Smt. S. Vijayalakshmi, Hyderabad V. ACIT,Central Circle-6, Hyderabad

ITA 774/HYD/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0361 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PALLAVI AGARWAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Capital asset; Search and seizure; Additional evidence; Cost of acquisition
• Section: 2(14); 153A; 32; 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 774/HYD/2014 ASSESSMENT YEAR: 2008-09 SMT. S. VIJAYALAKSHMI, HYDERABAD. PAN AEYPV2614P VS. ASST. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE - 6, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SMT. PALLAVI AGARWAL DATE OF HEARING 23-06-2015 DATE OF PRONOUNCEMENT 26-06-2015 O R D E R PER SAKTIJIT DEY: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 17/02/2013 OF LD. CIT(A)-I, HYDERABAD PERTAINING T O AY 2008-09. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS FOLLOWS: 2. THE CIT(A) ERRED IN GIVING A FINDING THAT THE LA ND SOLD CANNOT BE HELD TO BE AGRICULTURAL LAND ON INCORRECT PRESU MPTION THAT THE ASSESSEES HUSBAND IS IN REAL ESTATE BUSINESS AND SURMISES THAT THE VALUE PAID BY THE PURCHASER DOES NOT JUST IFY THE COST OF AGRICULTURAL LAND THOUGH THEY ARE NOT RELEVANT FAC TORS TO DECIDE WHETHER THE LAND FALLS WITHIN THE DEFINITION OF SE CTION 2(14) AGRICULTURAL LAND. 4. BRIEFLY THE FACTS RELATING TO THIS ISSUE IN DISP UTE ARE, ASSESSEE IS AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION U/S 1 32 OF THE ACT WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF ASSESSEE O N 22/02/2008. PURSUANCE TO THE SEARCH AND SEIZURE OPERATION, NOTI CES U/S 153A WERE ISSUED TO ASSESSEE REQUIRING HER TO SUBMIT RET URN OF INCOME FOR AY 2003-04 TO 2008-09. IN RESPONSE TO THE NOTICED I SSUED U/S 53A, ASSESSEE FILED HER RETURN OF INCOME ON 17/08/2010 D ECLARING TOTAL 2 ITA NO. 774 /HYD/2014 SMT. S. VIJAYALAKSHMI INCOME OF RS. 1,64,530. IN COURSE OF ASSESSMENT PRO CEEDING, AO FOUND THAT DURING SEARCH AND SEIZURE OPERATION, DEP ARTMENT OBTAINED INFORMATION THAT ASSESSEE HAS PURCHASED A LAND ADME ASURING 1.09 ACRES AT KUNTLUR VILLAGE, HAYATNAGAR MANDAL IN TWO TRANCHES ONE LAND ADMEASURING 0.16 GUNTAS FROM SRI T. CHANDRASEKHAR F OR A CONSIDERATION OF RS. 79,500 IN THE YEAR 2003 AND AN OTHER LAND ADMEASURING 0.33 GUNTAS FROM SRI V. ARAVINDA REDDY FOR A CONSIDERATION OF RS. 9,90,000 IN THE YEAR 2007. THU S, TOTAL CONSIDERATION PAID BY ASSESSEE FOR THE ENTIRE 1.09 ACRES OF LAND WAS TO THE TUNE OF RS. 10,69,500. IT WAS NOTICED THAT T HE ENTIRE LAND OF 1.09 ACRE WAS SOLD BY ASSESSEE DURING THE PY RELEVA NT TO AY UNDER DISPUTE TO M/S SRI ANDAL EDUCATIONAL & CULTURAL SOC IETY REPRESENTED BY ITS CHAIRMAN SRI G. RAJENDER REDDY ON A CONSIDER ATION OF RS. 24,50,000. WHEN ASSESSEE WAS CALLED UPON TO EXPLAIN THE REASON FOR NOT SHOWING CAPITAL GAIN, ASSESSEE STATED THAT SHE WILL ADMIT THE SAME IN HER RETURN OF INCOME AND PAY THE CAPITAL GA IN TAX. HOWEVER, IN THE RETURN FILED FOR THE IMPUGNED AY, SINCE ASSE SSEE DID NOT DECLARE ANY CAPITAL GAIN, AO PROCEEDED TO COMPUTE L ONG AND SHORT TERM CAPITAL GAINS AT RS. 8,00,000 AND RS. 16,50,00 0 RESPECTIVELY AND MADE ADDITION OF A TOTAL AMOUNT OF RS. 24,50,000. B EING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 5. BEFORE LD. CIT(A), IT WAS SUBMITTED BY ASSESSEE THAT THE LAND SOLD BEING AGRICULTURAL IN NATURE AND LOCATED BEYON D THE PRESCRIBED LIMIT OF THE NEAREST NOTIFIED MUNICIPALITY, IT CANN OT BE TREATED AS CAPITAL ASSET U/S 2(14), HENCE, NOT SUBJECT TO CAPI TAL GAIN. IT WAS FURTHER SUBMITTED BY ASSESSEE THAT WITHOUT VERIFYIN G THE NATURE AND CHARACTER OF LAND FROM THE SALE DEEDS AND OTHER DOC UMENTS SUBMITTED BY ASSESSEE, AO COULD NOT HAVE COMPUTED CAPITAL GAI N SOLELY RELYING UPON ASSESSEES STATEMENT RECORDED AT THE TIME OF S EARCH WHEREIN SHE STATED TO DISCLOSE CAPITAL GAIN IN THE RETURN O F INCOME. LD. CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF A SSESSEE. SHE CONFIRMED THE VIEW OF AO IN SUBJECTING THE TRANSACT ION RELATING TO SALE 3 ITA NO. 774 /HYD/2014 SMT. S. VIJAYALAKSHMI OF LAND BY ASSESSEE TO CAPITAL GAIN. HOWEVER, ACCEP TING ASSESSEES ALTERNATIVE CLAIM, SHE DIRECTED AO TO ALLOW DEDUCTI ON ON ACCOUNT OF COST OF ACQUISITION AND COST OF IMPROVEMENT. BEING AGGRIEVED OF THE ORDER OF LD. CIT(A), ASSESSEE IS BEFORE US. 6. LD. AR STRONGLY CONTESTING THE FINDING OF LD. CI T(A) THAT ASSESSEE HAS NOT PRODUCED SALE DEEDS TO INDICATE TH E NATURE OF LAND SOLD BY ASSESSEE, SUBMITTED THAT NOT ONLY INFORMATI ON RELATING TO SALE OF LAND WAS PART OF SEIZED MATERIAL BUT ASSESSEE IN COURSE OF ASSESSMENT PROCEEDING ALSO DID SUBMIT COPIES OF SAL E DEEDS WHICH CLEARLY INDICATE THE NATURE AND CHARACTER OF LAND A S AGRICULTURAL. LD. AR SUBMITTED THAT AT THE RELEVANT POINT OF TIME WHE N THE LAND WAS SOLD, IT WAS BEYOND THE PRESCRIBED LIMIT OF THE NE AREST NOTIFIED MUNICIPALITY, HENCE, CANNOT BE CONSIDERED AS CAPITA L ASSET IN TERMS OF SECTION 2(14) AS THE NATURE OF LAND IS AGRICULTURAL . LD. AR SUBMITTED THAT DURING THE RELEVANT POINT OF TIME, THE VILLAGE WHERE THE LAND WAS SITUATED I.E. KUNTLUR VILLAGE AT HAYATNAGAR MANDAL WAS NOT MERGED WITH GHMC. THEREFORE, THE NATURE AND CHARACTER OF L AND BEING AGRICULTURAL AND LOCATION OF THE LAND BEING BEYOND THE PRESCRIBED LIMIT OF THE NEAREST NOTIFIED MUNICIPALITY IT IS NOT A CA PITAL ASSET IN TERMS OF SECTION 2(14). TO DEMONSTRATE THAT AT THE RELEVANT POINT OF TIME WHEN THE LAND WAS SOLD IT WAS NOT PART OF GHMC, LD. AR S UBMITTED CERTAIN GOVT. ORDERS AND ALSO A CERTIFICATE FROM OFFICE OF DIRECTOR, PLANNING, HMDA, GHATKESAR ZONE ALONG WITH A PETITION SUPPORTE D BY AN AFFIDAVIT PRAYING FOR ADMISSION OF THE DOCUMENTS AS ADDITIONA L EVIDENCE. THE REASONS FOR WHICH EVIDENCES COULD NOT BE SUBMITTED BEFORE AO AND LD. CIT(A) WAS ALSO MENTIONED IN THE AFFIDAVIT. THUS, L D. AR REQUESTED FOR REMITTING THE MATTER TO AO FOR VERIFYING ASSESSEE S CLAIM AND DECIDING THE ISSUE AFTER EXAMINING THE ADDITIONAL E VIDENCE PRODUCED BY ASSESSEE. 7. LD. DR OBJECTING TO SUBMISSION OF ADDITIONAL EVI DENCE BY ASSESSEE AT THIS STAGE OF THE PROCEEDING, SUBMITTED THAT ASSESSEE HAVING FAILED TO SUBMIT ADDITIONAL EVIDENCE BEFORE AO AND LD. CIT(A), 4 ITA NO. 774 /HYD/2014 SMT. S. VIJAYALAKSHMI CANNOT BE ALLOWED TO SUBMIT THE SAME AT THIS STAGE. SHE FURTHER SUBMITTED THAT ASSESSEE HAVING FAILED TO ESTABLISH THE FACT THAT LAND SOLD IS AGRICULTURAL LAND AND SITUATED BEYOND THE P RESCRIBED LIMIT OF THE NEAREST NOTIFIED MUNICIPALITY, CAPITAL GAIN CHA RGED ON SALE OF LAND IS JUSTIFIED. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT ONLY R ELYING UPON THE STATEMENT OF ASSESSEE RECORDED AT THE TIME OF SEARC H OPERATION WHEREIN SHE STATED THAT CAPITAL GAIN ON SALE OF LAN D WILL BE SHOWN IN THE RETURN OF INCOME, AO HAS PROCEEDED TO COMPUTE CAPITAL GAIN ON THE ENTIRE AMOUNT OF SALE CONSIDERATION RECEIVED BY ASSESSEE. FROM THE ASSESSMENT ORDER, IT IS NOT FORTHCOMING WHETHER ANY ENQUIRY WAS MADE WITH REGARD TO NATURE AND CHARACTER OF LAND SO LD. HOWEVER, AS IT APPEARS, BEFORE LD. CIT(A) ASSESSEE TOOK A SPECIFIC PLEA THAT THE LAND SOLD BEING IN THE NATURE OF AGRICULTURAL LAND SITUA TED BEYOND THE PRESCRIBED LIMIT OF THE NEAREST NOTIFIED MUNICIPALI TY IS NOT SUBJECT TO CAPITAL GAIN AS IT CANNOT BE TREATED AS CAPITAL ASS ET AS PER SECTION 2(14). TO DEMONSTRATE THIS FACT ASSESSEE HAS SUBMIT TED CERTAIN DOCUMENTARY EVIDENCE BY WAY OF ADDITIONAL EVIDENCE BEFORE THIS FORUM AND HAD PRAYED FOR CONSIDERING THE SAME. AFTE R PERUSING THE ADDITIONAL EVIDENCES SUBMITTED BEFORE US, WE ARE OF THE VIEW THAT THEY ARE REQUIRED TO BE TAKEN ON RECORD AS THEY ARE GERM ANE AND VITAL FOR DECIDING THE CLAIM OF THE ASSESSEE THAT LAND SOLD B EING AGRICULTURAL LAND AND SITUATED BEYOND THE PRESCRIBED LIMIT OF TH E NEAREST NOTIFIED MUNICIPALITY IS NOT A CAPITAL ASSET. HOWEVER, SINCE THESE EVIDENCES WERE NOT SUBMITTED EITHER BEFORE AO OR BEFORE LD. C IT(A) AND AS THEY DID NOT HAVE ANY OCCASION TO GO THROUGH THESE DOCUM ENTS WHILE DECIDING ASSESSEES CLAIM, WE ARE INCLINED TO SET A SIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO TO DECIDE THE SAME AFRESH AFTER TAKING INTO CONSIDERATION THE ADD ITIONAL EVIDENCES PRODUCED BY ASSESSEE BEFORE THIS FORUM ALONG WITH O THER NECESSARY 5 ITA NO. 774 /HYD/2014 SMT. S. VIJAYALAKSHMI AND RELEVANT DOCUMENTS ALREADY AVAILABLE ON RECORD. AO MUST CONSIDER ASSESSEES CLAIM THAT LAND SOLD BEING IN T HE NATURE OF AGRICULTURAL LAND AND SITUATED BEYOND THE PRESCRIBE D LIMIT OF THE NEAREST NOTIFIED MUNICIPALITY IS NOT SUBJECT TO CAP ITAL GAIN AND DECIDE THE ISSUE AFTER VERIFYING EVIDENCES BROUGHT ON RECO RD AND IN ACCORDANCE WITH LAW. 9. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 26 TH JUNE, 2015 KV COPY TO:- 1) SMT. S. VIJAYALAKSHMI, C/O K. VASANTKUMAR & A.V. RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2) ACIT, CENTRAL CIRCLE 6, HYDERABAD. 3 CIT(A)-I, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.