ITO,Ward 4(1),, Hyderabad v. Smt. Uma Ravinder Reddy, Hyderabad

ITA 265/HYD/2014 | 2007-2008
Pronouncement Date: 31-07-2014 | Result: Dismissed

Appeal Details

RSA Number 26522514 RSA 2014
Assessee PAN ABMPM7563R
Bench Hyderabad
Appeal Number ITA 265/HYD/2014
Duration Of Justice 5 month(s) 7 day(s)
Appellant ITO,Ward 4(1),, Hyderabad
Respondent Smt. Uma Ravinder Reddy, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-07-2014
Assessment Year 2007-2008
Appeal Filed On 21-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA NO. 265/HYD/2014 ASSESSMENT YEAR 2007-08 THE INCOME TAX OFFICER WARD-4(1) HYDERABAD VS. SMT. M. UMA RAVINDER REDDY HYDERABAD PAN: ABMPM7563R APPELLANT RESPONDENT C.O. NO. 22/HYD/2014 IN ITA NO. 265/HYD/2014 ASSESSMENT YEAR 2007-08 SMT. M. UMA RAVINDER REDDY HYDERABAD PAN: ABMPM7563R VS. THE INCOME TAX OFFICER WARD-4(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI R. MOHAN REDDY RESPONDENT BY: SRI A.V. RAGHU RAM DATE OF HEARING: 09 .0 7.2014 DATE OF PRONOUNCEMENT: 31 .07.2014 ORDER PER ASHA VIJAYARAGHAVAN J.M.: THE ABOVE APPEAL BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE CIT(A)-V HYDERABAD DATED 28.10.20 13 AND THE CROSS OBJECTION (CO) BY THE ASSESSEE AGAINS T THE APPEAL OF THE REVENUE. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 31.3.2008 FOR A.Y. 2007-08 DECLARING INCO ME OF RS. 87 878. THE ASSESSMENT WAS COMPLETED U/S. 143( 3) R.W.S. 147 OF THE INCOME-TAX ACT 1961 DETERMINING THE INCOME AT RS. 2 23 58 107 BY MAKING ADDITION OF RS. 2 22 70 229 TOWARDS LONG TERM CAPITAL GAINS ON SALE OF 2 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= AGRICULTURAL LAND FOR A TOTAL SALE CONSIDERATION OF RS. 2 29 75 000. 3. FACTS OF THE CASE ARE THAT A SURVEY U/S. 133A OF TH E ACT WAS CONDUCTED IN THE CASE OF M/S. SRI SURAKSHIT A HOMES A FIRM ENGAGED IN THE BUSINESS OF REAL ESTAT E BY THE ITO WARD-11(2) HYDERABAD CERTAIN INCRIMINATIN G MATERIAL WITH REGARD TO SALE OF LANDS BY THE ASSESS EE TO THE ABOVE FIRM WAS FOUND AND FORWARDED THE SAME TO THE PRESENT ASSESSING OFFICER. AS PER THAT INFORMATION THE ASSESSEE SOLD LANDS AT AUSHAPUR VILLAGE GHATKESAR MANDAL RANGAREDDI DISTRICT FOR A CONSIDERATION OF RS. 2.39 CRORES INCLUDING COMMISSION OF RS. 3 LAKHS PER ACRE FOR 7 ACRES 10 GUNTAS. AS PER ANNEXURE 1B/SH/06 PA GE 57 THE ASSESSEE WAS PAID AN AMOUNT OF RS. 2 17 50 000 FOR ACRES 7.10 GUNTAS @ RS. 30 LAKHS PER ACRE AND RS. 21. 75 LAKHS TOWARDS COMMISSION @ 3 LAKHS PER ACRE TOTALLING TO R S . 2 39 00 000. THE ABOVE TRANSACTION WAS EXECUTED THROUGH A REGISTERED SALE DEED DOCUMENT N O . 18495/06 DATED 4-11-2006 IN S U B-REGISTRAR'S OFFICE GHATKESAR. SINCE THE ASSESSEE DID NOT DECLARE ANY CAPITAL GAIN S ON SALE OF THE ABOVE LANDS THE AO HELD THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT AND HENCE REOPENED THE ASSESSMENT U/S 147 OF THE ACT. 4. DURING THE ASSESSMENT PROCEEDINGS IN REPLY TO SHOW-CAUSE NOTICE THE ASSESSEE SUBMITTED THE FOLLOW ING AS TO WHY THE SALE CONSIDERATION OF RS. 2.39 CRORES SHOULD NOT BE BROUGHT TO TAX UNDER THE HEAD LONG TERM CAPI TAL GAINS: 'AT THE OUTSET I SUBMIT THAT THE LAND ADMEASURING AC. 7-10 GUNTAS SITUATED IN 3 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= AUSHAPUR VILLAGE & GRAM PANCHAYAT GHATKESAR MANDAL R. R. DISTRICT IS AGRICULTURAL LAND AS LAND IS NOT AN ASSET WITHIN THE MEANING OF SECTION 2(14) THE GAIN ARISING ON SALE OF SUCH LAND IS EXEMPTED FROM CAPITAL GAIN. HENCE I HUMBLY REQUEST YOUR GOOD-SELVES NOT TO SUBJECT THE IMPUGNED GAINS TO TAX. I SUBMIT THAT THE SALE CONSIDERATION MENTIONED SALE DEED IS RS. 65 25 000 ONLY BUT NOT RS. 77 50 000 AS STATED IN YOUR SHOW CAUSE NOTICE. I ALSO SUBMIT THAT IT IS NOT TRUE TO SAY THAT I HAVE RECEIVED RS. 2.39 CRORES FROM THE PURCHASERS. I AM HEREWITH ENCLOSING A COPY OF THE SALE DEED. I FURTHER SUBMIT THAT I HAVE RECEIVED A SALE CONSIDERATION OF RS. 65 25 000 ONLY FROM M/S. SRI SURAKSHITA HOMES BY WAY OF POST DATED CHEQUES AS UNDER: DALE CHQ. NO. BANK AMOUNT 10.12.2006 138754 DEVELOPMENT CREDIT BANK 20 25 00 0 05.01.2007 138755 DEVELOPMENT CREDIT BANK 45 00 00 0 AT THIS JUNCTURE I BRING TO YOUR KIND NOTICE THOUGH IT HAS BEEN MENTIONED IN THE SALE DEED THAT THE PURCHASERS HAVE PAID THE SALE CONSIDERATION NO MENTION HAS BEEN MADE THEREIN THE MODE OF PAYMENT. TO AVOID FUTURE DISPUTES AND MISUNDERSTANDINGS WE HAVE ENTERED INTO A MEMORANDUM OF UNDERSTANDING REGARDING THE MODE OF PAYMENT OF SALE CONSIDERATION ON THE SAME DAY I.E. 04.11.2006 ON WHICH THE SALE DEED HAS BEEN EXECUTED. A COPY OF THE SAME IS ENCLOSED. OUT OF THE ABOVE TWO PAYMENTS CHQ. NO. 138755 TO RS. 45 00 000 WAS NOT HONOURED BY THE PURCHASERS. INSTEAD THEY MADE PART PAYMENT BY WAY OF CHEQUE & PART PAYMENT BY WAY OF CASH THE DETAILS OF WHICH HAVE ALREADY BEEN AT THE TIME OF EARLIER HEARING. I SUBMIT THAT I HAVE NOT RECEIVED THE VARIOUS SUMS AS MENTIONED IN YOUR LETTER [PARA 3(B). I REITERATE THAT I HAVE RECEIVED ONLY RS. 4 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= 65 25 000 AS SALE CONSIDERATION AS AGREED IN THE SALE DEED' 5. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE ALSO SUBMITTED A NOTE ON EXEMPTION ON CAPITAL GAINS WHICH IS AS UNDER: 'DURING THE COURSE OF HEARING ON 22.01.2013 YOUR GOOD-SELVES HAVE ASKED ME TO EXPLAIN WHY THE AGRICULTURAL LAND SOLD BY ME IS NOT A CAPITAL ASSET. IN THIS REGARD I SUBMIT THAT THE LAND WHICH WAS SOLD BY ME IS SITUATED IN A GRAM PANCHAYAT AND VILLAGE KNOWN AS AUSHAPUR. THERE ARE NO NOTIFIED MUNICIPALITIES NEAR THE VILLAGE. YOUR GOOD-SELVES HAVE EXPRESSED THAT GHATKESAR IS A MUNICIPALITY. I SUBMIT THAT GHATKESAR IS NOT A MUNICIPALITY EVEN TODAY. HENCE I HUMBLY SUBMIT THAT THE LAND WHICH WAS SITUATED IN THE VILLAGE AND GRAM PANCHAYAT KNOWN AS AUSHAPUR AND THE LANDS AND THE LAND WAS RECORDED AS AGRICULTURAL LANDS IN THE VILLAGE ADANGAL/ PAHANI. TO REINFORCE MY SUBMISSIONS I DRAW YOUR KIND ATTENTION TO NOTIFICATION UNDER SECTION 2(1A)(C) PROVISO CLAUSE (II)(B) AND SECTION 2(14)(III)(B) - NOTIFICATION NO. 50 DATED 6 TH JANUARY 1994 WHEREIN THE MUNICIPALITIES ARE NOTIFIED FOR THE PURPOSE OF SECTION 2(14)[1994] 205 ITR (STAT) 121. IT IS OBVIOUS THAT GHATKESAR DID NOT FIND ANY PLACE IN THE SAID NOTIFICATION. EVEN TODAY THE SAID NOTIFICATION IS IN FORCE. ACCORDINGLY I HUMBLY REITERATE THE FACT THAT THE LAND WHICH WAS SOLD BY ME AND WHICH WAS SITUATED IN AUSHAPUR VILLAGE AND GRAM PANCHAYAT IS PURELY AN AGRICULTURAL LAND AND THE GAINS DERIVED FROM SALE OF SUCH LAND ARE EXEMPTED FROM CAPITAL GAINS UNDER THE PROVISIONS OF INCOME-TAX ACT 1961' 6. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE THE ASSESSING OFFICER IN ORDER TO ASCERTAIN WHETHER THE LANDS IN QUESTION ARE AGRICULTURAL LANDS OR OTHERWI SE 5 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= ASKED THE ASSESSEE TO FURNISH THE DETAILS BY LETTER DATED 28.1.2013 THE DETAILS ASKED BY THE ASSESSING OFFIC ER WERE AS UNDER: (A) PATTADAR PASSBOOK (B) NAME OF THE CROPS GROWN FOR THE LAST THREE YEARS IN THE SAID LAND. (C) BILLS/VOUCHERS ETC. FOR EXPENDITURE AND SALE OF AGRICULTURAL PRODUCE. (D) PROOF IN SUPPORT OF TAXES PAID ON THESE AGRICULTURAL LANDS. 7. THE ASSESSING OFFICER HELD THAT THE LANDS WERE CONVERTED INTO PLOTS. FROM THE LETTER WHICH WAS ADDRESSED TO MRO GHATKESAR MANDAL VIDE LETTER OF E VEN NO DATED 28.01.2013 REQUESTING TO FURNISH THE DETA ILS OF THE LANDS IN QUESTION ALONG WITH SURVEY NUMBERS AND REQUESTED TO CONFIRM WHETHER ANY AGRICULTURAL ACTIV ITY WAS BEING CARRIED OUT IN THE SAID LANDS DURING THE PERI OD 2002 TO 2006. IN RESPONSE TO THIS THE TAHSILDAR GHATK ESAR MANDAL VIDE HIS LETTER NO. B/84/13 DATED NIL.02.201 3 FURNISHED THE INFORMATION WHICH IS REPRODUCED HERE AS UNDER: 'I INVITE YOUR ATTENTION TO THE REFERENCES CITED AND IT IS TO INFORM THAT THE VRO AUSHAPUR VILLAGE GHATKESAR HAVE ENQUIRED INTO THE MATTER AND REPORTED THE SY. NO. WISE DETAILS: S. NO. SY. NO. EXTENT (AC. GTS) REMARKS 2. 252 1 - 21 COVERED INTO PLOTS 3. 257 1 - 28 COVERED INTO PLOTS AND SOME EXTENT PADAVA. 4. 262 0 - 21 COVERED INTO PLOTS. 5. 263 0 - 07 COVERED INTO PLOTS 6. 352 0 - 10 PADAVA 7. 353 0 - 01 PADAVA AND SOME EXTENT IS COVERED INTO UNDER BY-PASS ROAD. 8 260 2 - 10 COVERED INTO PLOTS. 6 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= THE SAME IS FURNISHED FOR FAVOUR OF INFORMATION' 8. THE ASSESSING OFFICER HELD THAT THE LANDS SOLD TO M/S. SRI SURAKSHITA HOMES ARE NOT AGRICULTURAL LAND S AND NO AGRICULTURAL ACTIVITY WAS CARRIED OUT IN THEM. THEREFORE HE BROUGHT TO TAX THE AMOUNT OF RS. 2 22 70 229 AS LONG TERM CAPITAL GAINS. 9. ON APPEAL BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THE PROCEEDINGS OF THE MRO GHATKESAR MAND AL VIDE NO. B/2723/97 DATED 8-10-1997 WHEREIN IT WAS MENTIONED IN PAGE 3 THAT ALL THE SURVEY NUMBERS WER E RECORDED PLOTS AND THE VILLAGE ASSISTANT AUSHAPUR ENQUIRED ON THE SPOT AND REPORTED THAT AFTER DELIVE RY OF POSSESSION BY COURT COMMISSIONER THE PETITIONERS H AVE FENCED THE LAND AND WERE DOING AGRICULTURE. THE ASS ESSEE SUBMITTED THE SUBMISSIONS IN SUPPORT OF HER CONTENT ION THAT THE LANDS SOLD BY THE ASSESSEE ARE AGRICULTURA L LANDS AND HENCE EXEMPT FROM ASSESSING THE SALE CONSIDERAT ION AS CAPITAL GAINS U/S 2(14) OF THE ACT. 10. THE LEARNED AR FURTHER SUBMITTED THAT T HE AGRICULTURAL LAND IN QUESTION WAS LOCATED IN AUSHAP UR VILLAGE COMPRISED IN THE AREA WITHIN THE JURISDICT ION OF GRAM PANCHAYAT OF AUSHAPUR AND AS SUCH IT WAS SITUA TED IN AN AREA OUTSIDE ANY MUNICIPALITY OR CANTONMENT B OARD HAVING A POPULATION OF NOT LESS THAN TEN THOUSAND AND ALSO BEYOND THE DISTANCE NOTIFIED BY THE CENTRAL GOVERNMENT FROM THE LIMITS OF ANY SUCH MUNICIPALITY OR CANTONMENT BOARD. THUS THE LAND IN QUESTION DOES N OT CONSTITUTE A CAPITAL ASSET AS DEFINED U/S 2(14) OF IT ACT 7 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= 1961. HE FURTHER SUBMITTED THAT THIS POSITION IS AL SO EVIDENT FROM THE MEMORANDUM EXPLAINING THE PROVISIO NS OF FINANCE ACT 1970 WHEREBY S . 2(14) WAS AMENDED SO AS TO INCLUDE THE AGRICULTURAL LANDS LOCATED WITHIN TH E JURISDICTION OF A MUNICIPALITY IN THE DEFINITION OF THE EXPRESSION 'CAPITAL ASSET'. 11. THE AR SUBMITTED THAT E VEN VIDE NOTIFICATION U/S 2(1A)(C) PROVISO C LAUSE (IL) (B) AND SECTION 2(14)(III)(B) CBDT NOTIFICATION NO. 164/3/87-ITA-1 DATED 6-1-1994 WHEREIN MUNICIPALITIES WERE NOTIFIED FOR THE PURPOS E OF SECTION 2( 14) (1994) 205 ITR (STAT) 121 AND VIDE NOTIFICATION NO. 9947 DATED 6-1-1994 AND NOTIFICATION NO. SO 1302 DATED 28-12-1999 REPORTED IN 248 ITR 258 PUBLISHED IN THE GAZETTE OF INDIA MINISTRY OF FINA NCE DEPT. OF REVENUE GHATKESHAR UNDER WHICH THE AUSHAP UR VILLAGE IN WHICH THE LANDS OF THE ASSESSEE ARE LOCATED WAS NOT NOTIFIED AS MUNICIPALITY AND EVEN TODAY THE SA ID NOTIFICATION WAS IN FORCE. 12. THE AR SUBMITTED THAT T HE SAID LAND ORIGINALLY BELONGED TO MR. YADAGIRI AND MRS BAL LAXMAMMA WHO WERE DECLARED AS PATTADARS AS PER A COURT DECREE I N O.S. NO. 23 OF 1984 DT. 03.09.1997. SUBSEQUENTLY THE SAID OWNERS TOOK POSSESSION OF THE LANDS AND CARRIED OUT AGRICULTURAL OPERATIONS. AS IS EVIDENT FROM THE ORD ERS OF THE MRO GHATKESAR MANDAL VIDE PROCEEDINGS DT. 08 .10.1997 GIVING EFFECT TO THE COURT DECREE THOUGH THE LANDS IN QUESTION WERE REFLECTED AS PLOTS IN RECORD S THE V.A. OF AUSHAPUR CONDUCTED A PHYSICAL INSPECTION OF THE SPOT AND REPORTED THAT THE LAND OWNERS HAD FENCED T HE LAND AND WERE ACTUALLY DOING AGRICULTURE. THUS THE 8 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= ALLEGATION OF THE AO THAT THE LAND IN QUESTION WAS IN THE NATURE OF PLOTS IS FACTUALLY INCORRECT. 13. HE FURTHER SUBMIT TED THAT AS IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF THE REPORT OF THE MRO OBTA INED BY THE AO SUGGESTS THAT IT WAS BASED ON THE ENQUIRY CONDUCTED IN 2013 AND AS SUCH DOES NOT REFLECT THE FACTUAL POSITION RELEVANT TO 2006 IT WAS POINTED OU T THAT THE ASSESSEE PURCHASED THE SAID LAND IN 2002 FROM THE PERSON WHO BOUGHT FROM THE ORIGINAL OWNERS AND AGRICULTURAL OPERATIONS WERE CARRIED OUT UPON SUCH LAND REGULARLY THROUGHOUT THE PERIOD OF HOLDING TILL THE DAT E OF SALE AND IT WAS INFORMED TO THE AO D URING THE ASSESSMENT PROCEEDINGS THAT THE IMPUGNED LAND WAS DRY LAND W HICH WAS BASICALLY RAIN-FED WITHOUT ANY ALTERNATIVE WATE R RESOURCE AND THE CROP GROWN ON SUCH LAND WAS MAIZE . IT WAS STATED THAT UNFORTUNATELY AS THE RAIN FALL DUR ING THE PERIOD WAS NOT SUFFICIENT THERE WAS HARDLY ANY SUR PLUS FROM AGRICULTURE ACTIVITY AND THE FACT REMAINS THAT AGRICULTURAL OPERATIONS WERE ACTUALLY CARRIED OUT B Y THE ASSESSEE . THE LEARNED COUNSEL SUBMITTED THAT THE OBSERVATION OF THE AO THAT THE CLAIM OF THE ASSESSEE WAS UNVERIFIABLE AS SHE FAILED TO PRODUCE PATTADAR PASS BOOK IS NOT TENABLE AS THE PASS BOOK PROVES ONLY OWNERSHIP OF THE LAND WHICH IN THE CASE OF THE ASSESSEE IS PROVED BEYOND DOUBT BY THE REGISTERED PURCHASE DEEDS. WITH REGARD TO THE OBSERVATION OF THE AO THAT THE ASSESSEE FAILED TO PRODUCE BILLS AND VOUCHERS IN RESPECT OF SALE OF AGRICULTURAL PRODUCE IT WAS SUBMITTED THAT IT WAS CLEARLY STATED DURING THE ASSESSMENT PROCEEDINGS THAT AS TH E YIELD FROM THE CROPS GROWN WAS NOT CONSIDERABLE THE SAME WAS SOLD TO THE PETTY TRADERS FROM THE LOCAL AREA A ND SUCH 9 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= SALE OF PRODUCE AT FIELD TO THE LOCAL BUYERS IS A R EGULAR PRACTICE IN THIS REGION. 14. THE AR RELIED ON THE DECISION OF VIZAG BENCH OF THE TRIBUNAL IN THE CASE OF M. NARAYANA CHALAMAIAH V S ITO IN ITA NO. 343 OF 2007 DT. 24.09.2010 WHEREIN THE TRIBUNAL THAT THE CLAIM OF THE ASSESSEE REGARDING ACTUAL CUL TIVATION OF LANDS CANNOT BE LIGHTLY REJECTED UNLESS' SOME MA TERIAL IS BROUGHT ON RECORD TO REJECT SUCH CLAIM. HE ALSO RELIED ON DECISION OF T HE TRIBUNAL HYDERABAD BENCH IN THE CASE OF MR. T.C. REDDY IN ITA NO. 469/HYD/2009 AND I TA NO. 228/HYD/2010 WHEREIN HELD THAT AS AGRICULTURE IN THIS COUNTRY IS AN UNORGANISED SECTOR AND SALE OF AGRICU LTURAL PRODUCE IS ALSO NOT PROPERLY ORGANIZED ONE CANNOT BLAME THE ASSESSEE FOR NOT MAINTAINING THE BOOKS OF ACCOU NT FOR THE PURPOSE OF CULTIVATION AND THEREFORE NON MAINTE NANCE OF BOOKS OF ACCOUNT CANNOT BE A GROUND TO REJECT TH E CLAIM OF THE ASSESSEE. IT WAS SUBMITTED THAT NON-PRODUCTION OF TAX PAYMENT RECEIPTS CANNOT BE THE BASIS FOR DENIAL OF THE CLAIM IN VIEW OF THE FACT THAT THE REVENUE AUTHORI TIES NEVER RAISED ANY TAX DEMAND AND AS SUCH THE QUESTIO N OF PAYMENT OF TAX DOES NOT ARISE. 15. THE AR RELIED ON THE JUDGEMENT OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. DEBBILE ALEMAO (S MT.) (2010) 46 DTR 341 (BORN.) THAT AGRICULTURAL LAND W HICH WAS NEVER SOUGHT TO BE USED FOR NON AGRICULTURAL PU RPOSE BY THE ASSESSEE TILL IT WAS SOLD HAS TO BE TREATED AS AGRICULTURAL LAND EVEN THOUGH NO AGRICULTURAL INCO ME WAS SHOWN BY THE ASSESSEE FROM THIS LAND AND THEREFORE NO CAPITAL GAIN WAS TAXABLE ON THE SALE OF THE SAID LA ND. 10 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= 16. THE AR SUBMITTED THAT T HE LAND HAD NEVER BEEN USED BY THE ASSESSEE FOR NON-AGRICULTURAL PURPOSE ANY TIME BEFORE THE DATE OF SALE. IT WAS POINTED OUT THAT NO THING HAS BEEN BROUGHT ON RECORD BY THE AO THAT IT WAS US ED FOR NON-AGRICULTURAL PURPOSE AND THE ASSESSEE DID NOT SEEK ANY PERMISSION FROM THE RELEVANT AUTHORITIES TO PUT IT TO NON-AGRICULTURAL USE. THE ASSESSEE SUBMITTED THAT AS PER THE ANDHRA PRADESH AGRICULTURAL LAND (CONVERSION FO R NON-AGRICULTURAL PURPOSES) ACT 2006 CONVERSION OF AGRICULTURAL LANDS FOR ANY OTHER PURPOSE IS PROHIBI TED EXCEPT WITH SPECIFIC PERMISSION BY THE AUTHORITY UN DER THAT ACT. IT WAS FURTHER SUBMITTED THAT THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. SMT. K. LEELAVATHY 341 ITR 287 APPROVED THE ORDER OF THE I TAT WHEREIN IT WAS HELD THAT THE LAND SOLD BY THE ASSESSEE RETAINED ITS AGRICULTURAL CHARACTER TILL THE DATE O F THE ORDER PERMITTING NON-AGRICULTURAL USE AND COULD BE TREATE D AS A CAPITAL ASSET ONLY THEREAFTER. IT WAS POINTED OUT T HAT THE IMPUGNED LAND WAS SOLD ON ACREAGE BASIS AND HAD IT BEEN CONVERTED INTO PLOTS AS ALLEGED BY THE AO THE REG ISTERING AUTHORITIES WOULD NOT HAVE PERMITTED THE TRANSFER O F LAND ON ACREAGE BASIS. 17. THE AR SUBMITTED W ITH REGARD TO THE DECISION IN THE CASE OF SARIFABIBI MOHMED IBRAHI M V. CIT 204 ITR 631 RELIED ON BY THE AO THE HON'BLE SUPREME COURT APPR OVED AS MANY AS 13 TESTS LAID DOWN BY THE HIGH COURT IN CIT V. SIDDHARTH J. DESAI 139 ITR 628 (GUJ) FOR ASCERTAINI NG THE CHARACTER OF LAND AT THE TIME OF SALE. AT THE SAME TIME THE SUPREME COURT HELD THAT WHETHER A LAND IS AN AGRICULTURAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FACT WHICH HAS TO BE ANSWERED IN EACH CASE HAVING REGARD TO 11 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= THE FACTS AND CIRCUMSTANCES OF THAT CASE. IT WAS FU RTHER OBSERVED THAT THERE MAY BE FACTORS BOTH FOR AND AGA INST A PARTICULAR POINT OF VIEW AND THE COURT HAS TO ANSWE R THE QUESTION ON A CONSIDERATION OF ALL OF THEM BY A PRO CESS OF EVALUATION AND INFERENCE HAS TO BE DRAWN ON A CUMUL ATIVE CONSIDERATION OF ALL THE RELEVANT FACTS THE SUPREM E COURT HAS FURTHER STATED THAT NOT ALL THESE FACTORS OR TE STS WOULD BE PRESENT OR ABSENT IN ANY CASE AND THAT IN EACH C ASE ONE OR MORE OF THOSE F ACTORS MAY M AKE APPEARANCE AND THAT THE ULTIMATE DECISION WILL HAVE TO BE REA CHED ON A BALANCED CONSIDERATION OF THE TOTALITY OF THE CIRCUMSTANCES. ACCORDINGLY ON A CUMULATIVE CONSIDERATION OF ALL T HE FACTS AS EXISTING IN THAT CASE THE LAND IN QUESTION WAS HELD TO BE NON-AGRICULTURAL. 18. THE AR FURTHER SUBMITTED THAT T HE HON'BLE HIGH COURT OF BOMBAY AFTER ELABORATELY DISCUSSING THE D ECISION IN THE CASES OF SARIFABIBI MOH M ED IBRAHI M CITED ABOVE HELD THE LAND IN QUESTION TO BE AGRICULTURAL LAND I N A LATER CASE I.E. CIT V. MINGUEL CHANDRA PAIS 282 ITR 618 (BORN) WHEREIN THE LAND UNDER REFERENCE WAS ADJACENT TO 4 FIVE STAR HOTELS AND THE PERSON TO WHOM THE LAND WAS SOL D WAS SAID TO BE A SISTER CONCERN OF ONE OF THOSE HOT ELS. WHILE COMING TO THE CONCLUSION THE HIGH COURT MADE A CUMULATIVE CONSIDERATION OF THE FACTS VIS-A-VIS THE TESTS LAID DOWN AND THE FACTS WHICH WEIGHED IN FAVOUR OF THE ASSESSEE WERE ASUNDER: (I) THE SUBJECT LAND WAS SITUATED IN A VILLAGE AND AT A DISTANCE OF ABOUT 15 KM FROM THE MUNICIPAL LIMITS. (II) ALL DOCUMENTS PRODUCED BY THE APPELLANTS SHOWED THAT THE SAID LAND WAS AGRICULTURAL. 12 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= (III) THE APPELLANTS HAD NEITHER CONVERTED NOR MADE ANY PLANS NOR TAKEN ANY STEPS TOWARDS THE CONVERSION OF THE SAID LAND INTO NON-AGRICULTURE. (IV) THE SUBJECT LAND HAD CONTINUED TO BE PUT TO AGRICULTURAL USE AND THAT IT WAS ALWAYS USED FOR AGRICULTURAL PURPOSE. THE HON'BLE HIGH COURT OBSERVED THAT AS THE APPELLANTS HAD SATISFIED MOST OF THE TESTS WHICH WE RE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SARIFABIBI THE LANDS IN QUESTION WERE AGRICULTURAL IN NATURE. (I) THE AR FURTHER SUBMITTED THAT INFLATION OR ESCALATION IN PRICE OF THE AGRICULTURAL LAND WOULD NOT CHANGE THE BASIC CHARACTER OF THE LAND. THIS VIEW WAS ALSO UPHELD BY THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT V: MINGUEL CHANDRA PAIS 282 ITR 618 (BORN) WHEREIN IT WAS HELD THAT THE PRICE PAID IS NOT DECISIVE TO SAY WHETHER THE LAND IS AGRICULTURAL OR NOT. FURTHER IT WAS HELD IN THE CASE OF CIT V. SMT. DEBBIE ALEMAO 331 ITR 59 (SUPRA) THAT THE USE TO WHICH THE PURCHASER WOULD PUT COULD NOT BE A FACTOR FOR THE INFERENCE THAT THE LAND IS NOT AGRICULTURAL IN THE HANDS OF THE ASSESSEE AT THE TIME OF TRANSFER. RELIANCE IS ALSO PLACED ON THE DECISION OF THE HON'BLE HIGH COURT OF MADRAS IN THE CASE OF M.S. SRINIVASA NAICKER VS ITO (SUPRA). 19. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AGREED THAT THE LAND IN QUESTION DOES NOT CONSTITUTE CAPITAL ASSET AS DEFINED U/S. 2(14) OF T HE IT ACT 1961. 20. REGARDING THE REPORT CALLED FOR FROM THE MRO GHATKESAR MANDAL ON 28.1.2013 AND RECEIVED IN FEBRUARY 2013 REPORTING THE STATUS OF THE LAND FAL LING IN VARIOUS SY. NOS. 'AS COVERED INTO PLOT' AND COVERED WITH WEAKER SECTION COLONY AND PLOTS ETC. THE CIT(A) WA S OF THE 13 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= OPINION THAT THE REPORT CANNOT BE GIVEN CREDENCE SI NCE THE FACTUAL POSITION REPORTED PERTAINS TO THE YEAR 2013 AND NOT BEFORE 5 YEARS I.E. 2006 WHICH IS THE YEAR IN WHICH THE ASSESSEE SOLD THE LAND. THE CIT(A) OBSERVED T HAT THE ASSESSING OFFICER DID NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO REBUT THE CONTENTS OF THE REPORT AND CR OSS EXAMINE THE AUTHORITIES WHO HAS RECEIVED THE REPORT . THE CIT(A) FURTHER AGREED THAT THE RATIO LAID DOWN IN T HE CASE OF CIT VS. SASHIBEN (280 ITR 319) (GUJ) WHEREIN IT HAS BEEN HELD THAT THE FACT OF NON-AGRICULTURAL USER BY THE BUYER WILL NOT ALTER THE CHARACTER OF LAND IN THE C ASE OF SELLER. THE CIT(A) HELD THAT THE ASSESSEE SATISFIE D THE VARIOUS STEPS LAID DOWN IN THE CASE OF SARIFABIBI M OHD. IBRAHIM & ORS (204 ITR 631) FOR CONSIDERING THE LA ND WAS AGRICULTURAL LAND AND THEREFORE DIRECTED THE ASSE SSING OFFICER TO DELETE THE ADDITION OF RS. 2 22 70 229 U NDER THE HEAD LONG TERM CAPITAL GAINS AND ACCEPTED THE INCOM E RETURNED BY THE ASSESSEE. 21. WITH RESPECT TO THE GROUND NO. 4 OF THE ASSESSEE AGAINST THE DETERMINATION OF THE SALE CONSIDERATION OF RS. 2 29 75 000 AS AGAINST RS. 77 50 000 CLAIMED BY THE ASSESSEE HE DID NOT GO INTO THE MERITS OF THE SALE CONSIDERATION OF RS. 2 29 75 000 DETERMINED BY THE ASSESSING OFFICER AS AGAINST SALE CONSIDERATION OF RS. 77 50 000 AS CLAIMED BY THE ASSESSEE AND HELD THE S AME TO BE REDUNDANT. AGGRIEVED THE REVENUE IS IN APPE AL BEFORE US AND RAISED THE FOLLOWING GROUNDS: (1) THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH IN LAW AND ON FACTS OF THE CASE; (2) THE LEARNED CIT(A) OUGHT TO HAVE 14 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= APPRECIATED THE ACTION TAKEN BY THE ASSESSING OFFICER TREATING THAT THE LANDS SOLD BY THE ASSESSEE ARE NOT AGRICULTURAL LANDS; (3) THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE FAILED TO DECLARE AGRICULTURAL INCOME EITHER IN THE ASST. YEAR UNDER CONSIDERATION OR IN EARLIER YEARS AND SHOULD HAVE TREATED THAT THE LANDS SOLD BY THE ASSESSEE ARE NON- AGRICULTURAL LANDS; (4) THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE FAILED TO PRODUCE ANY MATERIAL EVIDENCE TO PROVE THAT THERE IS AGRICULTURAL ACTIVITY (BASIC AND SUBSEQUENT OPERATIONS) IN THE LANDS UNDER CONSIDERATION AND SHOULD HAVE TREATED THAT THE LANDS AS NON-AGRICULTURAL LANDS; (5) THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE FAILED TO FURNISH ANY PROOF THAT SHE HAS PAID LAND REVENUE AND ACCORDINGLY TREATED THAT THE LANDS AS NON-AGRICULTURAL; (6) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE LANDS SOLD BY OTHERS ADJACENT TO THE LANDS IN QUESTION DECLARED THE INCOME ON SALE OF THE SAID LANDS AND PAID THE TAXES FOR THE A.Y. 2007-08. ACCORDINGLY THE LEARNED CIT(A) SHOULD HAVE TREATED THE LANDS IN QUESTION ARE ALSO TAXABLE UNDER THE HEAD LONG TERM CAPITAL GAINS AS ADMITTED BY OTHER SELLERS IN THE SAME PROJECT; (7) THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE FAILED TO FULFIL ALL THE 13 CHARACTERS (EXCEPT CHARACTER NO. 12) AS APPROVED BY THE SUPREME COURT IN THE CASE OF SARIFABIBI MOHAMED IBRAHIM VS. CIT 204 ITR 631 FOR ASCERTAINING THE STATUS OF THE LAND AT THE TIME OF SALE AND SHOULD HAVE TREATED THE LAND IN QUESTION AS NON-AGRICULTURAL LAND; 15 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= 22. THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE AO MAINLY TREATED TH E LANDS AS NON-AGRICULTURAL IN NATURE FOR THE FOLLOWI NG REASONS: (I) THE ASSESSEE DID NOT PRODUCE PATTADAR PASS BOOK BILLS IN RESPECT OF SALE OF AGRICULTURAL PROCEEDS AND RECEIPTS OF TAXES PAID. (II) AS PER THE INFORMATION GATHERED FROM MRO GHATKESAR THE LANDS WERE CONVERTED INTO PLOTS. (III) IN THE CASE OF SARIFABIBI MOHD IBRAHIM & OTHE RS 204 ITR 631 THE HON'BLE SUPREME COURT HELD THAT THE LAND SOLD FOR NON-AGRICULTURAL PURPOSE IS ASSESSABLE TO CAPITAL GAINS. 23. THE LEARNED COUNSEL FOR THE ASSESSEE SRI A.V. RAGHU RAM REITERATED THE SUBMISSIONS AS MADE BEFORE THE CIT(A). HE PRODUCED THE REGISTERED SALE DEED PERTAINING TO THE PURCHASE AND SALE OF AGRICULTURAL LAND BY WAY OF PAPER BOOK. HE FURTHER POINTED OUT TO PA GE 23 OF THE PAPER BOOK WHEREIN IT HAS BEEN STATED BY ORD ER OF THE MRO GHATKESAR MANDAL AS FOLLOWS: 'VERIFIED THE FORM-1 OF RO WHEREIN EXCEPT THE SY. NOS. 351 TO 354 ALL THE SURVEY NUMBERS ARE RECORDED AS PLOTS.' THE MRO IN HIS REPORT HAS REPORTED THAT THE PETITIO NERS ARE IN POSSESSION OF THE LAND AND WERE DOING AGRICULTURE OPERATIONS . 24. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ITAT COCHIN BENCH IN THE CASE OF M.K. ABDUL REHIMAN VS. DCIT (16 TAXMAN 406). 16 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= 25. WE HAVE HEARD BOTH THE PARTIES. WE SHALL DRAW OUR OPINION BASED ON THE FOLLOWING POINTS: (A) THE AGRICULTURAL LAND IN QUESTION IS LOCATED IN AUSHAPUR VILLAGE AND IS SITUATED IN AN AREA OUTSIDE ANY NOTIFIED MUNICIPAL AND CANTONMENT BOARD BOTH HAVING POPULATION OF LESS THAN 10000 AND ALSO BEYOND DISTANCE NOTIFIED BY THE CENTRAL GOVERNMENT FROM THE LIMITS OF ANY SUCH MUNICIPALITY OR CANTONMENT BOARD. THUS THE LAND IN QUESTION DOES NOT CONSTITUTE CAPITAL ASSET AS STIPULATED U/S. 2(14) OF THE IT ACT 1961. (B) THE LAND ORIGINALLY BELONGS TO M. YADAIAH AND MRS. BALALAXMAMMA WHO WERE DECLARED AS PATTADAR AS PER THE COURT DECREE. THE SAID PERSONS SEEMS TO HAVE TAKEN POSSESSION OF THE LAND AND HAVE CARRIED OUT AGRICULTURE OPERATIONS ACCORDING TO THE ORDER OF THE MRO GHATKESAR MANDAL WHICH WAS PASSED TO GIVE EFFECT TO THE COURT DECREE. FROM THIS THE LAND IN QUESTION SEEMS TO BE AGRICULTURAL LAND. (C) THE REPORT OF THE MRO OBTAINED BY THE AO IS BASED ON THE ENQUIRY CONDUCTED IN 2013 AND NOT IN THE YEAR 2006 AS OBSERVED BY THE CIT(A). (D) THE LAND HAPPENS TO BE RAIN FED AND THE ARGUMENT OF THE ASSESSEE THAT THERE MIGHT NOT BE MUCH SURPLUS FROM AGRICULTURAL ACTIVITY AND THEREFORE NON DISCLOSURE OF MARKET INCOME CAN BE EXCUSED. (E) THE PRODUCTION OF PATTADAR PASSBOOK AS INSISTED BY THE ASSESSING OFFICER DOES NOT SERVE MUCH PURPOSE SINCE THE PASSBOOK PROVES THE OWNERSHIP OF LAND AND DOES NOT THROW MUCH LIGHT ON AGRICULTURAL OPERATIONS. (F) THE CROPS HAVING BEEN GROWN NOT BEING CONSIDERABLE SALE OF AGRICULTURE PRODUCE HAS 17 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= BEEN ACCOUNTED AS THE SAME MIGHT HAVE SOLD TO THE LOCAL BUYERS. (G) THAT THE LAND WAS SOLD IN ACREAGE AND NOT IN SQUARE YARDS ALSO SHOWS THAT THE REGISTERING AUTHORITY WAS AWARE THAT THE SAME WAS AGRICULTURE LAND. (H) THE ASSESSEE HAS NOT OBTAINED ANY PERMISSION FROM THE APPROPRIATE AUTHORITIES FOR NON- AGRICULTURE USE OF LAND OR FOR DEVELOPMENT INTO PLOTS I.E. THE ASSESSEE HAS NOT PUT THE LAND INTO ALTERNATE USE OTHER THAN AGRICULTURE. (I) BOTH PURCHASE AND SALE DEEDS WHEN PERUSED SAY THAT THE LAND IS SPECIFIED AS AGRICULTURE IN THE SCHEDULE. 26. WE ARE OF THE OPINION THAT THE LANDS SOLD BY THE ASSESSEE ARE AGRICULTURAL LANDS AND THE ASSESSEE SA TISFIED MOST OF THE TESTS WHICH ARE LAID DOWN BY THE HONBL E SUPREME COURT IN THE CASE OF SARIFABIBI MD. IBRAHIM & OTHERS (SUPRA). 27. THE FOLLOWING PICTURE EMERGES WHEN THE FACTS OF THE ASSESSEE'S CASE ARE TESTED ON THE TOUCHSTONE OF THE GUIDELINES APPROVED BY THE APEX COURT IN THE CASE OF SARIFABIB I MOHMED IBRAHIM: (I) THE IMPUGNED LAND WAS SITUATED IN A VILLAGE COMPRISED IN THE AREA WITHIN THE JURISDICTION OF A GRAM PANCHAYAT AND AS SUCH IT WAS SITUATED IN AN AREA OUTSIDE ANY MUNICIPALITY OR CANTONMENT BOARD HAVING A POPULATION OF NOT LESS THAN TEN THOUSAND AND ALSO BEYOND THE DISTANCE NOTIFIED BY THE CENTRAL GOVERNMENT FROM THE LIMITS OF ANY SUCH MUNICIPALITY OR CANTONMENT BOARD. (II) AS CAN BE SEEN FROM THE PROCEEDINGS OF THE MRO DT. 08.10.1997 THE LAND IN QUESTION WAS ACTUALLY AGRICULTURAL IN NATURE. 18 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= (III) THE LAND WAS ACTUALLY USED FOR AGRICULTURAL PURPOSES THROUGHOUT THE PERIOD OF HOLDING TILL THE DATE OF SALE AND THE AO HAS NOT BROUGHT ANY CONCRETE EVIDENCE ON RECORD TO SUGGEST THAT IT WAS NOT PUT TO AGRICULTURAL USE AT THE RELEVANT POINT OF TIME. (IV) WITH REGARD TO THE OBSERVATION OF THE A.O. THAT THE LAND WAS SOLD FOR NON-AGRICULTURAL USE THE ASSESSEE SUBMITTED THAT THE HON'BLE HIGH COURT OF DELHI OBSERVED IN THE CASE OF HINDUSTAN INDUSTRIAL RESOURCES LTD. V. ASST. CIT 335 ITR 77 HELD THAT WHETHER THE ASSESSEE INTENDED TO USE THE LAND FOR INDUSTRIAL PURPOSE OR THAT THE ASSESSEE HAD NOT CARRIED OUT ANY AGRICULTURAL OPERATION DID NOT IN ANY WAY ALTER THE NATURE AND CHARACTER OF THE AGRICULTURAL LAND. THE INTENTION OF THE LAND ACQUIRING AUTHORITY WAS A WHOLLY IRRELEVANT CONSIDERATION FOR DETERMINING THE CHARACTER OF LAND AT THE TIME OF SALE. IT WAS OBSERVED THAT WHERE THE NATURE OF THE LAND BOTH AT THE TIME OF PURCHASE AND SALE/COMPULSORY ACQUISITION WAS AGRICULTURAL IT CANNOT BE HELD THAT ITS CHARACTER HAD UNDERGONE ANY CHANGE DURING THE TRANSITIONAL PERIOD I.E. BETWEEN THE DATE OF PURCHASE AND THE DATE OF SALE/ COMPULSORY ACQUISITION AND AS SUCH THE SAID LAND RETAINED THE CHARACTER OF AGRICULTURAL LAND AT THE TIME OF SALE. FOR COMING TO THE CONCLUSION IT RELIED UPON THE DECISIONS OF THE DELHI HIGH COURT IN D. L. F. HOUSING AND CONSTRUCTION (P.) LTD. V. CIT 141 ITR 806 (DELHI) D. L. F. UNITED LIMITED V. CIT 161 ITR 714 (DELHI) AND D. L. F. UNITED LIMITED V. CIT 217 ITR 333 (DELHI). 28. FURTHER A PLETHORA OF DECISIONS SUPPORT OUR VIEW SOME OF THEM ARE AS UNDER: (J) ON ALMOST IDENTICAL FACTS THE LAND WAS HELD TO BE. AGRICULTURAL IN THE FOLLOWING CASES: (A) SURJEET KAUR VS CIT 74 TTJ 722 (HYD) (B) HARISH V. MILANI VS ]CIT 111 TTJ 310 (PUNE) 19 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= (C) M.S.SRINIVASA NAICKER VS ITO 292 ITR 481 (MAD) (D) TULLA VEERENDER AND VIJAYENDER (HYD ITAT) VIDE ORDER DT. 04.07.2013 IN ITA NOS. 550 AND 551/2012. (E) FURTHER IT WAS HELD BY THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT V. SHASHIBEN 288 ITR 319 (GUJ) THAT THE FACT OF NON-AGRICULTURAL USER BY THE BUYER WILL NOT ALTER THE CHARACTER OF LAND IN THE CASE OF THE SELLER. THE RELEVANT PORTION OF THE DECISION IS EXTRACTED HEREUNDER: 'IF SOMEBODY THINKING THAT THE SAID LAND CAN BE PUT TO SOME OTHER PURPOSE PURCHASES THE LAND FOR A HIGHER PRICE AND THEREAFTER CHANGES THE USE FOR THE FIRST HOLDER THE PROPERTY WOULD NOT CHANGE ITS CHARACTER SO LONG AS HE HIMSELF DOES NOT CHANGE THE USE OR PUT THE LAND TO SOME OTHER USE AFTER GETTING THE CONVERSION OF USE FROM THE COMPETENT AUTHORITY/OFFICER.' 29. HOWEVER WE WOULD LIKE TO POINT OUT THAT THE CIT(A) HAS OBSERVED THAT THE ASSESSING OFFICER HAD NOT GIV EN OPPORTUNITY TO THE ASSESSEE TO REBUT THE CONTENTS O F THE REPORT CALLED FOR FROM THE MRO GHATKESAR MANDAL ON 28.1.2013. FURTHER NO OPPORTUNITY OF CROSS EXAMIN ATION OF THE AUTHORITIES WHO HAD ISSUED THE REPORT WAS GI VEN TO THE ASSESSEE. THE CIT(A) WAS CONSTRAINED IN GIVING A DIRECTION TO THE ASSESSING OFFICER INASMUCH AS MANY YEARS HAVE LAPSED FROM THE TIME THE TRANSACTION TAK EN PLACE WHICH WAS IN THE YEAR 2006-07 AND ALSO THE CA SE WAS HEARD BY THE CIT(A) WHICH WAS ON 4.10.2013. HE NCE GIVING THE BENEFIT OF DOUBT TO THE ASSESSEE WE ARE OF THE OPINION THAT THE MRO GHATKESAR HAD GIVEN A REPORT EVIDENCING THE CORRECT STATUS OF THE LAND AT PAGE 3 3 OF THE PAPER BOOK WHEREIN HE HAS MENTIONED THAT AGRICULTUR E 20 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= OPERATIONS WERE BEING CARRIED ON THE SAID LAND. BA SED ON THE ABOVE POINTS FROM WHICH WE GATHER THAT THE LAN DS SOLD BY THE ASSESSEE ARE AGRICULTURAL LANDS AND TH E CIT(A) HAS RIGHTLY ALLOWED THE ASSESSEE'S APPEAL ON THIS I SSUE. ACCORDINGLY WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS TAKEN BY THE REVENUE. 30. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMISSED. C.O. NO. 22/HYD/2014 31. IN THE CROSS OBJECTION BY THE ASSESSEE THE ASSESSEE RAISED THE GROUND THAT THE CIT(A) ERRED BY NOT ADJUDICATING ON THE GROUND RELATING TO THE ACTUAL S ALE CONSIDERATION OF THE LAND SOLD BY THE ASSESSEE AND THE CIT(A) OUGHT TO HAVE DECIDED THE ISSUE BASED ON MER ITS OF THE CASE. 32. WITH REGARD TO THIS GROUND THE CIT(A) HELD THAT THE LANDS SOLD BY THE ASSESSEE ARE AGRICULTURAL LANDS A ND COVERED BY S. 2(14)(III)(A)(B) OF THE ACT AND NOT A S A CAPITAL ASSET AND EXEMPT FROM CAPITAL GAINS AND DIRECTED TH E AO TO DELETE THE ADDITION OF RS. 2 22 70 229 MADE UNDE R THE HEAD 'LONG TERM CAPITAL GAINS' THE QUESTION OF GOI NG INTO THE MERITS OF SALE CONSIDERATION OF RS. 2 29 75 000 AS OPINED BY THE AO AS AGAINST THE SALE CONSIDERATION OF RS. 77 50 000 AS CLAIMED BY THE ASSESSEE DOES NOT ARIS E. 33. AS WE HAVE DECIDED THE APPEAL OF THE REVENUE AGAINST THE DEPARTMENT AND CONFIRMED THE ORDER OF T HE CIT(A) THIS GROUND NEEDS NO ADJUDICATION AND BECOM ES 21 ITA NO. 265/HYD/2014 & CO NO. 22/HYD./2014 SMT. M. UMA RAVINDER REDDY ======================= INFRUCTUOUS. ACCORDINGLY THIS GROUND IS DISMISSED AS INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON 31 ST JULY 2014 SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD DATED THE 31 ST JULY 2014 TPRAO COPY TO: 1. THE INCOME TAX OFFICER WARD - 4(1) 5 TH FLOOR AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 2. SMT. M. UMA RAVINDER REDDY # 1 - 1 - 648/3/B&C PLOT NO. 505 TAPANI RATNA TOWERS GANDHINAGAR HYDERABAD. 3. THE CIT(A) - V HYDERABAD. 4. THE CIT - IV HYDERABAD. 5. THE DR A - BENCH ITAT HYDERABAD.