Subramaniam Vadivel, CHENNAI V. ACIT, CHENNAI

MA 52/CHNY/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0499 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-06-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 27-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Assessee Lawyers: ANIL NAIR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER M.P.NO.52/MDS/2013 (IN I.T.A.NO.2118 /MDS/2012) ASSESSMENT YEAR : 2009-10 THE ASSISTANT COMMISSIONER OF INCOME-TAX, BUSINESS CIRCLE-VII, CHENNAI - 34. VS. SHRI SUBRAMANIAM VADIVEL 38-A, MAYOR BASUDEV ST., WASHERMANPET, CHENNAI 600 021. PAN AACPV2373F (PETITIONER) (RESPONDENT) PETITIONER BY : SHRI ANIL NAIR, CA RESPONDENT BY : SHRI T.N.BETGERI, IRS, JC IT DATE OF HEARING :14 TH JUNE, 2013 DATE OF PRONOUNCEMENT :14 TH JUNE, 2013 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESSE E, WHO WAS RESPONDENT IN THE APPEAL FILED BY THE REVENUE I N ITA MP 52/13 :- 2 -: NO.2118/MDS/2012. THE SAID APPEAL RELATED TO THE A SSESSMENT YEAR 2009-10. 2. IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THE ASSESSEE HAD SOLD 12 PIECES OF LAND FOR A CONSIDERA TION OF ` 26,40,00,000/-. THE CLAIM OF THE ASSESSEE WAS THAT THE LAND WAS AGRICULTURAL IN NATURE AND THEREFORE, THERE AR ISES NO CAPITAL GAINS. THIS VIEW WAS REJECTED BY THE ASSESSING OFF ICER AND THE LAND WAS TREATED AS NON-AGRICULTURAL AND LONG- TERM CAPITAL GAINS WAS BROUGHT TO TAX. IN FIRST APPEAL, THE ARGUMENT OF THE ASSESSEE WAS ACCEPTED AND THE COMMISSIONER OF INCO ME- TAX(APPEALS) HELD THAT THE LAND SOLD BY THE ASSESSE E WAS AGRICULTURAL IN NATURE AND NOT EXIGIBLE FOR CAPITAL GAINS TAXATION. THE REVENUE CAME IN APPEAL BEFORE THE TRIBUNAL AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), W HICH WAS HEARD AND DISPOSED OFF BY THE TRIBUNAL IN ITA NO.21 18/MDS/2012 THROUGH THEIR ORDER DATED 20.2.2013. IN THE SAID O RDER, THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE REVENU E AND DISMISSED THE CROSS OBJECTIONS FILED BY THE ASSESSE E, THEREBY HOLDING THAT THE LAND SOLD BY THE ASSESSEE WAS NOT AGRICULTURAL IN NATURE AND THE ASSESSEE WAS LIABLE FOR CAPITAL GAIN S TAXATION. MP 52/13 :- 3 -: 3. IN THIS MISCELLANEOUS PETITION, THE ASSESSEES G RIEVANCE IS THAT THERE ARE A NUMBER OF MISTAKES APPARENT ON THE FACE OF THE SAID ORDER OF THE TRIBUNAL AND THEREFORE, THOSE MIS TAKES NEED TO BE RECTIFIED. 4. WE HEARD SHRI ANIL NAIR, THE LEARNED CHARTERED A CCOUNTANT APPEARING FOR THE PETITIONER AND SHRI T.N.BETGERI, THE LEARNED JOINT COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENUE. 5. THE FIRST MISTAKE POINTED OUT BY THE ASSESSEE IS THAT THE LAND RECORDS AND ADANGAL EXTRACTS CERTIFIED BY THE VILLAGE ADMINISTRATIVE OFFICER(VAO) FOR THE EARLIER YEARS C LEARLY INDICATED THAT THE LAND WAS USED FOR AGRICULTURAL PURPOSES AN D PADDY WAS GROWN THEREIN. THE ASSESSEE HAS DETAILED YEAR-WISE PARTICULARS FOR THE PERIOD FROM 1989 TO 2001. IT IS THE CASE O F THE PETITIONER THAT IN VIEW OF THE ABOVE, IT WAS NOT PROPER ON THE PART OF THE TRIBUNAL TO RELY HEAVILY ON THE STATEMENT OF THE VA O THAT NO AGRICULTURAL ACTIVITIES WERE CARRIED OUT IN THE PRO PERTY FOR EARLIER SO MANY YEARS. THEREFORE, THE OBSERVATION OF THE T RIBUNAL IN PARAGRAPH 20 OF THE ORDER THAT THERE WERE NO AGRICU LTURAL OPERATIONS FOR SO MANY YEARS CONTINUOUSLY, IS NOT C ORRECT. MP 52/13 :- 4 -: 6. WE CONSIDERED THE ABOVE ALLEGED MISTAKE. WE HAV E TO STATE THAT THE DETAILS FURNISHED BY THE ASSESSEE AS WELL AS THE STATEMENT GIVEN BY THE VAO BEFORE THE ASSESSING OFF ICER AND ALL SUCH CONNECTED MATERIALS WERE EXAMINED BY THE TRIBU NAL AT THE TIME OF HEARING. A PERUSAL OF THE ORDERS OF THE TR IBUNAL, RUNNING INTO 21 PAGES, WILL CLEARLY ESTABLISH THAT THIS PRO CESS OF EXAMINATION WAS MADE BY THE TRIBUNAL. IN SPITE OF THE DETAILS FURNISHED BY THE ASSESSEE UPTO THE ASSESSMENT YEAR 2001, THE ASSESSEE HAS NO CASE EVEN NOW THAT THE ASSESSEE HA D CONTINUED THE AGRICULTURAL OPERATIONS FROM 2001 TO 2009. IT IS ALSO TO BE SEEN THAT THE VAO HAS MADE A DETAILED ST ATEMENT BEFORE THE ASSESSING OFFICER STATING THAT THERE WAS NO AGRICULTURAL OPERATIONS BEING CARRIED OUT IN THE SA ID PROPERTY FOR THE LAST SO MANY YEARS. THE SAID STATEMENT FURNISHE D BY THE VAO IS MORE CONTEMPORANEOUS AND AUTHORITATIVE, BECA USE HE HAS GIVEN A SPEAKING STATEMENT, NARRATING THE FUNCT IONAL USE OF THE SAID LAND. THE RECORDING OF THE NATURE OF THE LAND IN REVENUE RECORDS, EVEN THOUGH ONE OF THE IMPORTANT E VIDENCES TO DECIDE THE CHARACTER OF THE LAND, IS NOT A CONCL USIVE EVIDENCE TO SHOW THAT THE LAND WAS USED FOR AGRICULTURAL PUR POSES. WE SHOULD KNOW THAT TRADITIONALLY IN VILLAGE RECORDS, UNLESS IT IS USED MP 52/13 :- 5 -: FOR COMMERCIAL OR FOR OTHER SPECIFIC PURPOSES, GENE RALLY THE LAND EARLIER USED FOR AGRICULTURAL PURPOSES, CONTINUES T O BE SHOWN AS AGRICULTURAL LAND FOR THE PURPOSE OF COLLECTING LAN D REVENUE AND UPDATING THE REVENUE RECORDS. THE QUESTION CONSIDE RED BY THE TRIBUNAL WAS THAT IN SPITE OF SUCH TECHNICAL EVIDEN CE AVAILABLE IN THE VILLAGE RECORDS, WHETHER IN REALITY THE LAND WA S USED FOR AGRICULTURAL PURPOSES OR NOT. ON EXAMINING THE EVI DENCE INCLUDING THE STATEMENT OF THE VAO, THE TRIBUNAL HE LD THE VIEW THAT NO AGRICULTURAL ACTIVITIES WERE CARRIED OUT IN THE SAID PROPERTY FOR A LONG PERIOD IN THE PAST. THIS IS A FINDING O F FACT ARRIVED AT BY THE TRIBUNAL AFTER EXAMINING THE FACTS AND CIRCUMST ANCES OF THE CASE. THE TRIBUNAL MIGHT HAVE COMMITTED AN ERROR O F JUDGMENT. SUCH AN ERROR OF JUDGMENT IS TO BE CORRECTED ONLY B Y THE HONBLE HIGH COURT AND THIS TRIBUNAL DOES NOT HAVE ANY POWE R TO REVIEW ITS OWN ORDER. IT IS NOT POSSIBLE TO HOLD THAT THE POINT RAISED BY THE ASSESSEE IS A MISTAKE APPARENT FROM RECORD. TH E POINT RAISED BY THE ASSESSEE LEADS US TO RE-EXAMINATION O F THE FACTS AND RE-ADJUDICATION OF THE ISSUE, WHICH ARE NOT PER MISSIBLE IN LAW. THEREFORE, WE DO NOT FIND THAT THE MISTAKE PO INTED OUT BY THE PETITIONER REGARDING THE CHARACTER OF THE LAND IS A MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL. MP 52/13 :- 6 -: 7. THE NEXT MISTAKE POINTED OUT BY THE ASSESSEE IS THAT THE ASSESSEE WAS REGULARLY PAYING CESS AND KISTI, THE R ELEVANT TAXES FOR ALL THE YEARS AND, THEREFORE, IT WAS NOT PROPER ON THE PART OF THE VAO TO STATE THAT NO AGRICULTURAL TAX WAS COLLE CTED FROM THE PETITIONER. IT IS TO BE SEEN THAT WE ARE NOT SIMPL Y CARRIED AWAY BY THE STATEMENT GIVEN BY THE VAO. WE HAVE TAKEN A COMPREHENSIVE VIEW, AS ALREADY OBSERVED IN PARAGRAP HS ABOVE. IT IS CUSTOMARY IN THE VILLAGE OFFICES TO RECORD TH E NATURE OF THE LAND AS AGRICULTURAL LAND, IF NOT PUT TO USE FOR AN Y OTHER SPECIFIC PURPOSE. IT IS CONVENIENT FOR THE LAND OWNERS AL SO TO PAY THE TAX, AT THE MINIMUM RATE TREATING IT AS AGRICULTURA L LAND. THEREFORE, THE PAYMENT OF NOMINAL AMOUNT OF TAX AS AGRICULTURAL LAND IS NOT A CONCLUSIVE EVIDENCE TO SHOW THAT THE LAND WAS USED FOR AGRICULTURAL OPERATION. IN A CASE WHERE THE LA ND WAS NOT USED FOR AGRICULTURAL PURPOSES, THE CHARACTER OF THE LAN D CANNOT BE VIEWED DIFFERENTLY, EVEN IF THE ASSESSEE HAS PAID T HE BASIC TAX TO THE VAO. THIS IS NECESSARY TO KEEP THE OWNERSHIP O F THE LAND IN THE HANDS OF THE OWNER. OBVIOUSLY THIS POINT IS AL SO NOT A MISTAKE APPARENT FROM RECORD. MP 52/13 :- 7 -: 8. THE NEXT MISTAKE POINTED OUT BY THE ASSESSEE IS THAT THE TRIBUNAL HAS ERRED IN STATING THAT GROWING OF CASUA RINA PLANTS IS NOT AN AGRICULTURAL ACTIVITY. IT IS THE CASE OF TH E ASSESSEE THAT CASUARINA IS A CASH CROP WHICH IS RECOGNIZED AS AGR ICULTURAL ACTIVITY AND EVEN FUNDED BY NABARD. THE ASSESSEE A LSO PLACES RELIANCE ON THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF CIT V. RAJA BENOY KUMAR SAHAS ROY REPOR TED IN AIR 1957 SC 768. IT IS TO BE SEEN THAT THE TRIBUNAL HA S NEVER MADE ANY BINDING STATEMENT ANYWHERE IN THE ORDER THAT TH E PLANTATION OF CASUARINA IS NOT AN AGRICULTURAL ACTIVITY. ON T HE OTHER HAND, IT IS AN AGRICULTURAL ACTIVITY AND FOR THAT MATTER IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F CIT V. RAJA BENOY KUMAR SAHAS ROY, ANY INCOME ARISING OUT OF PRIMARY AGRICULTURAL OPERATION CARRIED OUT BY AN AS SESSEE ON LAND IS IN THE NATURE OF AGRICULTURAL INCOME. THE HONBLE SUPREME COURT IN THAT CASE HAS MORE PARTICULARLY DE ALT WITH REFERENCE TO WHAT IS AGRICULTURAL INCOME. AN AGR ICULTURAL LAND MAY GENERATE AGRICULTURAL INCOME, IF AGRICULTURAL O PERATIONS ARE CARRIED OUT. AT THE SAME TIME, AN AGRICULTURAL LAN D MAY NOT GENERATE AGRICULTURAL INCOME, IF NO AGRICULTURAL OP ERATIONS ARE CARRIED OUT. THE OBSERVATION OF THE TRIBUNAL IS TH AT CASUARINA MP 52/13 :- 8 -: PLANTS WERE GROWN BY THE ASSESSEE NOT AS A SERIOUS VOCATION OF AGRICULTURE, BUT ONLY AS A CASUAL OPERATION. THE S AID ORDER OF THE TRIBUNAL HAS HELD A VIEW THAT IN ORDER TO CLAIM THE LAND TO BE AGRICULTURAL LAND AND TO HOLD THAT AGRICULTURAL OPE RATIONS ARE BEING CARRIED OUT ON THE LAND, IT IS VERY MUCH NECE SSARY THAT THE AGRICULTURAL OPERATIONS CARRIED OUT BY THE ASSESSEE MUST BE AN OPERATION HAVING REASONABLE ECONOMIC SIGNIFICANCE. THE AGRICULTURAL LAND MUST BE UTILISED ECONOMICALLY. A CASUAL PLANTING OF TREES HERE AND THERE IS NOT AN AGRICULT URAL OPERATION. AGRICULTURAL OPERATION IS A CONSCIOUS OPERATION CA RRIED ON BY AN ASSESSEE, WHICH GENERATES EARNED INCOME. THE AG RICULTURAL INCOME CANNOT BE IN THE NATURE OF UN-EARNED INCOME . THE ECONOMIC SIGNIFICANCE OF AGRICULTURAL OPERATION IS NECESSARILY TO BE CONSIDERED TO DECIDE THE NATURE OF LAND ESPECIAL LY IN THE PRESENT DAY SITUATION, WHERE METRO POLIS ARE DEVELO PING AT A FAST PACE AND ENCOMPASSING OVER ABUTTING AGRICULTURAL LA NDS. IT IS NOT POSSIBLE FOR AN ASSESSEE TO RUN AWAY FROM TAX LIABI LITY POINTING OUT CASUAL PLANTING OF TREES ON THE LAND AND CLAIMI NG THE LAND TO BE AGRICULTURAL LAND. IT IS THIS POINT, WHICH HAS BEEN REITERATED BY THE TRIBUNAL IN ITS ORDER WHILE MEETING THE ARGUMEN TS OF THE MP 52/13 :- 9 -: ASSESSEE, THAT HE HAD GROWN CASUARINA PLANTS IN THE PROPERTIES SOLD BY HIM. THIS IS NOT A MISTAKE APPARENT FROM R ECORD. 9. THE NEXT MISTAKE POINTED BY THE ASSESSEE-PETITIO NER IS THAT THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAS NOT RET URNED ANY AGRICULTURAL INCOME UPTO THE ASSESSMENT YEAR 2003-0 4 AND THE PETITIONER STARTED FILING OF RETURNS FROM ASSESSMEN T YEAR 2004-05 ONWARDS ALONE, WHICH IS NOT CORRECT. THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME FROM ASSESSMENT YEAR 1 981-82 ONWARDS, AND ALL SUCH PARTICULARS WERE FILED BEFORE ALL THE AUTHORITIES INCLUDING THE TRIBUNAL. IT IS TO BE SE EN FROM THE DETAILS FURNISHED BY THE ASSESSEE IN THE PETITION, THE AMOUNTS OF AGRICULTURAL INCOME RETURNED BY THE ASSESSEE SINCE 1981-82 TO 2002-03 WERE VERY MINIMAL. THIS POINT HAS BEEN CON SIDERED BY THE TRIBUNAL. EVEN IF THERE IS SUCH AN INNOCUOUS M ISTAKE IN STATING THE ASSESSMENT YEAR AS SUCH, THE TRIBUNAL HAS ADMITTED THE FACT THAT THE ASSESSEE HAD RETURNED AGRICULTURA L INCOME. AT THE SAME TIME, THE SAID AGRICULTURAL INCOME WAS VER Y NOMINAL AND NOT ARISING OUT OF ECONOMIC UTILIZATION OF THE LAND. THEREFORE, THE OMISSION MADE BY THE TRIBUNAL SPECI FICALLY TO MENTION THE FILING OF RETURNS SINCE ASSESSMENT YEAR 1981-82 DOES NOT INFLUENCE THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IN MP 52/13 :- 10 -: ANY MANNER. WHAT IS FURNISHED BY THE PETITIONER IS FURTHER PARTICULARS OF THE EARLIER ASSESSMENT YEARS, WHICH DO NOT GO TO INFLUENCE THE FINDING OF THE TRIBUNAL. WE HAVE NO HESITATION IN ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE A SSESSEE HAD RETURNED AGRICULTURAL INCOME SINCE 1981-82. IN SPI TE OF THE CORRECTION OF THAT FACTUAL POSITION, THE REASONING AND CONCLUSION OF THE TRIBUNAL DO NOT CHANGE AND AS SUCH, WE FIND THAT THERE IS NO MISTAKE APPARENT FROM RECORD. THIS IS ONLY A CA SE, WHERE DETAILS FOR SO MANY YEARS IN THE PAST WERE NOT CONS IDERED BY THE TRIBUNAL. BUT THE TRIBUNAL HAS CONSIDERED THE LATT ER ASSESSMENT YEARS. IN FACT, ALL THE ASSESSMENT YEARS ARE SIMIL AR AND THE ASSESSMENT YEARS MENTIONED BY THE TRIBUNAL ARE REPR ESENTATIVE. 10. THE LAST POINT RAISED BY THE ASSESSEE IS THAT E VEN THE STATE ELECTRICITY DEPARTMENT IN 1993 HAD APPROVED F REE ELECTRICITY CONNECTION ON THE GROUND THAT THE LAND WAS AGRICULTURAL IN NATURE. THIS AGAIN IS A MATTER OF TECHNICAL DATA, WHICH DOES NOT GO TO CHANGE THE BASIC FEATURES OF T HE CASE. IT IS NOT A MISTAKE APPARENT FROM RECORD. 11. IN SHORT, WE FIND THAT THESE POINTS OF RE-ARGUM ENTS RAISED BY THE ASSESSEE ARE NOT MISTAKES APPARENT FROM THE RECORDS. MP 52/13 :- 11 -: THEY ARE LIABLE TO BE REJECTED. THE MISCELLANEOUS PETITION IS ACCORDINGLY, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON FRIDAY, THE 14 TH OF JUNE, 2013 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 14 TH JUNE, 2013 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.