Appeal Details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 0516 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 7 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-10-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
19-07-2016
Assessment Year
2009-2010
Appeal Filed On
11-03-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 654/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2009-10 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE ....... / APPELLANT )& / V/S. GANPAT BABURAO MURKUTE, S. NO. 254/6, BANER, SANTKRUPA BUILDING, PUNE-411045 PAN : AKZPM2856R / RESPONDENT / ITA NO. 655/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2009-10 GANPAT BABURAO MURKUTE, S. NO. 254/6, BANER, SANTKRUPA BUILDING, PUNE-411045 PAN : AKZPM2856R ....... / APPELLANT )& / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI L.S. CHANDRASEKHAR REVENUE BY : SHRI SUHAS S. KULKARNI / DATE OF HEARING : 28-09-2016 / DATE OF PRONOUNCEMENT : 31-10-2016 2 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS, ONE BY THE REVENUE AND THE OTHER B Y ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 19-10-2012 FOR THE ASSESSMENT YEAR 20 09-10. 2. THE REVENUE IN THE APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN ALLOWING DEDUCTION U/S. 54B OF THE ACT WITHOUT APPRECIATING THE FACT THAT IN THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDIN GS, THE ASSESSEE WAS NOT ABLE TO PROVE THAT HE WAS CARRYING OUT AGRI CULTURAL ACTIVITIES FOR THE PERIOD 21.06.2006 TO 21.06.2008 AND AS SUCH THE CONDITION REQUISITE FOR GRANT OF EXEMPTION U/S. 54B THAT LAND SHOULD HA VE BEEN USED FOR AGRICULTURAL PURPOSES BY THE ASSESSEE OR A PARENT O F HIS IN THE TWO YEARS IMMEDIATELY PRECEEDING THE DATE OF TRANSFER DOES REM AINS UNFULFILLED? 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN ALLOWING DEDUCTION U/S.548 OF THE ACT WITHOUT APPRECIATING THE FACT TH AT THE TALATHI IN THE STATEMENT RECORDED IN THE COURSE OF ASSESSMENT PROC EEDINGS HAD AFFIRMED THAT THE 7/12 EXTRACT HAD BEEN ISSUED WITH OUT VERIFYING THE LAND BY SPOT VERIFICATION? 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 3. THE ASSESSEE ON THE OTHER HAND RAISED FOLLOWING GROU NDS AGAINST THE FINDINGS OF FIRST APPELLATE AUTHORITY. 1) THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE CLAIM MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AS THERE IS NO ESTOPPELS AGAINST THE PROPER APPLICATION OF L AW. 3 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 2) THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED THE APPEAL OF THE ASSESSEE SINCE THE CLAIM WAS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE CIT(APPEALS). 3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND OF APPEAL WH ICH READS AS UNDER : 1) THE ASSESSEE SUBMITS THAT THE LAND SOLD BY HIM IN THIS YEAR WAS NOT A CAPITAL ASSET U/S. 2(14) SINCE THE SAID LAND WAS AN AGRICULTURAL LAND AND WAS BEYOND 8 KMS FROM THE BOUNDARIES OF PUNE MUNICI PAL CORPORATION AND THE POPULATION OF VILLAGE MULSHI WAS LESS THAN 10,000 AS PER THE LAST CENSUS AND HENCE, THE GAIN ARISING ON SALE OF THE S AID LAND WAS NOT TAXABLE AT ALL. THE ASSESSEE SUBMITS THAT THE ADDITIONAL GROUND RAI SED IS LEGAL IN NATURE AND AS ALL THE FACTS ARE ON RECORD, THE ASSESSEE RE QUESTS FOR ADMISSION OF THE ABOVE GROUNDS. 4. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE DURING THE FINANCIAL YEAR 2008-09 SOLD LAND COMPR ISING IN GAT NO. 1225 IN PIRANGUT, PUNE. THE ASSESSEE WAS HOLDING THE SAID LAND JOINTLY WITH SHRI PUNDALIK BABURAV MURKUTE. THE LAND WAS SOLD FOR THE TOTAL CONSIDERATION OF ` 5,30,55,000/-. THE ASSESSEE IN HIS RETURN OF INCOME DECLARED HIS SHARE OF CONSIDERATION I.E. ` 3,30,55,000/-. AGAINST HIS SHARE OF SALE CONSIDERATION, THE ASSESSEE COMPUTED CA PITAL GAIN OF ` 3,02,99,791/-. THE ASSESSEE PURCHASED AGRICULTURAL LAND TO THE TUNE OF ` 67,94,616/- FROM THE SALE CONSIDERATION RECEIVED. THE ASSE SSEE FURTHER INVESTED AN AMOUNT OF ` 1,95,00,500/- IN THE CAPITAL GAINS ACCOUNT SCHEME WITH BANK OF MAHARASHTRA. THE ASSESSE E CLAIMED PROPORTIONATE DEDUCTION OF ` 2,62,95,116/- U/S. 54B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN RESPEC T OF INVESTMENT MADE AND ARRIVED AT THE NET TAXABLE CAPITAL GAIN OF ` 40,04,675/- AND 4 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 PAID TAXES ON THE SAME. THE ASSESSEE FILED HIS RETURN O F INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31-03-2010 DECLARING TOTAL TAXABLE INCOME OF ` 47,84,770/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY NOTICE U/S. 143(2) WA S ISSUED TO THE ASSESSEE ON 04-09-2010. DURING THE COURSE OF SCRU TINY ASSESSMENT PROCEEDINGS THE ASSESSEE PLEADED THAT THE AGRICULTURAL LA ND SOLD BY THE ASSESSEE DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET AS DEFINED U/S. 2(14) OF THE ACT. THE AGRICULTURAL LAND SOLD BY THE AS SESSEE IS SITUATED BEYOND 8 KMS. FROM THE MUNICIPAL LIMITS OF PUNE. TH E CAPITAL GAIN DECLARED WAS OUT OF IGNORANCE. THE ASSESSEE IN AN A LTERNATIVE CLAIM PLEADED THAT THOUGH THE INVESTMENT WAS MADE IN ELIGIB LE ASSETS AS PER SECTION 54B OF THE ACT, HOWEVER, PROPORTIONATE DE DUCTION IS INADVERTENTLY CLAIMED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 54F OF THE ACT. THE ASSESSING OFFICER MADE ENQUIRY THROUGH TH E INSPECTOR, WHO VISITED THE OFFICE OF THE TALATHI, PIRANGUT, PUNE. THE INSPECTOR AFT ER CONDUCTING ENQUIRY REPORTED THAT 7/12 EXTRACTS WERE N OT ISSUED BY THE TALATHI AFTER SPOT INSPECTION OF THE LAND. SUMMONS WERE ISS UED TO THE TALATHI AND HIS STATEMENT WAS RECORDED U/S. 131 OF THE ACT. IN HIS STATEMENT THE TALATHI ADMITTED THAT 7/12 EXTRACTS WERE ISSUED BY HIM BUT THE SAME WERE NOT ISSUED AFTER SPOT VERIFICATION. THE ASSESSING OFFICER REJECTED THE PLEA OF ASSESSEE TO CONSIDER THE LAND SOLD OUTSIDE THE PURVIEW OF CAPITAL GAINS. SINCE, THE PLEA WAS TAKEN FOR T HE FIRST TIME DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE C ASE OF GOETZE (INDIA) LTD. VS. CIT REPORTED AS 284 ITR 323. THE ASSES SING OFFICER FURTHER REJECTED THE ASSESSEES CLAIM OF DEDUCTION U/S. 5 4B ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT HE WAS CARRYING AGRICULTURAL ACTIVITIES ON THE LAND SOLD. 5 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-12-2011, T HE ASSESSEE PREFERRED APPEALS BEFORE THE COMMISSIONER OF INC OME TAX (APPEALS). THE FIRST APPELLATE AUTHORITY REVERSED THE FINDIN GS OF ASSESSING OFFICER QUA ASSESSEES CLAIM OF DEDUCTION U/S. 54B OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING T HE DOCUMENTS ON RECORD AND SUBMISSIONS OF THE ASSESSEE HE LD THAT THE ASSESSEE WAS USING THE LAND FOR AGRICULTURAL PURPOSE. TH E COMMISSIONER OF INCOME TAX (APPEALS) FURTHER HELD THAT THE ASSESSEE HAS FULFILLED NECESSARY CONDITIONS FOR GRANT OF EXEMPTION U/S . 54B AND ALLOWED THE SAME. IN SO FAR AS THE CLAIM OF THE ASSESSEE WITH REGARD TO NOT TO TREAT THE AGRICULTURAL LAND AS CAPITAL ASSET ON THE GROUND THA T THE LAND IS SITUATED MORE THAN 8 KMS FROM NEAREST MUNICIPAL LIMIT S, THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE SAME BY FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CA SE OF GOETZE (INDIA) LTD. VS. CIT (SUPRA). AGAINST THE FINDINGS OF COMMISSIONE R OF INCOME TAX (APPEALS) BOTH, THE REVENUE, AND THE ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. 5. SHRI SUHAS S. KULKARNI REPRESENTING THE DEPARTMENT SUB MITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN GRANTING EXEMPTION TO THE ASSESSEE U/S. 54B OF THE ACT. IT IS EV IDENT FROM THE RECORDS THAT NO AGRICULTURAL ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER APPEAL, AS WELL AS THE PRECEDING TWO ASSESSMENT YEARS. THE 7/12 EXTRACT PLACED ON RECORD BY THE ASSESSEE WAS ISSUED BY THE TALATHI WITHOUT SPOT VERIFICATION. ON DISCREET ENQU IRY MADE BY THE ASSESSING OFFICER AND THE STATEMENT OF TALAT HI RECORDED ON OATH MAKES IT AMPLY CLEAR THAT RELIANCE CANNOT BE PLACED ON 7/12 EXTRACTS ALONE TO HOLD THAT THE LAND SOLD BY ASSESSEE W AS UNDER CULTIVATION. THE LD. DR FURTHER SUBMITTED THAT THE ASSES SEE HAS FILED 6 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 INCOME TAX RETURN FOR THE ASSESSMENT YEARS 2007-08 A ND 2008-09 IN BOTH THE RETURNS THE ASSESSEE HAS NOT DECLARED ANY IN COME FROM AGRICULTURE. DURING THE ASSESSMENT PROCEEDINGS THE ASSE SSEE COULD PRODUCE ONLY 4 BILLS SHOWING PURCHASE OF PESTICIDES AND FER TILIZERS AMOUNTING TO ` 11,568/- DURING THE PERIOD BETWEEN 21-06-2006 AND 21- 06-2008. ON THE BASIS OF DOCUMENTARY EVIDENCE PLACED ON RECORD AND THE FACTS OF THE CASE IT IS DIFFICULT TO BELIEVE THAT THE ASSE SSEE HAD CARRIED ON AGRICULTURAL ACTIVITIES ON THE LAND UNDER QUESTIO N. IN SUPPORT OF HIS SUBMISSIONS THE LD. DR PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ABHIJIT SUBHAS H GAIKWAD VS. THE DY. COMMISSIONER OF INCOME TAX IN ITA NO. 699/PN/2013 FOR ASSESSMENT YEAR 2009-10 DECIDED ON 27-05-2015. 6. ON THE OTHER HAND SHRI NIKHIL PATHAK & SHRI L.S. CHANDRA SEKHAR APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING DEDUCTIO N U/S. 54B OF THE ACT. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD PLACED ON RECORD 7/12 EXTRACTS FOR THE ASSESSMENT YEARS 2005-0 6, 2006-07 AND 2007-08. THE LD. AR CONTENDED THAT A PERUSAL OF 7/12 EX TRACTS AT PAGES 5 TO 8 OF THE PAPER BOOK WOULD CLEARLY SHOW THAT THE LAND COMPRISING IN GAT NO. 1225 WAS UNDER THE JOINT CULTIVATION OF ASSESSEE AND SHRI PUNDALIK BABURAV MURKUTE. THE CROPS GROWN DUR ING THE ASSESSMENT YEARS 2005-06 TO 2007-08 INCLUDE GROUNDNUT , CATTLE FEED/HORSEGRAM. IN ORDER TO SUBSTANTIATE THAT AGRIC ULTURAL OPERATIONS WERE CARRIED OUT ON THE LAND SOME INVOICES SHOWING PURC HASE OF FERTILIZERS AND PESTICIDES WERE ALSO PLACED ON RECORD. THE LD. AR CONTENDED THAT THE ASSESSEE IS UNEDUCATED AND WAS WO RKING AS LABOURER IN AMMUNITION FACTORY. HE IS DRAWING PENSION OF ` 52,000/- PER ANNUM. THE ASSESSEE BELONGS TO THE FAMILY OF AGRICULT URIST AND 7 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 OWNS AGRICULTURAL LAND FROM THE TIME OF HIS FOREFATHERS. THE LAND THAT WAS SOLD BY THE ASSESSEE WAS PURCHASED IN THE YEAR 19 89. THE LAND WAS HELD FOR ALMOST 20 YEARS AND DURING THIS PERIOD AGRICU LTURAL ACTIVITIES WERE CARRIED OUT ON THE SAID LAND. THE FACT THA T THE ASSESSEE HAS NOT DECLARED INCOME FROM AGRICULTURAL OPERATION IN THE RETURN OF INCOME WOULD NOT CHANGE THE NATURE OF LAND. THE 7/12 EX TRACTS ISSUED BY THE TALATHI SUBSTANTIATE THE CASE OF THE ASSESSEE. T HE FACT THAT THE ASSESSEE HAS PRODUCED SOME BILLS TO SHOW THAT AGRICULTUR AL OPERATIONS WERE CARRIED OUT ON THE LAND HAS BEEN RECORDED BY THE ASSESSING OFFICER. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER RECORDED THE STATEMENT OF TALATHI. IN THE FIRST INSTANCE THE SAID STATEMENT WAS NEVER PROVIDED TO THE ASSESSEE. THE ST ATEMENT WAS RECORDED BY THE ASSESSING OFFICER AT THE BACK OF THE ASS ESSEE IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. SECONDLY, NO O PPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS-EXAMINE THE TALATH I. THEREFORE, THE STATEMENT OF TALATHI CANNOT BE USED AGAINST THE ASSESS EE. THE LD. AR CONTENDED THAT 7/12 EXTRACTS WERE ISSUED BY THE TALAT HI ON 09-11-2011 WHEREIN THE DETAILS REGARDING THE CULTIVATION OF CROPS IN TH E ASSESSMENT YEARS 2005-06 TO 2007-08 WERE GIVEN. THE TALATHI RETRIE VED THIS INFORMATION FROM THE REVENUE RECORD MAINTAINED BY HIM IN OFFIC E AND NOT BY MAKING SPOT VERIFICATION. THEREFORE, 7/12 EXTRACTS WOULD NOT LOSE THEIR SANCTITY IF THEY ARE NOT ISSUED BY SPOT VERIFICA TION. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS OF THE TRIBUNAL. I. THANMAL GANESHMAL PARMAR VS. INCOME TAX OFFICER IN ITA NO. 266/PN/2013 FOR ASSESSMENT YEAR 2007-08 DECIDED ON 04-11-2015; 8 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 II. INCOME TAX OFFICER VS. SHRI NITIN M. RAJHANS IN ITA NO. 150/PN/2012 FOR ASSESSMENT YEAR 2008-09 DECIDED ON 30-12-2013. 7. THE LD. AR SUBMITTED THAT THE DECISION OF THE PUNE BEN CH OF THE TRIBUNAL IN THE CASE OF ABHIJIT SUBHASH GAIKWAD VS. THE DY . COMMISSIONER OF INCOME TAX (SUPRA) IS DISTINGUISHABLE ON FACTS . IN THE SAID CASE, THE ASSESSEE PRODUCED 7/12 EXTRACT ACCORDIN G TO WHICH, THE LAND WAS A JIRAYAT FALLOW LAND. THE ASSESSING OFFICER DEPUTED THE INSPECTOR TO MAKE ENQUIRY. THE INSPECTOR REPORTED TH AT THE LAND OF THE ASSESSEE WAS ON A HILLOCK AND WAS BARREN. THE LAND WAS GRASS LAND AND HENCE CULTIVATION MAY NOT BE POSSIBLE. IN THE PRESEN T CASE, THERE IS NO SUCH REPORT OF THE INSPECTOR THAT THE LAND IN QUESTIO N IS BARREN. THE INSPECTOR RESTRICTED HIS ENQUIRY TO ASCERTAIN WHETHER T HE 7/12 EXTRACT WERE ISSUED AFTER INSPECTION OF LAND. THE LD. AR PRAYED FOR UPHOLDING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE AND DISMISSING THE APPEAL OF THE REVENUE. 8. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS FILED APPEA L AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN REJECT ING THE PLEA OF ASSESSEE NOT TO TREAT THE LAND AS CAPITAL ASSET. THE LD. AR REFERRED TO CERTIFICATE OF TALATHI AT PAGE 11 OF THE PAPER BOOK TO SHOW THAT VILLAGE-PIRANGUT WHERE THE LAND IN QUESTION IS SITUATED IS BEYOND 10 KMS. FROM THE MUNICIPAL LIMITS OF PUNE. THE LD. AR FURTHER R EFERRED TO CERTIFICATE ISSUED BY TEHSILDAR, MULSHI AT PAGE 9 OF TH E PAPER BOOK TO SHOW THAT THE POPULATION OF VILLAGE-PIRANGUT AS PER 2001 CENSUS IS 6040. THE LD. AR SUBMITTED THAT ONCE IT IS ESTABLISHED FROM THE DOCUMENTS THAT THE AGRICULTURAL LAND IS SITUATED MORE TH AN 8 KMS. AWAY FROM THE NEAREST MUNICIPAL LIMITS AND THE POPULATION O F VILLAGE IS 9 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 LESS THAN 10,000, THE LAND DOES NOT COME WITHIN THE MEANIN G OF CAPITAL ASSET AS DEFINED U/S. 2(14) OF THE ACT. THE ASSESSEE AT T HE TIME OF FILING OF RETURN INADVERTENTLY OFFERED CAPITAL GAIN ARISING FROM SALE OF LAND TO TAX. AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESS EE REALIZED HIS MISTAKE AND IMMEDIATELY BROUGHT THIS FACT TO THE NOTICE OF ASSESSING OFFICER. THE ASSESSING OFFICER REJECTED THE CLAIM OF ASSESSE E MERELY ON THE GROUND THAT SINCE THE CLAIM HAS NOT BEEN RAISED BY FILING REVISED RETURN OF INCOME, THE SAME CANNOT BE ENTERTAINED IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE O F GOETZE (INDIA) LTD. VS. CIT (SUPRA). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER FOR THE SIMILAR REASONS . THE LD. AR CONTENDED THAT THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (SUPRA) HAS HELD THAT THE APPE LLATE AUTHORITY HAS POWER TO ENTERTAIN THE CLAIM BASED ON THE FACT. THE LD. AR FURTHER REFERRED TO THE DECISION OF HON'BLE BOMBAY HIGH COURT IN T HE CASE OF COMMISSIONER OF INCOME TAX VS. PRUTHVI BROKERS & SHAREHO LDERS (P) LTD. REPORTED AS 349 ITR 336 TO CONTEND THAT THE CLAIM OF ASSESSEE CAN BE CONSIDERED IF IT IS BASED ON UNDISPUTED FACTS. 9. THE LD. DR SUBMITTED THAT THE FACTS ON RECORD CLEARLY SHOW THAT THE ASSESSEE WAS VERY MUCH AWARE THAT THE LAND SOLD B Y HIM FALLS WITHIN THE DEFINITION OF CAPITAL ASSET. THE ASSESSEE ACCORD INGLY INVESTED SALE CONSIDERATION IN PURCHASE OF ANOTHER PIECE OF AGRICULTU RAL LAND AND DEPOSITED PART OF SALE CONSIDERATION IN CAPITAL BANK ACCOUN T SCHEME WITH BANK OF MAHARAASHTRA. IT WAS NOT INADVERTENT MISTA KE BUT A WELL THOUGHT OUT INVESTMENT. THE RETURN OF INCOME WAS FILED D ECLARING PART OF SALE CONSIDERATION AS CAPITAL GAIN BY SEEKING ADVICE FROM TAX PRACTITIONER. AS PER LD. ARS OWN SUBMISSIONS THE ASSESSE E IS AN UNEDUCATED PERSON. THEREFORE, BEFORE FILING OF RETURN OF IN COME THE 10 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 ASSESSEE MUST HAVE TAKEN ADVICE FROM TAX CONSULTANT FOR MAKING INVESTMENT AND CLAIMING DEDUCTION U/S. 54B OF THE ACT. THE LD. DR FURTHER CONTENDED THAT THE AUTHORITIES BELOW HAVE RIGHTL Y REJECTED THE CLAIM OF ASSESSEE WHICH WAS MADE DURING THE COURSE OF AS SESSMENT PROCEEDINGS IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME CO URT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (SUPRA). THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 10. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE DEPARTMENT IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONE R OF INCOME TAX (APPEALS) IN ALLOWING DEDUCTION U/S. 54B OF THE AC T TO THE ASSESSEE. THE ASSESSING OFFICER HAS DENIED DEDUCTION PRIMA RILY FOR THE REASON THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLIS H THAT THE AGRICULTURAL LAND SOLD WAS UNDER CULTIVATION OF THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER APPEAL, AS ALSO IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS. THE ASSESSEE HAS PLACED ON RECORD 7/12 EXTRACT TO SHOW THAT THE LAND WAS UNDER CULTIVATION. THE REVENUE H AS RAISED DOUBT OVER THE CONTENTS OF 7/12 EXTRACT AS THE SAME WAS NOT ISSUED BY THE TALATHI AFTER SPOT VERIFICATION. MUCH RELIANCE HAS BEEN PLACED ON THE STATEMENT OF TALATHI WHEREIN HE HAS STATED THAT 7/ 12 EXTRACT WAS ISSUED BY HIM WITHOUT SPOT VERIFICATION. THE ASSESSEE HAS RAISED AN OBJECTION THAT NEITHER THE STATEMENT OF TALATHI WAS PR OVIDED TO THE ASSESSEE NOR ANY OPPORTUNITY WAS GIVEN TO THE ASSESSE E TO CROSS- EXAMINE TALATHI. THIS FACT HAS NOT BEEN REBUTTED BY THE DEPARTMENT. ANY STATEMENT OR EVIDENCE COLLECTED AT THE BACK OF ASSE SSEE CANNOT BE USED TO DENY THE BENEFIT OR MAKE ADDITION. IF ANY SUCH S TATEMENT IS USED BY DEPARTMENT AGAINST THE ASSESSEE, IT IS IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. AS FAR AS THE ISSUE OF SPOT VERIFICATION IS CONCERNED, 11 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 WE DO NOT FIND ANY MERIT IN THE OBJECTION OF THE DEPARTME NT. THE CERTIFICATE WAS ISSUED BY TALATHI IN THE YEAR 2011 IN RESPE CT OF CROPS CULTIVATED IN THE ASSESSMENT YEARS 2005-06 TO 2007-08. THE TALATHI MAINTAINS REVENUE RECORD WHEREIN THE DETAILS OF OWNERSHIP OF THE LAND, NATURE OF LAND, SOURCE OF IRRIGATION, CROPS CULTIVATED DURING KHARIF/RABI SEASON ETC. ARE RECORDED. FOR ISSUING 7/12 CERTIFICATE TH E TALATHI HAS TO REFER TO THE REVENUE RECORDS ONLY. HENCE, THE OBJECTIO N OF DEPARTMENT THAT THE CERTIFICATE ISSUED BY TALATHI IS WITHOUT SPOT VERIFIC ATION LACKS MERITS. 11. ANOTHER OBJECTION BY THE DEPARTMENT IS THAT THE AS SESSEE HAS NOT DISCLOSED ANY AGRICULTURAL INCOME IN HIS RETURN OF INCOME FILE D FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. WE FIND THAT TH E CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THANMAL GANESHMAL PAR MAR VS. INCOME TAX OFFICER (SUPRA) WHEREIN SIMILAR OBJECTION WAS RAISE D, REVERSED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS ) BY PLACING RELIANCE ON THE JUDGMENT OF HON'BLE BOMBAY HIGH CO URT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. DEBBIE ALEMAO R EPORTED AS 331 ITR 59. THE RELEVANT EXTRACT OF THE FINDINGS OF TH E TRIBUNAL ARE AS UNDER : 7. ANOTHER REASON FOR HOLDING THE LAND AS CAPITAL ASSET BY THE REVENUE IS THAT THE ASSESSEE HAS NOT DISCLOSED AGRI CULTURAL INCOME FROM THE LAND IN HIS RETURN OF INCOME. WE ARE OF THE CO NSIDERED VIEW THAT, NON- DISCLOSURE OF AGRICULTURAL INCOME BY THE ASSESSEE I N THE RETURN OF INCOME CANNOT BE A GROUND FOR CHANGING THE CLASSIFICATION OF LAND FROM AGRICULTURAL LAND TO A CAPITAL ASSET. THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. DEBBIE ALEMAO (SUPRA) HAS H ELD THAT IF NO AGRICULTURAL INCOME WAS SHOWN FORM THE LAND WHICH W AS SHOWN AS AGRICULTURAL LAND IN THE REVENUE RECORDS AND NEVER SOUGHT TO BE USED FOR NON-AGRICULTURAL PURPOSE BY THE ASSESSEE TILL IT WA S SOLD HAS TO BE TREATED AS AGRICULTURAL LAND, EVEN THOUGH NO AGRICU LTURAL INCOME WAS 12 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 SHOWN BY THE ASSESSEE FROM THIS LAND AND, THEREFORE , NO CAPITAL GAIN WAS TAXABLE ON THE SALE OF THE SAID LAND. IN THE PRESENT CASE THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT TILL THE TIME OF SALE OF LAND THE ASSESSEE CARRIED AGRIC ULTURAL ACTIVITIES ON THE LAND AND EVEN AFTER SALE, THE PURCHASER HAS NOT UTILIZED THE LAND FOR ANY OTHER PURCHASE EXCEPT AGRICULTURAL PURP OSE. THIS FACT HAS NOT BEEN REBUTTED BY THE DEPARTMENT. 12. IN VIEW OF THE FACTS OF THE CASE, WE DO NOT FIND ANY E RROR IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING EXEMPTION U/S. 54B OF THE ACT TO THE ASSESSEE. ACCORDIN GLY, THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 13. NOW, WE ADVERT TO THE APPEAL FILED BY THE ASSESSEE. THE ASSESSEE IN ADDITIONAL GROUND OF APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THE AGRICULTUR AL LAND SOLD BY ASSESSEE AS CAPITAL ASSET U/S. 2(14) OF THE ACT. IN THE ORIGINAL RETURN OF INCOME THE ASSESSEE HAS DECLARED CAPITAL GAIN ARISING FROM SALE OF AGRICULTURAL LAND. PART OF SALE CONSIDERATION WAS IN VESTED BY THE ASSESSEE IN PURCHASE OF AGRICULTURAL LAND AND CAPITAL GAIN ACCOUNTS SCHEME. THE REMAINING AMOUNT WAS OFFERED TO TAX. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE CLAIMED THAT SINC E THE AGRICULTURAL LAND SOLD BY THE ASSESSEE IS BEYOND 8 KMS. FRO M THE MUNICIPAL LIMITS OF PUNE AND THE POPULATION OF VILLAGE IS LESS THA N 10,000, THE LAND DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL A SSET AS DEFINED U/S. 2(14) OF THE ACT. THE AUTHORITIES BELOW HAVE RE JECTED THE CLAIM OF ASSESSEE PRIMARILY BY FOLLOWING THE JUDGMENT OF HON 'BLE 13 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (SUPRA). 14. UNDISPUTEDLY, THE CLAIM OF ASSESSEE IS ARISING FROM FACTS . THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PRUTHVI BROKERS & SHAREHOLDERS (P) LTD. (SU PRA) HAS HELD THAT WHERE ADDITIONAL GROUND IS RAISED TO CLAIM DEDUCT ION IN THE RETURN OF INCOME WHICH WAS INADVERTENTLY LEFT OUT, EVEN IF T HE ASSESSING OFFICER IS NOT ENTITLED TO GRANT SUCH DEDUCTION ON THE BAS IS OF LETTER, THE SAME CAN BE CONSIDERED BY APPELLATE AUTHORITIES. 15. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GO ETZE (INDIA) LTD. VS. CIT (SUPRA) HAS HELD THAT THE ASSESSING OFFICER CAN NOT ENTERTAIN FRESH CLAIM OF DEDUCTION OTHERWISE THAN BY WAY OF REVISED RETURN BUT THE POWERS OF THE TRIBUNAL ARE NOT IMPINGED T O ENTERTAIN CLAIM OF ASSESSEE RAISED FOR THE FIRST TIME. 16. THUS, IN VIEW OF LAW LAID DOWN BY THE HON'BLE APEX COU RT WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. THE LD. AR HAS PLACED ON RECORD CERTIFICATE FROM TALATHI TO SHOW THAT THE LAND IS SITUATED MORE THAN 8 KMS. AWAY FROM THE MUNICIPAL LIMITS OF PUNE. THE LD. AR HAS ALSO DRAWN OUR ATTENTION TO THE CERTIFICATE ISSUED BY THE TEHSILADAR INDICATING THAT THE POPULATION OF VILLAGE IS LESS THA N 10,000. THESE FACTS APPARENTLY SHOW THAT THE LAND OF THE ASSES SEE DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET. THESE DOCUMENTS W ERE NOT CONSIDERED BY THE AUTHORITIES BELOW OBVIOUSLY FOR THE REA SON THAT THE GROUND WAS RAISED FOR THE FIRST TIME BEFORE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. THE ASSESSEE IN RETURN OF INCO ME HAD OFFERED CAPITAL GAIN ON SALE OF AGRICULTURAL LAND. WE DEEM IT APPROPR IATE TO 14 ITA NOS. 654 & 655/PN/2013, A.Y. 2009-10 REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFIC ATION OF THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE AT PA GES 9 TO 12 OF THE PAPER BOOK AND THEREAFTER DECIDED THE SAME, IN ACCORDAN CE WITH LAW AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON MONDAY, THE 31 ST DAY OF OCTOBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 31 ST OCTOBER, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-II, PUNE 4. ' / THE CIT-II, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE
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