Jai Prakash, Ghaziabad V. ITO, Ward- 1(3), Ghaziabad

ITA 6763/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2791 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Keywords: Capital asset; Fair market value
• Section: 2(14); 142(1); 148

Judgement Text

1 ITA NO. 6763/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R. S. SYAL, VICE PRES IDENT AND MS SUCHITRA KAMBLE, JUD ICIAL MEMBER ITA NO. 6763/DEL/201 7 ( A.Y 2010-11) JAI PRAKASH, M/S ALI SAVEZ EARTH MOVERS VILL. PATLA, TEHSIL, MODINAGAR GHAZIABAD (U.P) AONPN0165Q (APPELLANT) VS INCOME TAX OFFICER G. G. O COMPLEX, 1, HAPUR CHUNGI GHAZIABAD UTTAR PRADESH (RESPONDENT) APPELLANT BY SH. ANOOP SHARMA, SH. SANJAY PARASHAR, ADVS. RESPONDENT BY SH. V. K. TIWARI, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 01/09/2017 PASSED BY CIT(A) GHAZIABAD FOR ASSESSME NT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE REVENUE AUTHORITIES ERRED BOTH ON FACT S AND IN LAW; I. IN TREATING THE SUBJECT LAND AS NON AGRICULTURAL IN NATURE, TREATING IT TO BE CAPITAL ASSET AND THEREBY SUBJECTING IT TO BE CAPIT AL GAINS UNDER THE ACT. II. THAT THE ADDITION OF RS. 4128366/- REPRESENTING INCOME UNDER THE HEAD OF CAPITAL GAINS IS BAD IN LAW. III. IN HOLDING THE LAND TO BE A CAPITAL ASSET, SIN CE IT WAS SITUATED WITH NOTIFIED AREA OF TAJ EXPRESS WAY INDUSTRIAL DEVELOPMENT AUTH ORITY, IN SPITE OF ITS DATE OF HEARING 20.03.2018 DATE OF PRONOUNCEMENT 22.03.2018 2 ITA NO. 6763/DEL/2017 NATURE BEING MENTIONED AS AGRICULTURE IN REVENUE RE CORD. THAT THE APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD ANY ONE OR MORE GROUNDS. 3. THE CASE WAS REOPENED U/S 148 OF I.T. ACT, 1961 ON THE GROUNDS THAT AIR INFORMATION WAS RECEIVED THAT THE ASSESSEE HAS SOLD LAND FOR A STAMP VALUE OF RS. 1,10,08,000/- AND THE CONSIDERATION RECEIVED AT RS. 1,03,00,000,/-. THE LAND WAS SOLD BY THE ASSESSEE JOINTLY WITH ANOTHER PERSON AND THE ASSESSEE'S SHARE WAS 50% OF THE PROPERTY, I.E. RS.55,04,000/-. ACCORDINGLY, NOTICE U/S 148 DATED 15.12.2014 WAS ISSUED TO THE ASSESSEE AND DULY SERVED UPON HIM. FURTHER NOTICE U/S 142(1) OF THE ACT ALONG WITH DET AILED QUESTIONNAIRE DATED 20.01.2015 WAS ISSUED TO THE ASSESSEE. ANOTHER NOTI CE U/S 142(1) DATED 23.10.2015 WAS ISSUED TO THE ASSESSEE FIXING THE DA TE FOR COMPLIANCE ON 06.11.2015. IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME ON 22.02.2016 DECLARING INCOME OF RS.5,332/-. THEREAFTER, STATUTORY NOTICE U/S 143(2) OF THE ACT DATED 22.02. 2016 WAS ISSUED TO THE ASSESSEE FIXING THE DATE FOR COMPLIANCE ON 25.02.20 16. IN RESPONSE TO THESE NOTICES, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND CASE WAS DISCUSSED. THE ASSESSEE WAS REQUIRED T O SHOW CAUSE AS TO WHY THE LAND BE NOT TREATED AS CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(L)(III)(A) OF THE I.T. ACT, 1961 AND THE INCOME FROM SALE PROC EEDS BE NOT TREATED AS INCOME FROM CAPITAL GAIN. THE ASSESSING OFFICER HEL D THAT THE LAND SOLD BY THE ASSESSEE IS CLEARLY CAPITAL ASSET WITHIN THE MEANIN G OF SECTION 2(14) (III) (A) OF THE INCOME TAX ACT, 1961 AS IT IS SITUATED WITHIN T HE NOTIFIED AREA OF TAJ EXPRESS WAY INDUSTRIAL DEVELOPMENT AUTHORITY. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT DOCUMENTARY EVIDENCE I N THE SHAPE OF KHASRA/KHATAUNI SHOWING NATURE OF LAND AS AGRICULTU RAL IN 'LAND REVENUE 3 ITA NO. 6763/DEL/2017 RECORDS' COUPLED WITH TEHSIL REPORT DISCLOSING ITS DISTANCE AND CONTINUANCE OF AGRICULTURAL OPERATION BUT THE ASSESSING OFFICER OV ERLOOKED THE FACT THAT ASSESSEE PERUSED ALL THE DOCUMENTARY EVIDENCE AS PE R HIS OBSERVATION IN THE ASSESSMENT ORDER. THERE IS NO DISPUTE THAT THE LAND IS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL AND IS SUBJECT TO PAYMENT O F LAND REVENUE AS PER KHATAUNI FILED BY THE ASSESSEE AT ASSESSMENT STAGE. THERE IS ALSO NO DISPUTE THAT THE LAND WAS ACTUALLY BEING USED FOR AGRICULTU RAL PURPOSES AS PER TEHSIL REPORT. THERE IS ALSO NO DISPUTE THAT ITS PHYSICAL CHARACTERISTIC AND SURROUNDING SITUATION INDICATE THAT THE LAND IS AGR ICULTURAL AS PER TEHSIL REPORT. THERE IS ALSO NO DISPUTE THAT THE LAND WAS SOLD ON ACREAGE BASIS AS PER SALE DEED. THERE IS ALSO NO DOUBT THAT THE LAND WAS PURCHASED AND SUBSEQUENTLY SOLD FOR AGRICULTURAL PURPOSES AT THE THEN PREVAILING FAIR MARKET VALUE. THE LD. AR SUBMITTED THAT TO COUNTERACT THE ASSESSEE'S CLAIM, THE ASSESSING OFFICER HAD NOT MADE ANY ADVERSE COMMENTS ON THE VERACITY OF THE DOCUMENTARY EVIDENCE IN THE IMPUGNED ASSESSMENT ORD ER, WHICH MANIFESTLY GOES TO SHOW THAT 'ACQUIESCENCE' MEANS 'ADMISSION O R ACCEPTANCE WITHOUT ANY PROTEST OR ADVERSE CRITICISM'. IN OTHER WORDS ASSEN T 'MEANS' NO DISSENT. THE LD. AR FURTHER SUBMITS THAT ON FACTS, IN LAW AND IN THE SURROUNDING CIRCUMSTANCES, AS EXPLAINED HEREINABOVE, IT IS CRYS TAL LIKE CLEAR THAT THE AGRICULTURAL LAND UNDER CONSIDERATION, IS NOT A 'CA PITAL ASSET' WITHIN THE MEANING OF SECTION 2(14)(III)(A) OF I.T. ACT AND CO NSEQUENTLY THE PROVISIONS OF 'CAPITAL GAIN' ARE NOT AT ALL ATTRACTED ON THE SALE OF AGRICULTURAL LAND BY THE APPELLANT. THE LD. AR SUBMIT THAT THE ASSESSING OFF ICER SOLELY FOCUSED ON SO CALLED NOTIFICATION FOR MAKING ADDITION FOR 'ADDITI ON SAKE'. THE LD. AR SUBMITTED THAT IN DOING SO THE ASSESSING OFFICER UN DER MISCONCEPTION, MISCONSTRUCTION AND MISINTERPRETATION OF THE CONTEN TS OF THE NOTIFICATION HAD MADE IMPUGNED ADDITION MECHANICALLY. 6. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AS WELL AS THE CIT(A). 4 ITA NO. 6763/DEL/2017 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CONTENTIONS OF THE LD. AR THAT THERE I S NO DISPUTE THAT THE LAND IS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL A ND IS SUBJECT TO PAYMENT OF LAND REVENUE AS PER KHATAUNI FILED BY THE ASSESSEE AT ASSESSMENT STAGE. THERE IS ALSO NO DISPUTE THAT THE LAND WAS ACTUALLY BEING USED FOR AGRICULTURAL PURPOSES AS PER TEHSIL REPORT. THERE IS ALSO NO DIS PUTE THAT ITS PHYSICAL CHARACTERISTIC AND SURROUNDING SITUATION INDICATE T HAT THE LAND IS AGRICULTURAL AS PER TEHSIL REPORT. THERE IS ALSO NO DISPUTE THAT THE LAND WAS SOLD ON ACREAGE BASIS AS PER SALE DEED. THERE IS ALSO NO DOUBT THAT THE LAND WAS PURCHASED AND SUBSEQUENTLY SOLD FOR AGRICULTURAL PURPOSES AT THE THEN PREVAILING FAIR MARKET VALUE. THESE APPEARS TO BE CORRECT AND BOTH THE ASS ESSING OFFICER AS WELL AS THE CIT(A) IGNORED THESE FACTORS WHILE MAKING ADDIT IONS. MERELY OBSERVING THAT THERE WAS NO AGRICULTURAL PRODUCT SOLD IN THE PARTI CULAR FINANCIAL YEAR UNDER CONSIDERATION AND THE CERTIFICATE GIVEN BY THE TEHS ILDAR IS NOT THAT OF RELEVANT ASSESSMENT YEAR, CANNOT PROVE THAT THE ASSESSEE HAS NOT PROVED HIS PROPER PURCHASE AND SOLD OF THE AGRICULTURAL LAND. THE CI T(A) AS WELL AS THE ASSESSING OFFICER MADE ADDITION ONLY ON THE GROUND THAT THE SAID LAND IS SITUATED AT THE NOTIFIED AREA OF TAJ EXPRESS WAY INDUSTRIAL DEVELOP MENT AUTHORITY. THE ASSESSEE HAS GIVEN ALL THE DOCUMENTS BEFORE THE CIT (A) AS WELL AS THE ASSESSING OFFICER. IT CAN BE SEEN FROM THE DOCUMENTS THAT TH E LAND WAS PURCHASED AND SOLD FOR AGRICULTURAL PURPOSE AND THERE IS NO CHANG E OF THE UTILIZATION OF THE LAND. IN FACT, LAND IS NOT COMING UNDER THE PURVIE W OF NOTIFIED AREA AS PER THE CERTIFICATE GIVEN BY THE TEHSILDAR. THUS, THE SAID PROPERTY DOES NOT COME UNDER THE PURVIEW OF SECTION 2(14) (III) (A) AS DEF INED FOR CAPITAL ASSET. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5 ITA NO. 6763/DEL/2017 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22ND MARCH, 2018 . SD/- SD/- (R. S. SYAL) (SUCHITRA KAMBLE) VICE PRESIDENT JUDI CIAL MEMBER DATED: 22/03/2018 R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 6763/DEL/2017 DATE 1. DRAFT DICTATED ON 20/03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 21/03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 22.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 2 .03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 7 ITA NO. 6763/DEL/2017