Kadiravan Chemicals P Ltd., CHENNAI V. DCIT, CHENNAI

ITA 512/CHNY/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9723 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: S SRIDHAR
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.512/CHNY/2017 ( )( / ASSESSMENT YEAR : 2011-12 M/S KADIRAVAN CHEMICALS PVT. LTD., 246, ANNA SALAI, THOUSAND LIGHTS, CHENNAI - 600 006. PAN : AAACK 4308 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(4), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI V. NANDAKUMAR, JCIT 1 / 2% / DATE OF HEARING : 29.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -8, CHENNA I, DATED 18.01.2017 FOR THE ASSESSMENT YEAR 2011-12, CONFIRM ING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.512/CHNY/17 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE CLAIMED THE SALE OF LAND AS AGRIC ULTURAL INCOME AND CLAIMED EXEMPTION. ACCORDING TO THE LD. COUNSE L, THE ASSESSING OFFICER, HOWEVER, TREATED THE NATURE OF L AND AS NON- AGRICULTURAL. ON A QUERY FROM THE BENCH, THE LD.CO UNSEL SUBMITTED THAT THERE WAS NO FURTHER APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. ACCORDING TO THE LD. COUNSEL, THE LAND IN QUESTION IS AGRICULTURAL LAND AND THE ASSESSEE USED IT FOR CULT IVATION. THE ASSESSING OFFICER ON THE BASIS OF CLASSIFICATION SA ID TO BE MADE BY THE SUB-REGISTRAR APPEARS TO HAVE TAKEN THE VIEW TH AT IT IS NOT AN AGRICULTURAL LAND. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE LEVY OF PENALTY IS NOT JUSTIFIED. 3. ON THE CONTRARY, SHRI V. NANDAKUMAR, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R AFTER DUE VERIFICATION FOUND THAT THE LAND IN QUESTION IS NOT AN AGRICULTURAL LAND. THEREFORE, ACCORDING TO THE LD. D.R., THE CLAIM OF THE ASSESSEE AS AGRICULTURAL LAND IN THE RETURN OF INCOME AMOUNTS T O CONCEALMENT OF PARTICULARS OF INCOME, HENCE, THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY. 3 I.T.A. NO.512/CHNY/17 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER OBSERVED IN THE ASSESSMENT ORDER THAT ON DU E VERIFICATION, IT WAS FOUND THAT THE LAND IN QUESTION IS NOT AN AGRIC ULTURAL LAND. THERE IS NO REFERENCE ABOUT THE VERIFICATION OF MAT ERIAL EVIDENCE FOR THE PURPOSE OF CONCLUDING THAT THE LAND IS NOT AN A GRICULTURAL LAND. IT IS NOT KNOWN WHETHER THE ASSESSING OFFICER HAS TAKE N INTO CONSIDERATION THE CLASSIFICATION MADE BY THE REVENU E AUTHORITIES. IT IS ALSO NOT KNOWN WHETHER THE ASSESSING OFFICER HAS CONSIDERED THE ADANGAL EXTRACT MAINTAINED BY THE REVENUE DEPARTME NT FOR THE PURPOSE OF CULTIVATION. A MERE REFERENCE TO THE CL ASSIFICATION MADE BY THE STATE REGISTRATION DEPARTMENT FOR THE PURPOS E OF COLLECTION OF STAMP DUTY CANNOT BE A SOLE FACTOR FOR DETERMINING THAT THE LAND IN QUESTION IS NOT AN AGRICULTURAL LAND. 5. IT IS A COMMON KNOWLEDGE THAT IN MANY AREAS, THE REGISTRATION DEPARTMENT FOR THE REASONS BEST KNOWN TO THEM, HAS CLASSIFIED THE LANDS EVEN THOUGH THE CLASSIFICATION IN THE REVENUE RECORDS STAND AS WET LAND OR DRY LAND. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT IF THE LAND IS CLASSIFIED A S WET LAND, THEN THERE SHOULD BE NATURAL SOURCE OF IRRIGATION FOR CU LTIVATION. IN CASE IT 4 I.T.A. NO.512/CHNY/17 WAS CLASSIFIED AS DRY LAND, THE LAND MAY BE CULTIVA TED BY USING RAIN OR THERE MAY BE ARTIFICIAL SOURCE OF IRRIGATION BY WAY OF WELL OR BOREWELL. THESE FACTORS WERE NOT BROUGHT ON RECORD EITHER BY THE ASSESSING OFFICER OR BY THE CIT(APPEALS). MOREOVER , A MERE CLAIM IN THE RETURN OF INCOME AS AGRICULTURAL LAND CANNOT BE CONSIDERED TO BE FURNISHING INACCURATE PARTICULARS OF INCOME OR C ONCEALING ANY PART OF INCOME. 6. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSES SEE HAS NOT DISCLOSED ENTIRE SALE CONSIDERATION. IT IS ALSO NO T THE CASE OF THE REVENUE THAT THE ASSESSEE HAS CONCEALED ANY PART OF SALE PROCEEDS OF THE SAID LAND. THE ADMITTED CASE OF TH E REVENUE IS THAT THE ASSESSEE CLAIMS THE GAIN ARISING OUT OF SA LE OF LAND AS EXEMPTION ON THE GROUND THAT THE LAND IN QUESTION I S AGRICULTURAL LAND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THIS CLAIM OF THE ASSESSEE CANNOT BE CONSIDERED TO BE CONCEALING ANY PART OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME AS H ELD BY THE APEX COURT IN CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2 010) 322 ITR 158. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES 5 I.T.A. NO.512/CHNY/17 BELOW ARE SET ASIDE AND THE PENALTY LEVIED BY THE A SSESSING OFFICER IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3 RD DECEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD DECEMBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.