Special Deputy Collector (LA), Yelamanchili v. ITO, Visakhapatnam

ITA 115/VIZ/2009 | 2006-2007
Pronouncement Date: 07-10-2010 | Result: Partly Allowed

Appeal Details

RSA Number 11525314 RSA 2009
Bench Visakhapatnam
Appeal Number ITA 115/VIZ/2009
Duration Of Justice 1 year(s) 7 month(s) 3 day(s)
Appellant Special Deputy Collector (LA), Yelamanchili
Respondent ITO, Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 07-10-2010
Date Of Final Hearing 05-10-2010
Next Hearing Date 05-10-2010
Assessment Year 2006-2007
Appeal Filed On 04-03-2009
Judgment Text
ITA NOS.114 & 115 SPECIAL DY COLLECTOR (LA) YELLAMA NCHILI PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS. 114 & 115/VIZAG/2009 ASSESSMENT YEAR: 2006-07 & 2007-08(FINANCIAL YEAR 2 005-06 & 2006-07) SPECIAL DEPUTY COLLECTOR (L.A) YELAMANCHILI VS. ITO WARD 6(3) VISAKHAPATNAM (APPELLANT) PAN NO: VPN000 199 D (RESPONDENT) APPELLANT BY: SHRI C.V.S. MURTHY CA RESPONDENT BY: SHRI T.L. PETER (CIT-DR) ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 31.1.2009 PASSED BY LEARNED CIT(A) VIS AKHAPATNAM AND THEY RELATE TO THE FINANCIAL YEARS 2005-06 AND 2006-07 R ELEVANT TO THE ASSESSMENT YEARS 2006-07 AND 2007-08 RESPECTIVELY. THE ASSESSEE IS CHALLENGING ORDER OF LEARNED CIT (A) IN CONFIRMING THE TAX AND INTEREST LEVIED UNDER SECTION 201 (1) AND 201 (1A) OF THE AC T. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. A SURVEY UNDER SECTION 133A WAS CONDUCTED IN THE OFFICE PREMISES O F THE SPECIAL DEPUTY COLLECTOR LAND ACQUISITION NAVY ELAMANCHILI VIS AKHAPATNAM DISTRICT ON 25-02-2008. IN COURSE OF THE SURVEY IT WAS NOTICED THAT THE SPECIAL DEPUTY COLLECTOR HAD MADE SUBSTANTIAL PAYMENTS TO THE LAND OWNERS TOWARDS COMPENSATION FOR ACQUISITION OF THE LAND FROM THEM. THE SAID LANDS HAD BEEN ACQUIRED FOR THE PURPOSES OF USE BY NAVAL AUTH ORITIES. IN TOTAL 1 348.34 ACRES OF LAND WERE ACQUIRED DURING THE FIN ANCIAL YEARS 2005-06 AND 2006-07 AND OUT OF THE SAME AS PER THE INFORMA TION FURNISHED BY THE SAID SPECIAL DEPUTY COLLECTOR 518.26 ACRES RELATED TO NON-AGRICULTURAL LANDS WHICH WERE CLASSIFIED AS AQUA CULTURE/PRAWN CULTURE /SALT MAKING LANDS. THE ITA NOS.114 & 115 SPECIAL DY COLLECTOR (LA) YELLAMA NCHILI PAGE 2 OF 4 TOTAL PAYMENTS RELEASED TOWARDS ACQUISITION OF SUCH NON-AGRICULTURAL LANDS WAS RS.17 09 71 162/-. NO TAX WAS DEDUCTED AT SOURC E WHILE MAKING SUCH PAYMENTS TOWARDS ACQUISITION OF NON-AGRICULTURAL LA NDS THOUGH SEC.194LA SPECIFICALLY REQUIRES THE DEDUCTION OF TAX AT SOURC E ON SUCH PAYMENTS. FOR THE FAILURE OF THE APPELLANT TO DEDUCT TAX AT SOURC E ON SUCH PAYMENTS THE ASSESSING OFFICER TREATED THE APPELLANT AS AN ASSE SSEE IN DEFAULT AND RAISED DEMANDS UNDER SECTION 201 (1) AND CHARGED TH E CONSEQUENT INTEREST UNDER SECTION 201 (1A) VIDE THE ABOVE ORDERS. THE A SSESSEE COULD NOT WIN IN THE APPEALS FILED BEFORE LEARNED CIT (A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE SPECIAL DEPUTY COLLECTOR HAS FURNISHED THE DETAILS OF AGRIC ULTURAL AND NON AGRICULTURAL LANDS ON THE BASIS OF REVENUE RECORD; WHEREAS MOST OF THE LANDS WHICH HAD BEEN CLASSIFIED AS AQUA CULTURE/PR AWN CULTURE/SALT MAKING LANDS IN THE REVENUE RECORDS HAD ALREADY BEEN RECO NVERTED INTO AGRICULTURAL LANDS BY THE TIME THE LAND ACQUISITION TOOK PLACE. HOWEVER THE CONCERNED PARTIES HAD FAILED TO EFFECT NECESSARY CHANGES IN T HE REVENUE RECORDS. IN SUPPORT OF THE SAID CONTENTION THE LEARNED AUTHORIS ED REPRESENTATIVE HAS FILED A PAPER BOOK CONTAINING MANY DOCUMENTS AS ADD ITIONAL EVIDENCES WHICH INTER ALIA INCLUDES THE ASSESSMENT ORDERS PE RTAINING TO FEW PERSONS FROM WHOM THE LAND WAS ACQUIRED. IN THE ASSESSMENT ORDERS THE CONCERNED ASSESSING OFFICER HAD ACCEPTED THE SAID L ANDS AS AGRICULTURAL LANDS. THE LEARNED AUTHORISED REPRESENTATIVE SUBMIT TED THAT THE ASSESSEE COULD COLLECT ALL THESE DETAILS ONLY AFTER THE COMP LETION OF THE ORDER BY THE INCOME TAX OFFICER AND HENCE THE ASSESSEE COULD NOT FILE THEM BEFORE HIM. THE LEARNED AUTHORISED REPRESENTATIVE FURTHER SUBMI TTED THAT WHEN THE RECIPIENTS OF COMPENSATION ARE NOT LIABLE FOR INCOM E TAX ON SUCH COMPENSATION THEN THERE IS NO REQUIREMENT FOR DEDU CTION OF TAX AT SOURCE. IN THIS CONNECTION LEARNED AUTHORISED REPRESENTATIV E PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGE P. LTD. VS. CIT (2007) 293 ITR 226 (S C) AND SUBMITTED THAT THE SPIRIT OF THE SAID DECISION SHALL SUPPORT HIS CONTE NTIONS. ACCORDINGLY HE ITA NOS.114 & 115 SPECIAL DY COLLECTOR (LA) YELLAMA NCHILI PAGE 3 OF 4 PLEADED THAT THE ADDITIONAL EVIDENCES BE ADMITTED A ND THE MATTER MAY BE SET ASIDE TO THE FILE OF THE INCOME TAX OFFICER FOR FRESH CONSIDERATION. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE ADDITIONAL EVIDENCES NOW PRODUCED BEFORE THE BENCH DO NOT PERTAIN TO ALL THE NON AGRICULTURAL LANDS ON WHICH THE TAX AND INT EREST UNDER SECTION 201 WAS LEVIED. HOWEVER HE SAID THAT HE HAD NO OBJECTI ON IN SETTING ASIDE THE MATTER TO THE ASSESSING OFFICER PROVIDED THE MATTE R IS SET ASIDE WITH PROPER DIRECTIONS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD CAREFULLY. WE HAVE ALSO GONE THROUGH THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE US. WE NOTICE THAT THE ASSESSEE HAD STARTED COLLECTING DETAILS REGARDING THE ACTUAL USER OF THE LAND ONLY AFTER THE DATE OF PASSING OF IMPUGNED ORDERS UNDER SECTION 201 (1)/201 (1A) O F THE ACT. HENCE THE ASSESSEE COULD NOT HAVE BEEN IN A POSITION TO SUBMI T THE SAME BEFORE THE INCOME TAX OFFICER. THERE CANNOT BE ANY DISPUTE THA T THE ACTUAL USER OF THE LAND DETERMINES ITS CHARACTER I.E. WHETHER IT IS AGRICULTURAL LAND OR NON- AGRICULTURAL LAND. HENCE PLACING RELIANCE ON THE REVENUE RECORD MAY SOME TIME MISLEAD ANY PERSON IF THE SAID RECORD IS NOT PROPERLY UPDATED. WE ALSO NOTICE FROM THE PAPER BOOK FILED BY THE ASSESSEE TH AT SOME OF THE PERSONS FROM WHOM THE LAND WAS ACQUIRED HAVE GIVEN THEIR AS SESSMENT ORDERS; WHEREIN THE RESPECTIVE ASSESSING OFFICERS HAVE ACCE PTED THAT THE LAND SOLD BY THEM UNDER LAND ACQUISITION AS AGRICULTURAL LAND . THUS WE ARE OF THE VIEW THAT THE CHARACTER OF LAND REQUIRES TO BE PROP ERLY ASCERTAINED IN THIS CASE BY CONSIDERING THE ACTUAL USER OF LAND BEFORE THE DATE OF ACQUISITION. THERE IS NO DISPUTE THAT THE ASSESSEE IS NOT REQUIR ED TO DEDUCT TAX UNDER SECTION 194LA OF THE ACT IN RESPECT OF AGRICULTURAL LANDS. HENCE IN THE INTEREST OF NATURAL JUSTICE WE ARE OF THE VIEW THA T THE ADDITIONAL EVIDENCES FILED BEFORE US HAVE TO BE ADMITTED AND ACCORDINGLY WE ADMIT THE SAME. HOWEVER SINCE THE REQUIREMENT OF DEDUCTION OF TAX AT SOURCE SHALL APPLY ONLY TO THE NON AGRICULTURAL LANDS THE CLAIM OF TH E ASSESSEE THAT MOST OF THE LANDS ARE AGRICULTURAL LANDS REQUIRES NECESSARY VERIFICATION. ACCORDINGLY ITA NOS.114 & 115 SPECIAL DY COLLECTOR (LA) YELLAMA NCHILI PAGE 4 OF 4 WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT (A ) AND REMIT THE MATTER BACK TO THE FILE OF THE INCOME TAX OFFICER WITH A DI RECTION TO VERIFY THE NATURE & USER OF LAND AND ACCORDINGLY EXCLUDE THE V ALUE OF LANDS THAT WERE PROVED TO BE AGRICULTURAL LANDS FOR THE PURPOSE OF COMPUTING THE LIABILITY UNDER SECTION 201(1) AND INTEREST UNDER SECTION 201 (1A). THE ASSESSING OFFICER IS ALSO DIRECTED TO TAKE INTO ACCOUNT THE D ECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LTD. (SUPRA) WHILE DECIDING THE ISSUE. 7. IN THE RESULT BOTH THE APPEALS FILED BY THE ASSE SSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 07 TH OCTOBER 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:07-10-2010 COPY TO 1 THE SPECIAL DEPUTY COLLECTOR (L.A) NAVY ELAMANC HILI VISAKHAPATNAM 2 THE INCOME TAX OFFICER WARD-6(3) VISAKHAPATNAM 3 4. THE CIT (TDS) HYDERABAD THE CIT(A)-I VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM