K.Bhavani Shankar, Coimbatore V. DCIT, Coimbatore

ITA 689/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7776 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R JEYAKUMAR
• Assessee Lawyers: K RAGHU
• Keywords: Capital asset; Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.689/MDS/2016 / ASSESSMENT YEAR : 2012-13 SHRI K. BHAVANI SHANKAR, 37, RACE COURSE ROAD, COIMBATORE 641 018 PAN : ALTPB6312J V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE. ( /APPELLANT) ( !' /RESPONDENT) # /APPELLANT BY : SHRI K. RAGHU, CA !' # /RESPONDENT BY : SHRI R. JEYAKUMAR, JCIT # /DATE OF HEARING : 25.01.2017 # /DATE OF PRONOUNCEMENT : 23.02.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : [ THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE D ATED 18.12.2015 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. 2 I.T.A. NO.689/MDS/2016 2. SHRI K. RAGHU, THE LD. REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS ADDITION OF 8,73,22,381/- TREATING THE AGRICULTURAL LAND AS CAP ITAL ASSET. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE T RANSFERRED 33.35 ACRES OF AGRICULTURAL LAND SITUATED AT PERUR VILLAG E, COIMBATORE. THE ASSESSEE HAS PRODUCED ALL THE DETAILS INCLUDING THE COPY OF THE SALE DEED BEFORE THE ASSESSING OFFICER. FOR THE YEAR UND ER CONSIDERATION, THE ASSESSING OFFICER AFTER VERIFYING THE MATERIALS AVAILABLE ON RECORD FOUND THAT THE ASSESSEE HAS SOLD 22.63 ACRES OF LAN D SITUATED AT PERUR VILLAGE TO SHRI B. SOMASUNDARAM ON 07.12.2011 FOR A TOTAL CONSIDERATION OF 9,05,20,000/- THOUGH THE SALE DEED WAS REGISTERED FOR 2,28,46,500/- THE LAND WAS SOLD FOR 9,05,20,000/-. IN FACT, THE AGREEMENT WAS ENTERED INTO BETWEEN THE PARTIES ON 2 7.07.2011. THE AGREEMENT DISCLOSES THE SALE VALUE OF THE PROPERTY AS 40 LAKHS ONLY PER ACRE. THE ASSESSEE AFTER TAKING INTO CONSIDERAT ION OF THE SALE CONSIDERATION DISCLOSED IN THE SALE AGREEMENT CLAIM ED THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND. 3. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSI NG OFFICER REJECTED THE CLAIM OF THE ASSESSEE HOLDING THE LAND IN QUESTION IS NOT AN AGRICULTURAL LAND, ACCORDINGLY LEVIED TAX ON THE CAPITAL GAIN. REFERRING TO THE ASSESSMENT ORDER, THE LD. REPRESEN TATIVE SUBMITTED 3 I.T.A. NO.689/MDS/2016 THAT THE GUIDELINE VALUE WAS ONLY 2,28,46,500/-. HOWEVER THE SAME WAS SOLD FOR 9,05,20,000/-. THE ASSESSING OFFICER AFTER CONSIDE RING THE SALE CONSIDERATION OF THE ASSESSEE FOUND THAT N O SENSIBLE AGRICULTURIST PURCHASES THE LAND IN QUESTION TO CAR RY OUT ANY AGRICULTURAL OPERATION. ACCORDINGLY CONCLUDED THAT THE LAND IN QUESTED IS NOT AN AGRICULTURAL LAND AND IT IS A CAPITAL ASSET. REFER RING TO THE FAIR MARKET VALUE ADOPTED BY THE ASSESSING OFFICER AS ON 01.04. 1981, THE LD. REPRESENTATIVE SUBMITTED THAT EVEN THOUGH A SPECIFI C GROUND WAS RAISED BEFORE CIT (APPEALS), THE SAME WAS NOT ADJUDI CATED BY HIM. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE LA ND IN QUESTION IS CLASSIFIED AS AGRICULTURAL LAND IN REVENUE RECORDS. THE CHITTA ISSUED BY THE TALUK OFFICE, COPY OF THE ORDER OF SETTLEMENT C OMMISSIONER WAS TOTALLY IGNORED BY THE AUTHORITIES BELOW. ACCORDIN G TO THE LD. REPRESENTATIVE, THE ASSESSEE CULTIVATED COCONUT TRE ES WITH THE HELP OF PUMP SETS. THE ASSESSEE HAS ALSO OFFERED FOR TAXATI ON THE AGRICULTURAL INCOME FOR THE PURPOSE OF COMPUTING THE CORRECT TAX . HENCE, ACCORDING TO THE LD. REPRESENTATIVE, THE ADDITION M ADE BY THE ASSESSING OFFICER MAY BE DELETED. 4. ON THE CONTRARY SHRI R. JEYAKUMAR, THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT EVEN THOUGH THE ASSES SEE CLAIMED THE LAND IN QUESTION IS AN AGRICULTURAL LAND, THERE IS NO MATERIAL AVAILABLE 4 I.T.A. NO.689/MDS/2016 ON RECORD TO SUGGEST THAT THE LAND IN QUESTION IS C LASSIFIED AS AGRICULTURAL LAND. IN THE ABSENCE OF ANY MATERIAL, REGARDING THE CLASSIFICATION OF THE LAND AS AGRICULTURAL LAND BY THE STATE REVENUE DEPARTMENT, IT CANNOT BE CONCLUDED THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND. THEREFORE, THE CIT (APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. WITH REGARD TO FAIR MARKET VALUE AS ON 01.04.1981, THE LD. D.R., VERY F AIRLY CONCEDED THE SPECIFIC GROUND RAISED BY THE ASSESSEE WAS NOT DISP OSED OFF BY THE CIT (APPEALS). THEREFORE AT THE BEST THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE CIT (APPEALS) TO DISPOSE OFF THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO FAIR MARKET VALUE AS ON 01. 04.1981. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESS EE CLAIMS THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND. FROM THE ASSESSMENT ORDER, IT APPEARS THAT THE ASSESSEE WAS EXAMINED. THE ASSESSEE CLARIFIED BEFORE THE ASSESSING OFFICER DURING THE C OURSE OF EXAMINATION THAT HE PURCHASED THE LAND IN QUESTION FOR MAKING T HE SAME INTO PLOTS AND SELL IN AS FARM SITES. THE ASSESSING OFFICER HO WEVER PROCEEDED ON THE ASSUMPTION THAT THE ASSESSEE CLAIMED THAT TH E LAND IN QUESTION IS AN AGRICULTURAL LAND. THE ASSESSEE HAS NOW PRODU CED THE COPIES OF THE CHITTA ISSUED BY THE TALUK OFFICE AND ALSO COPY OF THE ORDER OF 5 I.T.A. NO.689/MDS/2016 SETTLEMENT COMMISSIONER IN RESPECT OF THIS LAND. T HESE MATERIALS WERE NOT CONSIDERED BY THE ASSESSING OFFICER AND TH E CIT (APPEALS). THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE CLAIMS THAT THE LAND IN QUESTION IS AGRICULTURAL LA ND, THE CLASSIFICATION OF THE LAND BY THE STATE REVENUE DEPARTMENT PLAYS AN I MPORTANT ROLE. THEREFORE, IT IS FOR THE ASSESSING OFFICER TO EXAMIN E THE CLASSIFICATION OF THE LAND BY THE STATE REVENUE DEPARTMENT BEFORE REACHING ANY CONCLUSION. IN OTHER WORDS, THE ASSESSING OFFICER HAS TO FIND OUT WHETHER THE LAND IN QUESTION IS A WET LAND OR DRY L AND. IN CASE OF WET LAND, DEFINITELY THERE WILL BE A SOURCE FOR IRRIGAT ION. IN CASE OF DRY LAND, THE ASSESSEE COULD ALSO CULTIVATE THE SAME BY CREAT ING ARTIFICIAL SOURCE OF IRRIGATION BY DIGGING WELL OR BORE WELL. THEREFO RE, BEFORE CONCLUDING THAT THE LAND IN QUESTION IS NOT AN AGRICULTURAL LA ND, IT IS NECESSARY TO BRING ON RECORD THAT THE CLASSIFICATION OF THE LAND BY THE STATE REVENUE DEPARTMENT., THE ACTUAL CROP IF ANY CULTIVATED BY T HE ASSESSEE. MOREOVER SINCE THE ASSESSEE CLAIMS TO HAVE PURCHASE D THE LAND TO MAKE INTO PLOTS AND SALE IT AS FARM SITES, IT NEEDS TO BE ASCERTAINED WHETHER THE ASSESSEE INTENDED TO ENGAGE IN THE BUSI NESS OF REAL ESTATE. SINCE, THESE ASPECTS WERE NOT EXAMINED EIT HER BY THE ASSESSING OFFICER OR BY THE CIT (APPEALS), THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECO NSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE 6 I.T.A. NO.689/MDS/2016 SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECO NSIDER THE MATTER AFRESH AND DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. THE ASSESSE E WILL BE AT LIBERTY TO FILE THE NECESSARY MATERIAL BEFORE THE A SSESSING OFFICER. 6. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 23 RD FEBRUARY, 2017. JR. # ! $ % $ /COPY TO: 1. /APPELLANT 2. !' /RESPONDENT 3. &' ( )/CIT(A)-1, COIMBATORE 4. &' /CIT 5. ! $ /DR 6. () /GF.