ITO, Chandigarh V. Sh. Gurmeet Singh, Chandigarh

ITA 524/CHANDI/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5297 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Capital asset
• Section: 148; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.524/CHD/2012 ASSESSMENT YEAR: 2007-08 THE ITO VS. SHRI. GURMEET SINGH WARD 5(4) S/O SHRI. MOHINDER SINGH CHANDIGARH HOUSE NO. 66, VILL- KHUDA LAHORA CHANDIGARH PAN NO. CKIPS9619H CROSS OBJECTION NO. 26/CHD/2012 (IN ITA NO.524/CHD/2012) ASSESSMENT YEAR: 2007-08 SHRI. GURMEET SINGH VS. THE ITO S/O SHRI. MOHINDER SINGH WARD 5(4) HOUSE NO. 66, VILL- KHUDA LAHORA CHANDIGARH CHANDIGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PARIKSHIT AGGARWAL REVENUE BY : SMT. CHANDRAKANTA DATE OF HEARING : 02/11/2017 DATE OF PRONOUNCEMENT: 24/01/2018 ORDER PER DR. B.R.R. KUMAR, A.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AN D CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT( A), CHANDIGARH DT. 29/02/2012. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATIN G THE FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 47,22,000/- MADE ON AC COUNT OF LONG TERM CAPITAL GAIN BY HOLDING THAT THE LAND SOLD BY THE ASSESSEE IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION -2(14) OF THE INCOME TAX ACT 1961. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SE T ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE IN HIS CROSS OBJECTION ARE AS UNDER: 4. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, W ORTHY CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF LD. AO WHEREIN HE WAS N OT JUSTIFIED IN FRAMING THE IMPUGNED ASSESSMENT EVEN WITHOUT ISSUING OR SERVING THE STAT UTORY NOTICE U/S 143(2) OF THE ACT. 5. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, W ORTHY CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF LD. AO WHEREIN HE WAS N OT JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS. 47,22,000/- WHICH WAS BEYOND THE PU RVIEW OF AIR INFORMATION AND THE ASSESSMENT THEREOF BECAME ILLEGAL IN THE LIGHT OF D IRECT CIRCULAR OF THE BOARD IN THIS REGARD. 4. BRIEF FACTS OF THE CASE ARE THAT NOTICE UNDER SE CTION 138 OF THE INCOME TAX ACT 1961 HAS ISSUED ON 02/09/2009 AND SERVED ON THE ASSESSEE ON 03/09/2009. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 4 7,22,000/- ON ACCOUNT OF CAPITAL GAIN EARNED BY THE ASSESSEE ON ACCOUNT OF S ALE OF AGRICULTURE LAND WHICH IS SITUATED WITHIN THE CHANDIGARH URBAN CONGL OMERATION. 5. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE TH E CIT(A). 6. THE LD. CIT(A) HAS DELETED THE ADDITION ON THE G ROUNDS THAT THE LAND IS SITUATED IN VILLAGE KHUDDA LAHORA WHICH IS NOT WITH IN THE JURISDICTION OF CHANDIGARH MUNICIPALITY AND IS NOT SPECIFIED AS PER THE NOTIFICATION ISSUED BY THE CBDT. 7. AGAINST THE ORDER OF THE LD. CIT(A) REVENUE FILE D APPEAL BEFORE US. THE ASSESSEE HAS ALSO FILED CROSS APPEAL ON THE GROUNDS OF REOPENING UNDER SECTION 148 AND ON ALLOWABILITY OF DEDUCTION UNDER SECTION 54B. 8. BEFORE US DURING THE ARGUMENTS THE LD. AR HAS B ROUGHT TO OUR NOTICE THE CIRCULAR NO. 9447 DT. 06/01/1994 9. THE LD. DR HAS SUBMITTED THAT THE LAND IN QUESTI ON WHICH HAS BEEN SOLD IS JUST NEXT TO PGI CHANDIGARH SECTOR 12 AND THE LIMIT OF THE VILLAGE KHUDDA LAHORA STARTS IMMEDIATELY FROM WHERE THE LIMIT MUNICIPAL C ORPORATION ENDS AND THE LAND IS WITHIN 8 KM FROM THE LIMIT OF CHANDIGARH MUNICIP AL CORPORATION 10. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE P ARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. 11. ON PERUSAL OF THE CIRCULAR NO. 9447 DT. 06/01/1 994 WE FIND THAT THE DISTANCE FROM THE MUNICIPAL LIMITS PERTAINING TO TH E AREAS FALLING OUTSIDE THE LOCAL LIMITS HAVE NOT BEEN MENTIONED FOR THE CITY OF CHAN DIGARH. HENCE THE AGRICULTURAL LAND SITUATED OUTSIDE THE MUNICIPAL LI MITS OF CHANDIGARH CANNOT BE TREATED AS A CAPITAL ASSET. SIMILARLY EVEN IF IT IS CONSIDERED TO TAKE THE NEAREST MUNICIPALITIES MOHALI THE LAND IS NOT WITHIN 1 KM O N EITHER SIDE OF MOHALI KHARAR ROAD UPTO THE DISTANCE OF 6 KM FROM MUNICIPAL LIMIT S AND IN CASE OF PANCHKULA THE LAND IS NOT WITHIN THE DISTANCE OF 5 KM FROM MU NICIPAL LIMITS. 12. AS THE LAND DOESNT FALL WITHIN THE ALLOWABLE M UNICIPAL LIMITS IT CANNOT BE TREATED AS A CAPITAL ASSET WITHIN THE MEANING OF SE CTION 2(14)(III) THEREFORE WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A) . 13. SINCE THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE ON MERITS, THE ADJUDICATION ON THE TECHNICAL ISSUES RAISED BY THE ASSESSEE BECOMES IRRELEVANT AND INFRUCTUOUS. 14. AS A RESULT THE APPEAL OF THE REVENUE IS DISMIS SED AND THE CO IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24/01/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR