M/s. Ganpati Concast Pvt. Ltd., Muzaffarnagar V. ITO, Muzaffarnagar

ITA 4457/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7373 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 22-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT KHAN
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-4457/DEL/2014 (ASSESSMENT YEAR-20 10-11) GANPATI CONCAST PVT.LTD., 29, SANGAM VIHAR, MUZAFFARNAGAR PAN-AACCG4569P (APPELLANT) VS ITO, WARD-1(1), MUZAFFARNAGAR (RESPONDENT) APPELLANT BY SH. M.P.RASTOGI, ADV. RESPONDENT BY SH. FARHAT KHAN, SR.DR. ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 31.03.2014 OF CIT(A), MUZAFFARNA GAR PERTAINING TO 2010 11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1) THAT THE CIT (A) HAS ERRED ON FACT AND UN DER THE LAW IN SUSTAINING THE ORDER OF AO TAXING THE PROFIT ON SALES OF AGRIC ULTURAL LAND WHICH IS NOT A CAPITAL ASSET IN TERMS OF SECTION 2(14) IF THE IN COME TAX ACT 1961. 2) THAT THE CIT (A) HAS OUGHT TO HAVE TAKEN I NTO CONSIDERATION THE NATURE OF AGRICULTURE LAND ON THE DATE OF SALE 30TH NOVEMBER 2009 AND NOT THE PRESENT CHARACTER OF THE LAND AT THE TIME O F ASSESSMENT CONSEQUENTLY THE TAXATION OF CAPITAL GAIN ON SALE O F AGRICULTURAL LAND IS ARBITRARY, UNJUST AND BAD IN LAW. 3) THAT THE DISALLOWANCE OF INTEREST OF RS. 63, 844/- OUT OF INTEREST IS ARBITRARY, UNJUST AND AT ANY RATE VERY EXCESSIVE. 4) THAT THE ASSESSEE DENIES HIS LIABILITY TO PA Y INTEREST CHARGED U/S 234B, OF THE INCOME TAX ACT 1961 AT RS. 3,68,424/-. 5) THE ABOVE GROUNDS OF APPEAL ARE INDEPENDEN T AND WITHOUT PREJUDICE TO ONE ANOTHER. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE IN THE YEAR UNDER CONSIDERATION SHOWED NIL TAXABLE INCOME AND CLAIMED NET LOSS OF RS.93,448/- BE CARRIED FORWARD TO BE SET OFF IN FOLLOWING YEARS. IN THE SCRUTINY ASSESSMENT IT WAS DATE OF HEARING 22.06.2016 DATE OF PRONOUNCEMENT 19.08.2016 I.T.A .NO.-4531/DEL/2014 PAGE 2 OF 4 SEEN THAT THE ASSESSEE CARRIED NO BUSINESS ACTIVITY AND ONLY AGRICULTURAL LAND WAS PURCHASED ON 29.11.2007 FOR SETTING OF BUSINESS ACT IVITIES WAS SOLD FOR A CONSIDERATION OF RS.65,95,000/- ON 30.11.2009. THE AO CONSIDERING THE FACT THAT THE LAND WHICH WAS SOLD WAS NEVER USED FOR FARMING REQUIRED THE ASSESSEE TO FURNISH REASONS FOR NOT SHOWING PROFIT OF RS.33,41 ,573/-. THE ASSESSEE EXPLAINED THAT AGRICULTURAL LAND WAS PURCHASED AND AGRICULTUR AL LAND WAS SOLD. IT WAS FURTHER SUBMITTED THAT IN THE CIRCUMSTANCES THE PRO FIT IS NOT TAXABLE AS PER THE ACT. RELYING ON SECTION 2(14)(III) IT WAS SUBMITTED IT W AS NOT AN ASSET. 2.1. THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPT ED BY THE AO HOLDING THAT THE SPECIFIC LAND PURCHASED WAS INDUSTRIAL LAND AS PER INFORMATION MADE AVAILABLE BY THE REVENUE DEPARTMENT OF THE STATE. 3. THE ASSESSEE CAME IN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY CONTENDING THAT THE KHASRA & KHATAUNI OF AGRICULTURAL LAND SHO WED THAT IT WAS CONVERTED INTO NON-AGRICULTURAL LAND AND MUTATED ONLY ON 06.01.201 0 I.E. AFTER THE SALE AND WAS DECLARED BY SDM, KHATAULI AS PER ORDER DATED 19.04. 2010. HOWEVER THE CLAIM OF THE ASSESSEE WAS REJECTED. 4. THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD. AR INVITING ATTENTION TO THE REASONS PREVAILING WITH THE AO TO HOLD THAT IT WAS AN INDUSTRIAL LAND AND NOT AN AGRICULTURAL LAND, WHICH HAVE BEEN EXTRACTED BY THE CIT(A) SUBMITTED THAT IT REFERS TO THE INFORMATION RECEIVED ON 23.03.2013 I. E MUCH AFTER THE SALE WAS MADE. IT WAS SUBMITTED THAT INSTEAD OF CONSIDERING THE ST ATUS OF THE LAND AT THE TIME OF THE SALE, THE REVENUE HAS WRONGLY CONSIDERED THE ST ATUS OF THE LAND AS ON THE DATE OF THE ASSESSMENT ORDER. THE REVENUE IT WAS SUBMIT TED WAS REQUIRED TO ADJUDICATE UPON THE ISSUE CONSIDERING THE STATUS OF THE LAND ON THE DATE WHEN IT I.T.A .NO.-4531/DEL/2014 PAGE 3 OF 4 WAS SOLD BY THE ASSESSEE WHICH AS PER DOCUMENTS MAD E AVAILABLE TO THE AO AND THE CIT(A) IT WAS SUBMITTED ADMITTEDLY DEMONSTRATED THAT IT WAS AN AGRICULTURAL LAND. RELYING ON THE SUBMISSIONS RECORDED AT PAGES 4 & 5 OF THE CIT(A)S ORDER AND THE REASONS OF THE AO EXTRACTED AT PAGE 4 OF THE IM PUGNED ORDER, IT WAS HIS SUBMISSION THAT IRRELEVANT FACTS HAVE BEEN TAKEN IN TO CONSIDERATION FOR DECIDING THE ISSUE. ACCORDINGLY A PRAYER WAS MADE THAT CONS IDERING THE EVIDENCE THE APPEAL OF THE ASSESSEE MAY BE ALLOWED. 4. THE LD. SR.DR PLACED RELIANCE UPON THE ORDERS O F THE AUTHORITIES BELOW. ON BEING CONFRONTED WITH THE COPIES OF THE KHASRA & KH ATAUNI CONSIDERED BY THE TAX AUTHORITIES AND RELIED UPON BY THE ASSESSEE MADE AV AILABLE ONCE AGAIN WHEREIN IN THE SECOND PAGE OF THE KHATAUNI, RECORDING IS MADE THAT THE OWNERSHIP OF THE SPECIFIC PIECE OF LAND WAS WITH CHAKRADHAR CHEMICAL S BY SDM, KHATAULI U/S 143 AND THE LAND WAS CONVERTED FROM AGRICULTURAL LAND ON 13.04.2010 TO NON- AGRICULTURAL LAND NO ARGUMENT IN SUPPORT OF THE ORD ERS WAS ADVANCED. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT IN THE PECULIAR FACT S AND CIRCUMSTANCES OF THE CASE, THE TAX AUTHORITIES HAVE MIS-DIRECTED THEMSELVES BY TAKING INTO CONSIDERATION THE STATUS OF THE LAND AS ON THE DATE ON WHICH THE QUER IES WERE MADE BY THE AO. THE RELEVANT DATE FOR DECIDING THE ISSUE WOULD HAVE BEE N THE STATUS OF LAND AS PER THE LAND REVENUE RECORDS, ON THE DATE OF THE SALE OF TH E SAID PROPERTY. THE STATUS OF THE LAND HAS TO BE CONSIDERED AS PER THE CLASSIFICATION DONE BY THE LAND REVENUE AUTHORITIES AND NOT AS PER THE WHIM & FANCIES OF TH E PARTIES. ACCORDINGLY THE ISSUE IS SET ASIDE AND RESTORED BACK TO THE AO WITH THE D IRECTION TO VERIFY THE CORRECTNESS I.T.A .NO.-4531/DEL/2014 PAGE 4 OF 4 OF THE ASSESSEES CLAIM IN SUPPORT OF WHICH PHOTOCO PIES OF KHASRA & KAHATUANI HAVE BEEN FILED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST 2016. SD/- (DIVA SINGH ) JUDICIAL ME MBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI