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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI LALIET KUMAR,AND DR. MITHA LAL MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER,AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
I.T.A No.440/Agra/2017 (ASSESSMENT YEAR-2009-10)
Hari Singh S/o Budha Village Vs.. Income Tax Officer, Chharora, P.O. Chhatikara, Distt. Ward-3(2), Mathura. Mathura. PAN:HKYPS7932E (Appellant) (Respondent)
Appellant by Shri R.C. Tomar, ITP. Assessee by Shri Waseem Arshad, Sr. DR.
Date of Hearing 16.07.2019 Date of Pronouncement 30.07.2019
ORDER Per Dr. M. L. Meena, A.M.: The captioned appeal emanates from the order of the ld. Commissioner of Income Tax (Appeals),1, Agra, [(in short ‘the ld. CIT(A)], dated 31.08.2017 for A.Y. 2009-10 where assessee raised the following grounds of appeal: “1. Because the Ld CIT (Appeal) has erred in law as well as on facts in holding that the order passed by the AO. u/s/144/147 was in order without considering the facts that no capital gains
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tax was chargeable in this case being 85% of net consideration invested in assets u/s 54B of the IT Act 1961. 2. Because the Ld CIT(A) has erred in law as well as on facts in holding that the order passed by the AO u/s 144 of the IT Act 1961 was in order ignoring the factual position that no benefit of inflation cost index as well as section 54 F was allowed by the A.O. 3. Because the orders of the Ld CIT (A) as well as AO. being erroneous in law deserve to be cancelled and direction be issued to A.O. to allow benefit of cost inflation index as well as benefit of section 54 F of the I.T. Act 4. Because the judgment/order is passed without giving the proper opportunity to be heard the assessee. 5. Because no show cause notice is issued by A.O. and an exparte order was passed. 6. BECAUSE, the order appealed against is arbitrary, illegal, contrary to the facts, material on record, law and principles of natural justice. The 'appellant' reserves his right to add, delete, modify, alter or substitute any or all the grounds of appeal.” 2. Apropos ground no. 4 assessee questioned the order passed by the ld. CIT(A) is without granting the proper opportunity of being heard to the assessee. The AO completed assessment u/s 144/147 vide order dated 14.12.2016 computing the assessed income at Rs.2,31,450/- by allowing deduction u/s 54B of the Act of
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Rs.1,70,000/- in lieu of investment made in the agricultural land out of a long term capital gain of Rs.4,01,454/- on sale of an immovable property, where the assessee did not file any return of income. 3. The ld. CIT(A) observed that the AO noted in the assessment order that the claim of Rs.3,25,000/- made by the appellant assessee in respect of construction of a house was not substantiated with the supporting material either at the stage of assessment proceeding or before him. Accordingly, he was not inclined to accept the appellant contention and endorse the finding of the AO charging long term capital gains on sale of an immovable property after allowing the corresponding deduction u/s 54B of the Act for investment in agricultural land as per law. 4. That the assessee is agriculturist having only source of income from agriculture (APB, page 1). The ld. AR further submitted as follows: “1. That assessee is an agriculturist having only source of income from agricultural Farming. During the year under Consideration co owners Sold agricultural land for rupees 16,00000/- but its value for stamp duty was estimated at Rupees 3502591/- the appellant owned 1/8 Share in this ancestral agriculture land. Thus he actually got Rs- 200000/- as sale consideration against value taken u/s 54 C at Rs 401454/-.
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That There after the assessee purchased agricultural land for Rs. 1,70,000/- at Bharatpur and remaining amount of sale proceeds was Incurred in making payments due for labour engaged and material purchase for construction of new residential house at village chharora post chhatikara Distt- Mathura and thus the appellant was confident that he has no liability of any tax. 3. That the assessing officer completed the assessment u/s 144/147 of the IT Act 1961 summarily without considering the return as well as verbal arguments that full amount of actual sale consideration of Rs. 200000/- was invested u/s 54B/54F and then no capital gain Tax was chargeable. 4. That the A.O did not accepted our plea and investment u/s 54F was ignored and by applying provisions of section 54C estimated capital gain at Rs.231454-00. Aggrieved with the order passed by the A.O appeal before the Ld CIT(A) was moved and it was argued that a new house was under construction in u/s assessment year 2009-10 in which an Amount more than Rupees 231454-00 has been invested and Approx of Rs 325000-00 was invested till its construction completed in A.Y 2010-11 within two year and therefore no capital gain Tax is chargeable from the appellant. 5. That no show cause notice is issued by the A.O and an ex parte order was passed.
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That the appellant is a semiliterate agriculturist and having no knowledge of Income tax Act. 7. That the appellant submitted written reply to the A.O that the appellant has invested approx of Rs. 325000/- within two year after getting consideration of transfer of agriculture land but without giving the proper opportunity the A.O has passed the ex parte order. 8. That the A.O did not make any enquiry on the written submission (PB Page 3 to 4) made before him and brought no adverse material before disallowing the claim made u/s 54F. 9. That the appellant has got the valuation report on Dt. 29-08-2015 from valuer with estimated cost Rs.320580/- of constructed house property. 10. That the appellant is submitting the photo and electric bill of his constructed housing property.” 5. The ld. AR has also filed a Paper Book with copies of documents as claim to be filed before Authorities below numbered from 3 to 36. 6. The ld. DR placed strong reliance on the order of the ld. CIT(A) and argued that the explanation filed by the assessee is not supported by the material evidence and he has not filed any explanation for the expenses incurred on investment in agricultural land and construction of the house. He contends that the explanation has to be bona fide and is duly supported with legal evidence. It is held by the Hon’ble Allahabad
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High Court in case of ‘Punjab Mal vs. CIT’ ITA 352/2010 that the penalties is also leviable where the explanation offered by the assessee is not substantiated with the evidence and the assessee failed to prove that the explanation was bona fide and all the relevant facts and material for computation of total income was fully disclosed. 7. Having heard rival contention, perused the record and the documentary evidence brought before us, we are of the considered opinion that impugned order was passed ex parte qua the assessee, without appreciating the merits of the case. Considering the principles of natural justice, in our considered opinion the assessee should be provided one more opportunity of hearing to present his case afresh with the support of documentary evidences before the ld. CIT(A). The assessee being the agriculturist which is not well convergent with income tax law, we take a liberal view and allow him one more opportunity to represent his case before the ld. CIT(A) who is directed to examine the matter afresh and pass the de novo order as per law. Accordingly, the matter is restored back to the file of the CIT(A) with direction to examine the issue of the long term capital gains if any, on sale of immovable property after allowing corresponding deduction u/s 54B of the Act on investment in agricultural land as per law. Needless to say, the assessee shall cooperate in the fresh proceedings before the ld. CIT(A). All pleas available under the law shall remain so available to the assessee. The appeal of the assessee is restored to the CIT(A) in the terms indicated as above.
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In the result, the appeal of the assessee for statistical purposes treated as
allowed.
Order pronounced in the open court on 30/07/2019.
Sd/- Sd/- (Laliet Kumar) (Dr. M.L. Meena) JUDICIAL MEMBER ACCOUNTANT MEMBER *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Sr. PRIVATE SECRETARY ITAT, AGRA