Parmanand, Rewari V. ITO, Rewari

ITA 963/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7481 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 02-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: NAVEEN GUPTA
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Valuation report; Competent authority
• Section: 54F; 2(14); 142(1); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO. -963/DEL/2016 (ASSESSMENT YE AR-2007-08) PARMANAND, S/O-SH. INDER SINGH, 5174, TOPCHIWARA, REWARI. PAN-BOCPP6870A (APPELLANT) VS IT O , WARD-2, REWARI (RESPONDENT) APPELLANT BY SH. NAVEEN GUPTA, ADV. RESPONDENT BY SH. MANOJ KUMAR CHOPRA, SR.DR DATE OF HEARING 0 2 .05.2016 DATE OF PRONOUNCEMENT 10 .0 6 .2016 O R D E R PER SMT. DIVA SINGH, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 22.12.2015 OF CIT(A)-2, GURGAON PERTAIN ING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF LD. CIT (APPEALS) IS AGAIN ST LAW AND FACTS. 2. THAT THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF LONG TERM CAPITAL GAINS OF RS. 605990/- BY IGNORING ALL THE F ACTS AND EVIDENCES FILED BY THE APPELLANT. 3. THAT THE LD. CIT (APPEALS) ERRED IN TREATING TH E LONG TERM CAPITAL GAINS IN THE HANDS OF APPELLANT IN HIS INDIVIDUAL CAPACITY, WHEREAS THE AGRICULTURAL LAND SOLD BELONGS TO HUF OF THE APPELLANT. 4. THAT THE LD. CIT (APPEALS) ERRED IN NOT ALLOWIN G THE BENEFIT OF SEC. 54F TO THE APPELLANT FOR THE AMOUNT INVESTED IN THE CONSTR UCTION OF RESIDENTIAL HOUSE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AL TER ANY OF THE GROUNDS OF APPEAL. I.T.A .NO.-963/DEL /2016 PAGE 2 OF 5 2. THE RELEVANT FACTS OF THE CASE ARE THAT IN RESPONSE TO THE AIR INFORMATION THAT THE ASSESSEE HAD SOLD HIS SHARE IN IMMOVABLE PROPERTY A T RS.56,77,500/- ON 06.05.2006, THE ASSESSEE WAS REQUIRED TO FURNISH ITS RETURN. ACCOR DINGLY, NOTICE U/S 148 WAS ISSUED. IN RESPONSE THEREOF, THE ASSESSEE FILED ITS RETURN DEC LARING AN INCOME OF RS.29,990/-. SCRUTINY PROCEEDINGS WERE STARTED PURSUANT TO ISSUANCE OF NO TICE U/S 143(2) & 142(1) ETC. WHEREIN THE ASSESSEE WAS REQUIRED TO FURNISH THE CALCULATIO N OF CAPITAL GAIN ON SALE OF LAND. THE SPECIFIC LAND SOLD BY THE ASSESSEE MEASURED 14 KANA L 16.5 MARLA WHICH WAS SITUATED AT SHANTI NAGAR, REWARI WAS STATED TO BE SOLD VIDE SAL E DEED NO.901 DATED 10.05.2006 FOR AN AMOUNT OF RS.56,77,500/-WHEREIN THE ASSESSEES SHAR E CAME TO RS.6,30,833/-. THE AO RELYING UPON SECTION 2(14) OF THE ACT WHICH DEFINES CAPITAL ASSET AND REFERRING TO SUB CLAUSE (III)(A) AND (B) THEREOF AND THE CBDT NOTIFI CATION UNDER SECTION 2(IA)(C) PROVISO, CLAUSE (II)(B) NOTED THAT URBANIZATION OF AREAS-SPE CIFIES THE AREAS FALLING OUTSIDE THE LOCAL LIMITS OF MUNICIPALITY OR CANTONMENT BOARD, F.NO.16 4/3/87-ITAT DATED 06.01.1994 HAD NOTIFIED THE AREA OF REWARI CITY AS AREAS UPTO A D ISTANCE OF 5 KMS FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS CONCLUDED THAT THE SPECIFIC LAND SOLD LIES WITHIN THE MUNICIPALITY LIMITS OF REWARI CITY. ACCORDINGLY, HE HELD THAT IT IS COVER ED UNDER THE DEFINITION OF CAPITAL ASSET AND HENCE THE SALE PROCEEDS OF THE LAND ARE LIABLE FOR CAPITAL GAINS TAX U/S 45 OF THE INCOME TAX ACT, 1961. INFORMATION U/S 133(6) WAS CALLED F OR FROM THE OFFICE OF THE DEPUTY COMMISSIONER CUM REGISTRAR, REWARI ON 05.11.2012 TO SUPPLY THE COPY OF THE PURCHASE/ SALE DEED OF AGRICULTURE LAND REGISTERED DURING THE PERIOD 01.04.1980 TO 31.03.1982. THE DY. COMMISSIONER CUM REGISTRAR, REWARI SUPPLIED THE SALE/PURCHASE DEED REGISTERED ON 19.06.1980. THE AGRICULTURE LAND MEASURING 8 KANA L 12 MARLA WAS SOLD ON 19.06.1980 FOR A TOTAL CONSIDERATION OF RS.25,000/- WHICH GAVE PER M ARLA RATE OF THE LAND @ RS.145.34/- OR I.T.A .NO.-963/DEL /2016 PAGE 3 OF 5 PER ACRE RATE @ 2907/-. BY APPLYING THIS RATE OF R S.145.34 PER MARLA, THE COST OF ACQUISITION OF THE SHARE OF THE LAND SOLD BY THE AS SESSEE COMES TO RS.4,789/- (32.95 MARLA X RS.145.34). ACCORDINGLY, AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE VIDE OFFICE LETTER DATED 12.11.2012 ASKING HIM TO SHOW CAUSE AS TO WHY THE C OST OF ACQUISITION OF THE LAND SOLD SHOULD NOT BE TAKEN AT RS.145.34 PER MARLA ON THE B ASIS OF INFORMATION SUPPLIED BY THE DY. COMMISSIONER CUM REGISTRAR, REWARI. THE ASSESSEE IN REPLY RELIED UPON THE CERTIFICATE OF THE TEHSILDAR WHICH WAS NOT ACCEPTED BY THE AO. 3. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE LD. AR FILED FRESH EVIDENCE UNDER RULE 46A CLAIMING THAT THE PROCEEDS OF THE ANCESTR AL LAND SOLD HAD BEEN INVESTED IN CONSTRUCTION OF RESIDENTIAL HOUSE AND DEDUCTION U/S 54F WAS CLAIMED. THE VALUATION REPORT FILED IT WAS STATED WAS FILED AS A FRESH EVIDENCE A S THE ASSESSEE WAS NOT AWARE OF THE DEDUCTION U/S 54F OF THE ACT. ADMITTING THE FRESH EVIDENCE THE CLAIM WAS REJECTED BY THE CIT(A). AGGRIEVED THE ASSESSEE IS IN APPEAL. 4. THE LD. AR SUBMITTED THAT IN SUPPORT OF ITS CLAI M NOT ONLY CERTIFICATE OF A GOVERNMENT REGISTERED VALUER ALONGWITH SITE PLAN SANCTIONED BY THE COMPETENT AUTHORITY WAS FILED EVEN EVIDENCE OF CONSTRUCTION OF RESIDENTIAL HOUSE WAS F ILED. IT WAS ALSO SUBMITTED THAT THE FACT OF CONSTRUCTION OF RESIDENTIAL HOUSE HAS BEEN ACCEP TED EVEN BY THE AO IN THE CASE OF THE FAMILY MEMBERS OF THE ASSESSEE ITSELF AND THE CIT(A ), ROHTAK IN APPEAL NO.341/RTK/12-13 VIDE ORDER DATED 15.07.2015 HAS ACCEPTED IN THE CAS E OF BHAGWAN DASS SAINI , A CO-SHARER (BROTHER) IN ANCESTRAL AGRICULTURAL LAND. THE SAID ORDER WAS HEAVILY RELIED UPON. IT WAS FURTHER SUBMITTED THAT APART FROM THAT THE ASSESSEE ALSO RAISED THE FOLLOWING PLEA BEFORE THE CIT(A):- THE 3 RD GROUND OF APPEAL IS AGAINST MAKING THE ADDITION OF CAPITAL GAIN IN THE HANDS OF INDIVIDUAL WHEREAS THE AGRICULTURE LAND SO LD WAS THAT OF HUF. THE I.T.A .NO.-963/DEL /2016 PAGE 4 OF 5 AGRICULTURE LAND IN QUESTION WAS ANCESTRAL AGRICULT URE LAND AND AS SUCH BELONGS TO HUF. THE APPELLANT HAD INHERITED THE ABOVE AGRICULT URE LAND FROM HIS FATHER WHO ALSO HAD INHERITED THE SAME FROM FOREFATHERS AND AS SUCH IF ANY CAPITAL GAIN REMAINS TO BE TAXED, THE SAME SHOULD HAVE BEEN TAXE D IN THE HANDS OF HUF AND NOT IN THE HANDS OF INDIVIDUAL. 5. IN THE CIRCUMSTANCES, IT WAS HIS SUBMISSION THAT THE CIT(A) GUIDED BY THE FACT THAT THE ASSESSEE HAD ALSO CLAIMED THAT THE FUNDS WERE I NVESTED IN FDR ETC. MISDIRECTED HIMSELF. IT WAS SUBMITTED THAT THE ASSESSEE BEING UNAWARE OF THE DEDUCTION AVAILABLE HAD NOT BEEN ABLE TO PLACE FULL AND COMPLETE FACTS ON RECORD. A CCORDINGLY HE ALSO SOUGHT AN OPPORTUNITY TO FILE ADDITIONAL EVIDENCES ADDRESSING THE ISSUES. CONSIDERING THE SAME, THE LD. SR. DR STATED THAT IN SUCH AN EVENTUALITY THE ISSUE MAY BE RESTORED TO THE AO AS HE WOULD NOT BE ABLE TO ADDRESS IT AT THIS STAGE. ACCORDINGLY IT W AS A COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT IT WOULD BE APPROPRIATE TO RESTORE T HE ISSUE BACK TO THE FILE TO THE AO AS ADMITTEDLY FACTS HAVE NOT BEEN ADDRESSED IN THE PRO PER PROSPECTIVE. THE SAID SUBMISSION OF THE PARTIES IS FOUND TO BE BORNE OUT FROM RECORD. AS ADMITTEDLY THE ANCESTRAL PROPERTY SOLD UNDER CONSIDERATION BELONGED TO SIX FAMILY MEMBERS AND THE ASSESSEES SHARE OF THE PROPERTY WAS ONLY ONE SIXTH OF THE SAME. THE PROCE EDS FOR THE VERY SAME ANCESTRAL PROPERTY IS STATED TO BE INVESTED IN RESIDENTIAL PR OPERTY WITHIN THE TIME FRAME PERMISSIBLE UNDER LAW. ACCORDINGLY IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RES TORE THE ISSUE BACK TO THE AO WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WI TH LAW DENOVO . THE ASSESSEE WOULD BE AT LIBERTY TO PLACE FRESH EVIDENCES IN SUPPORT OF ITS CLAIM, IF SO DEEMED APPROPRIATE. I.T.A .NO.-963/DEL /2016 PAGE 5 OF 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 TH OF JUNE, 2016. SD/- SD/- (L.P.SAHU) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI