Sri.K.G.Simon, Cochin V. The ITO, Cochin

ITA 453/COCH/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7314 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 10-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 453 /COCH/201 6 ASSESSMENT YEAR : 2008 - 09 K.G. SIMON, H.NO. 3/317, KANDAYIKODEN HOUSE, KURIANS ROAD, NARAKKAL-682 505. [PAN:BMWPS 2505P] VS. THE I NCOME - TAX OFFICER , WARD-3(5), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI R. LOKA NATHAN,CA REVENUE BY SHRI A. DHANARAJ , SR. DR DATE OF HEARING 11 / 0 1 / 201 7 DATE OF PRONOUNCEMENT 12 / 0 1 /201 7 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE CIT(A)-II, KOCHI DATED 30.06.2016. THE RELEVAN T ASSESSMENT YEAR IS 2007-08. 2. THE SOLITARY ISSUE THAT ARISES FOR MY CONSIDERAT ION IS WHETHER THE LAND IN QUESTION IS AGRICULTURAL LAND OR NOT. I.T.A. NO.453/COCH/2016 2 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSE SSMENT YEAR 2008-09, THE RETURN OF INCOME WAS FILED ON 21/07/2008 DECLARING A TOTAL INCOME OF RS. 10,278/- UNDER THE HEAD INCOME FROM OTHER SOURCES. THE AS SESSMENT WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE U/S. 143(2) OF THE A CT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASS ESSEE ALONGWITH HIS BROTHERS JOINTLY OWNED 99.828 CENTS OF LAND OUT OF WHICH DUR ING THE RELEVANT PREVIOUS YEAR, 42.105 CENTS OF LAND WAS ACQUIRED BY THE SPEC IAL TAHSILDAR, (LAND ACQUISITION) ICTT, VALLARPADAM FOR CONSTRUCTION OF A ROAD FOR THE INTERNATIONAL CONTAINER PROJECT AT VALLARPADAM. THE LAND WAS ACQU IRED BY WAY OF DIRECT PURCHASE SCHEME AND A SUM OF RS.39,97,863/- WAS PAI D TO THE ASSESSEE AND HIS BROTHERS BY THE PROJECT DIRECTOR, NATIONAL HIGHWAY AUTHORITY OF INDIA AS COMPENSATION FOR LAND SO ACQUIRED. THE ASSESSEES S HARE OF THE ACQUIRED PROPERTY WAS TAKEN AT RS.13,32,621/-. SINCE THE AS SESSEE HAD FAILED TO DISCLOSE THE CAPITAL GAINS IN THE RETURN OF INCOME FILED, TH E ASSESSING OFFICER DIRECTED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE SAID RECEIPT S HOULD NOT BE BROUGHT TO TAX UNDER THE HEAD LONG TERM CAPITAL GAINS. IN REPLY , THE ASSESSEE STATED VIDE LETTER DATED 26/07/2010 THAT THE COMPENSATION WAS RECEIVED FOR THE LAND ACQUIRED IN A PANCHAYAT AREA AND WAS AGRICULTURAL IN NATURE AND W AS NOT EXIGIBLE TO CAPITAL GAINS TAX. THE ASSESSEE HAD FURNISHED A CERTIFICAT E ISSUED BY THE AGRICULTURAL OFFICER, KRISHI BHAVAN, KADAMAKUDY STATING THAT THE SAID LAND IS AGRICULTURAL LAND. THE ASSESSEE HAD ALSO FILED A LETTER OF THE SPL. TA HSILDAR, (LAND ACQUISITION) ICTT, I.T.A. NO.453/COCH/2016 3 VALLARPADAM TO PROVE THAT THE COMPENSATION RECEIVED BY THE ASSESSEE WAS FOR THE LOSS OF TREES. THE ASSESSING OFFICER HOWEVER RE JECTED THE CONTENTIONS OF THE ASSESSEE AND HELD THAT THE SAID LAND WAS A CAPITAL ASSET AND WAS LIABLE FOR LONG TERM CAPITAL GAINS TAX. THE ASSESSING OFFICER COMP UTED THE INDEXED COST OF LAND AT RS.2,31,999/- AND AFTER DEDUCTING THE SAME FROM COMPENSATION RECEIVED, ARRIVED AT THE LONG TERM CAPITAL GAINS AT RS.11,00, 622/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFIC ER IN ARRIVING AT THE LONG TERM CAPITAL GAINS ON THE LAND ACQUIRED, THE ASSESSEE PR EFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. SINCE THE NOTICE OF HEARING I SSUED FROM THE CIT(A)S OFFICE WAS RETURNED UNSERVED WITH THE REMARK AS ADDRESS N OT KNOWN, THE CIT(A) DECIDED THE CASE EXPARTE ON MERITS. THE CIT(A) CONF IRMED THE FINDINGS OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR T HE ASSESSEE HAS SUBMITTED A PAPER BOOK, ENCLOSING, THE CERTIFICATES ISSUED BY T HE AGRICULTURAL OFFICER, KRISHI BHAVAN, KADAMAKUDY SHOWING THE IMPUGNED PROPERTY AS AGRICULTURAL AND ALSO LETTER OF SPECIAL TAHSILDAR (LAND ACQUISITION), STA TING THAT THE COMPENSATION HAS BEEN PAID FOR THE LOSS OF TREES, THE AFFIDAVIT OF T HE PERSON WHO HAD CARRIED OUT AGRICULTURAL OPERATION IN THE IMPUGNED LAND ETC. I.T.A. NO.453/COCH/2016 4 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT TH E ASSESSEE HAS NOT PRODUCED ANY PROOF TO SHOW THAT THE IMPUGNED LAND IS AGRICUL TURAL IN NATURE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT DISCLOS ED ANY AGRICULTURAL INCOME IN THE RETURN OF INCOME FILED AND HENCE IT CANNOT BE A SSUMED THAT THE LAND IS AGRICULTURAL IN NATURE. IT WAS CONTENDED THAT THE FINDINGS OF THE ASSESSING OFFICER AND THE CIT(A) SHOULD NOT BE INTERFERED WIT H. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. IT IS AN ADMITTED FACT THAT THE SAID LAND IS AN ANCEST RAL PROPERTY AND WAS IN THE OWNERSHIP OF THE ASSESSEE PRIOR TO 01/04/1981. IT IS FURTHER CLEAR THAT THE SAID LAND IS SITUATED IN A PANCHAYAT AREA FAR BEYOND 8 K MS. FROM THE LIMITS OF THE CORPORATION OF COCHIN. THEREFORE, THE ONLY DISPUTE TO BE RESOLVED IS WHETHER THE SAID LAND IS AN AGRICULTURAL LAND OR NOT. THE ASSE SSEE HAD OBTAINED A CERTIFICATE FROM THE AGRICULTURAL OFFICER, KRISHI BHAVAN, KADAM AKUDY ON 22/10/2010 CERTIFYING THE AREA ACQUIRED WAS AN AGRICULTURAL LA ND. THE CERTIFICATE WAS DISREGARDED BY THE ASSESSING OFFICER FOR THE REASON THAT NO REPLY WAS SENT BY THE AGRICULTURAL OFFICER FOR THE LETTER SENT BY THE ASS ESSING OFFICER. THE SPECIAL TAHSILDAR, (LAND ACQUISITION), ICTT, VALLARPADAM HA D ALSO ISSUED A CERTIFICATE TO PROVE THAT THE ASSESSEE AND HIS BROTHERS WERE COMPE NSATED FOR LOSS OF YIELDING COCONUT AND ARECANUT TREES, ETC. FURTHER, THE ASSE SSEE HAS ALSO PRODUCED AN AFFIDAVIT FROM THE PERSON WHO HAD UNDERTAKEN THE AG RICULTURAL ACTIVITIES IN HIS LAND. THE TAX PAID RECEIPTS OF THE ADJACENT LAND W ERE ALSO PRODUCED BY THE I.T.A. NO.453/COCH/2016 5 ASSESSEE TO PROVE THAT THE NATURE OF THE LAND IS AG RICULTURAL PROPERTY EVEN AS ON TODAY. 7.1 THE COCHIN BENCH OF THE TRIBUNAL IN THE CAS E OF KALATHINGAL FAIZAL RAHIMAN IN I.T.A. NO.456/COCH/2015 AND IN THE CASE OF M.J. THOMAS IN I.T.A. NOS. 224/COCH/2011 AND 311/COCH/2011 HAD HELD THAT THE CERTIFICATE ISSUED BY THE REVENUE AUTHORITIES REGARDING THE NATURE OF THE LAND WHETHER IT IS AGRICULTURAL OR NOT, IS A CONCLUSIVE EVIDENCE, UNLESS AND UNTIL THE SAME IS PROVED OTHERWISE BY THE DEPARTMENT. IN THE INSTANT CASE, THE CERTIFICAT E FROM THE AGRICULTURAL OFFICER, KADAMAKUDY HAVING JURISDICTION OVER THE LAND IN QUE STION WAS SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS. THE SAME IS VERY CATEGORICAL AND UNAMBIGUOUS AND THE ASSESSING OFFICER HAS NOT FOUND ANY EVIDENCE TO DISREGARD CONTENTS OF THE CERTIFICATE. SIMILARLY, THE SPECIAL. TAHSILDAR (LAND ACQUISITION), A REVENUE AUTHORITY HAD ALSO IS SUED A CERTIFICATE SHOWING IN DETAIL THE EXISTENCE OF VARIOUS AGRICULTURAL YIELDI NG TREES LIKE COCONUT, ARECANUT AND MANGO. THE ASSESSING OFFICER HAS NOT OBTAINED A NY EVIDENCE AGAINST THE ASSESSEE SO AS TO REJECT THE ABOVE TWO CERTIFICATES . MOREOVER, I NOTICE NO CAPITAL GAINS TAX HAS BEEN LEVIED IN THE HANDS OF THE ASSES SEES BROTHERS WHO ARE THE CO- OWNERS OF THE IMPUGNED PROPERTY WHICH WAS ACQUIRED. FOR THE AFORESAID REASONS, I AM OF THE VIEW THAT ASSESSEE IS NOT LIABLE FOR CA PITAL GAINS TAX ON ACCOUNT OF COMPULSORY ACQUISITION OF THE IMPUGNED PROPERTY. I T IS ORDERED ACCORDINGLY. I.T.A. NO.453/COCH/2016 6 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 12 TH -01-2017. SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 12 TH JANUARY, 2017 GJ COPY TO: 1.K.G. SIMON, H.NO. 3/317, KANDAYIKODEN HOUSE, KURI ANS ROAD, NARAKKAL-682 505. 2. THE INCOME-TAX OFFICER, WARD-3(5), KOCHI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II,KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN