Shri Shabbir Husain Pithawala, Indore v. The Asstt. Commissioner of Income Tax 5(1), Indore

ITA 506/IND/2010 | 2007-2008
Pronouncement Date: 28-07-2011 | Result: Dismissed

Appeal Details

RSA Number 50622714 RSA 2010
Assessee PAN ACJPP3244L
Bench Indore
Appeal Number ITA 506/IND/2010
Duration Of Justice 1 year(s) 2 day(s)
Appellant Shri Shabbir Husain Pithawala, Indore
Respondent The Asstt. Commissioner of Income Tax 5(1), Indore
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 28-07-2011
Assessment Year 2007-2008
Appeal Filed On 26-07-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.506/IND/2010 A.Y.2007-08 SHABBIR HUSSAIN PITHAWALA INDORE PAN ACJPP 3244L :: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 5(1) INDORE :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 10.07.2012 DATE OF PRONOUNCEMENT 12.07.2012 O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 31 ST MARCH 2010. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN HOLD ING THAT 2 THE LANDS SOLD BY THE ASSESSEE ARE CAPITAL ASSET THEREFORE THE GAIN FROM TRANSFER OF THE SAME IS TA XABLE AS CAPITAL GAIN AND THEREBY CONFIRMING THE LONG TERM C APITAL GAIN AT RS.62 73 636/- AND FURTHER ERRED IN HOLDING THAT THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S 54B O F THE ACT. 2. DURING HEARING THE LD. COUNSEL FOR THE ASSESSEE SHRI S.S.DESHPANDE CONTENDED THAT THE IMPUGNED LAND S SOLD BY THE ASSESSEE ARE BEYOND THE PRESCRIBED MUNICIPAL LIMIT OF 8 KMS. TO SUBSTANTIATE ITS CLAI M THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE MUNICIPAL MAP BY CLAIMING THAT THE VILLAGE UMARI KH EDA IS SITUATED BEYOND 8 KMS FROM VILLAGE LIMBODI WHICH IS 2 KMS AWAY FROM THE MUNICIPAL LIMIT BY CLAIMING THAT THE IMPUGNED LAND IS LOCATED APPROXIMATELY 10 KMS FROM THE MUNICIPAL LIMIT. THE LD. COUNSEL FOR THE ASSESSEE A LSO INVITED OUR ATTENTION TO A CERTIFICATE ISSUED BY VI LLAGE PANCHAYAT UMARI KHEDA (PAGE 32 OF THE PAPER BOOK) T O 3 SHOW THAT THE VILLAGE UMARI KHEDA IS ABOUT 9 KMS FR OM THE MUNICIPAL LIMIT. ON THE OTHER HAND THE LEARNE D SENIOR DR DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT THE VILLAGE IS WITHIN THE PRESCRIBED LIMIT FRO M THE MUNICIPAL LIMIT AND AS PER LETTER FROM JOINT CONTRO LLER NAGAR TATHA GRAM NIVESH DISTRICT INDORE THE SAID VILLAGE IS 7 KMS FROM THE MUNICIPAL LIMIT THEREFOR E THE CLAIMED BENEFIT MAY NOT BE EXTENDED TO THE ASSESSEE . IN REPLY THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION FROM HONBLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF CIT VS. SATINDER PAL SINGH (2010) 33 DT R 281 (P&H) THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. GAURAV KHANDELWAL (ITA NO.195/AGRA/2010) AND THE DECISION FROM DELHI BENCH OF THE TRIBUNAL IN THE C ASE OF SHRI HUKMI VS. DCIT (ITA NO. 2582/DEL/2004) TO THE EFFECT THAT THE DISTANCE IS TO BE MEASURED BY ROAD AND NOT BY ARIAL DISTANCE. 4 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW THE ABOVE AND FOR REACHING TO A FAIR CONCLUSION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID DECISION IN THE CASE OF GAURAV KHANDELWAL (SUPRA) :- 3.2 ON THE ABOVE ISSUE THE HONBLE P&H HIGH COURT IN THE CASE OF CIT VS. SANTINDER PAL SINGH 33 DTR 281 (P&H) HAS APPROVED THE DECISION OF HONBLE ITAT MUMBAI IN THE CASE OF LAUKIK DEVELOPERS PVT. LTD. THE CONCLUSION IS REPRODUCED AS UNDER :- DISTANCE OF THE AGRICULTURAL LAND BELONGING TO THE ASSESSEE WITHIN THE MEANING OF S. 2(14)(III)(B) HAS TO BE MEASURED IN TERMS OF THE APPROACH BY ROAD AND NOT BY THE STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. 3.3 ACCORDINGLY THE A.O. IS DIRECTED TO CONSIDER THE APPELLANTS CASE IN THE LIGHT OF THE ABOVE DECISION TO DETERMINE WHETHER THE IMPUGNED LAND IS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OR NOT AND GIVE RELIEF IF DUE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. THE LEARNED DR ALTHOUGH VEHEMENTLY RELIED ON THE ORDER OF THE ASSESSING OFFICER BUT COULD NOT SUBMIT ANY CASE LAW CONTRARY TO THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SATINDER PAL SINGH 5 33 DTR 281 (SUPRA). THE LEARNED AR OF THE ASSESSEE ON THE OTHER HAND RELIED ON THE ORDER OF THE DELHI BENCH IN THE CASE OF SHRI HUKMI VS. DCIT IN ILTA NO. 2582/DEL/2004 IN WHICH WE NOTED THAT THE TRIBUNAL UNDER PARA 8 HAS AS UNDER :- 8. AS REGARDS THE ISSUE RELATING TO THE EXACT NATURE OF LAND BELONGING TO THE ASSESSEE IT IS OBSERVED THAT THE SAID LAND WAS HELD TO BE AN AGRICULTURAL LAND BY THE LEARNED CIT(A) AFTER TAKING INTO CONSIDERATION THE EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF COPY OF KHASRA GIRDAWARI AND THE REVENUE HAVING NOT FILED ANY APPEAL OR CROSS OBJECTION AGAINST THE SAID INFERENCE DRAWN BY THE LEARNED CIT(A) THIS ISSUE HAS REACHED FINALITY. THE ACTION OF THE A.O. IN TREATING THE SAID LAND AS A CAPITAL ASSET AND BRINGING THE PROFIT ARISING FROM SALE THEREOF TO TAX IN THE HANDS OF THE ASSESSEE AS LONG TERM CAPITAL GAIN HOWEVER WAS UPHELD BY THE LEARNED CIT(A) RELYING ON THE EVIDENCE BROUGHT ON RECORD BY THE LEARNED CIT ROHTAK DURING THE COURSE OF PROCEEDINGS U/S 263 IN THE FORM OF CERTIFICATES ISSUED BY THE CONCERNED AUTHORITIES SATING THEREIN THAT THE SAID LAND WAS SITUATED WITHIN 8 KMS FROM THE MUNICIPAL LIMIT. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US THE SAID DISTANCE WAS CERTIFIED AS 7.5 KMS FROM THE MUNICIPAL LIMIT BY THE CONCERNED AUTHORITY ON THE BASIS OF A SUGGESTION GIVEN BY THE LEARNED CIT ROHTAK TOP MEASURE SUCH DISTANCE ON A STRAIGHT LINE METHOD ON HORIZONTAL PLANE ACCORDING TO SECTION 11 OF THE GENERAL CLAUSES ACT. THIS METHOD FOLLOWED BY THE CONCERNED AUTHORITIES AS PER THE SUGGESTION GIVEN BY THE LEARNED 6 CIT ROHTAK TO MEASURE THE DISTANCE HAS BEEN CHALLENGED BY THE LEARNED COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION OF MUMBAI BENCH OF ITAT IN THE CASE OF LAUKIK DEVELOPERS VS. DCIT; 105 ITD 657 WHEREIN IT WAS HELD FOLLOWING THE DECISION OF PUNE TRIBUNAL IN THE CASE OF MANGALAM INORGANICS PVT. LTD. THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND ASSESSEES INDUSTRIAL UNDERTAKING IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD DISTANCE AND NOT AS PER THE CROWS FLIES I.E. A STRAIGHT LINE DISTANCE AS CANVASSED BY THE REVENUE. THE LEARNED DR HAS CONTENDED IN THIS REGARD THAT THE SAID DECISION HAS BEEN RENDERED BY THE MUMBAI BENCH IN THE CASE OF LAUKIK DEVELOPERS IN THE CONTEXT OF THE PROVISIONS OF SECTION 80IB(10) AND NOT IN CONNECTION WITH THE ISSUE OF DETERMINING A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14). IT IS HOWEVER OBSERVED THAT IN THE CASE OF MANGALAM INORGANICS PVT. LTD. (SUPRA) RELIED UPON BY THE MUMBAI BENCH THE DECISION WAS RENDERED BY PUNE BENCH OF ITAT IN THE CONTEXT OF THE ISSUE OF CAPITAL ASSET U/S 2(14) AS INVOLVED IN THE PRESENT CASE AND THIS BEING SO WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER ASCERTAINING THE EXACT DISTANCE OF THE LAND IN QUESTION FROM THE MUNICIPAL LIMITS BY ADOPTING THE METHOD AS GIVEN IN THE AFORESAID ORDERS OF THE TRIBUNAL. THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE THUS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7 5. IN VIEW OF THE ABOVE DECISION WE ARE IN AGREEME NT WITH THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESS EE THAT DISTANCE BY ROAD IS TO BE TAKEN AND NOT THE AR IEL DISTANCE. HOWEVER IN VIEW OF THE CONFLICTING VERS IONS AND THE LETTERS/CERTIFICATE ISSUED BY VARIOUS AUTHO RITIES AS DISCUSSED HEREINABOVE WE REMAND THIS ISSUE TO T HE FILE OF THE LEARNED ASSESSING OFFICER TO MEASURE TH E DISTANCE OF THE IMPUGNED LAND FROM THE MUNICIPAL LI MIT AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION HERE THAT THE ASSESSEE BE PROVI DED OPPORTUNITY OF BEING HEARD. THE ASSESSEE OR HIS LEG AL REPRESENTATIVE/AUTHORISED REPRESENTATIVE MUST BE PRESENT WHILE MEASURING THE DISTANCE ON A MUTUALLY AGREED DATE. THEREFORE THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. THE NEXT GROUND IS THAT THE LEARNED CIT(A) ERRE D IN CONFIRMING THE DISALLOWANCE OF RS. 1 07 398/- MADE U/S 8 14A OF THE ACT. AT THE OUTSET THE LEARNED SENIOR DR CONTENDED THAT THERE IS NO MERIT IN THIS ISSUE. HO WEVER ON PERUSAL OF RECORD AND AFTER HEARING THE SUBMISSI ONS WE FIND THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED DIVIDEND OF RS. 44 941/- AND CLAIMED THE SAME TO BE EXEMPT U/S 10(34) OF THE ACT. IN RESPONSE TO A SPE CIFIC QUERY IT WAS CLAIMED BY THE ASSESSEE THAT NO SUCH EXPENSES WERE CLAIMED IN RESPECT OF EXEMPT INCOME/DIVIDEND INCOME. WE FIND THAT AT PAGE 7 OF THE IMPUGNED ORDER THE LEARNED CIT(A) CALCULATED SUCH EXPENSES IN WHICH NO DEFECT WAS POINTED OUT THEREF ORE WE FIND NO INFIRMITY IN HIS CONCLUSION CONSEQUENTL Y IT IS AFFIRMED. 7. THE NEXT GROUND PERTAINS TO CONFIRMING THE DISALLOWANCE OF RS.1 10 792/- OUT OF THE EXPENSES. WE FIND THAT THIS ISSUE HAS BEEN DISCUSSED IN PARA C ( PAGE 8) OF THE IMPUGNED ORDER. THE FACTS ARE THAT THE ASSES SEE 9 SHOWED LOSS OF RS.1 70 720/- AND RS.12 10 778/- FRO M SHARE TRADING AND F&O TRANSACTIONS AND CLAIMED DEDUCTION OF RS.2 21 583/- FROM THESE FIGURES UNDER THE HEAD INSURANCE BANK INTEREST BANK CHARGES AND DEPRECIATION ON CAR. ON THE FACTS NARRATED IN THE CONCLUSION 50% OF THESE EXPENSES WERE DISALLOWED W HICH RESULTED INTO ADDITION OF RS.1 10 792/-. IF THE TO TALITY OF FACTS AND THE REASONING CONTAINED IN THE IMPUGNED O RDER ARE ANALYSED WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND CONFIRM THE SAME. 8. THE LAST GROUND PERTAINS TO CONFIRMING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. WE FIND THAT THE CLAIM OF THE ASSESSEE WAS DISALLOWED ON THE GROUND THAT NO AGRICULTURAL ACTIVITY WAS DONE BY TH E ASSESSEE THEREFORE THE AMOUNT OF RS.1 34 855/- SH OWN AS AGRICULTURAL INCOME WAS TREATED AS INCOME FROM O THER SOURCES. HOWEVER FROM THE PAPER BOOK THE LD. COUN SEL 10 FOR THE ASSESSEE INVITED OUR ATTENTION TO THE RECEI PTS ISSUED BY THE KRISHI UPAJ MANDI SAMITI TO THE EFFEC T THAT AGRICULTURAL PRODUCE WAS SOLD BY THE ASSESSEE. THE AUTHENTICITY OF THESE RECEIPTS WAS CHALLENGED BY TH E LEARNED SENIOR DR MERELY ON THE GROUND THAT NO SEAL IS AFFIXED ON THESE RECEIPTS. IN VIEW OF THESE FACTS THE LEARNED ASSESSING OFFICER IS DIRECTED TO EXAMINE TH E GENUINENESS OF THESE RECEIPTS AND IF THE SAME ARE F OUND TO BE GENUINE THEN THE CLAIM OF THE ASSESSEE MAY BE TREATED TO BE CORRECT AND THE INCOME SO CLAIMED MAY BE TREATED AS AGRICULTURAL INCOME. HOWEVER WE ARE MAK ING IT CLEAR THAT IF THE RECEIPTS ARE FOUND TO BE NON-G ENUINE THEN HE IS FREE TO TREAT THE SAME AS INCOME FROM OT HER SOURCES THEREFORE THIS GROUND OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. FINALLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES ONLY. 11 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 10 TH JULY 2012. SD SD (R.C.SHARMA) (JOGI NDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12 TH JULY 2012 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE DN/-10.1111