Income Tax Appellate Tribunal - Amritsar
Income Tax Officer vs Chaman Lal Nagpal on 22 February, 2006
Equivalent citations: (2006)102TTJ(ASR)890
ORDER
Bhavnesh Saini, J.M.
1. This order shall dispose of both the appeals filed by the Revenue and the assessee for the asst, yrs. 1995-96 and 1996-97 on common questions/grounds of appeal.
2. We have heard the learned representatives of both the parties and gone through the observations of the authorities below and details submitted in the paper book.
3. ITA No. 441/Asr/2003 (Departmental appealAsst. yr. 1995-96):
This appeal by the Revenue is directed against the order of the CIT(A), Jalandhar dt. 29th Aug., 2003 for the asst. yr. 1995-96 challenging the deletion of addition of Rs. 16,58,155 made by the AO under the head "Capital gains".
3.1 The facts are that the return was filed by the assessee on 31st Aug., 1995 declaring income of Rs. 8,29,513 plus agriculture income of Rs. 25,000. Assessment was completed under Section 143(3) and returned income was accepted. Subsequently, the case was reopened by the AO after recording the reasons and notice under Section 148 was issued on 30th May, 2001 after obtaining approval of the CIT, Jalandhar. The assessee in response thereof filed return of income and filed various replies before the AO. During the year, the assessee received enhanced compensation of Rs. 16,58,155 on various dates i.e. on 14th Feb., 1995, 19th Sept., 1994 and 19th Nov., 1994 in respect of his land situated in village Afghan Patti, which had been acquired by HUDA. The compensation for acquisition of this land was first awarded on 4th Jan., 1988. The assessee claimed this receipt to be exempt from capital gain tax on the ground that the land in question, was situated more than 8 kms. away from the municipal limits of Panipat. To this effect, affidavit was also filed by the assessee in support of his contention during the asst. yr. 1992-93. In later years also, no capital gains tax has been paid by the assessee on the enhanced compensation received by him on the similar grounds. During the appellate proceedings for the asst. yr. 1996-97, the CIT(A) directed to make enquiries to determine the fact about the distance of the land in question, about the municipal limits of Panipat. Accordingly, Shri Vinod Kumar, Inspector was deputed to make the enquiry, who has submitted his report dt. 28th May, 2001 and submitted that the land in question is situated well within 8 kms. of the municipal limits. On the receipt of this information, the AO was of the view that the capital gains was chargeable to tax which had escaped assessment and, therefore, the assessment proceedings were reopened. The AO has mentioned that the assessee was asked to produce certificate from Tehsildar, Panipat. In this regard, no such certificate has been filed. The assessee has objected to the levy of the capital gains tax on the ground that land acquired by the Government is outside the municipal limits and is not covered in the notification issued by the CBDT. Therefore, under Section 2(14) this is not a capital asset and no capital gain arises thereon. The assessee's attention was drawn to the notification dt. 6th Jan., 1994 whereby the land of the assessee outside municipal limit (within 8 kms.) is covered and is liable to capital gains tax. The assessee submitted that the above notification will be of no use since the land in question, was acquired in the years 1987 and 1991 and not on or after 6th Jan., 1994. The AO considering the reply of the assessee and considering the notification dt. 6th Jan., 1994 was of the view that the land was situated within 8 kms. from the municipal limits of Afghan Patti, Panipat, which was acquired by HUDA under the Land Acquisition Act and accordingly directed to charge capital gains on such income.
3.2 The addition was challenged before the CIT(A) and detailed written submissions were filed and it was submitted that the land involved was agricultural land, which stood transferred during the asst, yrs. 1988-89 and 1992-93 as the same was acquired by HUDA in those years. It was mentioned that the capital gains tax was not leviable on the transfer of said land in those years as it was not a capital asset at the relevant time during the period of transfer. It was argued that an asset which is not a capital asset at the relevant time of transfer will not become capital asset at the time of receipt of payment of enhanced compensation in respect of the same asset. It was further argued that the compensation got merged with the original awards acquiring the agricultural land by the HUDA in the years 1987 and 1991 and due to this fact the right of the assessee over the land acquired by HUDA ceased to exist except to receive the value/compensation thereof. It was submitted that a certificate dt. 8th June, 2001 duly signed by the Tehsildar, Panipat confirming that the agricultural land of the assessee acquired by the HUDA was outside the municipal limits of Panipat stands furnished before the AO. It was further submitted that from the asst. yr. 1970-71, a new Sub-clause (iii)(a) and (b) of Section 2(14) was substituted bringing within the term "capital asset" agricultural land situated within the limit of any municipality and in exercise under the said section for urbanisation of areas for income-tax. The Instruction was issued vide No. S.O. 77(E), dt. 6th Feb., 1973 available in (1973) 83 ITR (St) 145-160 and the name of Panipat was not included therein. It was pointed out that the said notification was in force till 6th Jan., 1994 when fresh Notification No. 9447, dt. 6th Jan., 1994 available at (1994) 116 CTR (St) 13 : (1994) 205 TTR (St.) 121-163 for extended limit was issued for urbanisation of areas for income-tax purposes under Section 2(14)(iii)(b) of the IT Act. It was further pointed out that prior to second notification the agricultural land situated outside the municipal limits of Panipat were not within the definition of capital asset when the acquisition was effected by HUDA during 1988-89 and 1992-93 and in view of this the same AO for the asst. yr. 1992-93 in reassessment proceedings has not levied capital gains tax on the agricultural land acquired by HUDA accepting the same to be outside the municipal limits of Panipat but wrongly assessed the enhanced compensation received during the assessment year under consideration in respect of the same agricultural lands which were considered as exempt by him during the year of acquisition. The assessee's counsel made reference to definition of transfer under Section 2(14) [sic-2(47)] of the IT Act and also relied on the decision of the Hon'ble apex Court in the case cited at Mrs. Khorshed Shapoor Chenai v. Asstt. CED and Pandit Lakshmi Kant Jha v. CWT 1973 CTR (SC) 260 : (1973) 90 TTR 37 (SC) and mentioned that there cannot be any taxable capital gains on the amounts in respect of same land received during the relevant year as only the amount was due but the transfer and possession of the land had already been completed. Reliance was also placed on the decision of the Hon'ble apex Court in the case reported as K.M. Sharma v. ITO and mentioned that the judgment is squarely applicable to the case of the assessee as the enhanced compensation received later in respect of the same land is not taxable.
3.3 The CIT(A) considering the above submissions and material on record deleted the entire addition under the head "Capital gains". His findings in para 2.2 are reproduced as under:
2.2 I have considered the submissions of the appellant in the light of the details on the record. The question of taxability under the head 'Capital gains' is in turn dependent on the decision whether the asset, i.e., agricultural lands which were acquired by HUDA in the years 1987 and 1991 constituted capital asset because an asset which is not a capital asset at the relevant time of transfer will not become a capital asset at the time of receipt of payment of enhanced compensation in respect of the same asset. The subject lands being acquired in the years 1987 and 1991 were not specified assets because of Section 2(14)(iii)(b) of the IT Act. The AO admitted in asst. yr. 1992-93 that the agricultural lands acquired by HUDA were outside the municipal limits and accordingly did not charge capital gains tax. Prior to the notification dt. 6th Jan., 1994, the said lands being within 8 kms. could have represented capital asset but the town of Panipat was not specified in this behalf vide earlier notification in the Official Gazette. The later notification dt. 6th Jan., 1994 became effective after the lands were acquired and the town Panipat was also included therein but the lands were acquired prior to the date from which the later notification became effective. Therefore, the component of enhanced compensation received by the appellant did not get covered by the definition of term 'transfer' as per Section 2(47) of the IT Act and the appellant instead of the compensation amount rightly accounted the interest received on the enhanced compensation amount for taxation. Accordingly, I agree with the appellant that the enhanced amount received later in respect of the same lands were not taxable and find that the judicial pronouncement relied upon in this regard support the case of the appellant. Therefore, the addition of Rs. 16,58,155 made by the AO under the head 'Capital gains' is deleted.
3.4 The learned Departmental Representative relied upon the order of the AO and also relied upon the notification dt, 6th Jan., 1994 referred to by the AO and submitted that the assessee has not furnished certificate of Tehsildar and that the Inspector had submitted a report against the assessee on 28th May, 2001 and that the land of the assessee is within 8 kms. of the municipal limits and as such the AO was justified in charging capital gains tax. The learned Departmental Representative relied upon the decision of the Hon'ble Punjab & Haryana High Court in the matter of CIT v. Shiv Chand Satnam Paul (1998) 145 CTR (P&H) 246 : (1998) 229 TTR 745 (P&H). The learned Departmental Representative, however, Admitted that in the asst. yr. 1992-93, the AO did not charge capital gains tax on the same land vide order dt., 24th June, 2002.
3.5 On the other hand, the learned Counsel for the assessee relied upon the submissions made before the CIT(A). He has referred to pp. 17 and 18 of the paper book, which is a certificate issued by the Tehsildar, Panipat dt. 8th June, 2001 in which it was certified that the land situated in village Afghan Patti' during 1987 and 1991 were outside the municipal committee limit and now also the area is outside the municipal limit. He has submitted that on the same facts the AO did not charge capital gains tax in the preceding asst. yr. 1992-93. He has submitted that since the land was acquired earlier in the years 1987 and 1991, the land of the assessee did not fall in the municipal limits and the notification with regard to the distance of 8 tons., etc., and since in the year of "acquisition of land, the land of the assessee was not in the municipal limit, therefore, the agricultural land of the assessee could not have been treated as capital asset. Therefore, on enhanced compensation on the same facts the AO is not justified in charging capital gains tax on the agricultural land which is not a capital asset. He has submitted that the issue is squarely covered by the decision of the Hon'ble Punjab and Haryana High Court in the matter of A.R. Dahiya v. Asstt. CIT . The learned Counsel for the assessee further submitted that the certificate of the Tehsildar was filed before the AO and that the report of the Inspector does not give any exact location, which was also not confronted to the different (sic).
3.6 We have considered the rival submissions and material available on record. It is not in dispute that the land in question, was acquired in the year 1987 and 1991. The assessee for the first time received the compensation for acquisition of land on 4th Jan., 1988. The certificate of the Tehsildar, Panipat dt. 8th June, 2001 clearly proved statement of the assessee that his land in village Afghan Patti, Panipat, during the year 1987 and 1991 was outside the municipal limits and even at the time of issue of certificate it was also situated outside the municipal limits. Section 45 provides charging of the capital gain on the profits or gains arising from the transfer of a capital asset. Section 45(5) deals with transfer of a capital asset being transferred by way of compulsory acquisition under any law and rule as under:
45(5) Notwithstanding anything contained in Sub-section (1), where the capital gain arises from the transfer of a capital asset, being a transfer by way of compulsory acquisition under any law, or a transfer the consideration for which was determined or approved by the Central Government or the RBI, and the compensation or the consideration for such transfer is enhanced or further enhanced by any Court, Tribunal or other authority, the capital gain shall be dealt with in the following manner, namely:
(a) the capital gain computed with reference to the compensation awarded in the first instance or, as the case may be, the consideration determined or approved in the first instance by the Central Government or the RBI shall be chargeable as income under the head "Capital gains" or the previous year in which such compensation or part thereof, or such consideration or part thereof, was first received; and
(b) the amount by which the compensation or consideration is enhanced or further enhanced by the Court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee.
Section 2(14)(iii)(a) and (b) deals with the definition of "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include agricultural land in India, not being land situated in (a) and (b).
3.7 The CIT(A) on consideration of the material on record was of the view that the land in question which was acquired in the year 1987 and 1991 was not specified asset because of Section 2(14)(iii)(b) of the IT Act. The AO admitted in the asst. yr. 1992-93 that the agricultural land acquired by the HUDA was outside municipal limit and did not charge capital gain tax. The CIT(A), therefore, was of the view that prior to the notification dt. 6th Jan., 1994, the said land being within 8 kms. could have represented the capital asset but town of Panipat was not specified in this behalf vide the earlier notification of the Official Gazette. This finding of the CIT(A) has not been disputed by the learned Departmental Representative. The CIT(A) further mentioned that later notification dt. 6th Jan., 1994 became effective after the lands were acquired and the town of Panipat was also included therein. When the lands were acquired prior to the date from which the later notification became effective, the crux of the findings of the CIT(A) would be that when the earlier notification was in force, the name of Panipat area was not included in the notification and as such at the time of acquiring the land in question, the land of the assessee would not fall within the capital asset because the agricultural land was situated outside the municipal limits. The contention of the learned Counsel for the assessee had been that since the agricultural land of the assessee was not capital asset within the meaning of Section 2(14) of the IT Act at the time of acquisition, therefore, at the time of receiving enhanced compensation the same land would not fall in the definition of the capital assets. We find force in his submissions. The earlier notification did not specify the town of Panipat in the specified list and even the Tehsildar confirmed this fact that the land of the assessee did not fall within the municipal limit. The capital gains could be charged on the transfer of the capital asset. However, there was no transfer of the capital asset in the year under appeal because it had already been transferred earlier and at the time it did not fall within the definition of capital asset. Therefore, the component of Section 45 r/w Section 45(5) of the IT Act were not specified in this case. The Hon'ble Punjab and Haryana High Court dealing with the identical question in the matter of A.R. Dahiya (supra) held as under:
Where the Revenue has accepted the claim that the land in question was agricultural land not falling within the definition of 'capital asset1 in the year when the land was compulsorily acquired, it cannot be permitted to treat it as a capital asset in the year in which enhanced compensation is received. Once the land in question is held to be not a capital asset, the question of additional compensation being assessed as capital gains under Section 45(5) of the IT Act, 1961 does not arise.
The case of the assessee is, therefore, covered by the aforesaid decision of the Hon'ble Punjab and Haryana High Court. We may also mention that though Inspector of the IT Department, Shri Vinod Khanna was deputed to make the enquiry but he has not given any specific report. His report is based upon the assumption of certain facts without actually going into the actual measurement. Even otherwise in view of the above facts when earlier the agricultural land of the assessee was not treated as capital asset, therefore, the report of the Inspector loses its significance, which is otherwise not based upon the actual measurement.
3.8 The learned Departmental Representative relied on the decision of the Hon'ble Punjab and Haryana High Court in the matter of CIT v. Shiv Chand Satnam Paul (supra) but in this case the issue was whether in the fact and the circumstances of the case, the Tribunal was right in law in holding that capital gains arose in the asst. yr. 1971-72 and not in the asst. yr. 1972-73. This case is, therefore, not directly applicable to the present case. Considering the above facts and the circumstances of the case and the finding of the CIT(A), we do not find any merit in the appeal of the Revenue. The same is accordingly dismissed.
4. ITA No. 278/Asr/2005 (Assessee's appealAsst, yr. 1996-97):
In this appeal, the following effective issues have been raised which we shall discuss as under:
4.1 Issue No. 1 : On this issue, the assessee challenged the addition of Rs. 1,50,000 received on account of sale of old car. The AO has made the addition of Rs. 1,50,000 invested in purchase of car firstly disbelieving that the assessee sold old car for Rs. 1,50,000. The assessee had an old Maruti car bearing No. PB-08-G-9010 which he sold on 21st Feb., 1994 for Rs. 1,50,000. On enquiry by the AO, the assessee contacted the broker through whom the car was sold and the receipt which he gave him was produced before the AO. However, this was a wrong receipt bearing wrong chassis number and wrong engine number and wrong signatures. On being pointed out the assessee again contacted the broker and made deep probe and came to know that the car was sold to M/s Sumitra Industries, G.T. Road, Bye Pass, Jalandhar. The mistake occurred because the car was purchased by Shri Ashok Kumar, partner of M/s Sumitra Industries and the other receipt earlier produced was also in the name of Shri Ashok Kumar. The letter from M/s Sumitra Industries, was also filed before the AO. The mistake was detected during the course of assessment itself and the assessee vide his letter dt. 16th Dec., 1998 brought the true facts before the AO supported by documentary evidence. It was also submitted that in case there was any doubt with the AO he could have made enquiry from the District Transport Officer (DTO), Jalandhar. It was also submitted that the assessee made an application before the DTO confirming this fact with regard to the transfer of car of the assessee in the name of M/s Sumitra Industries, Jalandhar. It was, therefore, submitted that the aforesaid amount was available to the assessee on sale of old car for the purchase of new car. As such, the addition is unjustified. The learned Counsel for the assessee submitted before the CIT(A) that the amount of Rs. 1,50,000 received on sale of old car was not utilised anywhere and as such it was available for the purchase of new car for Rs. 2,50,000. The assessee relied on the decision of the Hon'ble Punjab and Haryana High Court in the matter of Shivcharan Dass v. CIT where the cash was kept by the assessee from October, 1951 to 1956, i.e., for about 4/5 years and deposited in bank thereafter. It was held that in the absence of any evidence to the effect that the sum was utilised by the assessee in any other manner, the default was not justified in unreasonably rejecting a good explanation. The AO submitted his comments before the CIT(A) stating therein that the details of transfer of ownership as submitted by the assessee have been verified from the DTO, Jalandhar and as per which the car was transferred from the assessee's name to M/s Sumitra Industries, Jalandhar on 18th March, 1994 whereas new car was purchased in June, 1995, which is stated to be utilised for purchase of new car. Therefore, such amount would not be available to the assessee. The CIT(A) considering the above facts did not accept the explanation of the assessee because of difference in the explanation of the assessee with regard to the sale of car. The CIT(A) also did not accept the explanation of the assessee that cash was kept with the assessee on sale of the car which was utilised after 15 months. It was also held that the assessee kept the cash of Rs. 1,50,000 at home and at the same time he was withdrawing money for the purpose of household expenses. The assessee's explanation was not accepted, therefore, the addition was confirmed.
4.2 The learned Counsel for the assessee reiterated the submissions made before the CIT(A) and submitted that the old car was sold to M/s Sumitra Industries, which had given a certificate and the certificate is corroborated with the certificate of the DTO. He has submitted that the assessee kept the cash with him. He has submitted that earlier mistake in giving number is rectified, therefore, the amount was available to the assessee for purchase of new car. He has relied upon the decision of the Hon'ble Punjab and Haryana High Court in the case of Shivcharan Dass v. CIT (supra).
4.3 On the other hand, the learned Departmental Representative relied upon the orders of the authorities below and submitted that the assessee kept the cash for about 15 months for which no explanation is given and the assessee was withdrawing cash from bank for the purpose but he must have spent the amount for another purpose and cash was not available to the assessee.
4.4 On consideration of the above facts and submissions, we are of the view that the addition is clearly unjustified wherein the ownership of the assessee of old car is not in dispute. Only source of income is agricultural income and Ors. The assessee has sold the car to M/s Sumitra Industries who have confirmed this fact by giving a certificate before the AO and the same is also available in the file. This fact is supported by the certificate issued by the District Transport Authority. Therefore, the sale of the car is not in dispute in a sum of Rs. 1,50,000. The earlier explanation of the assessee might have some wrong facts that the car was sold through one of the partners of M/s Sumitra Industries and in this regard the assessee might have given some wrong explanation but on making inquiry into the matter all the correct facts were brought to the notice of the AO, therefore, such facts could not have been disbelieved by the AO. The only question, therefore, left for consideration is whether this amount was available to the assessee for the purchase of new car after 15 months. The learned Counsel for the assessee relied upon the decision of the Hon'ble Punjab and Haryana High Court in the matter of Shivcharan Dass (supra) in which the cash was kept by the assessee for more than 4/5 years and it was deposited thereafter. Still no addition was made and it was held that the amount was available to the assessee. It was held by the Hon'ble High Court in this case that in the absence of any evidence to the effect that the said sum was utilised by the assessee in any other manner, the Department was not justified in rejecting the good explanation of the assessee. In the aforesaid case, the Revenue Department held that the assessee utilised the amount on sale of car for some other purpose, therefore, the burden was upon the assessee (sic-Revenue) to prove that the assessee utilised the same somewhere else but no such fact have been brought on record, therefore, the explanation of the assessee should not have been rejected in the matter. The AO has not brought any evidence on record to show that the assessee spent this amount somewhere else. The assessee being an agriculturist has been able to prove that the amount was kept at home, therefore, this explanation could not have been rejected by the AO. Merely because the assessee made withdrawal from the bank during this period would not prove that the amount in question received by the assessee on the sale of old car was spent somewhere else. In this view of the matter and in the absence of any material on record and on believing the submissions of the assessee, we are of the view that the addition is highly unjustified. We accordingly delete the same and this ground of appeal of assessee is allowed.
5. Issue No. 2 : On this issue, the assessee challenged the addition of Rs. 50,000. Briefly, the facts are that the assessee purchased a second-hand car for Rs. 2,50,000. Rs. 1,50,000 is stated to be invested on sale of the old car and Rs. 1,00,000 is stated to have been invested out of the withdrawal from the bank account. However, the AO was of the view that the car was originally purchased by the seller on 9th May, 1995 and the same was sold to the assessee on 30th June, 1995, i.e., after more than 1-1/2 months. The AO, therefore, was of the view that since new car of 1-1/2 months old purchased by the assessee which bears the cost of new car at Rs. 3 lakhs, therefore, there is no justification for purchase of the car in a sum of Rs. 2,50,000. The assessee submitted before the authorities below that it was second-hand car, therefore, it was purchased at reduced value. However, the submissions of the assessee did not find favour and the AO made the addition of Rs. 50,000. The CIT(A) also confirmed the addition.
5.1 The learned Counsel for the assessee submitted that receipt of the seller was filed before the AO along with affidavit, copies of the same are filed in the paper book. He has submitted that no enquiry is made by the AO with regard to the value of the second-hand car.
5.2 On the other hand, the learned Departmental Representative relied upon the orders of the authorities below.
5.3 We have considered the rival submissions and material available on record. The assessee explained before the AO that second-hand car was purchased for a sum of Rs. 2,50,000. The receipt of the owner and affidavit was filed, therefore, the AO should have made certain enquiries from the seller instead of estimating the value of the car in a sum of Rs. 3 lakhs. Nobody will purchase the new car from the seller at the same amount at which it is available on the show-room. The difference is very nominal i.e. of Rs. 50,000 which according to the assessee had been because of certain dents and damages on one side of the car. It is a matter of common knowledge that once a car comes out of the show-room, its value decreases day by day. The AO has not made any investigation of the fact from the owner and also no material has been brought on record to justify the finding. The AO should have made certain enquiries from the market with regard to the value of the car but no such details have been brought in the assessment order with regard to the prevailing market price. Therefore, the AO has not made any enquiry with regard to Rs. 50.000. We accordingly delete this addition and allow this ground of appeal of the assessee.
6. Issue No. 3 : On this issue, the assessee challenged the addition of Rs. 13,91,164 on account of capital gains taxable under Section 45(5) on account of enhanced compensation received during the year under assessment. The facts are same as have been recorded in the asst. yr. 1995-96 in which we have dismissed the Departmental appeal. In this year, the AO did not make any addition with regard to the amount of enhanced compensation. The CIT(A) at the appellate proceedings noticed that the enhanced compensation amounting to Rs. 13,91,164 was not offered for taxation. The same facts were considered as having been considered in the asst. yr. 1995-96 and the CIT(A) was of the view that he has power under Section 251(1) of the IT Act to make the addition and after giving notice to the assessee and considering the submissions, made the addition and held that Rs. 13,91,164 is taxable as capital gains under Section 45(5) and should be taxed accordingly. The learned Counsel for the assessee submitted that the facts are same, therefore, order in Departmental appeal may be followed in this year. He has further submitted that power of enhancement of the AO [CIT(A)] is restricted to the subject-matter of assessment or source of income which have been considered by the AO from the point of view of the taxability. He has further submitted that the CIT(A) has no power to enhance the assessment by discovering new source of income which is not considered by the AO in the order appealed against. In support of the contention, he has relied upon CIT v. Rai Bahadur Hardutroy Motilal Chamaria , Abdul Wahid Gehlot v. ITO (2005) 93 TTJ (Jd) 232, CIT v. Sardari Lal and Co. (2001) 170 CTR (Del)(FB) 431 : (2001) 251 ITR 864 (Del)(FB), CIT v. Chaganlal Kailas and Co. and Pennzol Investment & Trading Co. (P) Ltd. v. Asstt. CIT (1994) 49 TTJ (Hyd) 322 : (1994) 49 TTD S34 (Hyd).
6.1 On the other hand, the learned Departmental Representative submitted that the AO was aware of the receipt of enhanced compensation and as such on the same facts the CIT(A) was justified in enhancing the income by making addition on account of enhanced compensation received by the assessee on account of the acquisition of the property by HUDA. He has further submitted that powers of the CIT(A) are coterminus to that of the AO. Therefore, the CIT(A) rightly made the addition in the matter. He has relied upon CIT v. Kanpur Coal Syndicate , Jute Corporation of India Ltd. v. CIT , CIT v. McMillan and Co. and CIT v. Scindia Steam Navigation Co. Ltd. .
6.2 We have considered the rival submissions and material available on record. This issue has already been considered by us in the Departmental appeal in ITA No. 441/Asr/2003 for the asst. yr. 1995-96 and the Departmental appeal has been dismissed. By following the same order enhanced compensation received by the assessee in respect of the land in question is not capital gains. By following the same order, we set-aside the order of the CIT(A) and delete the entire addition.
7. In view of the above findings, there is no need to deal with the powers of the CIT(A) to make the addition. However, we would like to mention that the Hon'ble Allahabad High Court in the recent judgment in the matter of CIT v. Kashi Nath Chandiwala by considering the decision of the Hon'ble Supreme Court has held "The Tribunal was not justified in holding that the CIT(A) had no power of enhancement in respect of an issue which was not the subject-matter of the appeal".
8. Since we have deleted the addition on merits, therefore, this point is of academic interest only. We accordingly delete the addition in the matter.
9. No other issue is argued or pressed.
10. As a result, the appeal of the assessee is allowed.
11. As a result, the Departmental appeal in ITA No. 441/Asr/2003 is dismissed and the assessee's appeal in ITA No. 278/Asr/2005 is allowed.