Sh. Jasjit Singh, Panchkula V. ACIT, Panchkula

ITA 507/CHANDI/2004

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1605 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 28-04-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.507/CHD/2004 (ASSESSMENT YEAR : 2001-02) SH.JASJIT SINGH VS. THE A.C.I.T., S/O SHRI.JAGDISH SINGH, PANCHKULA. VPO RAMGARH, PANCHKULA. PAN: (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI SUSHIL KUMAR, DR DATE OF HEARING : 01.12.2015 DATE OF PRONOUNCEMENT : 04.12.2015 O R D E R PER RANO JAIN, A.M . : THIS APPEAL HAS COME BACK FROM THE HON'BLE SUPREME COURT VIDE ORDER DATED 8.11.2010 IN CIVIL APPEAL NO.9579 OF 2010. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME AS ON 23.10.200 1 DECLARING AN INCOME OF RS.62,61,670/-. THE LAND OF THE ASSESSEE SITUATED AT VILLAGE RAMGARH, PANCHKULA WAS ACQUIRED BY LAO, HUDA. THE ASSESSEE RECEIVED AN ENHANCEMENT COMPENSATION WHICH WAS AWARDED BY THE 2 ADDITIONAL DISTRICT & SESSION JUDGE, AMBALA AND ALS O RECEIVED INTEREST ON ENHANCED COMPENSATION. THE AM OUNT OF COMPENSATION RECEIVED BY THE ASSESSEE WAS RS.1,57,21,757/-. THIS AMOUNT WAS RECEIVED IN ASSESSMENT YEAR 2000-01. DURING THE RELEVANT ASSESS MENT YEAR I.E. ASSESSMENT YEAR 2001-02 THE ASSESSING OFF ICER MADE ADDITION OF AN AMOUNT OF RS.59,47,525/- BEING 50% OF THE INTEREST RECEIVED BY THE ASSESSEE AS THE 50% OF THE INTEREST WAS DEPOSITED IN THE BANK AS PER THE DIREC TIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT. THE ASSE SSEE WENT IN APPEAL BEFORE THE LEARNED CIT (APPEALS) AG AINST THE SAID ADDITION OF RS.59,47,525/- AND MADE SUBMIS SIONS THAT IN ORDER TO OBTAIN BANK GUARANTEE THE ASSESSEE APPROACHED THE BANK, WHO FURNISHED THE BANK GUARANT EE OF RS.1,18,95,049/- ON PAYMENT OF 50% OF THE AMOUNT I.E. RS.59,47,525/-. SINCE THE JUDGMENT OF THE ADDITION AL DISTRICT & SESSION JUDGE, AMBALA WAS CHALLENGED BY THE LAO BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT AS WELL AS BY THE ASSESSEE, THE ASSESSEE OFFERED 50% O F THE AMOUNT ACTUALLY RECEIVED BY HIM AND PAID TAX ON THE SAME. THE CONTENTION OF THE ASSESSEE WAS THAT THE BALANCE 50% WAS NOT CHARGEABLE TO TAX AS THE APPEAL S OF BOTH LAO AS WELL AS THE ASSESSEE ARE PENDING BEFORE THE HON'BLE HIGH COURT. AFTER MAKING A DETAILED DISCUSSION ON THE ISSUE OF TAXABILITY OF ENHANCED COMPENSATION AS WELL AS THAT OF INTEREST ON SUCH COMPENSATION, THE LEARNED CIT (APPEALS) DISMISSED T HE APPEAL OF THE ASSESSEE BY HOLDING THAT THERE IS NO 3 AMBIGUITY IN THE LAW THAT THE INTEREST ON ENHANCED COMPENSATION IS TO BE TAXED IN THE YEAR IN WHICH IT IS RECEIVED. THE ASSESSEE WENT IN APPEAL BEFORE THE I.T.A.T. THE I.T.A.T., CHANDIGARH BENCH IN ITA NO.507 OF 200 4 DATED 27.12.2004 RELYING ON THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF HINDUSTAN HOUSING & LAND DEVELOPMENT TRUST LTD . [1986] 161 ITR 524 (SC) ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE. 3. AGGRIEVED BY THIS ORDER, THE REVENUE FILED AN APPEAL BEFORE THE HIGH COURT. THE HON'BLE PUNJAB & HARYANA HIGH COURT ALSO DISMISSED THE APPEAL OF THE REVENUE. 4. AGGRIEVED BY THE ORDER OF THE HON'BLE HIGH COURT, THE DEPARTMENT PREFERRED AN APPEAL BEFORE TH E HON'BLE SUPREME COURT OF INDIA. BEFORE THE HON'BLE SUPREME COURT, THE CASE OF THE DEPARTMENT WAS THAT NOW THE MATTER IS SQUARELY COVERED BY THE JUDGMENT OF H ON'BLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM HUF , REPORTED IN 315 ITR 1. HOWEVER, THE ASSESSEE TOOK THE PLEA BEFORE THE HON'BLE SUPREME COURT THAT CERTAIN AGRICULTURAL LANDS OWNED BY HIM WERE ACQUIRED BY HARYANA GOVERNMENT IN 1989 ON WHICH THE ASSESSEE RECEIVED COMPENSATION OF RS.1,57,21,757/- IN ASSESS MENT YEAR 2000-01. THE PLEA OF THE ASSESSEE WAS THAT SI NCE THE LAND WAS FALLING OUTSIDE THE MUNICIPAL LIMITS OF AM BALA, THE SAID LANDS WERE AGRICULTURAL IN NATURE, THEREFO RE, NO INCOME TAX IS EXIGIBLE ON ANY COMPENSATION RECEIVED ON 4 ACQUISITION OF SUCH LAND. SINCE THE ISSUE OF LAND BEING AGRICULTURAL LAND WAS NEVER AGITATED BY THE ASSESSE E BEFORE ANY OF THE AUTHORITIES BELOW, THE HON'BLE SU PREME COURT SET ASIDE THE IMPUGNED ORDER OF THE HON'BLE H IGH COURT AND REMANDED THE CASE TO THE TRIBUNAL. IN TH IS WAY, THIS APPEAL HAS COME UP AGAIN BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE THE HON'BLE SUPREME COURT A ND STATED THAT THE IMPUGNED LAND BEING SITUATED OUTSID E THE MUNICIPAL LIMITS OF AMBALA IS AN AGRICULTURAL LAND. THEREFORE, THE COMPENSATION RECEIVED ON ACQUISITION OF SUCH LAND IS NOT TAXABLE. IT WAS STATED AT THE BAR THAT IN THE COPY OF COMPUTATION OF INCOME FOR ASSESSMENT YE AR 2000-10, THE DEPARTMENT HAS ACCEPTED THE CASE OF TH E ASSESSEE THAT THE LANDS WERE AGRICULTURAL LANDS FAL LING OUTSIDE THE MUNICIPAL LIMITS OF AMBALA. THIS FACT HAS ALSO BEEN STATED IN THE ORDER OF THE HON'BLE SUPREME COU RT. FURTHER, IT WAS ALSO STATED THAT IN THE CASE OF TH E BROTHER OF THE ASSESSEE, WHO IS THE CO-OWNER OF THE SAME LA ND, AN ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) WAS FRAMED FOR ASSESSMENT YEAR 2000-01 VIDE ASSESSING OFFICERS ORDER DATED 28.2.2 003, WHEREBY THE LAND HAS BEEN TREATED AS AGRICULTURAL L AND AND NO TAX UNDER THE HEAD CAPITAL GAIN WAS CHARGE ABLE TO HIM. IN THIS WAY, IT WAS SUBMITTED THAT THE ADDIT ION MADE BY THE ASSESSING OFFICER BE DELETED. 5 6. THE LEARNED D.R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE ONLY ISSUE TO BE DECIDED BY US AS PER THE DIREC TIONS OF THE HON'BLE SUPREME COURT IS WHETHER THE IMPUGNED L AND IS AN AGRICULTURAL LAND OR NOT. FROM THE PERUSAL O F THE COMPUTATION OF INCOME OF ASSESSEE FOR ASSESSMENT YE AR 2000-01, IT IS QUITE CLEAR THAT THE LAND HAS BEEN T REATED AS AGRICULTURAL LAND. FURTHER, ON PERUSAL OF THE O RDER OF THE ASSESSING OFFICER IN THE CASE OF ASSESSEES BR OTHER SHRI JAGJIT SINGH TIKKA FOR ASSESSMENT YEAR 2000-01 , WE OBSERVE THAT THE ISSUE OF ADDITIONAL COMPENSATION R ECEIVED ON THE ACQUISITION OF LAND HAS BEEN DISCUSSED AT LE NGTH BY THE ASSESSING OFFICER AND IT WAS HELD THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND AND NO TAX IS CHAR GEABLE UNDER THE HEAD CAPITAL GAIN. THE LEARNED COUNSE L FOR THE ASSESSEE STATED AT BAR THAT THE BROTHER OF THE ASSESSEE IS CO-OWNER OF THE SAME PROPERTY AND THE PROPERTY DISCUSSED IN THE CASE OF JAGJIT SINGH TIKKA IS THE PROPERTY IN QUESTION. REFRAINING OURSELVES FROM GIVING ANY FINDING ON THE ISSUE, WE THINK IT PROPER TO SEND THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE QUE STION OF LAND BEING AGRICULTURAL IN VIEW OF THE OBSERVATIONS MADE BY THE HON'BLE SUPREME COURT AS WELL AS MADE BY US IN THE PRECEDING PARAGRAPHS AND DECIDE THE ISSUE AS PE R LAW. 6 THE ASSESSEE SHOULD BE GIVEN PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF DECEMBER, 2015. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 4 TH DECEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH