Smt. Madhu Ajmera, Indore V. The Addl.CIT R-2, Indore

ITA 519/IND/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5675 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Opportunity of being heard; Principle of natural justice; Cost of acquisition; Assessment record

Judgement Text

MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER .../ I.T.A. NO. 519/IND/2013 / ASSESSMENT YEAR: 2009-10 MADHU AJMERA INDORE PAN ABWPA 1601 N :: / APPELLANT VS ADDL. COMMISSIONER OF INCOME TAX RANGE 2, INDORE :: ! / RESPONDENT ../ I.T.A. NO. 518/IND/2013 / ASSESSMENT YEAR: 2009-10 LATE PRADEEP AJMERA THROUGH L/H SMT. MADHU AJMERA INDORE PAN ABWPA 1601 N :: / APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 1(2), INDORE :: ! / RESPONDENT '# $ % & / ASSESSEE BY SHRI PRAKASH JAIN '( $ % & / REVENUE BY SHRI MOHD. JAVED DR ) * $ #+ DATE OF HEARING 2 8 .3 .2017 ,-./ $ #+ DATE OF PRONOUNCEMENT 2 9 . 3 .2017 MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 2 / O R D E R PER BENCH THE ABOVE-CAPTIONED APPEALS HAVE BEEN FILED BY THE ASSESSEE-APPELLANTS AGAINST DIFFERENT ORDERS OF THE LEARNED CIT(A)-I, INDORE, BOTH DATED 25.3.2013 IN FIRST APPEAL NOS. I T-768/11-12/38 AND IT-768/11-12/39 FOR THE ASSESSMENT YEAR 2009-10 . 2. IN BOTH THESE APPEALS, THE COMMON GROUNDS OF APP EAL ARE AS UNDER :- 1. THAT IMPUGNED ORDER PASSED BY THE LD. LEARNED C IT(A) IS BAD IN LAW AS WELL AS ON THE FACTS. IT IS BASED ON INCORRECT INTERPRETATION OF LAW AND THE FACTS HAVE ALSO BEEN INCORRECTLY CONSTRUED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTI ON OF THE LD. A.O. IN ASSESSING THE LONG TERM CAPITAL GAIN OF RS. 48,60,503/- ON SALE OF AGRICULTURE LAND SITUATED IN RURAL AREA AND SPECIFIED IN SECTION 2(14)(III) OF THE INC OME TAX ACT WITHOUT APPRECIATING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 3 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. A.O. AND CIT(A) ERRED IN NOT RELYIN G ON THE CERTIFICATE OF GRAM PANCHAYAT AND PATWARI FILED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS INTER ALIA STATING THAT LAND SOLD BY THE APPELLANT IS MORE THAN 8 KOLOMETER S FROM THE MUNICIPAL LIMITED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT ACCEPTING THE A RGUMENTS OF THE APPELLANT THAT THE SDO WAS EXAMINED BY THE L D. A.O. BEHIND THE BACK OF THE APPELLANT WITHOUT ALLOW ING A REASONABLE OPPORTUNITY TO REBUT HIS STATEMENT. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. A.O. ERRED IN NOT PUTTING REQUIRED QUESTION BEFORE THE SDO WHICH ARE NECESSARY FOR DECIDING THE ISSUE VIZ. HOW THE DISTANCE IS MEASURED I.E. BY MOTOR/PAG DANDI OR AIRLY AND HOW AT FIRST OCCASION HE MEASURED THE DISTANCE AT 3 KILOMETERS AND LATER ON IT BECAME 6.8 KILOMETERS ETC. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS 50% SHAREHOLDER OF LAND BEARING SURVEY NO. 906/13 A ND 906/17 IN MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 4 VILLAGE KAILOD KARTA WHICH WAS SOLD FOR A SUM OF RS .1 CRORE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE CLAIMED 50% SHARE OF THE SALE CONSIDERATION OF THE SAID LAND AS EXEMPT B EING AGRICULTURAL LAND. HOWEVER, THE ASSESSING OFFICER DID NOT ALLOW THE EXEMPTION AND ASSESSED THE INCOME UNDER THE HEAD LONG TERM C APITAL GAIN AFTER ALLOWING INDEXED COST OF ACQUISITION AT RS.1 ,29,966/-. THE ASSESSING OFFICER HELD THAT THE LAND UNDER CONSIDER ATION WAS NOT AGRICULTURAL LAND WITHIN THE MEANING OF SECTION 2(1 4)(III) OF THE ACT. IN THIS CONNECTION, THE ASSESSING OFFICER REQUIRED THE SDO, RURAL, INDORE, TO SUBMIT HIS REPORT AS REGARDS THE DISTANC E BETWEEN THE LAND, IN QUESTION, AND THE MUNICIPAL LIMITS OF INDO RE. THE SDO VIDE LETTER DATED 17.10.2011 INFORMED THAT THE LAND UNDE R CONSIDERATION WAS WITHIN 3 KMS OF MUNICIPAL LIMITS OF INDORE. HOW EVER, THE ASSESSEE PRODUCED COPIES OF CERTIFICATE GIVEN BY PA TWARI, HALKA NO. 12, VILLAGE KAILOD KARTAL STATING THAT THE SAID LAN D WAS LOCATED AT MORE THAN 8 KMS AWAY FROM MUNICIPAL LIMITS OF INDOR E. THE ASSESSEE ALSO PRODUCED A LETTER FROM VILLAGE SARPAN CH OF VILLAGE KAILOD KARTAL TO THE EFFECT THAT THE LAND FELL 8 KM S AWAY FROM MUNICIPAL LIMITS. THE ASSESSING OFFICER TREATED THE CERTIFICATE OF THE SDO AS CORRECT. ACCORDINGLY, THE SURPLUS ARISING O N SALE OF THE LAND MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 5 WAS BROUGHT TO TAX AS CAPITAL GAINS BY THE ASSESSIN G OFFICER. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE-APPELLANTS ARE I N APPEAL BEFORE THE TRIBUNAL. 4. AT THE VERY OUTSET OF THE HEARING, THE LEARNE D ASSESSEES REPRESENTATIVE (AR) AS WELL AS THE LEARNED SENIOR D EPARTMENTAL REPRESENTATIVE (DR) PLACED THEIR CONCURRENCE THAT G ROUND NOS. 4 AND 5 OF THE ASSESSEES APPEALS MAY KINDLY BE HEARD FIRSTLY. 5. BEFORE US, THE LEARNED AR SUBMITTED THAT THE LEA RNED CIT(A) HAS GROSSLY ERRED IN NOT ACCEPTING THE CONTENTION O F THE APPELLANT THAT THE SDO WAS EXAMINED BY THE ASSESSING OFFICER AT THE BACK OF THE APPELLANT WITHOUT ALLOWING THE ASSESSEE A REASO NABLE OPPORTUNITY TO REBUT HIS STATEMENT BY WAY OF CROSS- EXAMINATION AND BY PRODUCING OTHER SUPPORTIVE DOCUMENTARY EVIDENCE IN FAVOUR OF THE ASSESSEE. THE LEARNED AR FURTHER CONTENDED THAT THE ASSESSING OFFICER WAS NOT CORRECT IN NOT PUTTING THE REQUIRED QUESTION BEFORE THE SDO WHICH WAS RELEVANT AND NECESSARY FOR DECIDI NG THE ISSUE VIZ. HOW THE DISTANCE OF THE LAND SOLD WAS MEASURED FROM THE BOUNDARY OF NAGAR NIGAM, INDORE. THE LEARNED AR VEH EMENTLY SUBMITTED THAT THE AUTHORITIES BELOW IGNORED THIS F ACT THAT ON THE MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 6 FIRST OCCASION THE SDO ISSUED LETTER STATING THAT T HE LAND IS 3 KMS AWAY FROM THE BOUNDARY OF NAGAR NIGAM, INDORE, AND SECONDLY DURING THE STATEMENTS RECORDED BY THE ASSESSING OFF ICER, HE STATED THAT THE DISTANCE IS 6.8 KMS. THEREFORE, HIS STATEM ENT CANNOT BE RELIED UPON FOR MAKING THE DISALLOWANCE. THE LEARNE D AR FURTHER POINTED OUT THAT DURING THE ASSESSMENT PROCEEDINGS WHEN THE ASSESSEE WAS INFORMED ABOUT THE STATEMENT OF THE SD O THEN IMMEDIATELY THE ASSESSEE PLACED HIS OBJECTION TO TH E STATEMENTS WHICH WERE NOT PROPERLY ADJUDICATED BY THE ASSESSIN G OFFICER AND THE OPPORTUNITY OF CROSS-EXAMINING THE SDO WAS ALSO NOT GIVEN TO THE APPELLANT. 6. REPLYING TO THE ABOVE, THE LEARNED DR SUPPORTING THE ACTION OF THE AUTHORITIES BELOW SUBMITTED THAT THE ASSESSEE N EVER ASKED FOR CROSS-EXAMINATION OF THE SDO AND HIS WRITTEN OBJECT IONS TO THE STATEMENT AND THE EVIDENCE FILED BY THE SDO WERE DI SMISSED BY THE ASSESSING OFFICER AFTER DUE CONSIDERATION OF TOTAL FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, THERE IS NO V IOLATION OF PRINCIPLES OF NATURAL JUSTICE BY THE ASSESSING OFFI CER. THE LEARNED DR STRENUOUSLY CONTENDED THAT THE ASSESSEE NEVER AS KED FOR CROSS- MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 7 EXAMINATION OF THE SDO NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED CIT(A). THEREFORE, THIS PLEA CAN NOT BE AGITATED AT THIS BELATED STAGE BEFORE THE TRIBUNAL. 7. PLACING REJOINDER TO THE ABOVE SUBMISSIONS OF TH E REVENUE, THE LEARNED AR SUBMITTED THAT THE ASSESSEE BY WAY OF WR ITTEN LETTER DATED 14.11.2011 (ASSESSEES PAPER BOOK PAGES 38-39 ) THE ASSESSEE PLACED HIS DETAILED OBJECTIONS TO THE STATEMENT AND EVIDENCE FILED BY THE SDO AND ALSO REQUESTED THE ASSESSING OFFICER TO KINDLY CONFIRM THE FACT IN THE LIGHT OF THE CERTIFICATES ISSUED BY TEHSILDAR, SARPANCH AND PATWARI FILED BY THE ASSESSEE ON THE ASSESSMENT RECORD BUT THE ASSESSING OFFICER DID NOT PROPERLY CONSIDER THE OBJ ECTIONS OF THE ASSESSEE. THE LEARNED AR FURTHER SUBMITTED THAT BY WAY OF WRITTEN OBJECTIONS TO THE STATEMENT OF THE SDO, THE ASSESSE E PLACED HIS CONTRARY STAND AND THE ASSESSING OFFICER WAS DUTY B OUND TO ALLOW THE ASSESSEE AN OPPORTUNITY OF CROSS-EXAMINING THE SDO AND THUS THERE WAS CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND, HENCE, THE STATEMENT OF THE SDO ALONG WITH THE EVIDENCE FI LED BY HIM DURING THE STATEMENT CANNOT BE RELIED UPON BEING SE LF- CONTRADICTORY. MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 8 8. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSION S, WE ARE OF THE VIEW THAT WHEN THE ASSESSING OFFICER WANTS TO M AKE THE ADDITION OR DISALLOWANCE ON THE BASIS OF ANY EVIDEN CE OR STATEMENT THEN HE IS DUTY BOUND TO CONFRONT THE MATERIAL TO T HE ASSESSEE AND AFTER ALLOWING DUE OPPORTUNITY OF HEARING, SUCH EVI DENCE OR STATEMENT CAN BE RELIED UPON FOR MAKING ANY DISALLO WANCE OR ADDITION. BE THAT AS IT MAY, IN THE PRESENT CASE, U NDISPUTEDLY THE ASSESSING OFFICER RECORDED THE STATEMENT OF THE SDO AND HE ALSO PLACED DOCUMENTARY EVIDENCE IN SUPPORT OF HIS STATE MENT AND THE ASSESSEE ALSO PLACED HIS OBJECTIONS TO THE ADMISSIB ILITY AND RELIABILITY OF THE STATEMENT OF THE SDO AS WELL AS THE STATEMENT FILED BY HIM, BUT THE ASSESSING OFFICER WITHOUT ALLOWING OPPORTUNITY TO REBUT THE SAME TO THE ASSESSEE, PROCEEDED TO MAKE D ISALLOWANCE AND CONSEQUENT ADDITION WHICH IS NOT A PROPER AND J USTIFIED APPROACH. AT THIS JUNCTURE, WE MAY POINT OUT THAT D URING THE ARGUMENTS BEFORE US, THE LEARNED DR FAIRLY SUBMITTE D THAT THE DEPARTMENT HAS NO OBJECTION IF THE ASSESSEE IS ALLO WED AN OPPORTUNITY TO CROSS-EXAMINE THE SDO IF IT IS FOUND NECESSARY IN THE INTEREST OF JUSTICE. IN VIEW OF THE ABOVE SITUATION , WE ARE OF THE VIEW MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 9 THAT THE REVENUE AUTHORITIES ARE EMPOWERED TO INQUI RE AND VERIFY THE FACTS PLACED BEFORE THEM BY THE ASSESSEE BY WAY OF CALLING ANY EVIDENCE OR RECORDING STATEMENT OF ANY RELEVANT PER SON OR AUTHORITY BUT SUCH MATERIAL CANNOT BE USED AGAINST THE ASSESS EE WITHOUT CONFRONTING THE SAME TO HIM. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT IN THE PRESENT CASE, DESPITE WRITTEN O BJECTIONS DATED 14.11.2011 OF THE ASSESSEE, THE ASSESSING OFFICER, WITHOUT ALLOWING THE ASSESSEE TO REBUT OR TO CROSS-EXAMINE THE SDO, PROCEEDED TO MAKE DISALLOWANCE AND CONSEQUENT ADDITION WHICH IS NOT A PROPER AND JUSTIFIED APPROACH AND IN THIS SITUATION WE MAY SAFELY PRESUME THAT THE ASSESSMENT ORDER HAS BEEN FRAMED BY VIOLAT ING THE PRINCIPLES OF NATURAL JUSTICE AND THUS THE SAME CAN NOT BE HELD AS SUSTAINABLE IN LAW. 9. ON THE BASIS OF THE FOREGOING DISCUSSION, WE REA CH TO THE CONCLUSION THAT THE ASSESSEE SHOULD BE GIVEN AN OPP ORTUNITY TO CROSS-EXAMINE THE SDO. THEREFORE, THE CASE IS RESTO RED TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT HE SH ALL ALLOW THE ASSESSEE TO CRSS-EXAMINE THE SDO CONCERNED AND THER EAFTER SHALL ADJUDICATE THE ISSUE AFRESH WITHOUT BEING PREJUDICE D FROM THE MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 10 EARLIER ASSESSMENT AND THE FIRST APPELLATE ORDER. N EEDLESS TO SAY THAT THE ASSESSEE SHALL BE GIVEN AN OPPORTUNITY OF BEING HEARD ON THE ISSUE. ACCORDINGLY, GROUND NOS. 4 AND 5 ARE ALL OWED AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFF ICER WITH THE DIRECTIONS AS NOTED ABOVE. 10. SINCE WE HAVE RESTORED THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, THEREFORE , GROUND NOS. 1 TO 3 HAVE BECOME INFRUCTUOUS AND THE SAME ARE NOT BEIN G ADJUDICATED UPON. 11. SO FAR AS ITA NO. 518/IND/2013 IS CONCERNED, BO TH THE PARTIES AGREED THAT THE FACTS AND CIRCUMSTANCES IN THIS CAS E ARE EXACTLY SIMILAR AND IDENTICAL WITH THE FACTS AND CIRCUMSTAN CES OBTAINING IN THE CASE OF SMT. MADHU AJMERA (SUPRA). THEREFORE, OUR CONCLUSION ARRIVED AT IN THE CASE OF SMT. MADHU AJMERA (SUPRA) SHALL APPLY TO THIS APPEAL ALSO AND, THEREFORE, WE RESTORE THIS AP PEAL TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION ALONG WITH THE CASE OF SMT. MADHU AJMERA WITH SIMILAR DIRECTIONS. 12. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. MADHU AJMERA & LATE PRADEEP AJMERA ITA NOS. 519 &518/IND/2013 11 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 29 TH MARCH, 2017. SD/- SD/- &+ ( ( (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MARCH 29 TH , 2017 DN/