Sh. Gurdial Singh, Panchkula v. DCIT, Panchkula

ITA 54/CHANDI/2011 | 2007-2008
Pronouncement Date: 28-02-2011 | Result: Allowed

Appeal Details

RSA Number 5421514 RSA 2011
Assessee PAN BMAPS8403A
Bench Chandigarh
Appeal Number ITA 54/CHANDI/2011
Duration Of Justice 1 month(s) 8 day(s)
Appellant Sh. Gurdial Singh, Panchkula
Respondent DCIT, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-02-2011
Assessment Year 2007-2008
Appeal Filed On 19-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE HONBLE SHRI D K SRIVASTAVA AM AND HONBLE MS. SUSHMA CHOWLA JM ITA NO. 54/CHANDI/2011 ASSESSMENT YEAR: 2007-08 SH.GURDIAL SINGH V D.C.I.T. CIRCLE 3 S/O SH.UDEY RAM PANCHKULA VPO NADA SAHIB PANCHKULA PAN: BMAPS8403A ITA NO. 55/CHANDI/2011 ASSESSMENT YEAR: 2007-08 SH.ARJUN SINGH V D.C.I.T. CIRCLE 3 S/O SH.UDEY RAM PANCHKULA VPO NADA SAHIB PANCHKULA PAN: BMAKPS8132G ITA NO. 56/CHANDI/2011 ASSESSMENT YEAR: 2007-08 SH.HARI KISHAN V D.C.I.T. WARD 3 S/O SH.UDEY RAM PANCHKULA VPO NADA SAHIB PANCHKULA PAN: AVAPK1816D APPELLANT BY: SHRI MUKESH AGGARWAL RESPONDENT BY: SMT.SARITA KUMARI DR ORDER BENCH: THE PRESENT BUNCH OF THREE APPEALS IS DIRECT ED AGAINST THE SEPARATE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX (A) ON 12.11.2010 IN THEIR RESPECTIVE CASES. AT THE TIME OF HEARING IT WAS STA TED THAT THE FACT SITUATION ISSUES INVOLVED AND THE GROUNDS OF APPEAL IN ALL TH E THREE APPEALS ARE IDENTICAL. WE THEREFORE FIND IT CONVENIENT TO DISPOSE OFF TH E PRESENT BUNCH BY A CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE T HE FACTS AND THE GROUNDS OF APPEAL ARE BEING EXTRACTED FROM THE FILE OF SHRI GU RDIAL SINGH (ITA NO.54/CHANDI/2010). 2. A STATED EARLIER THE GROUNDS OF APPEAL TAKEN UP BY THE ASSESSEE IN ALL THE APPEALS ARE IDENTICAL. THEY READ AS UNDER: 1 THE ORDER OF THE LD. CIT(A) PANCHKULA CONFIRMIN G THE ORDER OF INCOME TAX OFFICER WARD 3 PANCHKULA TREATING THE EN HANCED COMPENSATION GURDIAN SINGH & OTHERS I.T.A.NOS.54 TO 56/CHANDI/2011 2 FOR COMPULSORY ACQUISITION OF AGRICULTURAL LAND AS CAPITAL GAIN AMOUNTING RS.6 94 165/- IS CONTRARY TO LAW AND THE FACTS OF T HE CASE. HENCE THE ADDITION SHALL BE DELETED. 2. FURTHER THE LD. CIT(A) PANCHKULA IS NOT JUSTIFI ED IN DISALLOWING THE CLAIM OF THE ASSESSEE REGARDING EXEMPTION OF CAPITA L GAINS AS PER THE PROVISIONS OF SECTION 10(37) OF IT ACT 1961 AND HA D ERRED IN LAW ANDFACTS OF THE CASE TREATING THE AGRICULTURAL LAND AS CAPIT AL ASSETS U/S 2(14) OF IT ACT 1961. FURTHER IT IS NOT JUSTIFIED TO INITIATE THE PENALTY PROCEEDINGS U/S 271(1)(C) AND CHARGING HE INTEREST 234A 234B 234C . 3. THE BASIC ISSUE IN ALL THE THREE APPEALS REVOLVE S AROUND THE TAXABILITY OF ENHANCED COMMISSION AND INTEREST RECEIVED BY THE AS SESSEE ON COMPULSORY ACQUISITION OF LAND. ACCORDING TO THE ASSESSEE TH E LAND COMPULSORY ACQUIRED IS AGRICULTURAL LAND AND THEREFORE NOT EXIGIBLE TO T AX. THE CASE OF THE DEPARTMENT ON THE OTHER HAND IS THAT THE LAND IS OF THE CAPIT AL NATURE WITHIN THE MEANING OF SECTION 2(14) OF THE INCOME-TAX ACT. 4. AT THE TIME OF HEARING BOTH THE PARTIES SUBMITTE D THAT EXACTLY IDENTICAL ISSUE HAS BEEN RAISED BY THIS TRIBUNAL IN ITS ORDER DATED 30.9.2010 IN CHURA RAM VS. ITO WARD 3 PANCHKULA I.T.A.NO. 863/CHD/2010 FOR ASSESSMENT YEAR 2007- 08. IT WAS SUBMITTED THAT THE TRIBUNAL AFTER ELAB ORATE DISCUSSION RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR A F RESH DECISION KEEPING IN VIEW THE DIRECTIONS GIVEN BY THE TRIBUNAL AND THEREFORE WE SHOULD ALSO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DE CISION FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL. IN ITS ORDER DATED 30.9.201 0 IN THE CASE OF CHURA RAM VS. ITO WARD 3 PANCHKULA I.T.A.NO. 863/CHD/2010 THI S TRIBUNAL HAS HELD AS UNDER: 8. ON THIS ASPECT WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. FIRSTLY IT IS TO BE OBSERVED THAT THE USE OF THE LAND FOR AGRICULTUR AL PURPOSES HAS TO BE SEEN DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRE CEDING THE DATE OF TRANSFER AS REQUIRED BY SECTION 10(37)(II) OF THE ACT AND NOT THE DATE OF ACQUISITION AS CANVASSED BY THE REVENUE. IT IS TO BE APPRECIATED THAT IN ORDER TO CHARGE TAX ON CAPITAL GAINS ACCRUING ON A PROPERTY ACQUIRED UNDER THE LAND ACQUISITION ACT 1894 THE DATE OF TRANSFER HAS TO BE RECKONED IN TERMS OF SECTION 16 OF THE LAND ACQUISITION ACT 189 4. WHERE A PROPERTY IS ACQUIRED UNDER THE LAND ACQUISITION ACT 1894 THE T ITLE TO THE LANDS VESTS IN THE GOVERNMENT U/S 16 OF THE SAID ACT ON TAKING OF POSSESSION OF LAND BY THE LAND ACQUISITION COLLECTOR IN PURSUANCE TO THE AWARD. THE ABOVE GURDIAN SINGH & OTHERS I.T.A.NOS.54 TO 56/CHANDI/2011 3 PROPOSITION IS SUPPORTED BY THE JUDGMENT OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF BUDDAIAH VS CIT 155 ITR 277 (K AR). IN THIS CONNECTION WE HAVE PERUSED THE AWARDS RENDERED BY THE LAND ACQUISITION COLLECTOR PANCHKULA ON 01.10.1999 AND 10.12.2002. IN TERMS OF THE STATED AWARDS THE POSSESSION HAS BEEN TAKEN OVER IMMEDIAT ELY AND THEREFORE THE TITLE VESTED IN THE GOVERNMENT IN TERMS OF SECT ION 16 OF THE LAND ACQUISITION ACT 1894 FROM THE SAID DATES. ACCORDI NGLY FOR THE PURPOSES OF CHARGING CAPITAL GAINS THE DATE OF TRANSFER CORRES PONDS TO THE DATES OF THE TWO AWARDS. THEREFORE FOR THE PURPOSES OF SECTION 10(37)(II) OF THE ACT THE DATE OF TRANSFER IS TO BE TAKEN AS THE DATES OF THE AWARDS. NOW IN ORDER TO EXAMINE THE CONDITION PRESCRIBED IN CLAUSE (II) OF SECTION 10(37) IT HAS TO BE ESTABLISHED THAT DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING SUCH DATES OF TRANSFER THE LAND WAS BEIN G USED FOR AGRICULTURAL PURPOSES BY THE ASSESSEE OR A PARENT OF HIS. THE PL EA OF THE ASSESSEE FOR AGRICULTURAL USE OF LAND IS BASED ON COPIES OF KHAS RA GIRDAWRI WHICH CLEARLY SHOWS GROWING OF CROPS IN THE RELEVANT PERIOD. THE OBJECTIONS OF THE DEPARTMENT THAT THE AGRICULTURAL USE IS NOT PROVED BECAUSE OF THE NON MENTIONING OF CROPS IN THE AWARD GIVEN BY THE LAND ACQUISITION COLLECTOR PANCHKULA IN OUR VIEW IS A MERE PRESUMPTION WHICH DOES NOT DISTRACT FROM THE EVIDENTIARY VALUE OF THE KHASRA GIRDAWRI PRODUC ED BY THE ASSESSEE. EVEN THE MENTIONING OF GAIR MUMKIN IN THE KHASRA GI RDAWRI CANNOT BE CONSTRUED AS FATAL TO THE CONTENTS OF KHARSA GIRDAW RI WHICH REVEAL THE GROWING OF CROPS THUS PROVING THE AGRICULTURAL USE OF THE LAND. ON THIS ASPECT THE LD. COUNSEL EXPLAINED THAT THE LAND WAS SELF IRRIGATED. 9. ON THIS ASPECT A REFERENCE TO THE JUDGEMENT O F THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS SMT . SAVITA RANI 270 ITR 40 (P&H) IS NOTE WORTHY. THE HON'BLE HIGH COURT IN T HE CONTEXT OF SECTION 54B OF THE ACT WAS EXAMINING WHETHER THE LAND CAN B E SAID TO HAVE BEEN USED FOR AGRICULTURAL PURPOSES. THE DEPARTMENT HAD SOUGHT TO HOLD THAT THE LAND WAS NOT BEING USED FOR AGRICULTURAL PURPOS ES BECAUSE THE LAND WAS SAID TO BE SITUATED WITHIN THE MUNICIPAL LIMITS; TH AT ONLY FODDER GRASS AND VEGETABLES WERE GROWN IN THE KHARIF SEASON WHILE TH E LAND REMAINED FALLOW IN THE RABI SEASON; AND THAT ASSESSEE HAD ACQUIRED HUGE CHUNKS OF LAND AND CONSTRUCTED CERTAIN GODOWNS ALSO. ALL THESE OB JECTIONS WERE NOT HELD AS CONCLUSIVE IN THE FACE OF THE KHASRA GIRDAWRI OF THE LAND PRODUCED BY THE ASSESSEE. AS PER THE HON'BLE HIGH COURT KHASRA GIR DAWRI PRODUCED BY THE ASSESSEE SHOWED THAT AGRICULTURAL OPERATIONS WERE B EING CARRIED ON BY THE ASSESSEE AND MERELY BECAUSE THE LAND WAS LOCATED IN A COMMERCIAL AREA OR LAND WAS HAVING PARTIAL UTILIZATION FOR NON-AGRICUL TURAL PURPOSES WERE NOT THE RELEVANT CONSIDERATIONS. EVEN IN THE CASE BEFO RE US KHASRA GIRDAWRI PRODUCED BY THE ASSESSEE CLEARLY SHOWS THAT DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER THE LAN D WAS BEING PUT TO USE FOR AGRICULTURE PURPOSES. THE KHASRA GIRDAWRI PLAC ED AT PAGES 8-9 AND 14- 15 OF THE PAPER BOOK SHOW GROWING OF WHEAT BAJRA MAKKI CHARI ETC. MOREOVER IN THIS CASE WE FIND THAT THE LOWER AUTHO RITIES HAVE DISREGARDED THE EVIDENCE PRODUCED BY THE ASSESSEE BY MERELY DIS BELIEVING THE SAME AND WITHOUT BRINGING ON RECORD ANY CLINCHING EVIDEN CE TO THE CONTRARY. THEREFORE IN VIEW OF THE COPIES OF KHASRA GIRDAWRI OF THE RELEVANT PERIOD RELIED UPON BY THE ASSESSEE IT CAN BE SAID THAT IN THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER THE LAND S IN QUESTION WERE USED GURDIAN SINGH & OTHERS I.T.A.NOS.54 TO 56/CHANDI/2011 4 FOR AGRICULTURAL PURPOSES AND ACCORDINGLY ASSESSEE SATISFIES THE CONDITIONS MENTIONED IN SECTION 10(37)(II) OF THE ACT. MERELY BECAUSE THE LAND WAS ADJOINING A DEVELOPED AREA WOULD NOT TAKE AWAY THE AGRICULTURAL USE OF THE LAND PORTRAYED BY THE KHASRA GIRDAWRIS. THEREFORE OUR CONCLUSION THAT USE OF THE LAND FOR AGRICULTURAL PURPOSES STANDS PROVED . IT MAY BE MENTIONED THAT THE LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT THE LANDS MENTIONED IN GIRDAWRI AT KHASRA NOS. 420 AND 421 HAVE NOT BEEN P UT TO USE FOR AGRICULTURAL PURPOSES AS CERTAIN BUILDINGS WERE CON STRUCTED THEREON AS EVIDENCED BY THE KHASRA GIRDAWRI. THEREFORE THE COR RESPONDING ENHANCED COMPENSATION RECEIVED THIS YEAR SHALL NOT BE ELIGIB LE FOR EXEMPTION UNDER SECTION 10(37) OF THE ACT. 10. IN SO FAR AS CONDITION PRESCRIBED IN CLAUSE (III) OF SECTION 10(37) IS CONCERNED THERE IS NO DISPUTE THAT ENHANCED COMPEN SATION HAS BEEN RECEIVED BY THE ASSESSEE DURING THE YEAR IN PURSUAN CE OF AN ACQUISITION BY THE STATE GOVERNMENT UNDER THE PROVISIONS OF THE LA ND ACQUISITION ACT 1894. 11. CLAUSE (IV) OF SECTION 10(37) PROVIDES THAT TH E COMPENSATION OR CONSIDERATION CONSIDERED EXEMPT SHOULD BE RECEIVED BY THE ASSESSEE ON OR AFTER FIRST DAY OF APRIL 2004. THE IMPUGNED COMPE NSATION HAS BEEN CLEARLY RECEIVED BY THE ASSESSEE AFTER THE AFORESAID DATE A ND IS THEREFORE ELIGIBLE FOR EXEMPTION. IN THIS CONNECTION AS PER THE CIT(A PPEALS) THE SAID CONDITION IS NOT SATISFIED BY THE ASSESSEE BECAUSE THE PROVISIONS OF SECTION 10(37) ARE APPLICABLE TO CASES WHERE THE AGRICULTUR AL LAND HAS BEEN COMPULSORILY ACQUIRED AFTER 01.04.2004 AND IN THE C ASE OF THE ASSESSEE THE LAND HAS BEEN ACQUIRED ON AN EARLIER DATE. IN OUR CONSIDERED OPINION THE REASONING PUT FORTH BY THE CIT(APPEALS) IS NOT CONSISTENT WITH THE PROVISIONS OF SECTION 10(37)(IV). THE SAID CLAUSE MERELY PROVIDES THAT THE INCOME OUGHT TO HAVE BEEN RECEIVED BY THE ASSESSEE ON OR AFTER 01.04.2004 WHICH IS NOT IN DISPUTE IN THE PRESENT CASE. THEREFORE THE CONDITION PRESCRIBED IN CLAUSE (IV) OF SECTION 10(3 7) IS SATISFIED IN THIS CASE. 12. IN THE RESULT WE SET ASIDE THE ORDER OF THE C IT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE EXEMPTION ELIGIB LE U/S 10(37) OF THE ACT KEEPING IN MIND THE NON-AGRICULTURAL USE OF TH E LANDS AS CONCEDED BY THE APPELLANT. NEEDLESS TO MENTION THE ASSESSING OFFICER SHALL RE-COMPUTE THE AMOUNT OF EXEMPTION U/S 10(37) OF THE ACT AFTER ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THUS ON THIS ASPECT ASSESSEE PARTLY SUCCEEDS. 5. WE HAVE HEARD BOTH THE PARTIES. SINCE BOTH THE PARTIES HAVE SHOWN THEIR KEENNESS TO GO BACK TO THE ASSESSING OFFICER FOR A FRESH DECISION IN THE LIGHT OF THE DIRECTIONS GIVEN BY THIS TRIBUNAL IN THE ORDER REFERRED TO ABOVE. ALL THE THREE MATTERS UNDER APPEAL ARE RESTORED TO THE FILE OF TH E ASSESSING OFFICER FOR A FRESH DECISION. HE WILL CONSIDER ALL THE ASPECTS OF THE CASE DE NOVO IN CONFORMITY WITH LAW INCLUDING THE DECISION OF THE TRIBUNAL CITED (S UPRA). REASONABLE OPPORTUNITY GURDIAN SINGH & OTHERS I.T.A.NOS.54 TO 56/CHANDI/2011 5 OF HEARING SHALL BE GIVEN TO THE ASSESSEE. ALL THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 FEBRUARY 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE 28 FEBRUARY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 4. THE D.R. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH GURDIAN SINGH & OTHERS I.T.A.NOS.54 TO 56/CHANDI/2011 6