ITO, JODHPUR v. Smt. Usha Chhajer, JODHPUR

ITA 216/JODH/2013 | 2009-2010
Pronouncement Date: 22-10-2013 | Result: Dismissed

Appeal Details

RSA Number 21623314 RSA 2013
Assessee PAN AGHPC6194J
Bench Jodhpur
Appeal Number ITA 216/JODH/2013
Duration Of Justice 6 month(s) 13 day(s)
Appellant ITO, JODHPUR
Respondent Smt. Usha Chhajer, JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 22-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-10-2013
Date Of Final Hearing 21-10-2013
Next Hearing Date 21-10-2013
Assessment Year 2009-2010
Appeal Filed On 08-04-2013
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K. SAINI ACCOUNTANT MEMBER. ITA NO.216/JODH/2013 (A.Y. 2009-10) ITO WARD-3(3) VS. SMT. USHA CHHAJER JODHPUR. PALASANI HAVELI MANAK CHOWK JODHPUR. PAN NO. AGHPC 6194 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 21/10/2013. DATE OF PRONOUNCEMENT : 22/10/2013. O R D E R PER N.K.SAINI A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 06/02/2013 OF LD. CIT (A) JODHPUR. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: UNDER THE FACTS & CIRCUMSTANCE IN THE CASE THE CI T(A) HAS ERRED IN- 1. DELETING THE PROFIT EARNED RS. 35 00 000/- ON TH E SALE OF AGRICULTURE LAND IGNORING THE FACTS DISCUSSED BY AO AND CIRCUMS TANTIAL EVIDENCES 2 WHICH SHOW THAT THE TRANSACTION WAS IN THE NATURE O F ADVENTURE IN TRADE. 2. TREATING THE PURCHASE OF LAND AS INVESTMENT WHER EAS THE ASSESSEE NEVER DID AGRICULTURE ACTIVITY ON THE LAND BUT IMME DIATELY SOLD WITHIN 17 MONTHS ON A PROFIT OF RS. 35 00 000/- WHICH CONS TITUTE THE TRANSACTION AS ADVENTURE IN THE NATURE OF TRADE WIT H THE INTENTION TO EARN THE PROFIT. 3. DELETING THE INTEREST INCOME RS. 67 665/- EARNED BY THE ASSESSEE AS ACCRUED INTEREST ON FDR ON MERE PLEA OF THE ASSESSE E THAT INTEREST WAS NOT ACCRUED. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD AMEND OR ALTER THE GROUNDS OR APPEAL ON OR BEFORE THE DATE OF THE APPEAL IS FINAL LY HEARD. 2. THE ISSUE VIDE GROUNDS NO. 1 & 2 RELATES TO THE DE LETION OF ADDITION OF RS. 35 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALE OF AGRICULTURE LAND. 3. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE WAS ENGAGED IN TRADING OF OLD AND NEW BARDANA AND FILED RETURN OF INCOME ON 06/01/2010 DECLARING AN INCOME OF RS. 2 16 392/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SOLD AN AGR ICULTURAL LAND SITUATED AT KHASRA NO. 371 VILLAGE PAL TEHSIL AND DISTRICT JODHPUR MEASURING 44 BIGHA 01 BISWA ON 05/12/2008 FOR A CONSIDERATION OF RS. 45 00 000/- AND THE SAID LAND WAS PURCHASED BY THE ASSESSEE ON 04/0 7/2008 FOR A CONSIDERATION OF RS. 10 00 000/-. THE SUBMISSIONS OF THE ASSESSEE BEFORE 3 THE ASSESSING OFFICER WAS THAT THIS LAND BEING AN A GRICULTURAL LAND WAS NOT A CAPITAL ASSET UNDER SECTION 2(14) OF THE I.T. ACT 1961 (HEREINAFTER REFERRED TO AS ACT IN SHORT) AND THE PROFIT EARN ED FROM THIS TRANSACTION WAS NOT TAXABLE AS CAPITAL GAIN. THE ASSESSEE ALSO SUBMITTED THAT THIS LAND WAS RURAL AGRICULTURAL LAND SITUATED AT VILLAG E PAL WHICH WAS APPROXIMATELY 13 KMS. AWAY FROM JODHPUR. 4. THE ASSESSING OFFICER IN ORDER TO EXAMINE THE ISSU E WHETHER THE LAND IN QUESTION WAS AN AGRICULTURAL/RURAL LAND OR WAS AN URBAN LAND WROTE LETTERS TO THE MUNICIPAL COMMISSIONER AND TEH SILDAR JODHPUR IN RESPONSE THE MUNICIPAL COMMISSIONER VIDE LETTER NO . 9900 DATED 22/11/2011 CERTIFIED THAT THE SAID LAND DID NOT FAL L WITHIN THE MUNICIPAL LIMIT OF NAGAR NIGAM JODHPUR. HE ALSO ENCLOSED THE COPY OF NOTIFICATION PUBLISHED IN RAJASTHAN GAZETTE DATED 06/02/2009. THE PATWARI OF THE VILLAGE PAL IN RESPONSE TO THE LETTER WRITTEN TO T EHSILDAR JODHPUR STATED VIDE LETTER DATED 18/11/2011 THAT KHASRA NO. 371 VI LLAGE PAL WAS KHATEDARI LAND AND SITUATED AT 13 KMS. AWAY FROM THE LIMITS OF NAGAR NIGAM JOHPUR. THE ASSESSING OFFICER ASKED THE ASS ESSEE TO CLARIFY THE PURPOSE FOR THE PURCHASE AND SALE OF THE AGRICULTUR AL LAND. THE ASSESSEE SUBMITTED THAT THE PURPOSE FOR PURCHASE OF THIS LAN D WAS AGRICULTURE BUT THE WATER LEVEL WAS FOUND VERY THIN AND THERE WERE NO DESIRED RESULTS 4 FROM THE AGRICULTURAL LAND THEREFORE THE ASSESSEE DECIDED TO SALE THE AGRICULTURAL LAND AND THAT THE ASSESSEE WAS NOT DOI NG BUSINESS OF SALE AND PURCHASE OF LAND. IT WAS STATED THAT THE KHASRA GI RDAVARI REVEALED THAT THE CROPS WERE PRODUCED FOR THE LAST 08 YEARS. HOWE VER THE ASSESSING OFFICER WAS NOT SATISFIED FROM THE EXPLANATION OF T HE ASSESSEE BY OBSERVING THAT THE TRANSACTION MADE BY THE ASSESSEE WAS ADVENTURE IN NATURE OF TRADE AND IT COULD NOT BE PRESUMED THAT T HE ASSESSEE WHO ALLEGED TO BE AN AGRICULTURIST WOULD NOT BE AWARE O F THE NATURE AND CHARACTER OF THE LAND HE WAS PURCHASING PARTICULARL Y WHEN THE LAND WAS PURCHASED FOR AGRICULTURE PURPOSES. HE WAS OF THE VIEW THAT THE ASSESSEE DID NOT HAVE ANY INTENTION TO HOLD THE LAND PURCHAS ED AS HER INVESTMENT AND TO CARRYOUT AGRICULTURAL ACTIVITIES. HE THERE FORE DID NOT ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 2(14) OF THE AC T AND MADE THE ADDITION OF RS. 35 00 000/-. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT AND SUBMITTED THAT SHE HAD PURCHASED THE AGRICU LTURAL LAND FOR THE PURPOSE OF CULTIVATION AND TO GROW VARIOUS TYPES OF GRAINS FRUITS AND VEGETABLES FOR THE FAMILY WITHOUT THE AID OF ANY CH EMICAL FERTILIZER. IT WAS FURTHER STATED THAT THE SAID LAND WAS CULTIVATE D IN PAST BY THE PREVIOUS OWNERS AND WAS SUBJECT TO LAND REVENUE. I T WAS STATED THAT THE 5 ASSESSEE TREATED THE LAND AS CAPITAL INVESTMENT IN HER BOOKS OF ACCOUNTS AND COULD ONLY GROW THE CROP OF BAJRA AS THERE WAS NO SUITABLE WATER UNDER THE LAND WHICH WAS REQUIRED TO GROW VEGETABL E FRUIT PULSES ETC. IT WAS STATED THAT THE CAPITAL GAIN ON THE SALE OF THE SAID AGRICULTURAL LAND WAS NOT TAXABLE AS PER THE PROVISIONS OF CLAUSE (II I) OF THE SUB-SECTION (14) OF SECTION 2 OF THE ACT. IT WAS ALSO STATED THAT T HE INTENTION OF THE ASSESSEE WAS TO MAKE INVESTMENT AND TO CULTIVATE TH E AGRICULTURAL LAND WHICH HAS TO BE ACCEPTED AS CORRECT UNLESS IT WAS F OUND THAT THE ASSESSEES INTENTION WAS TO EARN PROFIT. RELIANCE WAS PLACED ON THE FOLLOWING CASE-LAWS:- 1. ITAT HYDERABAD BENCH IN THE CASE OF MS. K. RADH IKA & ORS. VS. DCIT REPORTED IN 65 DTR. 2. HON'BLE MP HIGH COURT IN THE CASE OF CIT VS. SUR ESH CHANDRA GOYAL REPORTED IN 163 TAXMAN. 3. HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. DEBBIE ALEMO REPORTED IN 331 ITR 59 (BOM.) 4. ITAT JODHPUR BENCH IN THE CASE OF SHANTI LAL SON I. 5. HON'BLE DELHI HIGH COURT IN THE CASE OF DLF HOUS ING AND CONSTRUCTION (P) LTD. VS. CIT REPORTED IN 141 ITR. 6. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE OBSERVED THAT THE LAND IN QUESTION WAS AGRICULTURAL LAND AND THAT FROM 6 THE VARIOUS ENQUIRIES CONDUCTED BY THE ASSESSING OF FICER FROM THE GOVERNMENT AUTHORITIES IT PROVED THAT THE LAND WAS SITUATED 13 KMS. AWAY FROM THE MUNICIPAL LIMITS OF JODHPUR AND THIS FACT WAS NOT DISPUTED BY THE ASSESSING OFFICER. LEARNED CIT(A) FURTHER O BSERVED THAT FROM THE KHASRA GIRDAVARI IT WAS CLEAR THAT THE LAND IN QUE STION WAS AN AGRICULTURAL LAND AND THE CONTENTION OF THE ASSESSI NG OFFICER THAT THE INTENTION OF THE ASSESSEE WAS OF PROFIT MOTIVE WAS WITHOUT ANY MERIT BECAUSE THE ASSESSING OFFICER HAD NOT GIVEN ANY MAT ERIAL/EVIDENCE IN SUPPORT OF HIS CONTENTION. LEARNED CIT(A) ACCORDING LY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DE PARTMENT IS IN APPEAL. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE LAND IN QUEST ION PURCHASED BY THE ASSESSEE WAS AN AGRICULTURAL LAND AND THE KHASRA GI RDAVARI REVEALED THAT IT WAS USED TO CULTIVATE THE AGRICULTURAL PRODUCE. THIS LAND WAS SITUATED 13 KMS. AWAY FROM THE MUNICIPAL LIMITS OF JODHPUR IN THIS REGARD THE MUNICIPAL COMMISSIONER AND THE HALKA PATWARI REPORT ED TO THE ASSESSING OFFICER DIRECTLY. THEREFORE IT WAS AN ESTABLISHED FACT THAT THE SITUATION OF THE LAND WAS MORE THAN 08 KMS. AWAY FROM THE MUN ICIPAL LIMITS OF 7 JODHPUR. THEREFORE AS PER THE PROVISIONS CONTAINE D IN SECTION 2(14)(III)(A) OF THE ACT THE PRESENT LAND BEING AG RICULTURAL LAND SITUATED BEYOND 08 KMS. OF THE MUNICIPAL LIMITS WAS NOT A CA PITAL ASSET THEREFORE THE PROFIT EARNED BY THE ASSESSEE ON THE SALE OF TH E SAID LAND WAS NOT A CAPITAL GAIN. MOREOVER THIS WAS THE FIRST TRANSAC TION OF THE ASSESSEE WITH A SOLE INTENTION TO KEEP THE LAND AVAILABLE FOR CUL TIVATION. IN OUR OPINION THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE PROFIT EARNED BY THE ASSESSEE ON THE LAND IN QUESTION AS BUSINESS PROFIT . WE THEREFORE CONSIDERING THE TOTALITY OF THE FACTS ARE OF THE VI EW THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THIS ISSUE AGITATED BY THE DEPARTMENT. 8. THE NEXT ISSUE VIDE GROUND NO.3 RELATES TO THE DELE TION OF INTEREST INCOME OF RS. 67 665/-. 9. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS NOT ICED THAT THE ASSESSEE HAD MADE FDR OF RS. 10 00 000/- WITH UNION BANK OF INDIA AND ACCRUED INTEREST AT THAT FDR WAS AT RS. 67 665/- S INCE THE ASSESSEE HAD 8 NOT SHOWN THAT ACCRUED FDR INTEREST IN THE RETURN O F INCOME THE ASSESSING OFFICER MADE THE ADDITION OF THE IMPUGNED AMOUNT. 10. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT THE INTEREST ON FDR WAS N OT ACCRUED BEING 12 MONTHS DID NOT EXPIRE AS ON 31/10/2009 FROM THE DAT E OF PURCHASE OF FDR. IT WAS FURTHER STATED THAT SINCE THE INTEREST ON FDR WAS NOT ACCRUED THEREFORE THE ASSESSING OFFICER WAS NO JU STIFIED TO MAKE THE ADDITION. LEARNED CIT(A) AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE DELETED THE ADDITION. NOW THE DEPARTMENT IS IN APPEAL. 11. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING O FFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW. 12. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES IT APPEARS THAT THE ASSESSEE PURCHASED FDR AMOUNTING TO RS. 10 00 000/- FOR 12 MONTHS AND THE PERIOD OF 12 MONTHS FROM THE DATE OF PURCHASE OF THE FDR WAS GOING TO BE EXPIRED ON 31/10/2009 THEREFORE M ATURITY DATE WAS NOT FALLING WITHIN THE PERIOD RELEVANT TO THE ASSESSMEN T YEAR UNDER CONSIDERATION. THEREFORE THE ASSESSING OFFICER WA S NOT JUSTIFIED IN MAKING THE ADDITION ON THE BASIS OF NOTIONAL INCOME ACCRUED TO THE 9 ASSESSEE. IN OUR OPINION LEARNED CIT(A) RIGHTLY D ELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE DO NOT SEE ANY M ERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 13. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMISSE D. (ORDER PRONOUNCED IN THE COURT ON 22 ND OCTOBER 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND OCTOBER 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R. ASSISTANT REGISTRAR ITAT JODHPUR.