ITO, WARD-4(1), PATNA V. KITAB RAY, PATNA

ITA 98/PAT/2020

• Counselvise Citation: [2022] 101 COUNSELVISE.COM (IT) 5324 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-12-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 30-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Audit objection; Corroborative evidences; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA VIRTUAL HEARING AT KOLKATA [Before Shri Sonjoy Sarma, Judicial Member & Shri Girish Agrawal, Accountant Member] I.T.A. No. 98/Pat/2020 Assessment Year : 2014-15 ITO, Ward-4(1), Patna Vs . Kitab Ray S/o. Late Jyoti Ray, In front of Kumar Apartment, Saristabad East Tola, Gardanibagh, Patna [PAN: BOAPR 1125 L] Appellant Respondent Date of Hearing 14.12.2022 Date of Pronouncement 21.12.2022 For the Assessee None For the Revenue Shri Rupesh Agrawal, Sr. DR ORDER Per Shri Sonjoy Sarma, JM: This is an appeal preferred by the revenue against the order of ld. CIT(A), Patna -2 dated 18.09.2020 and the grounds raised therein by the revenue read as under: “i. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by referring to the RFCTLARR Act, 2013 and granting relief to the assessee assuming hypothetically that the said Act is applicable in the case of the assessee without there being any supporting evidence or claim made by the assessee during the appellate proceeding or in the assessment proceedings before the AO. (ii) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by granting relief of Rs. 1,57,26,7 14/- on account of long term capital gain arising out of compensation against the land acquisition. The addition was based on the basis of information received from District Land Acquisition Officer which is a law enforcing agency /department and as such the case is covered under exceptions clause specified in Board's letter bearing F. No.279/Misc. 142/2007-ITJ (Pt) dated 20.08.2018. (iii) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by deleting the addition of Rs 14,05,000/- made u/s 56(2)(vii) of the Act ignoring the fact that there is an apparent difference of Rs. 19,95,000/- between the consideration value and stamp duty value as reflected in the sale deed. The difference considered by the Ld. cIT(A) taking into account brokerage, stamp duty etc. with Govt. value of land is based on erroneous proposition of law. 2 ITA No. 98/Pat/2020 AY: 2014-15 Kitab Ray iv. Any other grounds that may be urged at the time of hearing.” 2. At the outset, ld. DR pointed out that the tax effect involved in this appeal filed by the revenue is less than the revised monetary limit of Rs. 50 lakhs fixed by the CBDT for filing the appeal of the revenue before the Tribunal and this position which is clearly evident from the grounds raised by the revenue in this appeal which is not disputed even by the ld. DR. In Circular No. 17/2019 dated 8 th August, 2019 issued by the CBDT, the monetary limit for filing the appeal by the revenue before the Tribunal is revised to 50 lakhs and he further clarified the said circular prescribed monetary limit so revised is applicable even to the pending appeal and the same are directed to be withdrawn or not pressed. However, the ld. DR also pointed out that one of the ground in the instant appeal i.e. ground no. (ii) is covered by the exception clause specified in Board’s letter bearing F. No. 279/Misc. 142/2007-ITJ (Pt) dated 20.08.2018 issued to the CBDT Circular No. 3 of 2018 dated 11.07.2018 prescribed for monetary limit for filing of appeal by the department before ITAT, High Courts and SLP’s / appeals before Supreme Court for reducing litigation. He further submitted that the present appeal is covered by the exception noted in para 10e of the said circular which states that “where addition is based on information received from expressing source in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI)”. As in the instant case addition was based on the information received from District Land Acquisition Officer who is a law enforcement agency/department. Therefore, present appeal is not covered under Circular No. 17/2019 dated 08.08.2019 issued by the CBDT. 3. Before adverting on this issue, we take note of the facts of the case and from the perusal of the assessment order, we notice that the ld. AO made an addition on account of Long Term Capital Gain arising on receipt of compensation for acquisition of agricultural land of the assessee. In the impugned assessment order, the ld. AO observed that an enquiry letter was sent to the Land Acquisition Officer. In reply, it was reported that the nature of land is residential. Based on such land acquisition officer report, the ld. AO treated the nature of the land as residential and thus he completed the assessment by making the addition in this respect. The ld. AO made an addition of Rs. 1,57,26,714/- in the hands of the assessee and the total tax payable in this regard amounting to Rs. 18,83,360/-. 3 ITA No. 98/Pat/2020 AY: 2014-15 Kitab Ray 4. Aggrieved by the aforesaid order, assessee went in appeal before the ld. CIT(A). However, the ld. CIT(A) deleted the addition so made by the ld. AO by holding that capital gain arising from transfer of land by way of acquisition by Govt. of India is not taxable. 5. Aggrieved by the order of ld. CIT(A), revenue is in appeal before the Tribunal. 6. We after hearing the submission of the ld. DR and perused the letter issued by the CBDT Circular bearing no. F. No. 279/Misc. 142/2007-ITJ (Pt) dated 20.08.2018. We note that the monetary limit prescribed for filing of appeal by the department have been revised by CBDT vide its Circular No. 3 of 2018 dated 11.07.2018 and para no. 10 of the said circular has carved certain exception on the issues which should be contested on merits notwithstanding that the tax effect entailed is less than the specified monetary or where there is no tax effect. The issue enumerated as exception in para 10 are as under: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board’s order, notification, instruction or circular has been held to be illegal or ultra vires, or (c) where revenue audit objection in the case has been accepted by the department, or (d) where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/undisclosed foreign bank account, (e) where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI).” 7. From the perusal of the impugned assessment order, it is evident that the ld. AO had made an enquiry from the land acquisition officer who had settled the relevant information based on which a view was taken by the ld. AO to complete the assessment. It is not a case where the land acquisition officer was conducting any investigation or enquiry as law enforcement agency within the meaning of exception noted in para 10e of the CBDT’s Circular (supra). Also it is a case where information was sought from land acquisition officer by ld. AO to supply the information which was used for purpose of making the assessment in question. In fact the grounds taken by the revenue is not in conformity with the stated exceptions in CBDT Circular. Therefore, in our considered view the present appeal filed by 4 ITA No. 98/Pat/2020 AY: 2014-15 Kitab Ray the revenue does not fall in the exception noted in para 10e in the said circular. Accordingly, the appeal filed by the revenue is dismissed on the threshold in terms of CBDT’s Circular since the tax is below the monetary limit of Rs. 50 lakhs as prescribed in the said circular. 8. In the result, appeal filed by the revenue is dismissed. Order is pronounced in the open court on 21.12.2022 Sd/- Sd/- (Girish Agrawal) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 21.12.2022 Biswajit, Sr. PS Copy of the order forwarded to: 1. Appellant- ITO, Ward-4(1), Patna. 2. Respondent – Kitab Ray, S/o. Late Jyoti Ray, In front of Kumar Apartment, Saristabad East Tola, Gardanibagh, Patna. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata