NANDKUMAR PHUTANE, THANE V. ITO WD 3(1), THANE

ITA 595/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2281 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Assessee Lawyers: M G MORYANI
• Keywords: Capital asset; Additional evidence; Set aside
• Section: 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI SANDEEP GOSAIN (JM) I.T.A. NO. 595 /MUM/ 201 7 (ASSESSMENT YEAR 20 10 - 1 1 ) SHRI NANDKUMAR KRISHNARAO PHUTANE ROW HOUSE NO. 2, KRISHNAIE PRASIK NAGAR, NEAR RAGHUKUL SO CIETY, KALWA (WEST) THANE - 400 605. PAN : AFHPP1999P V S . ITO WARD 3(1) ROOM NO. 3, 6 TH FLOOR B WING, ASHAR I.T. PARK, ROAD NO. 16Z WAGLE ESTATE THANE (W) - 400 604. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI M.G. MORYANI DEPARTMENT BY SHRI JEETEN DRA KUMAR DATE OF HEARING 16.7 . 201 9 DATE OF PRONOUNCEMENT 27 . 8 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 26.10.2016 AND PERTAINS TO A.Y. 2010 - 11. 2. THE ISSUE RAISED INS THAT LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN OF RS. 91,98,500/ - . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS SOLD LA N D AT KARJAT ( SURVEY NO. 26/1) ON 26.3.2010. T HE SAID LAND WAS PURCHASED O N 21.8.2008. T HE ASSESSING OFFICER HAD COMPUTED SHORT TERM CAPITAL GAIN AMOUNTING TO RS. 9,40,500/ - . BEFORE LEARNED CIT(A) ASSESSEE MADE SUBMISSIONS THAT THE SAID LAND WAS AGRICULTURAL LAND AND HENCE THE ASSESSEE WAS ENTITLED TO EXEMPTION FROM TAX THERE UP ON. ASSESSEE ALSO FILED ADDITIONAL EVIDENCES IN THIS REGARD. LEARNED CIT(A) OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER ALSO. LEARNED CIT(A) ALSO NOTED THAT ASSESSEES SUBMISSION THAT THE SAID LAND WAS SHRI NANDKUMAR KRISHNARAO PHUTANE 2 SITUATED 8 KM FROM THE CITY LIMIT O F KARJAT AND OBSERVED THAT THE ASSESSEE HAS SUBMITTED PAPER BOOK AND ADDITIONAL EVIDENCES IN THIS REGARD. LEARNED CIT(A) NOTED THAT THE ASSESSEE HAD SUBMITTED 7/12 EXTRACTS IN SUPPORT OF THE CLAIM THAT THE SAID LAND WAS AGRICULTURAL LAND. HOWEVER, LEARNED CIT(A) HELD T HAT IN THE 7/12 EXTRACT THE LAND WAS MENTIONED AS BARREN LAND. HENCE, LEARNED CIT(A) DID NOT FIND COGENCY IN THE ASSESSEES SUBMISSION THAT THE SAID LAND WAS AGRICULTURAL LAND. LEARNED CIT(A) ALSO DREW ADVERSE INFERENCE THAT THE ASSESSEE HAS NOT SHOWN AGRI CULTURAL INCOME THEREFROM. HE ALSO REJECTED THE CONTENTION THAT THE SAID AGRICULTURAL LAND WAS SITUATED 8 KM FROM THE CITY LIMIT OF KARJAT AS HE FO ND THIS CONTENTION TO BE IRRELEVANT. 4. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE US. WE HAVE HEARD BO TH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE THE CLAIM OF THE ASSESSEE THAT THE SAID LAND IS AGRICULTURAL LAND IS DULY SUPPORTED BY THE 7/12 EXTRACT SUBMITTED BY THE ASSESSEE. NO CASE HAS BEEN MADE OUT THAT THE SAID LAND HAS BEEN PUT T O USE FOR NON - AGRICULTURAL PURPOSES. JUST BECAUSE THE ASSESSEE HAS NOT SHOWN AGRICULTURAL INCOME, IT CANNOT CHANGE THE NATURE OF THE LAND. THE CLAIM THAT THE SAID LAND IS SITUATED 8 KM FROM THE CITY LIMIT ALSO SUPPORTS PROPOSITION THAT THE SAID LAND BEING AGRICULTURAL , THE SALE IS NOT EXIGIBLE TO INCOME TAX. THIS VIEW IS DULY SUPPORTED BY THE CATENA OF CASE LAWS REFERRED BY LEARNED COUNSEL OF THE ASSESSEE AS UNDER : - SANJAY NAGORAO PAIDLEWAR VS. ACIT (ITA NO. 112/NAG/2012 AND OTHERS VIDE ORDER DATED 22.3. 2013) CIT VS. SATINDER PAL SINGH (33 DTR 281 DT. 7.1.2010) LAUKIK DEVELOPERS VS. DCIT (105 ITD 657 DT. 10.7.2016) CIT VS. SMT. DEBBIE ALEMAO (331 ITR 59 DT. 9.9.2010) CIT VS. LAL SINGH AND OTHERS (325 ITR 588 DT. 20.11.2009) 5. IN THIS REGARD WE MAY REFE R TO THE HON'BLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VS. P.C. JOSHI AND OTHERS (202 ITR 1017) AS UNDER : - 3. THE TRIBUNAL, WHILE CONSIDERING WHETHER CAPITAL GAINS TAX CAN BE LEVIED ON THE SALE OF THIS LAND BY THE ASSESSEES, HAS APPLIED TH E TESTS LAID DOWN BY THE SHRI NANDKUMAR KRISHNARAO PHUTANE 3 BOMBAY HIGH COURT IN AN UNREPORTED JUDGMENT IN THE CASE OF CWT VS. PODDAR MILLS LTD. (WT REF. NO. 5/64 DECIDED ON 4TH FEBRUARY, 1972). THE TRIBUNAL HELD : (1) EXCEPT FOR THE PORTION OF LAND COVERED BY SURVEY NO. 135/1B, OTHER LANDS WERE AGRICULTURAL LANDS, (2). THEY HAVE BEEN DESCRIBED AS AGRICULTURAL LANDS IN THE SALE DEED; (3). THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THESE LANDS WERE PUT TO NON - AGRICULTURAL USE. THE TOWN PLANNING SCHEME BECAME OPERATIVE IN THIS AREA MUCH AF TER THE DATE OF THE SALE DEED AND ONLY IN THE YEAR 1971; AND (4). THE LAND CONTINUED TO BE ASSESSED UNDER THE LAND REVENUE CODE AS AGRICULTURAL LAND. THE TRIBUNAL, THEREFORE, HELD THAT THE LAND COVERED UNDER SURVEY NO. 135/6 WAS AGRICULTURAL LAND. IT, THER EFORE, DIRECTED THAT ONLY SURPLUS ARISING ON THE SALE OF LAND COVERED UNDER SURVEY NO. 135/1B SHOULD BE SUBJECT TO TAX. THIS WAS IN VIEW OF S. 2(14)(III) OF THE IT ACT WHICH EXEMPTED, AT THE MATERIAL TIM E, AGRICULTURAL LANDS IN INDIA, FROM THE DEFINITION OF CAPITAL ASSETS. 4. THE FACTORS WHICH HAVE BEEN CONSIDERED BY THE TRIBUNAL IN DECIDING WHETHER THE LAND SHOULD BE CONSIDERED AS AGRICULTURAL LAND, ARE NOT IN ANY MANNER INCONSISTENT WITH THE TESTS LAID DOWN BY THE SUPREME COURT OF INDIA IN THE CASE OF CWT VS. OFFICER INCHA RGE (COURT OF WARDS), P AIGAH. THE SUPREME COURT HAS ALSO SAID THAT ENTRIES IN THE REVENUE RECORD ARE GOOD PRIMA FACIE EVIDENCE, THOUGH THEY MAY NOT BE CONCLUSIVE. IN THE PRESENT CASE AL SO, THE TRIBUNAL HAS LOOKED AT OTHER SURROUNDING CIRCUMSTANCES ALSO IN ADDITION TO THE ENTRIES IN THE REVENUE RECORD FOR COMING TO THE CONCLUSION IT HAS COME TO. WE MAY ADD THAT THE TRIBUNAL WAS BOUND TO APPLY THE TESTS LAID DOWN BY THE BOMBAY HIGH COURT I N THE CASE OF CWT VS. PODDAR MILLS (SUPRA) AS THIS DECISION WAS BINDING ON THE TRIBUNAL. IN THE PREMISES, THE QUESTION REFERRED TO US IS ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. 6. WE FIND THAT THE ABOVE CASE LAW IS FULLY APPLICABLE ON TH E FACTS OF THIS PRESENT CASE. WE FIND THAT IT IS UNDISPUTED THAT IN REVENUE RECORDS THE LAND IS SHOWN AS AGRICULTURAL LAND. NO EVIDENCE IS ON RECORD THAT THE SAID LAND HAS BEEN PUT TO ANY NON - AGRICULTURAL USE. IN THIS VIEW OF THE MATTER ON THE TOUCHSTONE O F THE ABOVE SAID HON'BLE JURISDICTIONAL HIGH COURT DECISION THE ASSESSEES CLAIM DESERVES TO SUCCEED. IT ALSO REMAINS UNDISPUTED THAT THE SAID LAND IS SITUATED BEYOND 8 KM OF KARJAT MUNICIPAL LIMIT. HENCE, THE ASSESSEE SUCCEEDS ON THIS COUNT ALSO THAT THE LAND BEING AGRICULTURAL, THE SALE THEREOF IS EXEMPT FROM TAX. SHRI NANDKUMAR KRISHNARAO PHUTANE 4 7. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 27 . 8 . 201 9 . SD/ - SD/ - (SANDEEP GOSAIN ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 27 / 8 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI