Income Tax Appellate Tribunal - Jaipur
Om Prakash Rasoria, Alwar vs Assessee on 24 July, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM
vk;dj vihy la-@ITA No. 209/JP/2014
fu/kZkj.k o"kZ@Assessment Year : 2006-10
Shri Om Prakash Rajoria cuke The CIT
267, Arya Nagar Vs. Ajmer
Scheme No.1, Alwar
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAOPR 6556 N
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal
jktLo dh vksj ls@ Revenue by :Smt. Rolee Agarwal (CIT-DR)
lquokbZ dh rkjh[k@ Date of Hearing : 28/05/2015
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 24 /07/2015
vkns'k@ ORDER
PER R.P. TOLANI, JM
This is an appeal filed by the assessee against the order of the ld. CIT, Alwar dated 24-01-2014 for the assessment year 2006-07 u/s 263 of the Act raising following grounds.
(i) challenging the action of ld. CIT u/s 263 of the Act in setting aside the assessment order dated 23-12-2011 u/s 148 r.w.s. 143(3) of the Act.
(ii) the ld. CIT held in not allowing deduction u/s 54B while computing the capital gains and held that the assessee had sold the plot and not agricultural land despite the fact that agricultural activities were carried on by the assessee 2 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar 2.1 Brief facts of the case are that the original assessment was framed u/s 143(3) of the Act vide order dated 23-12-2008. Thereafter the notice u/s 147/148 of the Act was issued on 29-03-2011 which was duly served on the assessee. In response to notice, the assessee vide application dated 25-04-2011 requested to treat the return already filed as in compliance to notice u/s 148 of the Act. The basis and reasons for reopening of the assessment was to the effect that the deduction u/s 54B of the Act claimed by assessee qua sale of Sohna land was wrongly allowed as one half of the new agriculture land was purchased in the name of the assessee's wife Smt. Anita Rajni. Consequently, claim u/s 54B of the Act was restricted to Rs. 15,51,730/-.
2.2 The ld. CIT called for the record and found that the assessment order passed by the AO was erroneous and prejudicial to the interest of the Revenue as enquiries were not made by the AO while allowing deduction u/s 54B inasmuch as the assessee sold the plots of residential land and not of agricultural land. Therefore, there was no eligibility for claim of deduction u/s 54B of the Act. Consequently, a show cause notice dated 12-10-2012 u/s 263 of the Act was issued.
2.3 The assessee filed its reply dated 31-01-2013 explaining that AO passed the order u/s 148 after conducting proper and adequate enquiry and arrived at a definite view that the land sold was urban agricultural 3 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar land and has been used for agricultural purposes in preceding two years besides section 54B does not restrict the benefit to the agricultural land only. For this proposition, decision of Hon'ble Punjab & Haryana High Court in case of CIT Vs. Savita Rani 271 ITR 40 was relied upon. Further, in support of the user of the land for agricultural purpose, copy of Jamabandi was filed along with affidavit of Sh. Shyam Singh confirming carrying on the agricultural activities on the assessee's land. 2.4 Aggrieved, the assessee is before us wherein the ld. Counsel for the assessee contends as under:-
(i) During the course of 148 proceedings, the assessee furnished the copy of sale deed/ sale agreement of the land sold by him which reflects that land in question was agricultural land. Ld. AO has referred to these documents and given findings of fact that the sold land belongs to the assessee. Thus the AO verified the claim of the assessee u/s 54B of the Act and disallowed ½ of the land was purchased in the name of the assessee. These facts clearly show that the AO made proper enquiry and applied his mind. Therefore, he disallowed 1/2 of claim u/s 54B of the Act. Since due inquiries were made, his order cannot be held to be erroneous and prejudicial to the interest of the revenue.
(ii) In the return for the assessment year 2005-06, the assessee had declared agricultural income of Rs. 10,140/-
which was accepted vide assessment u/s 143(3). The 4 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar previous record was also before the AO and must have been verified by him. The suspicion of the ld. CIT that land sold was not used for agricultural purposes is not justified and cannot be a valid basis for action u/s 263 of the Act.
(iii) The assessee vide letter dated 31-01-2013 had enclosed the copy of the jamabandi whereas the ld. CIT has given a finding that such jamanbandi was not found attached with the letter, besides this fact was never communicated to the assessee at any time. By affidavit Shri Shyam Singh has deposed that the assessee had carried out the agricultural operations on the this land.
(iv) From the copy of Khasra Girdawari from F.Y. 2002- 03 to 2006-07, it is reflected that agricultural activities were carried on this land. All these facts prove that all such documents were filed before the AO in the assessment proceedings which were verified by him and after proper verification and due enquiries, the claim of the assessee u/s 54B of the Act was examined and allowed as one half.
(v) The facts about the nature of the land as residential plot in sale deed and construction comprising of 9 rooms, bathrooms, etc. were all verified by ld. AO. Only because in the sale deed the nature of the land is stated to be a residential plot, it would not override the fact that the land sold was agricultural land so long as the category of such land in the revenue records is agricultural and it is not converteded into residential.
The ld. AR placed following case laws:-
5 ITA No. 209/JP/2014
Shri Om Prakash Rajoria vs. CIT , Alwar
(i) Hindustan Industrial Resources Ltd. Vs ACIT [2011] 335 ITR 77 (Delhi)
(ii) CIT v Smt. DEBBJE ALENO [2011] 331 ITR 59 (Bom)
(iii) CIT Vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi) (HC)
(iv) Mahish Kumar Vs. CIT (2012) 134 ITD 27/ 17 ITR (Trib.) 324 (Indore)(Trib.)
(v) CIT Vs. Gaberil India Ltd. 203 ITR 108, 113, 114 (Bom.) (HC)
(vi) CIT Vs. Amit Corpn. (2012) 213 Taxman 19 (Guj.) (HC) (Mag.)
(vii) CIT Vs. Leisure Wear Exports Ltd. (2011) 341 ITR 166/ 202 Taxman 130 (Magz.) (Delhi)(HC) 2.5 Ld. AR further pleaded that the order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue which has been passed after due enquiries and proper verification of the case. Therefore, the assumption of jurisdiction u/s 263 is untenable. Thus the order of the ld. CIT may be quashed.
2.6 On the other and, the ld. DR contends that:
i. Ld. CIT has given a clear finding that on perusal of the record, the copy of jamabandi was not found and a copy of jamabandi for financial year 2001-02 was found which does not pertain to the land sold in this year.
ii. The agricultural land is always sold on the basis of ''Khasra Numbr'' and measurement in ''Marla'' and ''Sarsai'' whereas the assessee has sold this land as residential measuring in sq. yards. iii. Land measuring 222.23. sq.yards sold vide agreement dated 20- 03-2006 for Rs. 13.60 lacs as a building consisting of Nine Rooms with boundary wall, open space, stairs etc. 6 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar iv. All the facts indicate that the land in question was sold in the form of plots and not as an agricultural land. Besides, no agricultural income has been disclosed in the IT Return for the assessment year 2006-07. Consequently, the assessee's claim of deduction u/s 54B was not allowable.
v. From the perusal of the assessment record, it is found that no inquiry has been caused with regard to first condition stated above, i.e. used of said land for agricultural purpose in the two years immediately preceding the date of such transfer. In this regard, reliance is placed to the decision of Kerala High Court in the case of Smt. Asha George vs. ITO (2013) 351 ITR 0123 in which Hon'ble High Court affirmed the finding of the lower authorities that the assessee was not entitled to the benefit of Section 54B on the ground that the property which she sold was not used for agricultural purposes for a period of two years prior to date of the sale as required u/s 54B of the I.T. Act. Therefore, ld. CIT has rightly exercised his jurisdiction u/s 263. Besides he has adopted a reasonable view in setting aside the assessment order for fresh consideration after giving the assessee adequate opportunity of being heard.
2.7 We have heard the rival contentions and perused the materials available on record. It has not been disputed by the assessee that agricultural income was not shown in this year, the claim of there being agricultural income rests on preceding year. The agricultural income shown in earlier year has not been demonstrated to be earned from the 7 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar land which is sold in the form of plots by the assessee. It is a settled law that burden to prove the eligibility for claim of deduction and exemption is on the assessee. While examining the record under sec. 263, CIT has to see whether the subordinate authority has considered relevant issues and enquired into the relevant aspect of the claims in the year in question.
Since the agricultural income in this year was not shown, the AO before partly accepting the assessee's claim u/s 54B ought to have enquired whether the land in question was used for agricultural purposes in the last two years or not, There is no finding to this effect in the assessment order. From the second page onwards till the end of impugned assessment order, there is only reference to claim of Section 54B of the Act. Thus in our view, this crucial aspect of land in question agriculture or residential plots, it's being sold by way of plots in sq. yards become necessary for allowability of claim. Record does not reveal that these were considered or inquired. Thus there is a total lack of enquiry on these aspects besides whether the agricultural income was earned or not from this very land. In our considered view, the assessment order suffers from lack of enquiry on these crucial aspects and it is not a case of partial inquiry as pleaded to be covered by the judgement of Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. (supra) and other citations. Thus in the entirety of the facts and circumstances of the case, we find merit in the 8 ITA No. 209/JP/2014 Shri Om Prakash Rajoria vs. CIT , Alwar arguments of the ld. CIT - DR and hold that the order passed by the AO was erroneous and prejudicial to the interest of the Revenue. The ld. CIT has rightly passed the order u/s 263 with the direction that the AO should properly frame the assessment order afresh after making proper enquiries and by affording adequate opportunity of being heard to the assessee. Thus the order of the ld. CIT is upheld and the appeal of the assessee is dismissed.
3.0. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 24/07/2015.
Sd/- Sd/- ¼Vh-vkj-ehuk½ ¼vkj-ih-rksykuh½ (T.R. Meena) (R.P.Tolani) ys[kk lnL;@ Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24 /07/ 2015 *Mishra
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Om Prakash Rajoria, Alwar
2. izR;FkhZ@ The Respondent- The CIT,
3. vk;dj vk;qDr@ CIT,
4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
5. xkMZ QkbZy@ Guard File (ITA No.209/JP/2014) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar