SHRI JITENDRA BAHADUR SINGH L/H PRABHA SINGH (WIFE),VARANASI V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 02, VARANASI

CO 1/VNS/2020

AI Insights

The case involves an appeal by the Revenue against the order of the CIT (A), which had deleted significant additions made by the Assessing Officer (AO) regarding the sale of agricultural land and gold. The Revenue contested the CIT (A)'s acceptance of additional evidence during the appellate proceedings, which led to the deletion of the additions. The Tribunal found that the land in question was indeed agricultural based on the consistent treatment of similar parcels of land and the lack of specific mention of non-agricultural status in the sale deed. Regarding the gold sale, the Tribunal directed a re-computation of the capital gains after considering the indexation, acknowledging the gold was received through a will, despite the will not being registered.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473601 (ITAT-VARANASI)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-09-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 06-11-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: ASHISH BANSAL
• Keywords: Additional evidence; Cost of acquisition; Gift; Bogus
• Section: 54B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.21/VNS/2020 (Assessment Year :2012-13) Dy. Commissioner of Income-Tax, Circle-1, Varanasi Vs. Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh C-3, Awas Vikas Complex Jawahar Nagar Bhelupura, Varanasi PAN/GIR No.AIJPS1622D (Appellant) .. (Respondent) CO No.1/VNS/2020 (Arising out of ITA No.21/VNS/2020) (Assessment Year :2012-13) Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh C-3, Awas Vikas Complex Jawahar Nagar Bhelupura, Varanasi Vs. Dy. Commissioner of Income-Tax, Circle-1, Varanasi PAN/GIR No.AIJPS1622D (Appellant) .. (Respondent) Assessee by Shri Ashish Bansal, Advocate Revenue by Smt. Kavita Meena, Sr. DR Date of Hearing 11/09/2024 Date of Pronouncement 02/12/2024 ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 2 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the Revenue and Cross Objection of the assessee against order dated 15/11/2019 passed by ld. CIT (A)-Varanasi for the quantum of assessment passed u/s.143 for the A.Y.2012-13. 2. In the grounds of appeal, the Revenue has raised following grounds:- 1. Whether on the facts and circumstances of the case and in law the Ld Commissioner of Income Tax(Appeal), Varanasi is justified in deleting the addition of Rs2,00,00,000/- by admitting additional evidence during the appellate proceedings, ignoring the fact that the assessee failed to furnish these evidences during the assessment proceedings despite being given multiple opportunities by the AO and failed to explain the circumstances under which he could not produce these evidences before the AO as required under Rule 46A(1) 2. Whether on the facts and circumstances of the case and in law the Ld Commissioner of Income Tax(Appeal), Varanasi is justified in deleting the addition of Rs2,00,00,000/- by admitting the certificate about the agriculture land issued by the revenue authorities during the appellate proceedings ignoring the fact that in the sale deed for this land the fact about this land being agricultural was not mentioned 3. Whether on the facts and circumstances of the case and in law, the Ld Commissioner of Income Tax(Appeal), Varanasi is justified in deleting the addition of Rs66,38,108/- by admitting additional evidence during the appellate proceedings, ignoring the fact that the assessee failed to furnish these evidences during the assessment proceedings despite being given multiple opportunities ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 3 by the AO and failed to explain the circumstances under which he could not produce these evidences before the AO as required under Rule 46A(1). 3. Where as in the Cross Objection, assessee has challenged the addition of Rs.14,99,860/- towards sales of gold and supported the deletion of addition of Rs.2,00,00,000/- made by the ld. CIT(A). 4. The brief facts as culled out from the assessment order for the impugned addition which has been raised in the Revenue’s appeal are that, the ld. AO on perusal of the documents noted that assessee has purchased two properties, i) Land at Survey no 146, Village Vakdi, District Raigad, Maharashatra (36 Guntha) for total consideration of Rs 3,48,610 (Rs 3,25,000+ Rs 23,610) on 03-06-2005; and (ii) land at Survey no 146, Village Vakdi, District Raigad, Maharashatra (89 Guntha) for total consideration of Rs 4,76,590/- (Rs 4,45,000 + Rs 31,590) on 14/10/2005. He further noted that as per the purchse deeds, they are treated as agricultural land. However on sale of one land it was not mentioned as agricultural land and assessee has not included any capital gain. The relevant findings by the ld. AO are as under: “Both the above said properties (land), as per sale deeds, are agriculture land. During the relevant assessment year, one property situated at Survey no 146, Village Wakdi, District Raipur, Maharashatra has been sold in two parts. One part is sold on 09- 05-2011 for Rs 15,51,000/- (32 Guntha, sold as agriculture land) ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 4 and second part is sold on 30-06-2011 for Rs 2,00,00,000/- (57 Guntha, sold as non agriculture land) The computation of income reveals that the assessee has taken it as agriculture land and he has not included the sale consideration for calculation of capital gain in his computation of total income. The details of the properties are as under:- Date of transaction Name of the Purchaser Area Value sale consideration (Rs) 09-05-2011 Rajendra V Kolkar Survey no 146, Village Wakdi, District Raipur, Maharashatra 32 Guntha 15,50,000 30-06-2011 Ms Pooja Raj Kandhari Survey no 146, Village Wakdi, District Raipur, 2,00,00,000 Maharashatra \"\"57 Guntha During the year, on perusal of documents filed by the assessee, it is found that assessee has purchased agriculture land at Pargana, Athgava, Village Gadwa, Varanasi, Uttar Pradesh for Rs 64,92,800/- (Rs 60,68,000 + Rs 4,24,800). However, assessee vide reply dated 09-02-2015 has submitted that he has purchased agriculture land at Sehmalpur Varansi for Rs 1, 32,51, 412/-. In this regard, he has not filed any documents. He has sold another land at mussoorie for Rs 11,48,700/- (Rs 10,94,000 + Rs 54,700). From the documents submitted regarding jsale of property revealed that sold land for sum of Rs 2,00,00,000/- is not a agriculture land. The assessee was asked to substantiate his claim to prove that it has an agriculture land. In this context, the ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 5 AR of the assessee filed letter dated 26-03-2015 along with a copy of certificate of Tehsildar and Executive Judicial Magistrate, Panvel, Raigarh, Maharashtra that the land sold by the assessee is agriculture land. The submitted documents have been perused and it is found that these documents are in respect of survey no 148 Village Wakdi, District Raipur and not for survey no 146 Village Wakdi, District Raipur. The assessee is misleading the facts of the case. Moreover, it is pertinent to mention here, that the assessee has sold another part of property for consideration of Rs 15,50,000/- which has been treated as agriculture land (as per sale deed), hence the same is not covered for calculation of capital gain. In view of the facts and circumstances of the case, it is found that section 54B of the Income Tax Act, is not applicable in this case. The entire sum received i.e. Rs 2,00,00,000/- is taxable under the head Long Term Capital Gain from sale of property. Therefore, a sum of Rs 2,00,00,000/-received as sale consideration of land is being considered for taxation without deduction of indexed cost of purchase and without relief u/s 54B of the Income Tax Act; Penalty proceeding u/s 271(l)(c) of the I T Act 1961 is initiated. 5. Before the ld. CIT(A) it was stated that sale deed of agriculture land, survey No.146 Guntha show that portion of the land bearing survey No.146 admeasuring about 89 Guntha situated at Village-Vakadi, Raigad was totally agriculture land. Further, the same page of the sale deed clearly mentions that the portion of this land measuring 32 Guntha was sold for Rs.15,51,000/- and this land was treated as agricultural land by the ld. AO. This land was sold on 09/05/2011. However, the other portion land, i.e., 57 Guntha from the same survey No.146 from the same village sold on 30/06/2011 was sold at ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 6 Rs.2,00,00,000/-. However, the nature of this land was not mentioned in the sale deed and for this reason AO held that capital gain is to be taxed. The ld. CIT (A) held that since the land is situated at same survey No.146 which was purchased as agricultural land and if part of the land at measuring 32 Guntha was sold as agricultural land at Rs.15,50,000/- then, other part of the land from the same survey is also an agricultural land. The ld. CIT(A) on the basis of evidence and material which was already on the record noted that evidences clearly shows that the total area of the land of 89 Guntha having survey No.146 in the same village was agricultural land. He also took note of the certificate issued by Gram Panchayat that the said land was agricultural land and the electricity connection taken in the said land was also for the agriculture purpose. He further held that the most crucial aspect in this case is the treatment of part of the land at measuring 32 Guntha which was sold out of the said Survey no of 146 itself barely a month before on 09/05/2011 has been treated as agricultural land by the A.O. himself. If the character of the part of the land situated at Survey no 146 has been accepted by the A.O as agricultural land, the balance portion of the land measuring 57 Guntha which was sold as it is on 30.06.2011 (barely a month after the sale of earlier land) cannot be considered as non-agricultural. The only ground for treating the sale of this land as non- agricultural was absence of specific term in the sale deed that the nature of the land is ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 7 agricultural. However, the sale deed also does not mention that the said land is non agriculture. Considering the facts of the case, he held that nature of land sold on 30.06.2011 at measuring 57 Guntha situated at Survey no. 146 is also agricultural as the facts and circumstances of the case are exactly similar with respect to 32 Guntha of land which was sold on 05.06.2011 out of the said land which was accepted by the A.O as agricultural. He has also incorporated the copy of certificate issued by Gram Panchayat, Vakadi and accordingly, addition made by the ld. AO was deleted. 6. After hearing both the parties and on perusal of the material placed on record including the remand report submitted by the ld. AO, we find that it is not in dispute that assessee had sold land admeasuring 89 Guntha survey No.146 situated at Village- Vakadi, Raigad in two trenches; one was 32 Guntha which sold on 09/05/2011 sold for Rs. 15,51,000/- and second was 57 Guntha which was sold on 30/06/2011. The ld. AO had held that in so far as land sold on 09/05/2011 it was an agriculture land but the land sold on 30/06/2011 is not an agricultural land because there is no mention in the sale deed. Once it is a matter of fact that assessee had purchased the land as agricultural land and the same land under the same survey No.146 one chunk is treated to be agricultural land, then another chunk of land of same survey number 146 sold within a month cannot be treated as non-agricultural income. Even if the so called certificate from ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 8 Gram Panchayat, Vakadi which department is harping that it is an additional evidence, but it only corroborates the assessee’s contention that land out of same survey No.146 sold on 30/06/2011 was an agricultural land. How, ld. AO can treat the part of the same land to be agriculture land and another part of the land is non-agricultural land without carrying out any enquiry or bringing any contrary material on record. The ld. AO has treated the entire sale proceeds as taxable income without benefit of indexation and deduction u/s.54B on the ground that nature of the land has not been mentioned in the sale deed. The ld. CIT (A) has categorically recorded the finding that it is also borne out from the records that the entire area of land of 89 Gunthas in Survey No.146 was agricultural land only and therefore, we do not find any reason to deviate from the finding of the ld. CIT (A) and we hold that addition of Rs.2,00,00,000/- deleted by the ld. CIT(A) is factually correct. 7. In the result, order of the ld. CIT (A) is upheld and grounds taken by the Revenue are dismissed. 8. Coming to the addition of Rs.14,99,860/- on account of sale of gold, the ld. AO has held that since no evidence have been submitted to substantiate the transaction taken during the year and the assessee’s contention that gold was gifted byhis mother has no evidence. Accordingly, he has made addition of Rs.14,99,860/-. The ld. CIT (A) has also confirmed the said ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 9 addition on the ground that assessee has not produced the original bill and Will is also not registered. Further assessee has not disclosed jewellery in the wealth tax return and therefore, the sale receipt of gold of Rs.14,99,860/- cannot be accepted to be genuine. The assessee had claimed deduction u/s.54B on the sale of gold treating to be as long term capital gain. 9. It was stated before us that assessee has received gold jewellery through will from his mother in the F.Y. 1986-87. Assessee had sold the gold jewellery in this year for Rs.14,99,860/- and indexed cost of acquisition came up to Rs.5,01,593/- and actual capital gain should have been Rs.9,98,267/-. 10. After hearing both the parties and on perusal of the relevant finding and the material placed on record, it is seen that addition has been confirmed by the ld CIT (A) on the ground that, firstly, will of the mother was not registered; secondly, assessee has not disclosed gold jewellery in the wealth tax return; and lastly, original sale bills were not produced. First of all it has been stated that ‘Will’ pertain to year 1986 and the only requirement at that time was whether testator has made the will in the presence of witnesses and is signed by the testator and witnesses and there is a clear cut mention about the property or assets or valuables to be bequeath/ bequest by the testator (owner of the property) in his/her will to the beneficiary. Here, the jewellery ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 10 has been given by the mother of the assessee before her death. The ld. AO has treated the entire sale of gold as ‘unexplained income’. If the jewellery has been received through Will even if it was not registered, the will cannot be said to be bogus or non- genuine simply because it was not registered at that time. Further, the quantum of jewellery itself was low so as to fall in the limit of filing of wealth tax return. Thus, the reason that disbelieving the sale of jewellery by the CIT (A) cannot be accepted. Accordingly, ld. AO is directed to compute the long term gain after giving indexation and tax the long term gain on sale of gold jewellery. Accordingly, the ground raised by the assessee is partly allowed. 11. In the result, the grounds raised by the assessee is partly allowed. 12. In the result, appeal of the Revenue is dismissed and cross objection of the assessee is partly allowed. Order pronounced on 02/12/2024. Sd/- (B.R. BASKARAN) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Varanasi; Dated 02/12/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. ITA No.21/VNS/2020 & CO No.01/VNS/2020 Smt. Prabha Singh (Wife) & L/H. of Late Jitendra Bahadur Singh 11 BY ORDER, (Asstt. Registrar) ITAT, Varanasi 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "