Tej Kaur, Mohali V. ITO, Mohali

ITA 507/CHANDI/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5442 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 05-07-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: JASPREET KAUR SOMAL
• Keywords: Capital asset; Additional evidence; Set aside; Capital Gains
• Section: 271(1)(c); 2(14); 274

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CH A, CHANDIGARH , . '.., # $, %& BEFORE: SH. SANJAY GARG, JM & DR. B.R.R. KUMAR, AM ITA NO. 164/CHD/2017 ASSESSMENT YEAR : 2009-10 SH. BHUPINDER SINGH # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: CVWPS3344A APPELLANT RESPONDENT ITA NO. 165/CHD/2017 ASSESSMENT YEAR : 2009-10 SH. PALWINDER SINGH # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: BJMPS3950F APPELLANT RESPONDENT ITA NO. 166/CHD/2017 ASSESSMENT YEAR : 2009-10 SH. GURVINDER SINGH # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: BJMPS3951E APPELLANT RESPONDENT ITA NO. 167/CHD/2017 ASSESSMENT YEAR : 2009-10 MS. GURMEET KAUR # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: ATHPK7178F APPELLANT RESPONDENT ITA NO. 507/CHD/2017 ASSESSMENT YEAR : 2009-10 SMT. TEJ KAUR W/O AMARJIT SINGH # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: ASKPK3208N APPELLANT RESPONDENT 2 ITA NO. 1195/CHD/2017 ASSESSMENT YEAR : 2009-10 SH. JASWINDER SINGH # 1582, PARK VIEW STREET WARD-5, NEAR BUS STAND, KHARAR, MOHALI THE ITO WARD 6(4) MOHALI PAN NO: APPELLANT RESPONDENT !' ASSESSEE BY : MS. JASPREET KAUR SOMAL #!' REVENUE BY : SMT. CHANDRAKANTA $ %! & DATE OF HEARING : 19/09/2018 '()*! & DATE OF PRONOUNCEMENT : 31/10/2018 %'/ ORDER PER BENCH: ALL THE ABOVE APPEALS HAVE BEEN FILED BY DIFFERENT ASSESSES AGAINST THE SEPARATE ORDER OF LD. CIT(A)-2, CHANDIGARH. 2. THE APPEAL NO. 164 TO 167/CHD/2017 ARE BARRED BY 16 DAYS. THE LD. AR EXPLAINED THAT OWING TO THE ILL HEALTH OF THE ASSES SEE THE APPEAL COULD NOT BE FILED IN TIME AND PLEADED FOR CONDONATION OF DELAY. AFTER ACCORDING DUE OPPORTUNITY OF HEARING TO THE REVENUE, THE DELAY WH ICH IS DUE TO THE MEDICAL REASON IS HEREBY CONDONED. IN THE CASE OF MRS. TEJ KAUR IN ITA NO. 507/CHD/2017 THE LEGAL HEIR WAS BROUGHT ON RECORD. 3. ASSESSEE HAS RAISED AMENDED GROUNDS IN ALL THE A BOVE APPEALS, SINCE THE ISSUES RAISED IN ALL THE APPEALS ARE COMMON THEREFO RE THEY ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER. FOR DEALING WE SHA LL TAKE ITA NO. 164/CHD/2017 AS A LEAD CASE WHEREIN ASSESSEE HAS RA ISED THE FOLLOWING AMENDED GROUNDS: 1. THAT ORDER OF LEARNED AO WARD 6(4) MOHALI IS ERRONE OUS BOTH ON FACTS AND IN LAW. THE CONFIRMING ORDER OF LEARNED CIT(A)-2 CH ANDIGARH IS ALSO ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THAT LEARNED AO HAS ERRED IN NOT TREATING THE RURAL AGRICULTURAL ANCESTRAL LAND BEYOND THE MUNICIPAL LIMITS, SOLD DURING THE Y EAR, AS AGRICULTURAL LAND WITHIN MEANING OF SECTION 2(14) OF INCOME TAX ACT 1961. 3 3. THAT LEARNED AO IS ERRED IN TREATING THE AGRICULTUR AL INCOME AS CAPITAL GAIN, CONCEALED INCOME AND EARNED INTEREST WITHOUT CONSIDERING THE EXPLANATIONS AND EVIDENCES SUBMITTED BY ASSESSEE TH EREIN. 4. THAT LEARNED AO HAS FAILED TO APPRECIATE THAT, THE ASSESSEE HAD DEMONSTRATED THAT SUCH LAND WAS ACTUALLY USED FOR A GRICULTURAL PURPOSE AND VARIOUS CROPS WERE PRODUCED ON THE SAID LAND AND WA S REFLECTED IN VARIOUS RECORDS MAINTAINED BY THE PATWARI NAMELY KHASRA GIR DWARI ETC WHICH IS PRIMARY RECORD AND COULD NOT HAVE BEEN BRUSHED ASIDE. 5. THE LEARNED AO FAILED TO APPRECIATE THAT THE LAND H AS BEEN ASSESSED TO THE LAND REVENUE (LAGAAN) AND ENTRY OF THE SAME REF LECTED IN THE SPECIFIC COLUMN IN JAMABANDI. 6. THAT LEARNED AO HAS FAILED TO APPRECIATE THE CONTEN TION OF ASSESSEE REGARDING THE POPULATION LESS THAN TEN THOUSAND, LA ND EXCLUDED FROM THE DEFINITION OF CAPITAL ASSET. 7. THAT LEARNED AO FAILED TO APPRECIATE THAT THE INCOM E DERIVED ON SALE OF AGRICULTURAL LANDS IS EXEMPT FROM INCOME TAX. 8. THAT LEARNED AO HAS FAILED TO APPRECIATE THE CONTEN TION OF ASSESSEE THAT THE LAND HELD BY ASSESSEE IS NOT CAPITAL ASSET AND IN NOT EXIGIBLE TO CAPITAL GAINS TAX. IT IS, THEREFORE, MOST RESPECTFULLY PRAYED THAT INS TANT APPEAL OF THE APPELLANT MAY KINDLY BE ACCEPTED AND IMPUGNED ORDER DATED 26-03-2015 PASSED BY SH. JASBIR SINGH (AO), WARD 6(4), SAS NAG AR (MOHALI) AND IMPUGNED ORDER DATED 17-10-2016 PASSED BY SH. BHIM SINGH, CO MMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH ARE ILLEGAL, NULL AND VOID AND PRIMA-FACIE IN-FRUCTUOUS. FURTHER PRAYED THAT SALE CONSIDERATION OF AGRICULTU RAL LAND IS AGRICULTURAL INCOME NOT EXIGIBLE TO CAPITAL GAIN TAX AND ORDER OF A.O. WARD 6(4), SAS NAGAR (MOHALI) AND CIT (APPEALS)-2, CHANDIGARH ARE INTRA-VIRES THE TAX LAWS, ULTRA-VIRES THE OTHER LAW TIME BEING IN FORCE AND ULTRA-VIRES PROVISIONS OF THE CONSTITUTION WHICH PROVIDE THE IMMUNITY TO THE AGRICULTURAL INCOME IN INDIA AN D STAY TO THE NOTICE UNDER SECTION 274 & 271(1)(C) AND NOTICE OF DEMAND UNDER SECTION 156 OF INCOME TAX ACT 1961 BE GRANTED DURING PENDENCY OF APPEAL THERE FORE, AGAINST THE ABOVE SAID IMPUGNED ORDERS MAY KINDLY BE SET ASIDE IN WIT H HEAVY COSTS IN THE INTEREST OF LAW AND JUSTICE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S SOLD LAND OF CERTAIN EXTENT (19 MARLAS) TO M/S HAMIR REAL ESTATE PVT. LTD. DURI NG THE ASSESSMENT YEAR FOR A CONSIDERATION OF RS. 87.50 LACS. THE ASSESSING OFFI CER HELD THAT THE LAND SOLD BY THE ASSESSEE IS CAPITAL ASSET IN VIEW OF THE PROVIS IONS OF SECTION 2(14)(III) READ WITH CBDT NOTIFICATION NO. 9447/F.NO.164/3/87-ITA-I DATE D 06/01/1994. THE SPECIFIED AREA OF MOHALI AS PER ABOVE NOTIFICATION ARE AS UND ER: AREA FALLING WITHIN 1 KM. ON EITHER SIDE OF MOHALI KHARAR ROAD UPTO A DISTANCE OF 6 KMS. FROM MUNICIPAL LIMITS ON THAT ROAD 5. THE ASSESSING OFFICER HELD THAT SINCE THE LAND S OLD BY THE ASSESSEES FALLS WITHIN ONE KILOMETER ON LEFT HAND SIDE OF MOHALI KHARAR ROAD (NATIONAL HIGHWAY -21), THE SALE CONSIDERATION RECEIVED ON IT S TRANSFER IS CHARGEABLE TO 4 CAPITAL GAINS. WHILE PASSING THE ORDER THE ASSESSIN G OFFICER RELIED ON THE ORDER OF THE LD. CIT(A) PERTAINING TO THE SALE OF LAND BELON GING TO THE OTHER PERSONS OF THE SAME VILLAGE. 6. LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE COMPLETE PORTION OF THE ORDER OF THE CIT(A) RELEVANT TO THE DECISION IS AS UNDER: 5.1 BRIEFLY THE FACTS ON THE ISSUE ARE THAT THE ASSESSE E, SH. BHUPINDER SINGH HAD SOLD LAND MEASURING 19 MARLAS 2 SARSAI (EQUILENT TO 0.119 ACRES) TO M/S HAMIR REAL ESTATE PVT. LTD. DURING THE RELEVANT ASSESSMENT YEA R FOR A CONSIDERATION OF RS. 87,50,000/-. ASSESSING OFFICER MADE INQUIRIES FROM SUB REGISTRAR AND AS PER THE REPORT OF THE SUB REGISTRAR IN THE CASE OF SMT. TEJ KAUR AND OTHERS, THE LAND SOLD BY THE ASSESSEE IS SITUATED WITHIN 1 KILOMETER OF MOHA LI KHARAR ROAD AND AO HELD THAT THE LAND SOLD IS A CAPITAL ASSET WHICH IS LIAB LE FOR CAPITAL GAINS. ASSESSING OFFICER ACCORDINGLY COMPUTED LONG TERM CAPITAL GAIN S AT RS. 87,36,148/- AFTER ALLOWING BENEFIT OF INDEXATION TO THE ASSESSEE. 5.2 DURING APPEAL PROCEEDING APPELLANT REITERATED HER S UBMISSION MADE BEFORE AO. IT WAS SUBMITTED THAT AO ASSESSED THE CA PITAL GAINS BY ATTRACTING SEC. 2(14)(III)(A) OF THE ACT HOWEVER THE IMPUGNED LAND IS SITUATED OUTSIDE THE MUNICIPAL LIMITS OF MOHALI. FURTHER THE LAND IN QUE STION IS ASSESSED TO LAND REVENUE OF THE STATE OF PUNJAB SINCE NUMBER OF YEARS. APPEL LANT SUBMITTED THAT AS PER THE CERTIFICATE SUBMITTED BEFORE AO THE POPULATION OF V ILLAGE BALLUMAJRA WHERE THE LAND IS SITUATED IS LESS THAN TEN THOUSAND AND THE CONDITION OF POPULATION IS APPLICABLE AND THE NOTIFICATION OF CBDT IS NOT RELE VANT. 5.3 SUBMISSION OF THE APPELLANT AND THE ASSESSMENT ORDE R HAVE BEEN CONSIDERED. ASSESSING OFFICER HAS DEALT WITH THE CO NTENTION OF THE APPELLANT IN THE ASSESSMENT ORDER IN DETAIL. THE SUBMISSION OF T HE APPELLANT REGARDING POPULATION OF BALLUMAJRA AND THE LAND IS ASSESSED T O LAND REVENUE ARE NOT RELEVANT AS IN PURSUANCE OF SECTION 2(14)(III), CBD T ISSUED NOTIFICATION NO 9447 DATED 06.01.1994 WHICH STATES THAT EVEN THE IAND BE YOND MUNICIPAL LIMITS BUT UPTO A SPECIFIED AREA ARE CAPITAL ASSETS. WITH REGA RDS TO CITIES OF MOHALI AND KHARAR THE NOTIFICATION PRESCRIBED THAT THE AGRICUL TURE LAND SITUATED WITHIN 1 KILOMETER ON EITHER SIDE OF MOHALI KHARAR ROAD UPTO A DISTANCE OF A 6 KILOMETER ARE CAPITAL ASSETS. THIS FACT WAS CONFIRMED BY THE SUB REGISTRAR VIDE ITS REPORT NO 359 DATED 10.09.2014 IN THE CASE OF SMT. TEJ KAUR A ND OTHERS WHOSE LAND ARE ADJACENT TO THE LAND OF THE APPELLANT INTIMATING TH AT THESE LANDS INCLUDING THE LAND SOLD BY THE APPELLANT IS SITUATED WITHIN 1 KIL OMETER ON LEFT SIDE OF MOHALI KHARAR ROAD AND THEREFORE AO HAS RIGHTLY HELD THE A GRICULTURE LAND AS A CAPITAL ASSET WITHIN THE MEANING OF SEC. 2(14)(III) OF THE ACT. THE APPELLANT HAS NOT CONTROVERTED THE FINDINGS OF AO. THE LONG TERM CAPI TAL GAINS ASSESSED BY THE ASSESSING OFFICER OF RS. 87,36,148 IS ACCORDINGLY U PHELD. 7. BEFORE US THE LD. AR FILED APPLICATION FOR ADMIS SION OF ADDITIONAL EVIDENCES. THE ADDITIONAL EVIDENCE CONSISTS OF THE REPORT OF THE TEHSILDAR, MOHALI REGARDING THE DISTANCE OF LAND IN QUESTION FROM NAT IONAL HIGHWAY 21. THE LD. DR HAS ALSO BEEN GIVEN THE COPIES OF ADDITIONAL EVIDEN CES FILED BY THE ASSESSEE. SINCE THE ADDITIONAL EVIDENCES WERE NOT AVAILABLE W ITH THE ASSESSEE EARLIER AND SINCE THE ADDITIONAL EVIDENCES ARE REQUIRED FOR ADJ UDICATION OF THE ISSUE THE 5 SAME ARE BEING ADMITTED AS PER THE PROVISIONS OF R ULE 29 WHICH PERMITS THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE FOR ANY S UBSTANTIAL CAUSE. THE INTENTION BEHIND THE RULE IS THAT SUBSTANTIAL JUSTI CE SHOULD BE DONE AND THE INTEREST OF JUSTICE SHOULD BE THE OVERRIDING CONSID ERATION. HENCE THE SAME ARE BEING ADMITTED IN ACCORDANCE WITH RULES IN FORCE. 8. BEFORE US, THE LD. AR ARGUED THAT THE ASSESSING OFFICER HAS WRONGLY TAKEN THE DISTANCE BASED ON THE ASSESSMENT ORDERS OF OTHE R VILLAGERS OF THE SAME AREA WITHOUT GIVING ANY OPPORTUNITY TO EXAMINE OR KNOW A S TO WHO ARE THESE LAND OWNERS AND WHAT IS THE LOCATION OF THEIR LAND , KHA SRA NUMBER ETC.. SHE ARGUED THAT THE CERTIFICATE WAS ISSUED BY GRAM PANCHAYAT W HEREIN IT WAS STATED THAT THE POPULATION OF THE REVENUE VILLAGE IS LESS THAN 10,000 AND DOES NOT FALL WITHIN THE PURVIEW OF NOTIFICATION NO. 9447/F.NO. 164/3/87 -ITA 1 DT. 06/01/1994. SHE HAS ALSO PRODUCED LETTER FROM TEHSILDAR, MOHALI DISTRIC T SAS NAGAR CERTIFYING THAT THE KHASRA NUMBER PERTAINING TO THE ASSESSEE ARE SITUAT ED AT A DISTANCE OF 1.5 KM IN THE VILLAGE BALLO MAJRA FROM NATIONAL HIGHWAY. FURT HER SHE ALSO BROUGHT TO OUR NOTICE THE ASSESSMENT ORDER PASSED UNDER SECTION 14 3(3) IN THE CASE OF ONE OF THE APPELLANTS NAMELY SMT.TEJ KAUR WHERE IN THE LAN D IN QUESTION WAS TREATED AS AGRICULTURAL LAND AND NO CAPITAL GAINS WERE CHARGED FOR THE A.Y. 2007-08. 9. LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORI TIES. 10. ON GOING THROUGH THE ASSESSMENT ORDER DT. 31/01 /2014 WE FIND THAT THE ITO WARD 6(3) MOHALI HAS ENQUIRED VIDE LETTER DT. 0 9/12/2013 FROM THE SUB REGISTRAR, MOHALI TO ASCERTAIN THE FOLLOWING FACTS (EXCERPTS FROM THE ASSESSMENT ORDER): I. WHETHER THE LAND IS SITUATED WITHIN MUNICIPAL LIMIT OR NOT? II. EXACT DISTANCE IN KILOMETERS/METERS OF THIS LAND FR OM THE NATIONAL HIGHWAY NO. 21(MOHALI TO KHARAR ROAD) DURING THE F.Y. 2005- 06. 6 III. WHETHER THIS LAND IS URBAN OR RURAL LAND ? 11. THE SUB-REGISTRAR VIDE REPORT NO. 6 DT. 03/01/2 014 AND NO. 50 DT. 22/01/2014 HAS INTIMATED THAT THE LAND SOLD BY SMT. TEJ KAUR IS RURAL LAND AND OUTSIDE THE MUNICIPAL LIMIT OF KHARAR AND MOHALI. I TS DISTANCE FROM NATIONAL HIGHWAY NO. 21 IS ABOVE 1 K.M.(4427 FT. 804 KARAM). ACCORDINGLY, THE LAND OF THE ASSESSEE IS OUT OF URBAN AREA. 12. THUS AFTER MAKING DUE ENQUIRIES THE ITO HAS ACC EPTED THE RETURNED INCOME IN THE CASE OF ONE OF THE APPLICANTS NAMELY SMT. TEJ KAUR IN THE EARLIER YEAR, HENCE, IT CAN BE SAID THAT THE REVENUE, HAVIN G ACCEPTED THE DISTANCE AFTER DUE ENQUIRIES BRINGING THE PROCEEDS OF THE SA LE OF REMAINING PART OF THE LAND TO TAXATION CANNOT BE ACCEPTED. NOT ONLY THAT, THE CERTIFICATE FROM THE TEHSILDAR, MOHALI AGAIN REITERATED THE FACT THAT TH E LAND IN QUESTION IS BEYOND THE DISTANCE OF 1 KM FROM THE NATIONAL HIGHWAY. THU S, KEEPING IN VIEW THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, THE CERTIFICAT ES OF THE LAND REVENUE AUTHORITIES, AND ORDERS OF THE DEPARTMENT IN THE CA SE OF THE ONE OF THE ASSESSEES FOR THE EARLIER YEARS, WE HEREBY DIRECT T HAT THE ADDITION MADE BE DELETED. 13. AS A RESULT, ALL THE ABOVE APPEALS OF THE ASSES SEE ARE ALLOWED. SD/- SD/- . '.., # $, (SANJAY GARG ) ( DR. B.R.R. KUM AR, AM) ) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER AG DATE: 31/10/2018 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE