUSE THE TRUCK WAS PURCHASED FROM THE CONCERN IN WHICH THE ASSESSEE IS INTERESTED CANNOT FORTIFY THE CONCLUSION THAT THE T RANSACTION IS SUSPICIOUS OR DOUBTFUL. THE LD. COUNSEL ALSO POINTED OUT THAT TH E AO HAS ALLOWED DEPRECIATION ON THE TRUCK, HENCE, ITS PURCHASE CANTO BE HELD AS SUSPICIOUS OR BOGUS. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, A T THE VERY OUTSET, WE NOTE THAT THE CIT(A) HAS GRANTED RELIEF FOR THE ASSESSEE WITH FOLLOWING CONCLUSION:- 7. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE BY THE AR. IT IS NOT IN DISPUTE THAT THE SALE OF TR UCK HAS BEEN RECORDED IN THE BOOKS OF ACCOUNTS OF M/S HARYANA LO GISTICS, WHICH IS ASSESSED TO TAX SEPARATELY. AS PER THE CAS H RECEIPT, THE POSSESSION OF THE TRUCK HAS BEEN HANDED OVER TO THE ASSESSEE ON 20.08.2009 ITSELF. MERELY BECAUSE THE TRUCK WAS PUR CHASED FROM A CONCERN IN WHICH THE ASSESSEE HAS BENEFICIAL INT EREST CANNOT LEAD TO THE CONCLUSION THAT THE TRANSACTION IS SUSP ICIOUS. IT IS WORTHWHILE TO NOTE THAT THE AO HAS NOT DISPUTED THE PRICE PAID FOR THE TRUCK. ONE OF THE REASONS GIVEN BY THE AO O F CASH RECEIPT HAVING NOT BEEN WITNESSED BY ANY PERSON IS DEVOID O F ANY MERIT, AS NO SUCH STIPULATION /REGULATION EXISTS. IT IS WELL SETTLED LAW THAT CHANGE OF NAME IN THE R C IS NOT COMPULSORY/ MANDATORY FOR CLAIMING BENEFICIAL OWNER SHIP AND DEPRECIATION THEREON. FURTHER, THE ASSESSEE HAS SHO WN THE FREIGHT ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 6 RECEIPT ON THE TRUCK PURCHASED AND THE CORRESPONDIN G EXPENDITURE. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO I S DELETED AND THE GROUND OF APPEAL IS ALLOWED. 7. IN VIEW OF ABOVE, WE NOTE THAT THE ONLY DOCUMENT S SUBMITTED BY THE ASSESSEE TO SUPPORT THE CLAIM OF PURCHASE OF TRUCK IS AVAILABLE AT PAGE 48 OF THE PAPER BOOK WHICH IS A CASH RECEIPT DATED 20.8.2009 OF RS.7,05,000. ON THIS CASH RECEIPT, THERE IS SIGNATURE OF SELLER MOHINDER AND THE COLUMN OF THE WITNESS IS BLANK. NO OTHER DOCUMENT SUPPORTING THE TRANSAC TION OF PURCHASE OF TRUCK NO. HR69/6516 HAS BEEN SUBMITTED BEFORE US. EVEN W E ARE UNABLE TO SEE ANY DOCUMENT TO SHOW THAT THE SAID TRUCK WAS ORIGINALLY REGISTERED IN THE NAME OF MOHINDER WHO HAS SIGNED ON THE CASH RECEIPT AS SELL ER. ON THE SPECIFIC QUERY FROM THE BENCH, LD. COUNSEL OF THE ASSESSEE COULD N OT ASSIST US WHY THE PAYMENT WAS MADE IN CASH AND WHAT WAS THE REASON FOR NOT GE TTING TRANSFERRED AND REGISTERED THE PURCHASED TRUCK IN THE NAME OF ASSES SEE EVEN AFTER A LAPSE OF MORE THAN 8 MONTHS DURING THE FINANCIAL YEAR UNDER CONSI DERATION. LD. COUNSEL DURING THE ARGUMENT HAS STRENUOUSLY POINTED OUT THA T THE AO HAS ALLOWED THE CLAIM OF DEPRECIATION OF RS.19,114 ON THE PURCHASED TRUCK, THEREFORE, THE TRANSACTION OF PURCHASE CANNOT BE DISPUTED BY THE A O. LD. COUNSEL POINTED OUT PAGE NO. 13 OF THE PAPER BOOK AND SUBMITTED THAT IN THE TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING ON 31.3.2001, THE ASSESSEE MADE A CLAIM OF ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 7 DEPRECIATION ON THE PURCHASED TRUCK WHICH WAS ALLOW ED BY THE AO AND IN THIS SITUATION, THE AO CANNOT DENY THE TRANSACTION. 8. ON CAREFUL CONSIDERATION OF ABOVE, WE ARE OF THE VIEW THAT THE PURCHASE OF TRUCK CANNOT BE HELD AS SUSPICIOUS OR BOGUS ONLY BE CAUSE THE TRUCK HAS BEEN PURCHASED IN CASH FROM THE CONCERN WHEREIN THE ASSE SSEE IS BENEFICIARY AND ONLY BECAUSE THE REGISTRATION WAS NOT TRANSFERRED IN THE NAME OF THE ASSESSEE PURCHASER. AT THE SAME TIME, WE ARE ALSO OF THE VI EW THAT THE TRANSACTION OF PURCHASE OF TRUCK CANNOT BE ACCEPTED BLINDLY MERELY BECAUSE THE AO HAS ALLOWED DEPRECIATION FOR THE ASSESSEE ON AN ENTRY M ADE IN THE P&L ACCOUNT. MAIN QUESTION IS THAT WHETHER THE TRUCK WAS PURCHAS ED AND USED BY THE ASSESSEE FOR THE PURPOSE OF HIS BUSINESS AND ANSWER TO THIS QUESTION CAN BE GATHERED ONLY WHEN THE ISSUES OF FUEL, DRIVERS AND CLEANERS SALAR Y AND OTHER WEAR AND TEAR EXPENSES ON THE TRUCK AFTER PURCHASE I.E. AFTER 20. 8.2009 IS EXAMINED AND VERIFIED AT THE END OF THE AO. 9. THE ISSUE OF REGISTERED OWNER PRIOR TO PURCHASE AND SUBSEQUENT TO PURCHASE IS ALSO RELEVANT TO PROPER DETERMINATION A ND EVALUATION OF TRANSACTION OF PURCHASE OF TRUCK WHICH ALSO REQUIRES VERIFICATI ON AND EXAMINATION AT THE END OF THE AO. THUS, WE FIND IT JUST AND PROPER TO RES TORE THIS ISSUE TO THE FILE OF THE AO FOR PROPER EXAMINATION AND VERIFICATION IN THE L IGHT OF AFORESAID OBSERVATIONS AFTER AFFORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT BEING PREJUDICED BY EARLIER ASSESSMENT AND IMPUGNED ORDER AND OUR OBSERVATIONS IN ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 8 THIS ORDER. ACCORDINGLY, GROUND NO. 2 OF THE REVEN UE IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AS INDICATED ABOVE. GROUND NO.3 10. APROPOS GROUND NO. 3, LD. DR SUBMITTED THAT CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 11,54,243/ - MADE BY THE A.O. BY WITHDRAWING THE EXEMPTION CLAIMED BY THE ASSESSEE U /S 10(37) OF THE INCOME- TAX ACT, 1961 AS THE ASSESSEE COULD NOT PRODUCE ANY SUSTAINABLE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM DURING ASSESSMENT PROCEEDINGS. 11. LD. DR SUPPORTING THE ASSESSMENT ORDER SUBMITTE D THAT THE ASSESSEE RECEIVED IMPUGNED AMOUNT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION ON ACCOUNT OF FURTHER ENHANCED COMPENSATION ON COMPULS ORY ACQUISITION OF HIS AGRICULTURAL LAND IN VILLAGE JAMALPUR KHURD, SONEPA T. LD. DR FURTHER SUBMITTED THAT THE SAID AGRICULTURAL LAND IS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III) OF THE ACT WHICH WAS ACQUIRED AND POSSES SION WAS TAKEN OVER BY HUDA ON 28.3.1990 AND THE WHOLE CONSEQUENT ORIGINAL COMPENSATION WAS RECEIVED BY THE ASSESSEE MUCH EARLIER THAN PREVIOUS YEAR RELEVANT TO AY 2005- 06, THEREFORE, EXEMPTION AVAILABLE U/S 10(37) OF TH E ACT INSERTED W.E.F. 1.4.2005 OF THE ACT CANNOT BE ALLOWED TO THE ASSESSEE IN RES PECT OF FURTHER ENHANCED COMPENSATION PERTAINING TO THE SAME LAND. ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 9 12. REPLYING TO THE ABOVE, LD. COUNSEL OF THE ASSES SEE SUPPORTED THE IMPUGNED ORDER AND SUBMITTED A COPY OF THE JUDGMENT OF ITAT, CHANDIGARH B BENCH IN THE CASE OF CHURA RAM VS ITO (2011) 10 TAXMANN.COM 34 (CHD.) AND SUBMITTED THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD REC EIVED ENHANCED COMPENSATION DURING THE YEAR UNDER CONSIDERATION AFTER 1.4.2005, THEREFORE, THE ENHANCED COMPENSATION IN RESPECT OF COMPULSORILY ACQUIRED AG RICULTURAL LAND IS EXEMPTED U/S 10(37) OF THE ACT. 13. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, WE NOTE THAT ITAT CHANDIGARH IN THE CASE OF CHURA RAM VS ITO (SUPRA) HAS HELD AS UNDER:- 8. ON THIS ASPECT WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. FIRSTLY, IT IS TO BE OBSERVED THAT THE USE O F THE LAND FOR AGRICULTURAL PURPOSES HAS TO BE SEEN DURING THE PER IOD OF TWO YEARS IMMEDIATELY PRECEDING 'THE DATE OF TRANSFER' AS REQUIRED BY SECTION 10(3 7)(II) OF THE ACT AND NOT THE DATE OF ACQUISITION, AS CANVASSED BY THE REVENUE. IT IS TO BE APPRECIATE D THAT IN ORDER TO CHARGE TAX ON CAPITAL GAINS ACCRUING ON A PROPERTY ACQUIRED UNDER THE LAND ACQUISITION ACT, 1894 THE D ATE OF TRANSFER HAS TO BE RECKONED IN TERMS OF SECTION 16 OF THE LAND ACQUISITION ACT, 1894. WHERE A PROPERTY IS ACQUIRED UNDER THE LAND ACQUISITION ACT, 1894 THE TITLE TO THE LANDS V ESTS IN THE GOVERNMENT UNDER SECTION 16 OF THE SAID ACT ON TAKI NG OF POSSESSION OF LAND BY THE LAND ACQUISITION COLLECTO R IN PURSUANCE TO THE AWARD. THE ABOVE PROPOSITION IS SU PPORTED BY THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF BUDDAIAH V. CIT [1985] 155 ITR 277. IN THIS CONN ECTION, WE HAVE PERUSED THE AWARDS RENDERED BY THE LAND ACQUIS ITION COLLECTOR, PANCHKULA ON 1-10-1999 AND 10-12-2002. I N TERMS OF THE STATED AWARDS, THE POSSESSION HAS BEEN TAKEN OV ER IMMEDIATELY AND THEREFORE, THE TITLE VESTED IN THE GOVERNMENT IN TERMS OF SECTION 16 OF THE LAND ACQUISITION ACT, 18 94 FROM THE SAID DATES. ACCORDINGLY, FOR THE PURPOSES OF CHARGI NG CAPITAL ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 10 GAINS, THE DATE OF TRANSFER CORRESPONDS TO THE DATE S OF THE TWO AWARDS. THEREFORE, FOR THE PURPOSES OF SECTION 10(3 7)(II) OF THE ACT, THE DATE OF TRANSFER IS TO BE TAKEN AS THE DA TES OF THE AWARDS. NOW, IN ORDER TO EXAMINE THE CONDITION PRES CRIBED IN CLAUSE (II) OF SECTION 10(37), IT HAS TO BE ESTABLI SHED THAT DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING SUCH DATES OF TRANSFER, THE LAND WAS BEING USED FOR AGRICULTURAL PURPOSES BY THE ASSESSEE OR A PARENT OF HIS. THE PLEA OF THE AS SESSEE FOR AGRICULTURAL USE OF LAND IS BASED ON COPIES OF KHAS RA GIRDAWRI WHICH CLEARLY SHOWS GROWING OF CROPS IN THE RELEVAN T PERIOD. THE OBJECTIONS OF THE DEPARTMENT THAT THE AGRICULTU RAL USE IS NOT PROVED BECAUSE OF THE NON- MENTIONING OF CROPS IN T HE AWARD' GIVEN BY THE LAND ACQUISITION COLLECTOR, PANCHKULA, IN OUR VIEW, IS A MERE PRESUMPTION WHICH DOES NOT DISTRACT FROM THE EVIDENTIARY VALUE OF THE KHASRA GIRDAWRI PRODUCED B Y THE' ASSESSEE. EVEN THE MENTIONING OF GAIR MUMKIN IN THE KHASRA GIRDAWRI CANNOT BE CONSTRUED AS FATAL TO THE CONTEN TS OF KHARSA GIRDAWRI, WHICH REVEAL THE GROWING OF CROPS, THUS P ROVING THE AGRICULTURAL USE OF THE LAND. ON THIS ASPECT THE ID . COUNSEL EXPLAINED THAT THE LAND WAS SELF-IRRIGATED. 9. ON THIS ASPECT, A REFERENCE TO THE JUDGMENT OF T HE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. SMT . SAVITA RANI [2004] 270 ITR 402(PUNJ. & HAR.) IS NOTE WORTHY. TH E HON'BLE HIGH COURT, IN THE CONTEXT OF SECTION 54B OF THE AC T WAS EXAMINING WHETHER THE LAND CAN BE SAID TO HAVE BEEN USED FOR AGRICULTURAL PURPOSES. THE DEPARTMENT HAD SOUGHT TO HOLD THAT THE LAND WAS NOT BEING USED FOR AGRICULTURAL PURPOS ES BECAUSE THE LAND WAS SAID TO BE SITUATED WITHIN THE MUNICIP AL LIMITS; THAT ONLY FODDER GRASS AND VEGETABLES WERE GROWN IN THE KHARIF SEASON WHILE THE LAND REMAINED FALLOW IN THE RABI S EASON; AND, THAT ASSESSEE HAD ACQUIRED HUGE CHUNKS OF LAND AND CONSTRUCTED CERTAIN GODOWNS ALSO. ALL THESE OBJECTIONS WERE NOT HELD AS CONCLUSIVE IN THE FACE OF THE KHASRA GIRDAWRI OF TH E LAND PRODUCED BY THE ASSESSEE. AS PER THE HON 'BLE HIGH COURT, KHASRA GIRDAWRI PRODUCED BY THE ASSESSEE SHOWED THA T AGRICULTURAL OPERATIONS WERE BEING CARRIED ON BY TH E ASSESSEE AND MERELY BECAUSE THE LAND WAS LOCATED IN A COMMER CIAL AREA OR LAND WAS HAVING PARTIAL UTILIZATION FOR NON-AGRI CULTURAL PURPOSES WERE NOT THE RELEVANT CONSIDERATIONS. EVEN IN THE CASE BEFORE US, KHASRA GIRDAWRI PRODUCED BY THE ASSESSEE CLEARLY SHOWS THAT DURING THE PERIOD OF TWO YEARS IMMEDIATE LY PRECEDING THE DATE OF TRANSFER, THE LAND WAS BEING PUT TO USE FOR ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 11 AGRICULTURE PURPOSES. THE KHASRA GIRDAWRI, PLACED A T PAGES 8-9 AND 14-15 OF THE PAPER BOOK SHOW GROWING OF WHEAT, BAJRA, MAKKI, CHARI ETC. MOREOVER, IN THIS CASE WE FIND TH AT THE LOWER AUTHORITIES HAVE DISREGARDED THE EVIDENCE PRODUCED BY THE ASSESSEE BY MERELY DISBELIEVING THE SAME, AND WITHO UT BRINGING ON RECORD ANY CLINCHING .EVIDENCE TO THE CONTRARY. THEREFORE; IN VIEW OF THE COPIES OF KHASRA GIRDAWRI OF THE RELEVA NT PERIOD, RELIED UPON BY THE ASSESSEE IT CAN BE SAID THAT IN THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFE R THE LANDS IN QUESTION WERE USED FOR AGRICULTURAL PURPOSES, AN D ACCORDINGLY ASSESSEE SATISFIES THE CONDITIONS MENTI ONED IN SECTION 10(37)(II) OF THE ACT. MERELY BECAUSE THE L AND WAS ADJOINING A DEVELOPED AREA WOULD NOT TAKE AWAY THE AGRICULTURAL USE OF THE LAND PORTRAYED BY THE KHASR A GIRDAWRIS. THEREFORE, OUR CONCLUSION THAT USE OF THE LAND FOR AGRICULTURAL PURPOSES STANDS PROVED. IT MAY BE MENTIONED THAT TH E ID. COUNSEL FOR THE ASSESSEE CONCEDED THAT THE LANDS ME NTIONED IN GIRDAWRI AT KHASRA NOS. 420 AND 421 HAVE NOT BEEN P UT TO USE FOR AGRICULTURAL PURPOSES AS CERTAIN BUILDINGS WERE CONSTRUCTED, THEREON, AS EVIDENCE BY THE KHASRA GIRDAWRI. THEREF ORE THE CORRESPONDING ENHANCED COMPENSATION RECEIVED THIS Y EAR SHALL NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 10(37) OF THE ACT. 10. INSOFAR AS CONDITION PRESCRIBED IN CLAUSE (III) OF SECTION 10(37) IS CONCERNED, THERE IS NO DISPUTE THAT ENHAN CED COMPENSATION HAS BEEN RECEIVED BY THE ASSESSEE DURI NG THE YEAR IN PURSUANCE OF AN ACQUISITION BY THE STATE GOVERNM ENT UNDER THE PROVISIONS OF THE LAND ACQUISITION ACT, 1894. 11. CLAUSE (IV) OF SECTION 10(37) PROVIDES THAT THE COMPENSATION OR. CONSIDERATION CONSIDERED EXEMPT SHOULD BE RECEI VED BY THE ASSESSEE ON OR AFTER FIRST DAY OF APRIL, 2004. THE IMPUGNED COMPENSATION HAS BEEN CLEARLY RECEIVED BY THE ASSES SEE AFTER THE AFORESAID DATE AND IS THEREFORE, ELIGIBLE FOR E XEMPTION. IN THIS CONNECTION, AS PER THE CIT (APPEALS), THE SAID CONDITION IS NOT SATISFIED BY THE ASSESSEE BECAUSE THE PROVISI ONS OF SECTION 10(37) ARE APPLICABLE TO CASES WHERE THE AGRICULTUR AL LAND HAS BEEN COMPULSORILY ACQUIRED AFTER 1-4-2004 AND IN TH E CASE OF THE ASSESSEE, THE LAND HAS BEEN ACQUIRED ON AN EARL IER DATE. IN OUR CONSIDERED OPINION, THE REASONING PUT FORTH BY THE CIT(A) IS NOT CONSISTENT WITH THE PROVISIONS OF SECTION 10(37 )(IV). THE SAID CLAUSE MERELY PROVIDES THAT THE INCOME OUGHT T O HAVE BEEN RECEIVED BY THE ASSESSEE ON OR AFTER 1-4-2004, WHIC H IS NOT IN ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 12 DISPUTE IN THE PRESENT CASE. THEREFORE, THE CONDITI ON PRESCRIBED IN CLAUSE (IV) OF SECTION 10(37) IS SATISFIED IN TH IS CASE. 12. IN THE RESULT, WE SET ASIDE THE ORDER OF THE CI T (APPEALS) AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE EXEMP TION ELIGIBLE UNDER SECTION 10(37) OF THE ACT, KEEPING IN MIND TH E NON- AGRICULTURAL USE OF THE LANDS AS CONCEDED BY THE AP PELLANT. NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL RE -COMPUTE THE AMOUNT OF EXEMPTION UNDER SECTION 10(37) OF THE ACT AFTER ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY OF B EING HEARD: THUS, ON THIS ASPECT, ASSESSEE PARTLY SUCCEEDS. 14. IN VIEW OF ABOVE, WE ARE INCLINED TO HOLD THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND THE CIT(A) WA S RIGHT IN GRANTING RELIEF FOR THE ASSESSEE AND WE HAVE NO REASON TO INTERFERE WIT H THE CONCLUSION OF CIT(A) ON THIS ISSUE. HENCE, GROUND NO. 3 OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. 15. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DEEME D TO BE ALLOWED ON GROUND NO.2 FOR STATISTICAL PURPOSES AND PARTLY DISMISSED ON GROUND NO. 1 AND 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/05/2015. SD/- SD/- (S.V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 8TH MAY 2015 GS ITA 4415/DEL/2013 ASSTT. YEAR: 2010-11 13 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. COMMISSIONER OF INCOME TAX(A) 4. CIT. 5. DR BY ORDER ASSTT. REGISTRAR