ITO,, CHENNAI v. Smt. Smita P Mehta,, CHENNAI

ITA 1160/CHNY/2012 | 2006-2007
Pronouncement Date: 30-07-2012 | Result: Allowed

Appeal Details

RSA Number 116021714 RSA 2012
Assessee PAN AAHPM8197K
Bench Chennai
Appeal Number ITA 1160/CHNY/2012
Duration Of Justice 2 month(s) 6 day(s)
Appellant ITO,, CHENNAI
Respondent Smt. Smita P Mehta,, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-07-2012
Assessment Year 2006-2007
Appeal Filed On 24-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER I.T.A. NO. 1160/MDS/2012 (ASSESSMENT YEAR : 2006-07) THE INCOME TAX OFFICER BUSINESS WARD XV(3) CHENNAI - 600 034 . (APPELLANT) V. SMT. SMITA P. MEHTA 6 GURUSWAMY ROAD CHETPET CHENNAI - 600 031. PAN : AAHPM8197K (RESPONDENT) I.T.A. NO. 1161/MDS/2012 (ASSESSMENT YEAR : 2006-07) THE INCOME TAX OFFICER BUSINESS WARD XV(2) CHENNAI - 600 034 . (APPELLANT) V. SHRI RASIKALAL M. MEHTA (HUF) 559 ANNA SALAI TEYNAMPET CHENNAI - 600 018. PAN : AAAHR0255C (RESPONDENT) C.O. NO. 112/MDS/2012 (IN I.T.A. NO. 1160/MDS/2012) (ASSESSMENT YEAR : 2006-07) SMT. SMITA P. MEHTA 6 GURUSWAMY ROAD CHETPET CHENNAI - 600 031. (CROSS OBJECTOR) V. THE INCOME TAX OFFICER BUSINESS WARD XV(3) CHENNAI - 600 034 . (RESPONDENT) I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 2 C.O. NO. 113/MDS/2012 (IN I.T.A. NO. 1161/MDS/2012) (ASSESSMENT YEAR : 2006-07) SHRI RASIKALAL M. MEHTA (HUF) 559 ANNA SALAI TEYNAMPET CHENNAI - 600 018. (CROSS OBJECTOR) V. THE INCOME TAX OFFICER BUSINESS WARD XV(2) CHENNAI - 600 034. (RESPONDENT) REVENUE BY : SHRI S. DASGUPTA JCIT ASSESSEE BY : SHRI SANJIV KUMAR SHAH CA DATE OF HEARING : 30.07.2012 DATE OF PRONOUNCEMENT : 30.07.2012 O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : THESE ARE APPEALS AND CROSS-OBJECTIONS OF THE REV ENUE AND ASSESSEES RESPECTIVELY DIRECTED AGAINST ORDERS DAT ED 15.2.2012 OF COMMISSIONER OF INCOME TAX (APPEALS)-XII FOR THE I MPUGNED ASSESSMENT YEAR. ISSUE RAISED BY THE REVENUE IN IT S APPEALS IS REGARDING AN ADDITION MADE BY THE A.O. ON LONG TERM CAPITAL GAINS FOR SALE OF LAND WHICH WAS DELETED BY CIT(APPEALS) ON A SSESSEES APPEALS. CROSS-OBJECTIONS OF THE ASSESSEE ARE IN S UPPORT OF THE ORDERS OF THE CIT(APPEALS). I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 3 2. SINCE THE PIECES OF LAND SALE OF WHICH GAVE RIS E TO THE ASSESSMENT OF LONG TERM CAPITAL GAINS ARE ADJACENT LY SITUATED THESE APPEALS ARE DISPOSED OF THROUGH THIS CONSOLIDATED O RDER. 3. FACTS APROPOS ARE THAT ASSESSEES SHRI RASIKALAL M. MEHTA (HUF) AND SMT. SMITA P. MEHTA HAD TRANSFERRED A JOI NTLY OWNED PIECE OF LAND LYING IN ORIGINAL SURVEY NO.103/1 AND 103/ 3 AND RE-SURVEY NUMBERING 103/47 AT KANNATHUR KUPPAM VILLAGE CHING LEPET TALUK KANCHEEPURAM DISTRICT FOR A CONSIDERATION OF ` 45 LAKHS AND ` 22.5 LAKHS RESPECTIVELY. CLAIMS OF THE ASSESSEES WERE T HAT THESE WERE AGRICULTURAL LAND AND HENCE THERE COULD NOT BE ANY CAPITAL GAINS ON THE SURPLUS. ASSESSEES ALSO FURNISHED COPIES OF CE RTIFICATE FROM VAO OF KOVALAM VILLAGE IN WHICH IT WAS STATED THAT LAND FALLING WITH SURVEY NOS. 103/1 103/3 103/46 AND 103/47 WERE AGRICULTU RAL LAND AND THESE WERE SITUATED 16 KMS AWAY FROM CHENNAI CITY L IMITS. ASSESSING OFFICER REQUIRED THE ASSISTANT COMMISSION ER URBAN LAND TAX TO CLARIFY WHETHER THESE PIECES OF LAND WERE AS SESSED TO ANY URBAN LAND TAX. THERE WAS A CLARIFICATION RECEIVED FROM ASST. COMMISSIONER URBAN LAND TAX INTER ALIA STATING T HAT KANATHUR REDDYKUPPAM WAS ONE OF THE VILLAGES COMING WITHIN T AMIL NADU URBAN LAND TAX ACT AND FURTHER THAT LAND IN SURVEY NO.103/3 WAS I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 4 CLASSIFIED AS FISH DRYING PLACE/PROMBOKE LAND. AS PER THE A.O. THERE WAS NO AGRICULTURAL ACTIVITY AND THE CERTIFICATE OF VAO COULD NOT BE ACCEPTED SINCE IT WAS NOT ISSUED BY THE JURISDICTIO NAL VAO. ASSESSEES WERE ISSUED SHOW CAUSE NOTICE IN THIS REG ARD. REPLY OF THE ASSESSEES WAS THAT THE LAND WAS AGRICULTURAL IN NATURE AS PER THE CERTIFICATE ISSUED BY VAO KOVALAM. HOWEVER THE A SSESSING OFFICER DID NOT ACCEPT THIS CONTENTION. ACCORDING TO HIM ASSESSEES CONCERNED HAD NOT RETURNED ANY AGRICULTURAL INCOME IN THEIR RETURNS FOR PRECEDING ASSESSMENT YEARS AND DESCRIPTIONS IN THE SALE DEED REGARDING NATURE OF LAND ALONE WOULD NOT BE SUFFICI ENT TO SUBSTANTIATE THEIR CLAIM. ACCORDING TO HIM NOTHING WAS PRODUCE D FOR PAYMENT OF LAND REVENUE FOR THE LAND AND ASSESSEES COULD NOT D ISCHARGE THE BURDEN TO SHOW THAT THE LAND WAS PUT TO ANY AGRICUL TURAL USE. HE REFUSED TO ACCEPT THE CONTENTION OF THE ASSESSEES T HAT LAND SOLD WERE AGRICULTURAL IN NATURE. THUS HE DECLINED TO ACCEP T THE CLAIM THAT CAPITAL GAINS ARISING OUT OF SUCH SALE WAS EXEMPT. HE THEREFORE DENIED SUCH CLAIM AND COMPUTED CAPITAL GAINS. 4. ASSESSEES MOVED IN APPEAL BEFORE CIT(APPEALS). ARGUMENT OF THE ASSESSEES BEFORE THE CIT(APPEALS) WAS THAT THE WEBSITE OF SUB- REGISTRY WHICH GAVE SURVEY NUMBER-WISE GUIDELINE VA LUE CLEARLY I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 5 MENTIONED THAT LAND FALLING IN SURVEY NO.103/1 AND 103/3 WERE AGRICULTURAL IN NATURE. A COPY OF THE PRINT OUT OF THE RELEVANT WEB- PAGE WAS FURNISHED BEFORE CIT(APPEALS). AS PER THE ASSESSEES THE ADANGAL RECORDS CLEARLY SHOWED THAT THE LAND WAS AG RICULTURAL AND ONCE IT WAS SO RECOGNIZED NATURE OF TAX COLLECTED BY LOCAL ADMINISTRATION WAS IRRELEVANT. ACCORDING TO THEM THE LAND WAS NOT SITUATED WITHIN THE LIMITS OF MUNICIPALITY OR CANTO NMENT NOR WITHIN 8 KMS OF ANY MUNICIPALITY OR CANTONMENT. FURTHER AS PER THE ASSESSEES WHETHER AGRICULTURAL OPERATIONS WERE CAR RIED OUT WAS NOT IMPORTANT BUT ONLY THE NATURE OF LAND WAS IMPORTAN T. CIT(APPEALS) WAS APPRECIATIVE OF THESE CONTENTIONS. ACCORDING T O HIM WHETHER AGRICULTURAL OPERATIONS WERE CARRIED OUT IN THE LAN D WAS NOT DETERMINANT OF THE NATURE OF THE LAND. AS PER THE CIT(APPEALS) AGRICULTURAL LAND COULD ALSO BE USED AS SIMPLE PAST URE LANDS. THERE WAS VAO CERTIFICATE THAT THE LAND WAS AGRICULTURAL IN NATURE. ONCE THE LAND WAS CLASSIFIED AS AGRICULTURAL AND IF IT WAS BEYOND THE LIMITS OF ANY MUNICIPALITY OR CANTONMENT IT WOULD BE AGRICUL TURAL LAND AS DEFINED UNDER SECTION 2(14) OF INCOME-TAX ACT 1961 (IN SHORT 'THE ACT'). HE THUS HELD THAT THE PROCEEDS ON SUCH SALE WERE TOTALLY OUTSIDE THE SCOPE OF ANY CAPITAL GAINS TAX. THUS H E DELETED THE ADDITIONS MADE BY THE A.O. I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 6 5. NOW BEFORE US LEARNED D.R. STRONGLY ASSAILING THE ORDERS OF CIT(APPEALS) SUBMITTED THAT INSPECTOR OF THE INCOM E-TAX DEPARTMENT WHO HAD VISITED THE LAND HAD CLEARLY M ENTIONED THAT THERE WERE NO AGRICULTURAL ACTIVITIES CARRIED ON IN SUCH LAND. ACCORDING TO HIM VAO OF KANATHUR REDDYKUPPAM VILLA GE AND NOT VAO OF KOVALAM VILLAGE HAD JURISDICTION OVER THE A REA AND THE FORMER HAD MENTIONED THAT THE LAND WAS ASSESSED TO URBAN L AND TAX. ASST. COMMISSIONER URBAN LAND TAX HAD CLEARLY STATED TH AT THE SUBJECT LAND WAS CLASSIFIED AS FISH DRYING PLACE/POROMBOKE LAND. CIT(APPEALS) DID NOT GO THROUGH ALL THESE RELEVANT RECORDS WHEN HE CAME TO A CONCLUSION THAT THE LAND WAS AGRICULTURAL . ASSESSEE NEVER PRODUCED ANY EVIDENCE FOR ANY AGRICULTURAL OPERATIO NS NOR HAD IT SHOWN ANY INCOME FROM AGRICULTURAL ACTIVITY IN ANY OF THE EARLIER YEARS RETURNS. RELIANCE WAS PLACED BY THE LEARNED D.R. O N THE DECISION OF HONBLE APEX COURT IN THE CASE OF SARIFA BIBI MOHD IBRAHIM AND OTHERS V. CIT 204 ITR 631 AND THAT OF HONBLE KERA LA HIGH COURT IN THE CASE OF KALPETTA ESTATES LIMITED V. CIT (185 IT R 318). 6. PER CONTRA LEARNED A.R. STRONGLY SUPPORTING THE ORDERS OF CIT(APPEALS) SUBMITTED THAT THE RECORDS OF CHITTA PATTA AND ADANGAL ALL CLASSIFIED THE LAND AS AGRICULTURE. COPIES OF ADANGAL CHITTA AND I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 7 PATTA WERE PLACED AS PAPER-BOOK PAGES 2 3 AND 4 IN SUPPORT. ACCORDING TO HIM SECTION 2(14) OF THE ACT WHICH D EFINED THE CAPITAL ASSET CLEARLY EXCLUDED THEREFROM AGRICULTURAL LAN D IN INDIA. IT WAS NOT NECESSARY THAT AGRICULTURAL OPERATIONS SHOULD BE CA RRIED OUT BUT THE ONLY REQUIREMENT WAS THAT THE LAND SHOULD BE AGRICU LTURAL. ONCE THE REVENUE RECORDS SHOWED THAT THE LAND WAS AGRICULTUR AL IN NATURE SUCH CLASSIFICATION COULD NOT BE ASSAILED BY THE INCOME- TAX AUTHORITIES. BY VIRTUE OF DEFINITION OF CAPITAL ASSET IN SECTION 2(14) SUCH LAND STOOD EXCLUDED FROM BEING CONSIDERED AS A CAPITAL ASSET A ND THEREFORE ASSESSEES WERE NOT EXIGIBLE TO ANY CAPITAL GAINS TA X. 7. AD LIBITUM REPLY OF THE LEARNED D.R. WAS THAT I N CHITTA PATTA ADANGAL COPIES FILED BY THE ASSESSEE NAME MENTIONE D WAS ONE MRS. PARAMESWARI AMMAL AND AT ONE PLACE ONE SHRI BALASUB RAMANIAM. ACCORDING TO HIM UNLESS AND UNTIL SOME AGRICULTURA L OPERATIONS WERE CARRIED OUT BY THE ASSESSEE THE LAND CONCERNED COU LD NOT BE PRESUMED AS AGRICULTURAL LAND. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THE PIECES OF LAND SOLD BY THE ASSESSEES FELL BEYOND 8 KMS OF ANY MUNICIPALITY OR CANTONMENT. AS PER THE ASSESSEES IN THE LAND REVENUE RECORDS THE LAND WA S CLASSIFIED AS I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 8 AGRICULTURAL AND THIS WOULD BE SUFFICIENT TO PROVE THAT IT WAS NOT A CAPITAL ASSET FALLING WITHIN THE DEFINITION OF SECT ION 2(14) OF THE ACT. AS PER THE A.O. THE VAO WHOSE CERTIFICATE WAS PROD UCED BY THE ASSESSEE WAS NOT THE VAO HAVING JURISDICTION OVER T HE SUBJECT LAND. THERE IS ALSO A CERTIFICATE FROM ASST. COMMISSIONER URBAN LAND TAX THAT IT WAS A PART OF A VILLAGE FALLING WITHIN THE TAMIL NADU URBAN LAND TAX ACT. AS AGAINST THIS CHITTA ADANGAL AND PATT A COPIES HAVE BEEN FILED BY THE ASSESSEES IN SUPPORT OF THEIR CASE. T HERE ARE SOME CULTIVATIONS MENTIONED BY THE VILLAGE ADMINISTRATIV E OFFICER IN THE CERTIFICATE GIVEN BY HIM WHICH IS PLACED AT PAPER- BOOK PAGE 6. NEVERTHELESS THESE CERTIFICATES ARE IN THE NAME OF ONE MRS. PARAMESWARI AMMAL WHO AS PER THE LEARNED A.R. WAS THE EARLIER OWNER OF THESE PIECES OF LAND. WE ARE ALSO UNABLE TO ACCEPT THE CONTENTION OF THE LEARNED A.R. THAT THE QUESTION WH ETHER AGRICULTURAL OPERATIONS WERE CARRIED OUT WAS IRRELEVANT FOR DET ERMINING THE NATURE OF THE LAND. AS HELD BY HONBLE APEX COURT IN THE CASE OF SARIFA BIBI MOHD IBRAHIM AND OTHERS (SUPRA) WHETHER A LAND IS AGRICULTURAL OR NOT IS A QUESTION OF FACT. SEVERAL TESTS HAVE BEEN EVOLVED BY HONBLE APEX COURT FOR DETERMINING THE NATURE OF A LAND. H ONBLE APEX COURT IN THE ABOVE MENTIONED DECISION HAD CONSIDERED ITS EARLIER DECISION IN THE CASE OF CIT V. RAJA BENOY KUMAR SAHAS ROY (3 2 ITR 466) I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 9 WHEREIN IT WAS HELD THAT ONE OF THE FACTORS THAT WA S REQUIRED TO BE LOOKED INTO WAS WHETHER THERE WAS USE FOR THE PURPO SE OF AGRICULTURE. IT WAS NOT THE MERE POTENTIALITY BUT ITS ACTUAL AND INTENDED USE THAT WAS TO BE SEEN. MERE POSSIBILITY OF USE OF THE LAN D WAS NOT SUFFICIENT. THOUGH THE LEARNED A.R. STRONGLY RELIED ON A DECISI ON OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT V. SHRI SAYARCHAND NAHAR DATED 16 TH FEBRUARY 2012 THERE IN THE WEALTH TAX RETURNS FILED THE CONCERNED ASSESSEES HAD SHOWN TH E LAND AS AGRICULTURAL. ASST. COMMISSIONER OF URBAN LAND TAX HAD ALSO COME TO A CONCLUSION THAT THE LAND CONCERNED WAS AGRICUL TURAL AND AGRICULTURAL ACTIVITIES WERE CARRIED ON IN IT. HER E ON THE OTHER HAND ASSESSEES CONCERNED HAD NEVER PRODUCED ANYTHING TO SHOW THAT AGRICULTURAL ACTIVITIES WERE CARRIED ON. NEVERTHEL ESS AS MENTIONED BY US THE RECORDS PRODUCED BY THE ASSESSEES IN THE FO RM OF ADANGAL CHITTA AND PATTA DO MENTION THAT THE LAND WAS AGRI CULTURE IN NATURE AND CERTAIN CROPS WERE RAISED THEREIN THOUGH THE N AME MENTIONED IN SUCH RECORDS WAS OF ONE MRS. PARAMESWARI AMMAL. WE ARE OF THE OPINION THAT THE ISSUE HAS NOT BEEN DECIDED BY THE A.O. CONSIDERING THE GUIDELINES LAID DOWN BY HONBLE APEX COURT FOR DETERMINING THE NATURE OF LAND AND AFTER GOING THROUGH THE RELEVANT RECORDS IN DETAIL. EACH OF THE FACTORS THAT ARE TO BE CONSIDERED HAVE NOT BEEN DEALT WITH I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 10 BY THE ASSESSING OFFICER. CIT(APPEALS) ON THE OTH ER HAND GAVE RELIEF TO THE ASSESSEES BASED ON THEIR SUBMISSIONS AND IGNORING THE CERTIFICATE ISSUED BY ASST. COMMISSIONER URBAN LAN D TAX AS ALSO ASSESSEES OWN ADMISSION REGARDING USE OF THE LAND. WE ARE THEREFORE OF THE OPINION THAT THE MATTER REQUIRES TO BE RE-VISITED BY THE A.O. FOR CONSIDERATION AFRESH. IF THE ASSESSEE S ARE ABLE TO SHOW THAT AGRICULTURAL ACTIVITIES WERE CARRIED OUT AND THE INTENDED PURPOSE WAS TO USE THE LAND FOR AGRICULTURE AND IF OTHER CO NDITIONS SPECIFIED BY HONBLE APEX COURT ARE SATISFIED IN SUCH A WAY THAT A SAFE CONCLUSION CAN BE DRAWN THAT THE NATURE OF THE LAND WAS AGRICU LTURAL THEN THE ASSESSEES CANNOT BE CONSIDERED AS LIABLE FOR CAPITA L GAINS TAX ON SALE THEREOF. WE DO AGREE WITH THE LEARNED D.R. TH AT IT IS THE ONUS OF THE ASSESSEES TO SHOW THAT THE LAND WAS AGRICULTURA L IN NATURE. WE THEREFORE SET ASIDE THE ORDERS OF AUTHORITIES BELO W AND REMIT THE ISSUE BACK TO THE FILE OF THE A.O. FOR CONSIDERATIO N AFRESH IN ACCORDANCE WITH LAW. 9. IN THE RESULT APPEALS OF THE REVENUE ARE ALLOWE D FOR STATISTICAL PURPOSES. 10. CROSS-OBJECTIONS OF THE ASSESSEE BEING IN SUPP ORT OF THE ORDERS OF CIT(APPEALS) HAVE BECOME INFRUCTUOUS. I.T.A. NOS. 1160 & 1161/MDS/12 C.O. NOS. 112 & 113/MDS/12 11 11. TO SUMMARIZE THE RESULT APPEALS FILED BY THE R EVENUE ARE ALLOWED FOR STATISTICAL PURPOSES WHEREAS CROSS-OBJ ECTIONS FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON MONDAY TH E 30 TH OF JULY 2012 AT CHENNAI. SD/- SD/- (S.S. GODARA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 30 TH JULY 2012. KRI. COPY TO: (1) ASSESSEES (2) ASSESSING OFFICER (3) CIT(A)-XII CHENNAI-34 (4) CIT-X CHENNAI (5) D.R. (6) GUARD FILE