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आदेश/Order
PER N.K. SAINI, VICE PRESIDENT This is an appeal by the Assessee against the order dt. 05/11/2019 of the Ld. CIT(A)-2, Chandigarh.
Following Grounds have been raised in this appeal:
That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 10478/2/17-18 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961.
2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of the Ld. AO wherein he had erred in initiating, continuing and concluding the impugned assessment u/s 148 r.w.s. 147 of the Act.
That on facts, circumstances and legal position of the case, Worthy CIT (A) has erred in confirming the action of Ld. A.O. even when the Ld. A.O. had passed the impugned assessment without affording reasonable opportunity of being heard to the appellant.
4. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action of Ld. AO wherein he made addition of Rs. 1,86,81,250/- by holding the sale of agricultural land as capital as amounting to Long term capital gain even when the land sold was not a capital asset u/s 2(14).
5. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action Ld. AO wherein he held the year of transfer of agricultural land sold as AY 2013-14 even when the same pertained to AY 2009-10.
6. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action Ld. AO wherein he had erred in holding the entire amount of sales consideration as capital gain and not giving any deduction for the cost of acquisition and cost of improvement.
7. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action Ld. AO wherein he had failed to allow the eligible deductions u/s 54B/54F from assessed Long Term Capital gains.
8. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.
3. The main grievance of the assessee in this appeal relates to the sustenance of addition of Rs. 1,86,81,250/- made by the A.O. by holding the sale of agriculture land as capital asset. The assessee also filed an application dt. 10/08/2020 under Rule 29 of ITAT Rules, 1963 for admission of additional evidence.
The facts of the case in brief are that the A.O. received an AIR information that the assessee has sold land measuring 8 Kanals 6 Marlas in village Balongi alongwith his brother for a consideration of Rs. 3,73,62,500/-. Since the assessee had not responded to the letter dt. 18/02/2010 calling for information under section 133(6) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’), the A.O. initiated the proceedings under section 147 of the Act and issued the notice under section 148 of the Act. The A.O. also issued the notice under section 142(1) of the Act. Since there was no compliance, the A.O. framed the assessment under section 144 of the Act and made the addition of Rs. 1,86,81,250/-.
Being aggrieved the assessee carried the matter to the Ld. CIT(A) and furnished the following submissions:
"That while making the computation of capital gains the Ld. AO did not consider the amount of cost of acquisition and the cost of improvement. Therefore, the computation of capital gains made by him is wrong. That in light of the above made submissions it is clear that the Ld. AO did not follow the applicable provisions of section 48 for the computation of capital gains in the case of the appellant assessee. Thus, it is humbly prayed to Your Honour that the impugned order passed by the Ld. AO must set aside to provide the necessary relief to the appellant assessee.
That the Ld. AO did not give any benefits of exemption to the appellant assessee while computing capital gains as per the provisions of the Income Tax Act, 1961. Thus, it is evident that the order passed by him is bad in law and we request Your Honour to set aside the impugned order of the Ld.AO to provide the necessary relief to the appellant assessee."
However the Ld. CIT(A) was not satisfied from the aforesaid submissions of the assessee and sustained the addition made by the A.O.
Now the assessee is in appeal.
Ld. Counsel for the assessee reiterated the submissions made before the authorities below and also furnished an application dt. 10/08/2020 for admission of the additional evidence by stating therein as under:
Sub: Prayer for admittance of additional evidence u.r. 29 of IT AT Rules, 1963 in Sh. Piara Singh, for A.Y. 2013-14 fixed for hearing on 18.08.2020.
Hon'ble Bench, The appeal in the case of appellant above cited is listed for hearing on 18.08.2020 before the Hon'ble Bench. Apart from various factual as well as legal issues involved in this case one of the crucial issue involved is as to land sold by the appellant is a capital asset. To come to a conclusive answer to the question, it is imperative to determine the location and distance of the land from the nearest municipal limit. The assessee requested the Land Revenue Officer of the assessee to give a certificate in this regard who has provided the same. Copy of the same is attached herewith. During the appellant proceedings before the Hon'ble CIT(A), assessee tried its best to obtain the certificate but couldn't get the same at time, therefore, there existed the reasonable cause for not furnishing the same before lower authorities. Further, the factual findings in this document by the Land Revenue Officer is static, out of control of assessee and is most crucial to decide the question involved in this case. Therefore, the same document deserves to be admitted as additional evidence. It is prayed accordingly. We shall be highly obliged.
8.1 It was further submitted that the certificate received from the Land Revenue Officer could not be produced before the authorities below, for the reason that the assessee could not get the said certificate in spite of his best efforts to obtain the same. It was further submitted that the additional evidence now produced goes to the root of the matter, therefore, the same is to be admitted.
In his rival submissions, the Ld. Sr. DR opposed the admission of the additional evidence and submitted that the ample opportunities were given by the A.O. as well as the Ld. CIT(A) therefore the evidence now furnished by the assessee may not be admitted. He reiterated the observation made by the authorities below and strongly supported the impugned order passed by the Ld. CIT(A).
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case it appears that the new evidence furnished by the assessee vide application dt. 10/08/2020, in the form a certificate issued by the Land Revenue Officer, goes to the root of the matter and very relevant to decide the present controversy. Therefore, in the interest of justice, the same is admitted. However, the said certificate was not available either to the A.O. or the Ld. CIT(A), we, therefore deem it appropriate to set aside the present case back to the file of the A.O. to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee and also by considering the new evidence, now furnished by the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes.
(Order pronounced in the open Court on 06/10/2020)