LATE SH. RAM SWAROOP NATH L/H JAGDISH TOGI, Jaipur V. ITO, Jaipur

ITA 756/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5263 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S HRIMATI RUNIPAL JCIT DHK
• Keywords: Capital asset; Additional evidence; Valuation report
• Section: 54B; 54F; 2(14); 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.756/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 LATE SHRI RAMSWAROOP NATH THROUGH L/H SHRI JAGDISH YOGI, GRAM BHAMBHORIYA, VIA BAD KE BALAJI, SANGANER, JAIPUR CUKE VS. THE INCOME TAX OFFICER, WARD 7(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. DBTPS 9115 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY :S HRIMATI RUNIPAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.04.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16 /05/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-III, JAIPUR DATED 23.09.2014 WHEREIN THE ASSESSEE HAS TA KEN FOLLOWING GROUNDS OF APPEAL: (1) THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT KHA SRA NO. 703 MEASURING 0.76 HECTARE (OUT OF TOTAL LAND OF 1.61 H ECTARE SOLD BY THE ASSESSEE COMPRISING OF KHASRA NO. 644, 645, 651 & 7 03) AT VILLAGE BHAMBHORIYA, SANGANER IS SITUATED WITHIN 8 KMS OF M UNICIPAL LIMIT OF JAIPUR AND THUS UPHOLDING THE ACTION OF THE AO IN A SSESSING THE PROPORTIONAL CAPITAL GAIN ON SALE OF SAID KHASRA AT RS. 32,74,533/- (2) CONFIRMING THE ACTION OF THE AO IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54B IN 4RESPECT OF AGRICULTURAL LAND OF RS. 40, 18,600/- PURCHASED ITA NO. 756/JP/14 LATE SH. RAMSWAROOP NATH VS. ITO WARD 7(2), JAIPUR 2 BY THE ASSESSEE IN THE NAME OF HIS WIFE SMT. BHULL I DEVI OUT OF THE SALE PROCEEDS OF THE ABOVE AGRICULTURAL LAND. HE H AS FURTHER ERRED 8IN RELYING ON THE DECISION OF HONBLE RAJASTHAN HIGH C OURT IN THE CASE OF KALYA VS. CIT-73 DTR 302 FOR NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54B IGNORING THAT THE SAID DECISION IS NOT APPLICAB LE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. (3) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54F OF RS. 15,80,000/- ON ACCOUNT OF INVESTMENT OF RESIDENTIAL HOUSE. HE HAS FURTHER ERRED IN NOT ALL OWING THIS CLAIM FOR TECHNICAL REASONS OF NOT FILING APPLICATION FOR ADM ISSION OF ADDITIONAL EVIDENCE IN FORM OF RESPECT OF REGISTERED VALUER IG NORING THAT SUCH CLAIM IS MADE IN THE RETURN, WITHDRAWAL FOR CONSTRU CTION OF HOUSE IS VERIFIABLE FROM BANK STATEMENT AVAILABLE BEFORE THE LOWER AUTHORITIES AND VALUATION REPORT IS ONLY IN SUPPORT OF QUANTUM OF INVESTMENT IN THE HOUSE PROPERTY. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE ALONG WITH HIS BROTHER SH. KALYAN NATH OWNS AN AGRICULTURAL LAND AT VILLAG E BHAMBHORIYA, TEHSIL SANGANER COMPRISING OF KHASRA NO. 644, 645, 651 & 7 03. THE SAID LAND WAS SOLD ON 24.02.2007 TO PUKHRAJ RETAILERS PVT. LTD. FOR CO NSIDERATION OF RS.1,39,51,424/- AND ASSESSEES SHARE COMES TO RS.6 9,75,712/-. IN RESPONSE TO NOTICE U/S 148 DT. 27.03.2012, ASSESSEE FILED THE R ETURN ON 13.04.2012 DECLARING NIL INCOME CLAIMING THAT THE AGRICULTURAL LAND SOLD IS 8 KMS AWAY FROM THE MUNICIPAL LIMITS AND THUS IS NOT THE CAPITAL AS SET U/S 2(14) OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBTAINED I NFORMATION FROM TESHILDAR, NAGAR NIGAM AS TO THE MUNICIPAL LIMIT OF JAIPUR ON AJMER ROAD. TEHSILDAR, NAGAR NIGAM JAIPUR VIDE LETTER DT. 22.02 .2013 INFORMED THAT THE MUNICIPAL LIMIT OF JAIPUR AT AJMER ROAD IS UPTO KHA SRA NO.315 OF VILLAGE HASANPURA VAS, BHAKROTA. THEREAFTER, THE AO DEPUTED HIS INSPECTOR ALONG WITH THE SON OF ASSESSEE MR. JAGDISH AND HIS A/R TO MEAS URE THE DISTANCE OF KHASRA NO.644, 645, 651 & 703 FROM THE MUNICIPAL LIMIT. TH E INSPECTOR VIDE ITS REPORT DT. 26.02.2013 STATED THAT THE DISTANCE OF KHASRA N O.644, 645 & 651 IS 8.1 KMS FROM THE MUNICIPAL LIMIT. IN THIS REPORT HE FURTHER STATED THAT SUBSEQUENT TO THIS VISIT IT WAS GATHERED BY HIM THAT LAND BEARING KHASRA NO.703 WHICH IS AT DIFFERENT LOCATION HAS NOT BEEN SHOWN BY THE ASSESS EE. AFTER THE ABOVE REPORT OF INSPECTOR, THE AO HAS STATED THAT THE INSPECTOR ALONG WITH THE PATWARI AGAIN VISITED THESE KHASRAS ON 11.03.2013 AND SUBMITTED T HAT THERE ARE TWO ROUTES TO MEASURE THE DISTANCE OF KHASRA FROM THE MUNICIPA L LIMIT, ROUTE 1 IS VIA BAD KE BALAJI, BHAMBHORIYA AND ROUTE 2 IS VIA JHANYA TO MAHAPURA ROAD, ITA NO. 756/JP/14 LATE SH. RAMSWAROOP NATH VS. ITO WARD 7(2), JAIPUR 3 BHAMBHORIYA. THE LAND BEARING KHASRA NO.644, 645 & 651 IS 8.2 KMS & 8.1 KMS AWAY FROM THE MUNICIPAL LIMITS AS PER ROUTE 1 & ROU TE 2 RESPECTIVELY BUT THE LAND BEARING KHASRA NO. 703 IS 7.9 KMS & 7.8 KMS AW AY FROM THE MUNICIPAL LIMITS AS PER ROUTE 1 & ROUTE 2 RESPECTIVELY. THE A SSESSEE WAS ISSUED SHOW CAUSE NOTICE DT. 07.02.2013 TO FURNISH THE EXPLANAT ION BY 19.02.2013 BUT NO SATISFACTORILY REPLY WAS FILED. ACCORDINGLY, AO HEL D THAT THE LAND BEARING KHASRA NO. 703 SOLD BY THE ASSESSEE IS A CAPITAL ASSET U/S 2(14) OF THE ACT AND DETERMINED THE LONG TERM CAPITAL GAIN AT RS.32,74,5 33/-. IN APPEAL, THE LD. CIT(A) HELD THAT AS PER REPORT O F THE INSPECTOR SIGNED BY JURISDICTIONAL PATWARI DT. 11.03.2013, THE LAND AT KHASRA NO.703 WAS FOUND TO BE WITHIN 8 KMS FROM THE MUNICIPAL LIMIT FROM BOTH THE ROUTES I.E. VIA BAD KE BALAJI, BHAMBORIA ETC. AND VIA MAHAPURA, BHAMBORIA ETC. THOUGH THE APPELLANT HAS CLAIMED THAT EVEN THIS KHASRA OF LAND WAS MORE THAN 8 KMS AWAY, HOWEVER SUCH SUBMISSION IS NOT SUPPORTED BY ANY EVIDENCE. A CCORDINGLY, AO HAS RIGHTLY TREATED SUCH LAND BEARING KHASRA NO.703 IS A CAPITA L ASSET U/S 2(14)(III) OF THE IT ACT AND HAS RIGHTLY DETERMINED THE LONG TERM CAPITA L GAIN OF RS.32,74,533/-. 3. THE LD AR AT THE OUTSET SUBMITTED THAT IT IS INC ORRECT ON PART OF THE INSPECTOR TO REPORT THAT ON INSPECTION MADE ON 26.0 2.2013, ASSESSEE HAS NOT SHOWN HIM KHASRA NO.703 WHICH IS AT DIFFERENCE LOCA TION. IT MAY BE NOTED THAT INSPECTION WAS MADE ON 26.02.2013, ON SAME DATE THE REPORT IS GIVEN, THEN HOW IN THE SAME REPORT HE CAN MENTIONED THAT SUBSEQ UENT TO HIS VISIT IT WAS GATHERED BY HIM THAT KHASRA NO.703 IS NOT SHOWN TO HIM. INFACT, KHASRA NO.703 IS ADJOINING TO KHASRA NO. 644, 645 & 651 AS IS EVI DENT FROM KHASRA GIRDAWARI AND THEREFORE ALSO IT IS INCORRECT TO SAY THAT KHAS RA NO.703 IS AT DIFFERENT LOCATION. IT IS FURTHER SUBMITTED THAT EVEN IF KHASRA NO.703 IS NOT VERIFIED BY THE INSPECTOR ON 26.02.2013, THEN WHY THE ASSESSEE WAS NOT REQUIRED TO ACCOMPANY ON 11.03.2013 WHEN THE INSPECTOR ALONG WI TH THE PATWARI AGAIN MEASURED THE DISTANCE. INFACT THIS REPORT WAS NEVER CONFRONTED TO THE ASSESSEE IN COURSE OF ASSESSMENT PROCEEDINGS. THIS IS EVIDEN T FROM THE FACT THAT ASSESSEE AFTER VERIFICATION OF DISTANCE GAVE A FACT UAL REPORT VIDE LETTER DT. 26.02.2013 . THEREAFTER, WITH REFERENCE TO THE DISCUSSION HELD WITH THE AO ON 27.02.2013, ASSESSEE FILED LETTER DT. 01.03.2013 AB OUT THE APPROACH ROAD OF THE LAND OF THE ASSESSEE FROM THE MUNICIPAL LIMIT. FURT HER, THE AO AT PG 10 OF THE ORDER HAS STATED THAT ASSESSEE WAS ISSUED SHOW CAUS E NOTICE DT. 07.02.2013 TO FURNISH REPLY ON 19.02.2013 WHICH IS BEFORE THE INS PECTION MADE ON 11.03.2013 AND THEREFORE ALSO IT IS EVIDENT THAT NO OPPORTUNIT Y WAS GIVEN TO THE ASSESSEE ITA NO. 756/JP/14 LATE SH. RAMSWAROOP NATH VS. ITO WARD 7(2), JAIPUR 4 TO VERIFY THE ACTUAL DISTANCE OF KHASRA NO.703 FROM THE MUNICIPAL LIMIT OF JAIPUR. IT WAS FURTHER SUBMITTED THAT AS PER REPORT DT. 11. 03.2013, KHASRA NO.703 IS 7.8/7.9 KMS OF THE MUNICIPAL LIMIT. IT IS NOT MENTI ON THAT AT WHICH POINT OF KHASRA NO.703, THIS DISTANCE IS MEASURED - WHETHER IT IS THE STARTING OR MIDDLE OR END POINT OF KHASRA NO.703. THE DIFFERENCE IS SO NARROW THAT WITHOUT ANY AUTHENTIC MEASUREMENT IT CANNOT BE SAID THAT KHASRA NO.703 WHICH ARE ADJACENT TO KHASRA NO. 644, 645 & 651 IS WITHIN 8 K MS OF THE MUNICIPAL LIMIT. IT WAS FINALLY SUBMITTED THAT THE AUTHENTICITY OF T HE DISTANCE MEASURED IS DOUBTFUL, NO OPPORTUNITY WAS PROVIDED TO THE ASSESS EE, THE CIT(A) ONLY REITERATED THE FINDING OF THE AO, THE CERTIFICATE P ROVIDED BY THE ASSESSEE IS TOTALLY IGNORED AND THEREFORE THE MATTER MAY BE SET ASIDE TO VERIFY THE ACTUAL DISTANCE ALONG WITH THE ASSESSEE. 4. THE LD DR IS HEARD WHO HAS RELIED UPON THE ORDER OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL ON RECORD. THE LIMITED ISSUE UNDER CONSIDERATION IS M EASUREMENT OF KHASRA NO. 703 AT VILLAGE BHAMBHORIYA, SANGANER AND WHETHER TH E SAME FALLS WITHIN 8 KMS OF MUNICIPAL LIMITS OF JAIPUR. THE LD AR HAS CONTE NDED THAT KHASRA NO. 703 IS ADJOINING KHASRA NO. 644, 645 AND 651 WHICH HAVE AL SO BEEN MEASURED AND HELD BEYOND 8 KMS OF THE MUNICIPAL LIMITS. THE LD AR FURTHER CONTENDED THAT ADEQUATE OPPORTUNITY HAS NOT BEEN PROVIDED TO THE A PPELLANT TO CROSS VERIFY THE REPORT DATED 11.03.2013 SUBMITTED BY THE INSPEC TOR AND THE PATWARI STATING THAT SAID KHASRA NO. IS SITUATED WITHIN 7.8 /7.9 KMS OF THE MUNICIPAL LIMITS AND EVEN THE BASIS OF MEASUREMENT ARE NOT CL EAR TO HIM. FOR ASSESSMENT YEAR PRIOR TO AY 2014-15, IT IS NOW A SETTLED POSITION THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND THE AGRIC ULTURAL LAND IS TO BE MEASURED IN TERMS OF THE APPROACH BY ROAD. THE LD AR IN THIS REGARD HAS SUBMITTED A LETTER DATED 1.3.2013 ISSUED BY THE SAR PANCH OF VILLAGE PANCHAYAT, SANGANER WHEREIN IT IS STATED THAT IN MARCH 2007 WH EN THE SUBJECT LAND WAS SOLD, THE ONLY APPROACH ROAD WAS VIA AJMER ROAD, BA D KE BALAJI, VILLAGE BHAMBORIYA , DHANKO MUHALLA. THE AO HAS STATED IN HIS ORDER THAT MEASUREMENT OF KHASRA NO. 703 AT VILLAGE BHAMBHORIY A, SANGANER VIA THE ROUTE SUGGESTED BY THE APPELLANT IS 7.9 KMS APPROXI MATELY AND VIA THE OTHER ITA NO. 756/JP/14 LATE SH. RAMSWAROOP NATH VS. ITO WARD 7(2), JAIPUR 5 ROUTE (MAHAPURA MODE, JHAIN, BHAMBORIYA), THE DISTA NCE COMES TO 7.8 KMS APPROXIMATELY. WE AGREE WITH THE CONTENTION OF THE LD AR THAT NO BASIS OF MEASUREMENT HAS BEEN SPECIFIED IN THE REPORT WHICH HAS BEEN RELIED UPON BY THE AO AND THE DIFFERENCE IS SO NARROW THAT IN ABSE NCE OF ANY AUTHENTIC MEASUREMENT, IT CANNOT BE SAID THAT KHASRA NO. 703 WHICH IS ADJACENT TO KHASRA NO. 644, 645 & 651 IS WITHIN 8 KMS OF THE MU NICIPAL LIMITS WHEN THE OTHER THREE KHASRAS ARE OUTSIDE THE LIMITS OF 8 KMS . IN ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DEEM IT FIT TO SET ASIDE THIS MATTER TO THE FILE OF THE AO, WHO SHALL EXAMIN E THIS ISSUE OF MEASUREMENT OF KHASRA NO. 703 FROM THE MUNICIPAL LIMITS OF JAIP UR IN TERMS OF APPROACH BY ROAD AT THE TIME OF SALE OF SUBJECT LAND, AFRESH WI TH THE AID AND ASSISTANCE OF VILLAGE HEAD, PATWARI, AND/OR OTHER CIVIL BODIES/EX PERTS IN THE FIELD OF LAND MEASUREMENT AND AFTER PROVIDING REASONABLE OPPORTUN ITY TO THE APPELLANT. GIVEN THAT THE ABOVE MATTER HAS BEEN SET-ASIDE TO T HE FILE OF THE AO, WE DEEM IT FIT AND PROPER TO REFER THE OTHER MATTERS REGARD ING CLAIM OF DEDUCTION UNDER SECTION 54B AND SECTION 54F ALSO TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AS PER LAW WITH A LIBERTY TO THE APPELLANT TO FILE VALUATION REPORT AND OTHER RELEVANT DOCUMENTATION IN SUPPORT OF HIS SAID CLAIM . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 / 05/2016. SD/- SD/- ( R.P. TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 16/ 05 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAM SWAROOP NATH, JAIPUR 2. THE RESPONDENT- THE ITO, WARD 7(2), JAIPUR 3. THE CIT(A) III, JAIPUR 4. THE CIT-III, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 756 /JP/14 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 756/JP/14 LATE SH. RAMSWAROOP NATH VS. ITO WARD 7(2), JAIPUR 6