Raghubir Singh V. Income Tax Officer, Ward 4(3), Amritsar and another

CWP/9831/2013

AI Insights

The case involves Raghubir Singh, an agriculturist, who sold a piece of land measuring 7 kanals 8 marlas. The land was originally purchased by him on 21.7.1995, and he incurred additional costs for earthwork and fencing. Upon selling the land on 13.5.2013 for a registered amount of 4 lakhs, the stamp duty assessed the land's value at 13,87,500. The Income Tax Officer reopened Singh's case under Section 147 of the Income Tax Act, leading to an incorrect assessment of the land's size and subsequent tax demand. Singh's revision petition was dismissed by the CIT, prompting the filing of this writ petition under Articles 226/227 of the Constitution.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 795544 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 21-04-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DENESH GOYAL
• Assessee Lawyers: SANDEEP GOYAL
• Keywords: Assessment; Capital Gain; Demand of tax; Natural Justice; Quashing Orders
• Section: 147; 264; 234 B; 226; 227

Judgement Text

"CWP No.9831 of 2013 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CWP No.9831 of 2013 Date of decision: 21.4.2014 Raghubir Singh -----Petitioner Vs. Income Tax Officer, Ward 4(3), Amritsar and another ----Respondents CORAM:- HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE JASPAL SINGH Present:- Mr. Sandeep Goyal, Advocate for the petitioner. Mr. Denesh Goyal, Advocate for the respondents. Ajay Kumar Mittal,J. 1. Prayer in this petition filed under Articles 226/227 of the Constitution of India is for quashing the orders dated 30.12.2011 and 4.3.2013, Annexures P.5 and P.8 passed by respondents No.1 and 2 respectively raising a demand of ` 5,39,275/- including interest of ` 2,48,280/- under Section 234-B of the Income Tax Act, 1961 (in short, “the Act”) for 93 months against the petitioner. 2. A few facts relevant for the decision of the controversy involved, as narrated in the petition, may be noticed. The petitioner is an agriculturist. The dispute in this present case relates to the sale of land measuring 7 kanals 8 marlas by the petitioner, which was purchased by him on 21.7.1995. The cost of acquisition at the time of purchase of the said land was ` 2,10,000/-. The petitioner had also incurred expenses relating to earthwork and fencing etc. to the tune of ` 4,70,000/-. According to the petitioner, taking the indexed cost as per the index for the impugned year, the total cost of acquisition worked out to be ` 12,79,417/-. On 13.5.2013, Singh Gurbax 2014.05.06 17:21 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9831 of 2013 2 the said land was sold for ` 4 lacs by the petitioner vide registered sale deed dated 13.5.2003, Annexure P.2. The value of land for the purpose of stamp duty was worked out at `13,87,500/- and stamp duty of ` 83,250/- was affixed on the same. The petitioner filed his return for the year in question which was below the taxable limit. However, his case was reopened under Section 147 of the Act and notice dated 24.3.2011 was issued to the petitioner. The petitioner appeared and pleaded that he had sold the entire land of 7 kanals 8 marlas and not 1 kanal as alleged. It was also urged that the cost of acquisition for the entire land worked out to be ` 12,79,417/- and, therefore, the proceedings should be finalised accordingly. The Assessing Officer vide order dated 30.12.2011, Annexure P.5 framed the assessment and calculated the taxable capital gain on `13,34,842/- by taking the land sold to be 1 kanal only. After determining the tax at `2,66,968/- and interest under Section 234-B of the Act to the tune of `2,48,280/- and under Section 234-A of the Act for ` 24,027/-, the total tax demand was raised to the tune of ` 5,39,275/-. Aggrieved by the order, the petitioner filed revision petition under Section 264 of the Act before the Commissioner of Income Tax, Amritsar (in short, “the CIT”), inter alia, pleading that he had sold his entire land and not only 1 kanal. It was further averred that principles of natural justice had not been followed while passing the assessment order. Vide order dated 4.3.2013, Annexure P.8, the revisional authority dismissed the revision petition. Hence the present petition by the petitioner. 3. Mr. Gurmeet Singh, Income Tax Officer (Tech.), Amritrsar is present in person in pursuance to the order passed by this Court on 24.3.2014. Singh Gurbax 2014.05.06 17:21 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9831 of 2013 3 4. We have heard learned counsel for the parties and perused the record. 5. Learned counsel for the petitioner submitted that the sale deed was relating to 7 kanals 8 marlas of land of which the value was estimated by the Registrar for stamp duty purposes at ` 13,87,500/- whereas the Assessing Officer had taken the land sold to be measuring 1 kanal only. 6. It was not disputed by the learned counsel for the revenue that the sale deed was for 7 kanals 8 marlas of land. 7. The Assessing Officer as well as the CIT had taken the land sold to be measuring 1 kanal instead of 7 kanals 8 marlas. In such circumstances, the orders passed by the Assessing Officer and the CIT cannot be legally sustained. 8. Accordingly, while setting aside the impugned orders dated 30.12.2011 and 4.3.2013, Annexures P.5 and P.8 respectively, the matter is remitted back to the Assessing Officer to pass fresh order after affording an opportunity of hearing to the petitioner in accordance with law. The petition stands allowed. (Ajay Kumar Mittal) Judge April 21, 2014 (Jaspal Singh) 'gs' Judge Singh Gurbax 2014.05.06 17:21 I attest to the accuracy and integrity of this document High Court Chandigarh "