PRINCIPAL COMMISSIONER OF INCOME TAX-4 vs. SAVITABEN CHANDULAL PATEL

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TAXAP/55/2018HC GujaratGJHC24008402201830 April 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages

AI SummaryRemanded

What did the High Court hold?

The High Court, while not disturbing the ITAT's direction to remand the matter to the Assessing Officer for verification of agricultural use, further requested the Assessing Officer to also verify the classification of these lands in the government records as agricultural or non-agricultural. This addition aims to provide a more comprehensive verification. The court noted that the Revenue's inquiries suggested the lands were classified as non-agricultural. The Tax Appeal was disposed of with these modified directions. The specific finding on whether the lands were indeed agricultural or non-agricultural, or the ultimate relief to the assessee, remains to be determined by the Assessing Officer based on the extended verification.

What were the facts?

The Revenue, Principal Commissioner of Income Tax-4, has challenged an order of the Income Tax Appellate Tribunal (ITAT) dated September 21, 2017. The dispute concerns the assessment of wealth tax on two parcels of land located in Surat and Vadaj. The assessee, Savitaben Chandulal Patel, contended that these lands were agricultural and used for agricultural purposes, thus qualifying for exemption. The ITAT, noting that sale deeds indicated the lands as agricultural but lacking clarity on their actual use, remanded the matter to the Assessing Officer (AO) for verification of agricultural use. The Revenue's counsel argued before the High Court that the ITAT had not verified the classification of these lands in revenue records. The Revenue's subsequent inquiries suggested both lands were categorized as non-agricultural. Despite notice, the assessee did not appear before the High Court.

What were the issues?

1. Whether the ITAT erred in remanding the issue of agricultural use of the lands to the Assessing Officer without first verifying their classification in government revenue records as agricultural or non-agricultural lands? (Question of law and fact, concerning the scope of remand and verification of asset classification for wealth tax purposes). Assessee's contention (as recorded by ITAT): The two parcels of land, situated at Surat and Vadaj, are agricultural lands and have been used for agricultural purposes, thus falling within the purview of exempt assets for wealth tax. Revenue's contention: The ITAT failed to verify whether the lands were reflected in the revenue records as agricultural or non-agricultural lands. Subsequent inquiries by the Revenue indicate both lands are categorized as non-agricultural lands.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

C/TAXAP/55/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 55 of 2018 ================================================================ PRINCIPAL COMMISSIONER OF INCOME TAX-4 Versus SAVITABEN CHANDULAL PATEL ================================================================ Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 30/04/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

Revenue has challenged judgment of the Income Tax Appellate Tribunal dated 21.9.2017. Issue pertains to assessment of wealth tax in relation to certain parcels of land. The Tribunal in the impugned judgment recorded assessee's contention that two lands in question situated at Surat and Vadaj would fall within the purview of exempt assets since both these parcels of lands had been held as agricultural lands and used for agricultural purposes. The Tribunal noted from the sale deeds that the land was shown as agricultural land. However, since the Tribunal was not clear whether such lands were actually used for agricultural purposes it remanded the proceedings before the Assessing Officer in the following terms:- “3. ........ The assessee shall be entitled to relief subject to production of evidence towards agricultural use of the aforesaid land at Vadaj to the satisfaction of the AO. For C/TAXAP/55/2018 ORDER this limited purpose, the matter is remanded back to the file of AO for necessary verification.”

Before us, learned counsel for the Revenue had argued that the Tribunal had not verified whether the lands were reflected in the revenue records as agricultural or non- agricultural lands. Today he submitted that his inquiries in the land records would show that both the lands are categorized as non-agricultural lands. We had issued notice for final disposal to the assessee on this short question. Despite service, no one appeared for the respondent-assessee.

In view of the material on record, while not disturbing the Tribunal's direction for placing the issue before the Assessing Officer, we further request the Assessing Officer also to verify whether such lands have been classified in the government records as agricultural lands or otherwise, in addition to what is stated by the Tribunal to verify whether the same are used for agricultural purpose.

Tax Appeal disposed of accordingly. (AKIL KURESHI, J) (B.N. KARIA, J) R.S. MALEK

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