GHANSHYAM SONGARA,INDORE vs. INCOME TAX OFFICER 2 (5), INDORE

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ITA 423/IND/2018Status: DisposedITAT Indore29 July 2019AY 2011-127 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the CIT(A) did not properly consider the assessee's objections regarding the validity of reopening and the location of the land. Therefore, the matter was set aside to the CIT(A) for a fresh, speaking order on these issues.

What were the facts?

The Assessing Officer (AO) reopened the assessment for AY 2011-12 based on information that the assessee sold agricultural land within 8 kms of municipal limits, attracting capital gains tax. The AO made an addition of Rs. 19,55,966/-. The CIT(A) dismissed the assessee's grounds, including the validity of reopening.

What were the issues?

The key issues were the validity of reopening the assessment and whether the agricultural land was situated within the prescribed municipal limits for capital gains tax purposes.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE “SMC” BENCH, INDORE

Before: SHRI KUL BHARAT

For Appellant: Shri Pankaj Shah, A.R
For Respondent: Shri R.P. Maurya, D.R
Hearing: 27.06.2019Pronounced: 29.07.2019

आदेश / O R D E R

PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of the CIT(A)-2, Indore dated 5.3.2018 pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal:

[ Songara, Indore]

1.

[ Songara, Indore] 2. Ground No.1 is against legality of the opening of assessment. The facts in brief are that the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was framed on 7.3.2014 by the A.O. pertaining to the assessment year 2011-12. However, subsequently, the A.O. reopened the assessment on the ground that he was in possession of information that assessee had sold immovable property for a consideration of Rs.19,65,000/- at patwari Halka No.12, survey Nos.155/79, 155/80 at village Machla, Tehsil and Dist. Indore on 10.12.2010 to Smt. Sunita W/o Shri Kamal Singh R/o vill. Morod Tehsil. It was noticed that the agricultural land fall within the 8 kms. of the Municipal limit, therefore, transfer of the same attracted capital gain tax. Thereafter, the assessing officer after considering the objections proceeded to make addition of Rs.19,55,966/- in respect of the long term capital gain arose out of the transaction.

3.

Aggrieved by this order, the assessee preferred an appeal before Ld. CIT(A) where the assessee had taken a ground of validity of reopening and other grounds of merit. The Ld. CIT(A) dismissed the grounds raised by the assessee. Ld. Counsel for the assessee reiterated the [ Songara, Indore] submissions as made in the synopsis. The submissions of the assessee are reproduced as under:

[ Songara, Indore]

[ Songara, Indore] 4. I have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. I find that Ld. CIT(A) dismissed the ground of validity of reopening without adverting to the submissions of the assessee by observing as under:

“4.0 This ground of appeal is with regard to dissatisfaction with the reasons for reopening the case by the A.O. u/s 148 of the I.T. Act, 1961. I have carefully gone through the assessment order as well as submission of the appellant in this regard. 4.1 After carefully examined the facts of the assessment order, I found that the A.O. had mentioned specific reason for reopening the case u/s 148 of the I.T Act, 1961. Hence, the view of the A.O. is found to be correct and these grounds of appeal are accordingly dismissed.”

5. From the above finding of the Ld. CIT(A), it is clear that he has not adverted to the submissions/objections of the assessee. Regarding treating the land as a capital asset being situated within the municipal limit as prescribed under the law and also whether reopening on the basis of change of opinion, when the A.O. had categorically in original assessment after making enquiries, treated the land being situated beyond municipal limit as prescribed under the law, I therefore hereby set aside the finding of the Ld. CIT(A) and restore the issue of validity of reopening u/s 148 of the Act and also the issue, whether the land in question is within the prescribed limit? Needless to say the [ Songara, Indore] Ld. CIT(A) would pass a speaking order on both these issues. Ground of the assessee’s appeal is allowed for statistical purposes.

6. Ground No.2 is on merit of the addition. Since I have set aside the order on the validity of the reopening to the file of the Ld. CIT(A) for decision afresh, this ground is also restored to the A.O. to decide this issue as well after the issue of validity and the factum of the location of the land is examined. This ground of the assessee’s appeal is allowed for statistical purposes.

7. Ground No.3 is general in nature and needs no separate adjudication.

8.

Appeal of the assessee in A.Y. 2011-12 is allowed for statistical purposes.

Order was pronounced in the open court on 29 .07.2019.

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