Brundaban Sahu, Ganjam v. ACIT, Berhampur

ITA 155/CTK/2010 | 2003-2004
Pronouncement Date: 16-09-2011

Appeal Details

RSA Number 15522114 RSA 2010
Assessee PAN AACHA8231P
Bench Cuttack
Appeal Number ITA 155/CTK/2010
Duration Of Justice 1 year(s) 4 month(s) 20 day(s)
Appellant Brundaban Sahu, Ganjam
Respondent ACIT, Berhampur
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 16-09-2011
Date Of Final Hearing 12-09-2011
Next Hearing Date 12-09-2011
Assessment Year 2003-2004
Appeal Filed On 26-04-2010
Judgment Text
IN THE INC O ME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE : SHRI K.K.GUPTA AM AND SHRI K.S.S.PRASAD RAO JM ITA NO. 155 156 AND 310/CTK/2010 (ASSESSMENT YEAR S2003 - 04 2004 - 05 AND 2006 - 07) BRUNDABAN SAHU HARADAKHANDI BERHAMPUR. PAN: AACH A 8231P VERSUS ASST.COMMISSIONER OF INCOME - TAX BERHAMPUR CIRCLE BERHAMPUR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI R.P.SAHU AR FOR THE RESPONDENT SHRI S.C.MOHANTY DR DATE OF HEARING : 12.09.2011 DATE OF PRONOUNCEMENT : 16.09.2011 ORDER SHRI K.S.S.PRASAD RAO JM : ALL THESE APPEALS ARE FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2003 - 04 2004 - 05 AND 2006 - 07 HAVING BEEN AGGRIEVED BY THE RESPECTIVE ORDERS PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE SAID YEARS. SI NCE ALL THE APPEALS ARE RELATING TO THE VERY SAME ASSESSEE AND INVOLVE MAJOR ISSUE COMMONLY IN ALL THE THREE YEARS THEY WERE TAKEN UP TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL IN THE RESPECTIVE AYS AS UNDER : ASSESSMENT YEAR 2003 - 04 : 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE FORUMS BELOW WERE UNJUSTIFIED IN TREATING THE FIRM HOUSE RENTAL INCOME AS REGULAR HOUSE PROPERTY INCOME AND CONSEQUENTLY ADDI NG A SUM OF 46 200 TO THE RETURNED INCOME. 2. THAT THE FIRM HOUSE IS SITUATED IN THE NEAR VICINITY OF AGRICULTURAL LAND MEANT FOR STORAGE OF AGRICULTURAL PRODUCTS SHOULD HAVE BEEN GIVEN EXEMPTION UNDER THE I.T.ACT. 3. THAT THE FORUMS BELOW WERE FULLY UNJUSTIFIED I N NOT ALLOWING CLAIM OF COMPENSATION TO DIFFERENT CULTIVATORS IN THE SHAPE OF DEMAND DRAFTS WHEN THE AMOUNTS WERE PAID FOR EVICTION OF THE LANDS WHICH COULD BE SOLD THEREAFTER. 4. THAT EVEN OTHERWISE THE DETERMINATION OF COST OF THE LAND SHOULD HAVE BEEN ENHANCED BY 4 890 000 AS HAS BEEN ITA NO.155 156 AND 310/CTK/2010 2 DETERMINED BY THE A.O. IN THE BLOCK ASSESSMENT ORDER PASSED U/S.158BC OF THE I.T.ACT FOR THE PERIOD FROM 1.4.1988 TO 18.1.1999. 5. THAT THE ORDER OF ASSESSMENT IS OTHERWISE ILLEGAL AND BAD IN LAW. 6. THAT THE QUANTUM OF ENHANCEMENT APART FROM BEING ARBITRARY WAS HIGH AND EXCESSIVE. 7. THAT FOR THESE AMONG OTHER GROUNDS TO BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS FOR ADEQUATE RELIEF IN THE INTEREST OF EQUITY AND JUSTICE. ASSESSMENT YEAR 2004 - 05: 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE FORUMS BELOW WERE UNJUSTIFIED IN TREATING THE FIRM HOUSE RENTAL INCOME AS REGULAR HOUSE PROPERTY INCOME AND CONSEQUENTLY ADDING A SUM OF 51 800 TO THE RETURNED INCOME. 2. THAT THE FIRM HOUSE IS SITUATED IN THE NEAR VICINITY OF AGRICULTURAL LAND AND IS MEANT FOR STORAGE OF AGRICULTURAL PRODUCTS AND AS SUCH THE RENTAL INCOME IS EXEMPT FROM TAX. THEREFORE THE ADDITION OF 51 800 IS NOT SUST AINABLE IN LAW. 3. THAT THE TELEPHONE EXPENSES AT 78 501 AND ALLOWED BY THE CIT(A) AT 42 057 APART FROM BEING ARBITRARY WAS HIGH AND EXCESSIVE. 4. THAT SINCE THE STAMP DUTY AND REGISTRATION FEES WERE BORNE AND MET BY THE SELLING DEALERS OF PROPERTIES ADDING A SUM OF 2 75 684 AS INCOME OF THE APPELLANT IS NOT AT ALL CORRECT. 5. THAT THE ORDERS PASSED BY THE FORUMS BELOW ARE OTHERWISE ILLEGAL AND BAD IN LAW. 6. THAT THE QUANTUM OF ASSESSMENT APART FROM BEING ARBITRARY WAS HIGH AND EXCESSIVE. 7. THAT FOR THESE AMONG OTHER GROUNDS TO BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS FOR ADEQUATE RELIEF IN THE INTERST OF EQUITY AND JUSTICE. ASSESSMENT YEAR 2006 - 07 : 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASES THE LEARNED CIT(A) WAS UNJU STIFIED IN ALLOWING 58 000 AS AGAINST 1 36 000 CLAIMED BY THE APPELLANT TOWARDS AGRICULTURAL INCOME WITHOUT ANY BASIS. 2. THAT THE LEARNED CIT(A) SHOULD HAVE ALLOWED AGRICULTURAL INCOME CLAIMED BY THE APPELLANT AT 1 36 000 IN FULL. ITA NO.155 156 AND 310/CTK/2010 3 3. THAT THE ORDERS PASSED BY THE FORUMS BELOW ARE OTHERWISE ILLELGAL AND BAD IN LAW. 4. THAT FOR THESE AMONG OTHER GROUNDS TO BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS FOR ADEQUATE RELIEF IN THE INTEREST OF EQUITY AND JUSTICE . 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RA ISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4. THE COMMON ISSUE IN ALL THESE APPEALS IS THAT ALL THE INCOME RECEIVED BY THE ASSESSEE IS RENT IN LETTING HIS FIRM HOUSE WHETHER IS AGRICULTURAL INCOME OR OTHERWISE. 5. ON CAREFUL CONSIDERATION OF THE MA TERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES THE UNDISPUTED FACTS ARE THAT THE ASSESSEE IS OWNING LANDED PROPERTY AND ALSO HAVING A FIRM HOUSE APPERTAINED TO THE LANDED PROPERTY FOR KEEPING AGRICULTURAL IMPLEMENTS AND OTHER STORES AND THE ASSESSEE HAS LET OUT THIS FIRM HOUSE AND THEREBY DERIVED RENTAL INCOME. THE ASSESSEE CLAIMED THIS AS AGRICULTURAL INCOME AND THEREBY NOT TAXABLE UNDER THE I.T.ACT. THE DEPARTMENT IS OF THE VIEW THAT SINCE THE INCOME IS DERIVED BY LETTING OUT FIRM HOUSE IT SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY ONLY. BUT THE ASSESSEE RELYING ON THE DEFINITION OF RENT GIVEN IN SECTION 2(1A) OF THE I.T.ACT CLAIMS THAT THIS BEING THE RENT DERIVED FROM LETTING O UT THE FIRM HOUSE APPERTAINING TO THE LAND AND USED AS PLACE FOR STORING AGRICULTURAL IMPLEMENTS AND OTHER CONNECTED STORES IS AGRICULTURAL INCOME. THE ASSESSEE HAS ENTERED INTO AGREEMENT WITH THE LESSEE FOR LETTING OUT THE LAND ALONG WITH THE FIRM HOUSE BUT BOTH THE DEPARTMENTAL AUTHORITIES HAVE NOT CONSIDERED THE SAID AGREEMENTS BETWEEN THE ASSESSEE AND THE LESSEES FOR DECIDING THE NATURE OF THE RENT. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT ISSUE TO BE SET ASIDE TO THE ASSESSING OFFIC ER FOR DE NOVO CONSIDERATION IN THE ITA NO.155 156 AND 310/CTK/2010 4 LIGHT OF THE AGREEMENT ENTERED BY THE ASSESSEE WITH THE LESSEES AND PASS CONSEQUENTIAL ORDER STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. WITH THIS DIRECTION WE RESTORED THE ISSUE TO THE FILE OF THE ASSESSING O FFICER. 6. THE OTHER COMMON ISSUE IN ALL THE THREE AYS UNDER CONSIDERATION IS THAT THE CALCULATION OF LONG TERM CAPITAL GAIN ON THE AMOUNT OF COMPENSATION RECEIVED BY THE ASSESSEE FOR ACQUISITION OF LAND BY THE NATIONAL HIGHWAYS AUTHORITIES OF INDIA FOR L AYING NH ROAD. BUT BEFORE THE ACQUISITION HE LET OUT THAT PIECE OF LAND TO THE AGRICULTURISTS WHO HAVE CONSTRUCTED SOME SHEDS THEREON FOR KEEPING AGRICULTURAL IMPLEMENTS AND CROPS ETC. ON ACQUISITION THE ASSESSEE WAS MADE TO PAY THE AMOUNT OF COST INCURR ED BY THOSE LESSEES FOR THESE SHEDS FROM OUT OF THE COMPENSATION GIVEN TO HIM BY THE NH AUTHORITIES OF INDIA. SO HE CLAIMS THAT THE AMOUNT PAID BY HIM TO THE LESSEE IS TO BE ALLOWED AS COST OF THE LAND. BUT THE DEPARTMENT IS NOT AGREED WITH THE CONTENTION OF THE ASSESSEE. ON CAREFUL CONSIDERATION OF THE MATERIALS MADE AVAILABLE BEFORE THE TRIBUNAL AND CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES RELATING TO THE ISSUE WE FIND THAT NONE OF THE DEPARTMENTAL AUTHORITIES HAVE FOUND ANYTHING ABOUT THE CORRECTN ESS OF THE CLAIM OF THE ASSESSEE OF LEASING OF THAT PIECE OF LAND TO THE TENANT AND CONSTRUCTION OF SHED BY THEM FOR KEEPING AGRICULTURAL IMPLEMENTS ETC. THIS IS AN IMPORTANT ASPECT THAT REQUIRES TO BE CONSIDERED FOR ARRIVING AT THE CORRECT AMOUNT OF CAPIT AL GAINS TAXABLE IN THE HAND OF THE ASSESSEE. THEREFORE WE SET ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO ASCERTAIN AS TO WHETHER THE ASSESSEE HAD LEASED THE PIECE OF LAND TO THE TENAN T AND THEY HAVE RAISED THE SHED THEREON FOR KEEPING AGRICULTURAL IMPLEMENTS AND ON ACQUISITION OF THE SAID LAND BY THE NH AUTHORITIES THOSE SHEDS HAVE BEEN REMOVED AND THE ASSESSEE WAS MADE TO PAY THAT AMOUNT OF COMPENSATION RELATING TO THE SHEDS TO THE TE NANTS AND ITA NO.155 156 AND 310/CTK/2010 5 ALSO VERIFY WHETHER THE ASSESSEE HAS INCURRED THE STAMP DUTY AND REGISTRATION OF THE LAND PURCHASED BY THE ASSESSEE AND THEREAFTER PASS NECESSARY CONSEQUENTIAL ORDERS STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. 7. THE ONLY ISSUE REMAINED TO BE ADJUDICATED FOR THE ASSESSMENT YEAR 2004 - 05 IN ITA NO.156/CTK/2010 IS THAT OF DISALLOWANCE OF TELEPHONE EXPENSES CLAIMED BY THE ASSESSEE IN THAT ASSESSMENT YEAR. 8. ACCORDING TO THE MATERIAL AVAILABLE TO THE TRIBUNAL THE UNDISPUTED FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAS CLAIMED TELEPHONE EXPENSES OF 95 320 IN THE P & L ACCOUNT. WHEN ASKED BY THE ASSESSING OFFICER THE ASSESSEE HAS GIVEN THE DETAILS AND AS PER THOSE DETAILS THE ASSESSEE COULD GIVE DETAILS F OR 16 819 ONLY. THEREFORE THE ASSESSING OFFICER HAS ALLOWED THAT AMOUNT ONLY AND DISALLOWED THE REST OF 75 501. IN APPEAL BEFORE THE LEARNED CIT(A) IT WAS MADE OUT THAT THE ASSESSEE HAVING TELEPHONE CONNECTIONS AT HIS RESIDENCE AND BILLS OF THOSE TELEPH ONES ALSO INCLUDED IN THIS AMOUNT. SO THE LEARNED CIT (A) RESTRICTED THE DISALLOWANCE TO 36 444 BY HOLDING THAT 1/4 TH OF 78 501 RELATES TO PERSONAL USAGE OF TELEPHONE BY THE ASSESSEE. BEFORE US THE ASSESSEE CONTENDED THAT SUCH DISALLOWANCE ON THE GROUND OF PERSONAL USAGES IS NOT PERMISSIBLE UNDER LAW BUT HE IS NOT ABLE TO SUBSTANTIATE THAT CONTENTION. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE ULTIMATE DISALLOWANCE OF 36 444 UPHELD BY THE LEARNED CIT(A) IS VERY MUCH REASONABLE AND HENCE WE HEREBY CONFIRM THE SAME BY FINDING THE ISSUE RAISED BY THE ASSESSEE AS DEVOID OF MERITS. ITA NO.155 156 AND 310/CTK/2010 6 9. IN THE RESULT ALL THESE APPEALS ARE ALLOWED PARTLY FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 12.09.2011 H.K.PADHEE SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: BRUNDABAN SAHU HARADAKHANDI BERHAMPUR. 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX BERHAMPUR CIRCLE BERHAMPUR. 3. THE CIT 4. THE CIT(A) 5. THE DR CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY.