Laxmiben Amratbhai Patel, Navsari V. The Income Tax Officer, Ward - 3, Navsari

ITA 751/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8095 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-01-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKSHAY M. MODI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Set aside
• Section: 148; 2; 50C; 2(14); 139(1); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.751/SRT/2023 Assessment Year: (2012-13) (Physical Hearing) Laxmiben Amratbhai Patel, At & Post: Ubhrat, Maroli Bazar, Tal: Jalalpore, Dist: Navsari – 396436. Vs. The ITO, Ward – 3 , Navsari èथायीलेखासं./जीआइआरसं./PAN/GIR No: BVEPP3211N (Appellant) (Respondent) Appellant by Shri Akshay M. Modi, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 12/01/2024 Date of Pronouncement 27/03/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “the ld. CIT(A)”], Surat, National Faceless Appeal Centre (in short ‘the NFAC’), dated 03.10.2023, which in turn arises out of an assessment order passed by Assessing Officer u/s 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 31.03.2012. 2. The grounds of appeal raised by the assessee are as follows: “1. On the facts and in the circumstances of the case as well in law, the learned CIT(Appeals) has erred in upholding the action of the AO to assume the jurisdiction u/s 147 of the Act and hence, the assessment proceedings carried out and concluded u/s 144 r.w.s. 147 of the Act by the AO for the income assessed at Rs.2,09,62,630 on account of alleged deemed Capital Gain u/s 50C of the Act, being without jurisdiction, bad in law, illegal, invalid and hence, liable to be held as void ab initio or annulled in toto. 2. On the facts and in the circumstances of the case as well in law, the learned CIT(Appeals) has erred both on facts and in law in upholding the AO’s order u/s 2 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel 144 r.w.s. 147 of the Act and therefore, the income assessed at Rs.2,09,62,630 purely on presumptions, assumptions and allegations of taxable income in the hands of the assessee for the year under appeal, being arbitrary, subjective, imaginary, perverse, baseless, bad in law and without jurisdiction, is liable to be annulled in toto. 3. On the facts and in the circumstances of the case as well in law, the learned CIT(Appeals) has erred both on facts and in law in upholding the AO’s order u/s 144 r.w.s. 147 of the Act making addition of Rs.2,09,62,630 on account of the alleged deemed Capital Gain invoking the provisions of Section 50C of the Act, without appreciating the character of piece of land being agriculture and not within the definition of “capital asset” u/s 2(14) of the Act and therefore, the addition of Rs.2,09,62,630 made for the alleged taxable income under the head “Capital Gain”, being under gross misconception, misconstruction and misapplication of the provision of Section 2(14) of the Act to the facts of the case, is without jurisdiction, bad in law, perverse, illegal, invalid, arbitrary, void ab initio, and hence, liable to quashed. 4. On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed to appreciate in considering the right, lawful and proper perspectives the underlying facts of the case that the piece of agriculture land in question is out of the purview of the ambit and definition of “capital asset” u/s 2(14) of the Act by virtue of specific exclusion provided under clause (iii)(b) of Sub-Section (14) of Section 2 of the Act, applicable for the relevant year under appeal and hence, the addition of Rs.2,09,62,630 made by the AO and confirmed by the CIT(Appeals) applying erroneously and under complete mis-conception, the provisions of the law not in existence in the Stature for the assessment year under appeal, being without jurisdiction, prejudicial, illegal, invalid, bad in law, is liable to be quashed or annulled in toto. 5. On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed to appreciate in the right, lawful and proper perspective the entire correspondences made in the course of assessment and/or appeal proceedings, already been supplied with the appeal memo forming part of the statement of facts including cogent explanations and submissions made in writing by the assessee on various dates along with the various enclosures attached with the said submissions and hence, no justified. 6. Your assessee further reserves her rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.” 3. Succinct facts are that no return of income was filed by the assessee for assessment year (AY) 2012-13. The assessing officer was having information that during the relevant financial year the assessee has sold immoveable property on 06.03.2012 for a consideration of Rs. 95.00 lakhs. No capital gain was offered by the assessee. The stamp valuation authorities valued the valued said property for the purpose of registration of sale 3 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel transaction at Rs. 2.09 Crore, on which the assessee paid stamp duty of Rs. 10.27 lakhs. On the basis of aforesaid information, the assessing officer was of the view that deeming provisions of section 50C is applicable on the transaction of sale and that income of the assessee has escaped assessment as the assessee has not offered capital gain. The assessing officer reopened the case under section 147. Notice under section 148 was issued to the assessee on 29.03.3019. The assessing officer noted that in response to notice under section 148, the assessee has not filed return of income. The assessing officer in para-2 of assessment order recorded that that despite issuing various show cause notices no response was made by the assessee. The assessing officer in para-3 of assessment order recorded that final show cause notice was issued to the assessee as to why amount of Rs. 2.09 Crore be added to the income of assessee. The assessing officer in para-3 of his order recorded that assessee was allowed time till 18.12.2019 to furnish her explanation but assessee has not complied. The assessing officer on the basis of value determined by the stamp valuation authority for the purpose of registration of transaction of land at Rs. 2.09 Crore. The assessing officer by invoking the provision of section 50C made addition of Rs. 2.09 Crore while passing assessment order dated 31.03.2012 under section 144 rws 147 of the Income Tax Act. 4. On appeal, before ld CIT(A), the assessee filed her written submissions as recorded in para-3 of order of ld CIT(A). The ld CIT(A) also recorded that the assessee sought video conferencing on 26/09/2023 at 3.00 PM, but not appeared in video conferencing on two occasions. The summery of submissions of assessee is recorded in page 3 to 8 of order of ld CIT(A). The assessee in her submissions submitted that she is homemaker and agriculturist by birth, She sold agriculture land at RS No. 122/39, Block No. 574 of Moje Gam, Jalalpore Ubrat, District Navsari at a sale consideration 4 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel of Rs. 95.00 Lakhs. The assessee furnished name, address, PAN of purchaser and details of property. The assessee sold agriculture land at Jantri rate applicable to the agriculture land in the area. The assessee has no other income chargeable to tax for AY 2012-13, hence, no return of income was filed. The land is situated 8 KM beyond of City Limit and is not ‘capital asset’ and the receipt is not chargeable under the head ‘capital gain’ under section 2(14) (iii)(B). the assessee also furnished certificate issued by Talati- cum-Mantri Gram Panchayat, Google Map, Form No. 8A and 7/12. The assesse also relied on various case laws, consisting of CIT Vs Chandan Magraj Parmar (2022) 135 taxmann.com 55 (Bom), Chimanbhai Dahyabhai Patel Vs ITO (2022) 140 taxmann.com 22 (Surat-Trib), Mohideen Sharif Inayatulla Sharif Vs ITO (2022) 139 taxmann.com 551 (Chennai-Trib)- and George Gee Varghese Vs ITO (2023) 152 taxmann.com 493 (Chennai-trib). 5. The ld CIT(A) after consideration the submissions of the assessee confirmed that action of assessing officer in reopening under section 147 by holding that the assessee has not offered capital gain on sale of immoveable property as no return of income was filed, the reopening was made after recording satisfaction. On merit, the ld. CIT(A) held that he has gone through the explanatory memorandum of Finance Act 2013 and Circular of CBDT No. 03/2014 dated 24 January 2014. The Circular of CBDT is clear that shortest possible route has to be taken as the crow flies. The assessee has not taken areal shortest possible route. The distance of the land from the City is within 8.00 KM as per the shortest route and that the assessee has given wrong map of areal distance. The land was treated as capital asset and confirmed the action of assessing officer, therefore assessee is in appeal before us. 6. The Ld. Counsel for the assessee submitted that although the assessment was framed by the assessing officer under section 144 of the Act, ex-parte, 5 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel however, relevant documents were available before the assessing officer, which the Assessing Officer has not considered. Before ld. CIT(A), the assessee filed detailed written submission which is recorded by him in his order. The land of the assessee is purely agriculture land and the assessee has filed sufficient evidence to prove such fact, including the Google Map of location of land and the approach road showing the distance from City Limit. Hence, the addition made by the Assessing Officer may be deleted, considering the merit of the case. To support his case, the ld AR of assessee relied on all the case laws, which were relied before ld CIT(A). 7. On the other hand, ld DR for the Revenue, argued that assessee has not filed return of income under section 139(1) of the Act for the assessment year 2012-13. Later on, assessee`s case was reopened under section 147/148 of the Act on dated 29.03.2019. As per para No.1 of assessment order, the assessee has not filed return of income in response to notice u/s 148 of the Act. Hence, assessee has never submitted any documents and evidences before the assessing officer. Therefore, the documents and evidences submitted by the assessee by way of paper book before the Tribunal, have never been examined by the assessing officer. Therefore, matter may be remitted back to the file of the assessing officer for fresh adjudication. 7. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. The Ld. Counsel for the assessee submitted before us the following documents and evidences, viz: (1) Copy of Gaam Namuno 7/12 and 8A (vide Pb.13 – 14), (2) Certificate given by Talati, Gram Panchayat Ubhrat Dtd. 07/01/2014 (vide Pb.15), (3) Copy of registered sale deed dated. 06.03.2012 (vide Pb. 16 - 31). We noted that the assessing officer made 6 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel addition by holding that the assessee has not filed any reply despite repeated notices. The assessing officer made addition of Rs. 2.09 Crore by invoking the provisions of section 50C on the basis of facts that the assessee has shown sale consideration only at Rs. 95.00 lakhs, but the stamp valuation authority has valued the land for the purpose of registration of transaction at Rs. 2.09 crore. The ld CIT(A) confirmed the action of assessing officer on the basis of CBDT Circular No. 3/2014 by holding that areal distance of shortest possible route has to be taken as the crow flies. On careful perusal of CBDT Circular No. 3/2014, we find that para- 4(4.5) of circular clearly specify that amendment made in the definition of Capital asset by Finance Act 2013 is applicable from AY 2014-15. We find that CBDT in its subsequent Circular No. 17/2015 has issued following directions, “CIRCULAR NO.17/2015 [F.NO.279/MISC./140/2015-ITJ], DATED 6-10-2015 "Agricultural Land" is excluded from the definition of capital asset as per section 2(14) (iii) of the Income-tax Act based, inter alia on its proximity to a municipality or cantonment board. The method of measuring the distance of the said land from the municipality, has given rise to considerable litigation. Although, the amendment by the Finance Act, 2013 w.e.f. 1-4-2014 prescribes the measurement of the distance to be taken aerially, ambiguity persists in respect of earlier periods. 2. The matter has been examined in light of judicial decisions on the subject. The Nagpur Bench of the Hon'ble Bombay High Court vide order dated 30-3-2015 in ITA 151 of 2013 in the case of Smt. Maltibai R Kadu has held that the amendment prescribing distance to be measured aerially, applies prospectively i.e. in relation to assessment year 2014-15 and subsequent assessment years. For the period prior to assessment year 2014-15, the High Court held that the distance between the municipal limit and the agricultural land is to be measured having regard to the shortest road distance. The said decision of the High Court has been accepted and the aforesaid disputed issue has not been further contested. 3. Being a settled issue, no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this issue before 7 751/SRT/2023/AY.2012-13 Laxmiben Amratbhai Patel various Courts/Tribunals may be withdrawn/not pressed upon. This may be brought to the notice of all concerned.” 8. Before us, the objection of ld Sr DR for revenue is that the documents and evidences have never been examined by the assessing officer, therefore, considering the above facts, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the assessing officer on limited issue to examine the fact about the distance of land sold by the assessee by considering the aforesaid in case the distance of location of land is more than 8.00 KM from municipal limits, allow relief to the assessee. Needless to direct that the assessing officer shall allow reasonable and fair opportunity to the assessee. The assessee is also directed to make compliance in time. For statistical purposes, the appeal of the assessee is treated as allowed. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 27/03/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 27/03/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. CIT 4. DR/AR, ITAT, Surat 5. Guard File By order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat