Sri.K.Rajendran, Trivandrum V. The ITO, Trivandrum

ITA 82/COCH/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3904 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Keywords: Question of law
• Section: 148; 6

Judgement Text

ITA NO.82/C/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH (SMC) KOCHI BEFORESHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO 82/COCH/2017 (ASST YEAR 2009-10 ) SHRI K RAJENDRAN T.C31/1286 JAYA PETTAH NEAR N H PETTAH TRIVANDRUM 695 024 VS THE INCOME TAX OFFICER WARD 1(2) TRIVANDRUM ( APP ELLANT ) (RESPONDENT) PAN NO. AQDPR6288C ASSESSEE BY SH MATHEW JOSEPH REVENUE BY SH A DHANARAJ, SR DR DATE OF HEARING 4 TH JULY 2017 DATE OF PRONOUNCEMENT 4 TH JULY 2017 ORDER PER GEORGE GEORGE K., JM: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE IS DI RECTED AGAINST THE CIT(A)S ORDER DATED 13.6.2016. THE RELEVANT ASSESSMENT YEAR IS 2009-10. 2 THERE IS A DELAY OF 274 DAYS IN FILING THIS APPEA L. THE ASSESSEE HAS FILED A PETITION FOR CONDONING THE DELAY. THE AFFIDAVIT OF THE CHARTERED ACCOUNTANT CONCERNED HAS ALSO BEEN FILED. IT IS STATED IN THE AFFIDAVIT THAT THE DELAY IN FILING THE APPEAL HAS BEEN CAUSED DUE TO THE FACT THAT THE ASSESSEE IS NO T HIS REGULAR CLIENT AND PAPER GIVEN TO HIM FOR FILING AN APPEAL TO TRIBUNAL WAS MISPLAC ED IN HIS OFFICE. IT WAS SUBMITTED THAT ONLY WHEN ASSESSEE CONTACTED THE CAS OFFICE, IT WAS REALIZED THAT THE APPEAL WAS NOT FILED AND IMMEDIATELY THEREAFTER THE APPEAL WAS PREPARED AND FILED WITHOUT ANY FURTHER DELAY. THE LD DR PRESENT WAS DULY HEARD. ITA NO.82/C/2017 2 3 I AM OF THE VIEW THAT THERE IS SUFFICIENT CAUSE F OR DELAY IN FILING THE APPEAL AND THE LATCHES IN FILING THE APPEAL CANNOT BE ATTRIBUT ED TO THE ASSESSEE AND HENCE, I CONDONE THE DELAY IN FILING THIS APPEAL AND PROCEE D TO DISPOSE OF THE MATTER ON MERITS. 4 THE GROUNDS RAISED READ AS FOLLOWS: THE LD CIT(A) ERRED IN IGNORING THE CLAIM OF THE A SSESSEE THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND AND DENIED THE EXEMPTION U/S 1 0(37). THE ACTION OF THE ASSESSING OFFICER AND CIT(A) IS AGAINST LAW AND FACTS. 2 ANY OTHER GROUNDS THAT MAY ALLOWED AT TIME OF HEA RING. 5 BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEES WIFE SMT JEYALEKSHMI OWNED 10 CENT S OF LAND (4.4 ARES) IN SURVEY NO. 205 OF PALKULANGARA VILLAGE. SHE GOT THE PROPERTY AS PER PARTITION DEED NO. 661/1971 DATED 30.1.1971. ON 3.1.2000 SPECIAL TAHSI DAR (LA) INTERNATIONAL AIRPORT ISSUED NOTICE FOR THE ACQUISITION OF THE PROPERTY. THE POSSESSION OF THE PROPERTY WAS TAKEN ON 29.7.2002 BY AWARDING RS. 4,80,398/-. THE ASSESSEE DID NOT FILE RETURN OF INCOME AS ACCORDING TO HER THE RECEIPT IS EXEMPT. A S THE AWARD AMOUNT WAS TOO LOW, THE ASSESSEE FILED PETITION FOR ENHANCING THE COMPE NSATION OF THE ACQUIRED PROPERTY. WHILE THE CASE FOR ENHANCEMENT WAS PENDING FOR DISP OSAL, THE OWNER OF THE PROPERTY SMT JAYALAKSHMI VISHWANATHAN EXPIRED ON 3.2.2005 AN D THE PRESENT ASSESSEE WAS IMPLEADED AS THE LEGAL HEIR OF THE DECEASED. THE A SSESSEE RECEIVED ADDITIONAL COMPENSATION OF RS. 9,45,240/- DURING THE ASSESSMEN T YEAR 2009-10. THE ASSESSEE DID NOT FILE RETURN OF INCOME. ACCORDING TO ASSESSEE TH E ADDITIONAL COMPENSATION IS NOT ITA NO.82/C/2017 3 LIABLE TO BE TAXED U/S. 10(37) OF THE I.T. ACT. TH E DEPARTMENT ISSUED NOTICE U/S 148 OF THE ACT. IN PURSUANT TO THE NOTICE ISSUED U/S 148 OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME CLAIMING ENHANCED COMPENSATION AS EXEMPT U/S 10(37) OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE CLAIM STATING THAT NO EVIDENCE HAS BEEN PRODUCED TO SHOW THAT THE LAND IN QUESTION IS AGRICULTURAL IN N ATURE. 6. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) DISMIS SED THE APPEAL OF THE ASSESSEE STATING THAT THE TRANSACTION WILL NOT COME WITHIN THE PURVI EW OF SECTION 10(37) OF THE I T ACT, AS THE SALE WAS EFFECTED BY A SALE DEED. THE CIT(A) RELIED ON THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF ARAVINDAKS HAN MADHAVAN I WPC NO. 15821 OF 2013 DATED 11.7.2013. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. THE LD COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE LAND ACQUIRED IS AN AGRICULTURAL LAND. IT WAS SUBMITTED THAT THE CONCERNED AGRICULTURAL OFFICER, KRISHI BHAVAN HAD ISSUED A CERTIFICATE STATING THAT LAND A CQUIRED IS PURELY AN AGRICULTURAL LAND AND WAS UNDER CULTIVATION TILL IT WAS ACQUIRED. TH E COPY OF THE CERTIFICATE OF AGRICULTURAL OFFICER THAT WAS PRODUCED BEFORE THE INCOME TAX AUT HORITIES IS PLACED ON RECORD. IT WAS FURTHER SUBMITTED THAT THE JUDGMENT OF THE HON BLE KERALA HIGH COURT RELIED BY THE CIT(A) HAS BEEN REVERSED BY THE HONBLE SUPREME COU RT IN CIVIL APPEAL NO. 1607/2010 ITA NO.82/C/2017 4 DT. 11-01-2017. THE LD DR SUPPORTED THE ORDERS OF T HE ASSESSING OFFICER AND THE CIT(A). 8 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIALS ON RECORD. THE HONBLE APEX COURT HAS OVERRULED THE JUDGMENT OF TH E HONBLE KERALA HIGH COURT IN THE CASE OF BALAKRISGHNAN VS UNION OF INDIA & ORS IN C IVIL APPEAL NO. 1607/2010 AND INFO PARK KERALA VS ACIT (2008) 4 KLT 782 HOLDING THAT NEGOTIATED SALE AFTER ACQUISITION PROCEEDINGS FALLS UNDER COMPULSORY ACQUISITION UND ER THE LAND ACQUISITION ACT. THE HONBLE APEX COURT WAS CONSIDERING THE FOLLOWING SU BSTANTIAL QUESTION OF LAW: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE HIGH COURT WAS JUSTIFIED IN DENYING THE CLAIM FOR EXEMPTION UNDER SECTION 10(37 ) OF THE I T ACT 1961 TO THE APPELLANT? 9. IN DECIDING THE ABOVE QUESTION OF LAW, THE HONB LE APEX COURT RENDERED THE FOLLOWING FINDINGS: IT IS IN THE AFORESAID FACTUAL BACKDROP, THIS COUR T IS TO DETERMINE AS TO WHETHER IT CAN BE TREATED THAT THE LAND OF THE APPELLANT WAS COMPULSO RILY ACQUIRED. FROM THE FACTS MENTIONED ABOVE, IT BECOMES APPARENT THAT THE ACQUI SITION PROCESS WAS INITIATED BY INVOKING THE PROVISIONS OF LA ACT BY THE STATE GOVE RNMENT. FOR THIS PURPOSE, NOT ONLY NOTIFICATION UNDER SECTION 4 WAS ISSUED, IT WAS FOL LOWED BY DECLARATION UNDER SECTION 6 AND EVEN AWARD UNDER SECTION 9 OF THE LA ACT. WITH THE AWARD THE ACQUISITION UNDER THE LA ACT WAS COMPLETED. ONLY THING THAT REMAINS THERE AFTER WAS TO PAY THE COMPENSATION AS FIXED UNDER THE AWARD AND TAKE POSSESSION OF THE LAND IN QUESTION FROM THE APPELLANT. NO DOUBT, IN CASE, THE COMPENSATION AS FIXED BY THE LAND ACQUISITION COLLECTOR WAS NOT ACCEPTABLE TO THE APPELLANT, THE LA ACT PROVIDES FO R MAKING A REFERENCE UNDER SECTION 18 OF THE ACT TO THE DISTRICT JUDGE FOR DETERMINING THE COMPENSATION AND TO DECIDE AS TO WHETHER THE COMPENSATION FIXED BY THE LAND ACQUISIT ION COLLECTOR WAS PROPER OR NOT. HOWEVER, THE MATTER THEREAFTER IS ONLY FOR QUANTUM OF COMPENSATION WHICH HAS NOTHING TO DO WITH THE ACQUISITION. IT IS CLEAR FROM THE AB OVE THAT INSOFAR AS ACQUISITION IS CONCERNED, THE APPELLANT HAD SUCCUMBED TO THE ACTIO N TAKEN BY THE GOVERNMENT IN THIS ITA NO.82/C/2017 5 BEHALF. HIS ONLY OBJECTION WAS TO THE MARKET VALUE OF THE LAND THAT WAS FIXED AS ABOVE. TO REITERATE HIS GRIEVANCE, THE APPELLANT COULD HAV E EITHER TAKEN THE AFORESAID ADJUDICATORY ROUTE OF SEEKING REFERENCE UNDER SECTI ON 18 OF THE LA ACT LEAVING IT TO THE COURT TO DETERMINE THE MARKET VALUE. INSTEAD, THE A PPELLANT NEGOTIATED WITH TECHNO PARK AND ARRIVED AT AMICABLE SETTLEMENT BY AGREEING TO RECEIVE THE COMPENSATION IN THE SUM OF RS. 38,42,489/-. FOR THIS PURPOSE, AFTER ENT ERING INTO THE AGREEMENT, THE APPELLANT AGREED TO EXECUTE THE SALE DEED AS WELL W HICH WAS A NECESSARY CONSEQUENCE AND A STEP WHICH THE APPELLANT HAD TO TAKE. IN OUR VIEW, IN SO FAR AS ACQUISITION OF THE LAND I S CONCERNED, THE SAME WAS COMPULSORILY ACQUIRED AS THE ENTIRE PROCEDURE PRESCRIBED UNDER T HE LA ACT WAS FOLLOWED. THE SETTLEMENT TOOK PLACE ONLY QUA THE AMOUNT OF THE CO MPENSATION WHICH WAS TO BE RECEIVED BY THE APPELLANT FOR THE LAND WHICH HAD BE EN ACQUIRED. IT GOES WITHOUT SAYING THAT HAD STEPS NOT BEEN TAKEN BY THE GOVERNMENT UND ER SECTIONS 4 & 6 FOLLOWED BY AWARD UNDER SECTION 9 OF THE LA ACT, THE APPELLANT WOULD NOT HAVE AGREED TO DIVEST THE LAND BELONGING TO HIM TO TECHNO PARK. HE WAS COMPEL LED TO DO SO BECAUSE OF THE COMPULSORY ACQUISITION AND TO AVOID LITIGATION ENTE RED INTO NEGOTIATIONS AND SETTLED THE FINAL COMPENSATION. MERELY BECAUSE THE COMPENSATION AMOUNT IS AGREED UPON WOULD NOT CHANGE THE CHARACTER OF ACQUISITION FROM THAT OF CO MPULSORY ACQUISITION TO THE VOLUNTARY SALE. IT MAY BE MENTIONED THAT THIS IS NOW THE PROC EDURE WHICH IS LAID DOWN EVEN UNDER THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013, AS PER WHICH THE COLLECTOR CAN PASS REHABILITATION AND RESETTLEMENT AWARD WITH THE CONSENT OF THE PARTIES/ LAND OWNERS. NONETHELESS, THE CHARACTER OF ACQUISITION REMAINS COMPULSORY. THIS COURT HAS DOUBTS ABOUT THE CORRECTNESS OF THE JUDGMENT IN THE CASE OF INFO PARK KERALA VS. ASSISTANT COMMISSIONER OF INCOME TAX (20 08) 4 KLT 782. THE COURT IN THE SAID CASE TOOK THE VIEW THAT SINCE THE TITLE IN THE PROPERTY WAS PASSED BY THE LAND OWNERS ON THE STRENGTH OF SALE DEEDS EXECUTED BY TH EM, IT WAS NOT A COMPULSORY ACQUISITION. WE ARE NOT IN AGREEMENT WITH THE AFORE SAID VIEW. IT IS CLEAR THAT BUT FOR NOTIFICATION UNDER SECTION 4 AND AWARD UNDER SECTIO N 9 OF THE LA ACT, THE APPELLANT WOULD NOT HAVE ENTERED IN TO ANY NEGOTIATIONS FOR T HE COMPENSATION OF THE CONSIDERATION WHICH HE WAS TO RECEIVE FOR THE SAID LAND. AS FAR A S THE ACQUISITION OF THE LAND IN QUESTION IS CONCERNED, THERE WAS NO CONSENT. THE AP PELLANT WAS PUT IN SUCH A CONDITION THAT HE KNEW THAT HIS LAND HAD BEEN ACQUIRED AND HE CANNOT REITERATE THE SAME. THE APPELLANT, THEREFORE, ONLY WANTED TO SALVAGE THE SI TUATION BY RECEIVING AS MUCH COMPENSATION AS POSSIBLE COMMENSURATE WITH THE MARK ET VALUE THEREOF AND IN THE PROCESS AVOID THE LITIGATION SO THAT THE APPELLANT IS ABLE TO RECEIVE THE COMPENSATION WELL IN TIME. IF FOR THIS PURPOSE THE APPELLANT ENTERED INTO THE NEGOTIATIONS, SUCH NEGOTIATIONS WOULD BE CONFINED TO THE QUANTUM OF COMPENSATION ON LY AND CANNOT CHANGE OR ALTER THE NATURE OF ACQUISITION WHICH WOULD REMAIN COMPULSORY . WE, THEREFORE, OVERRULE THE JUDGMENT OF THE KERELA HIGH COURT IN INFO PARK KERA LA VS. ASSISTANT COMMISSIONER OF INCOME TAX (2008) 4 KLT 782. AS A RESULT THE APPEAL OF THE APPELLANT IS ALLOWED AND PROCEEDINGS UNDER SECTION 148 OF THE ACT ARE QUASHED. ITA NO.82/C/2017 6 10. IN THE INSTANT CASE ALSO, ADMITTEDLY, THE LAN D WAS ACQUIRED UNDER LAND ACQUISITION ACT AND ADDITIONAL COMPENSATION WAS RECEIVED AFTER NEGOTIATING AND SIGNING THE SALE DEED. WHEN THE LAND WAS ACQUIRED BY INVOKING THE P ROVISIONS OF LAND ACQUISITION ACT, THE DICTUM LAID DOWN BY THE HONBLE APEX COURT WILL HAVE APPLICATION TO THE FACTS OF THE CASE, THOUGH THE ENHANCED COMPENSATION WAS PAID AFT ER NEGOTIATING AND SIGNING OF THE SALE DEED. FURTHER, ON PERUSAL OF THE CERTIFICATE ISSUED BY THE REVENUE AUTHORITY, IT IS CLEAR THAT THE IMPUGNED LAND IS AN AGRICULTURAL LAN D WHERE AGRICULTURAL OPERATION WAS CARRIED ON TILL IT WAS ACQUIRED. THEREFORE, THE PRO VISIONS OF SECTION 10(37) HAS APPLICATION TO THE FACTS OF THE INSTANT CASE AND TH E AMOUNT RECEIVED BY ASSESSEE ON ACQUISITION OF SUCH LAND WOULD NOT BE INCLUDABLE IN THE TOTAL INCOME. IT IS ORDERED ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JULY 2017. SD/- (GEORGE GEORGE K) JUDICIAL MEMB ER COCHIN: DATED 4 TH JULY, 2017 RAJ* ITA NO.82/C/2017 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT, 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN