Income Tax Officer, Ward-4, Warangal V. Banoth Kotya, Warangal

ITA 618/Hyd/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6479 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Assessee Lawyers: A KIRAN MANOHAR
• Keywords: Cost of acquisition; Tax effect
• Section: 2(14)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A-SMC, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 618/HYD/2018 ASSESSMENT YEAR: 2009-10 ITO, WARD 4, WARANGAL VS. SHRI BANOTH KOTYA, WARANGAL. PAN ATJPB4699N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAJEEV BENJWAL ASSESSEE BY : SHRI A. KIRAN MANOHAR DATE OF HEARING : 27-07-2018 DATE OF PRONOUNCEMENT : 27-07-2018 ORDER PER SHRI B. RAMAKOTAIAH, AM: THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF LD. CIT(A)-3, HYDERABAD DATED 17.01.2018. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO AN AMOUNT OF RS. 49,87,976/- BROUGHT TO TAX BY A.O. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE HAS DERIVED INCOME FROM AGRICULTURE AND THE LANDS WHICH WERE EARLIER ASSIGNED TO HIM WAS TAKEN BACK BY THE GOVERNMENT ON ACQUISITION FOR CONSTRUCTION OF MAIN CANAL. THE LANDS WERE SHOWN AS AGRICULTURAL LANDS AND ARE IN A VILLAGE CALLED MARIPEDA WHICH IS NOT NOTIFIED FOR THE PURPOSE OF MUNICIPALITY. AS ASSESSEE HAS RECEIVED COMPENSATION, A.O WAS OF THE VIEW THAT THE AMOUNT WAS RECEIVED FOR COMPULSORY ACQUISITION PROPERTY AND BROUGHT THE AMOUNT TO TAX AS CAPITAL GAINS. 2 ITA NO. 618/HYD/2018 SHRI BANOTH KOTYA, WARANGAL.. 3. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT THE LAND WAS ACQUIRED BY ASSESSEE BY WAY OF ASSIGNMENT FROM THE GOVERNMENT OF ANDHRA PRADESH UNDER SCHEDULED TRIBE QUOTA. THERE WAS NO COST OF ACQUISITION AND, THEREFORE, THE DECISION OF THE SUPREME COURT IN THE CASE OF B.C. SRINIVAS SETTY IS APPLICABLE AND THE CAPITAL GAIN IS NOT LIABLE. ASSESSEE ALSO RELIED ON THE DECISION OF THE HYDERABAD BENCH OF ITAT IN THE CASE OF ITO VS. UPPALA VENKAT RAO REPORTED IN 83 ITD 273 WHREIN IT IS HELD THAT NO CAPITAL GAIN IS TAXABLE WHERE THE LAND TRANSFERRED AS AN INAM LAND AND AS THE LAND WAS ACQUIRED BY THE APPELLANT WITHOUT COST. THE LAND IS AN AGRICULTURAL LAND ASSIGNED FOR AGRICULTURAL PURPOSES. ASSESSEE STAYS THERE BY HAVING A FARM-HOUSE WITHIN THE SAID LAND AND CARRYING ON AGRICULTURAL ACTIVITIES. THE AREA IS IN KUNIA THANDA WHICH IS BEYOND 8 KM., AND WHICH IS NOT NOTIFIED BY THE GOVERNMENT FOR THE PURPOSE OF SEC. 2(14) OF THE IT ACT. THE COMPENSATION IS OF THE CHARACTER OF AGRICULTURAL INCOME WHICH IS EXEMPT U/S 10(1) OF THE IT ACT. 4. LD CIT(A) AFTER VERIFYING THE FACTS OF THE CASE HAS ACCEPTED THE CONTENTIONS BY DELETED THE ADDITION BY ALLOWING THE EXEMPTION U/S 10(37) OF THE IT ACT. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, IT WAS NOTICED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS RS. 10,50,939/- AND AS PER THE RECENT BOARD CIRCULAR NO. 03/2018 DATED 11.07.2018, REVENUE SHOULD NOT HAVE COME IN APPEAL / SHOULD HAVE WITHDRAWN THE APPEAL. EVEN ON MERITS ALSO, THERE IS NO CASE FOR REVENUE AS IT IS VERY CLEAR THAT THE LAND IN 3 ITA NO. 618/HYD/2018 SHRI BANOTH KOTYA, WARANGAL.. QUESTION WAS NOT IN THE OWNERSHIP OF THE ASSESSEE AND THE AMOUNT WAS PAID FOR LOSS OF AGRICULTURAL INCOME AND THEREFORE ORDER OF CIT(A) IS TO BE UPHELD ON MERITS. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2018. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 27 TH JULY, 2018. KRK 1) SHRI BANOTH KOTYA, S/O SHRI MEGHYA, H. NO. 1-31, KUNYA THANDA, VILLAGE & MANGAL: MARIPEDA, WARANGAL DISTRICT 506315. 2) ITO, WARD-4, WARANGAL. 3) CIT(A) -3, HYDERABAD. 4) THE ADDL. CIT, WARANGAL RANGE. WARANGAL. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE