THE COMMISSIONER OF INCOME TAX vs. SHRI. SHAJI THOMAS

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

& THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY, THE 16TH DAY OF JULY 2018 / 25TH ASHADHA, 1940

I.T.A.No.61 of 2014 --------------------------- AGAINST THE ORDER IN I.T.A.NO.132/COCH/2013 DATED 25.10.2013 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN ------------- APPELLANT(S)/ RESPONDENT/RESPONDENT/REVENUE:- ------------------------------------------------------------------------------------ THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY SENIOR COUNSEL, GOVERNMENT OF INDIA (TAXES) SRI.P.K.R.MENON, STANDING COUNSEL FOR GOVERNMENT OF INDIA (TAXES) SRI.JOSE JOSEPH. RESPONDENT(S)/RESPONDENT/APPELLANT/APPELLANT ASSESSEE: SHRI. SHAJI THOMAS, P XI-725A,MANJANKAL HOUSE, PATTOM, THIRUVANANTHAPURAM. BY ADVS. SRI.T.M.SREEDHARAN (SENIOR ADVOCATE)

SRI.V.P.NARAYANAN

SMT.DIVYA RAVINDRAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:-

I.T.A.NO.61 of 2014 APPENDIX APPELLANT'S ANNEXURES:- ------------------------------------------- ANNEXURE-A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 143(3) DATED 30.12.2010. ANNEXURE-B TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 13.02.2013. ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, DATED 25.10.2013. RESPONDENT'S ANNEXURES:- ---------------------------------------------- ANNEXURE-R1 TRUE COPY OF THE CASH.CREDIT BILL NOS.286 DATED 4.4.2007 AND 19996 DATED 30.1.2007 ISSUED BY CHENGANNUR TALUK MARKETING AND PROCESSING CS LTD. ANNEXURE-R1(a) TRUE COPY OF INTIMATION NO.129/CIR.I(1)/TVM/10-11 DATED 28.6.2010 OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(b) TRUE COPY OF NOTICE DATED 28.6.2010 ISSUED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(c) TRUE COPY OF LETTER DATED 11.11.2010 SUBMITTED BY THE ASSESSEE TO THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(d) TRUE COPY OF NOTICE NO.R-1/CIR I(1)/10/-11 DATGED 11.11.2010 ISSUED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(e) TRUE COPY OF LETTER DATED 19.11.2010 SUBMITTED BY THE ASSESSEE TO THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(f) TRUE COPY OF LETTER DATED 24.11.2010 SUBMITTED BY THE ASSESSEE TO THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(g) TRUE COPY OF NOTICE DATED 30.11.2010 ISSUED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM. ANNEXURE-R1(h) TRUE COPY OF LETTER DATED 6.12.2010 SUBMITTED BY THE ASSESSEE TO THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), TRIVANDRUM.

I.T.A.NO.61 of 2014 - 2 - ANNEXURE-R1(i) TRUE COPY OF STATEMENT OF INCOME FOR THE ASSESSMENT YEAR 2008-09. ANNEXURE-R1(j) TRUE COPY OF STATEMENT OF AGRICULTURAL INCOME RECEIVED DURING 2007-08. ANNEXURE-R1(k) TRUE COPY OF TAX RECEIPT NOS.5988 AND 16 ISSUED BY THE VILLAGE OFFICER, KUMARAKOM ALONG WITH ITS ENGLISH TRANSLATION. ANNEXURE-R1(l) TRUE COPY OF CERTIFICATE NO.3860/10 DATED 14.09.2010 ISSUED BY THE VILLAGE OFFICER, KUMARAKOM ALONG WITH ITS ENGLISH TRANSLATION. ANNEXURE-R1(m) TRUE COPY OF REPORT PASSED BY THE DISTRICT SUPERINTENDENT OF SURVEY AND LAND RECORDS, KOTTAYAM ALONG WITH ITS ENGLISH TRANSLATION. ANNEXURE-R1(n) TRUE COPY OF DEED OF CONVEYANCE DATED 5.2.2008 BETWEEN SHAJI THOMAS AND INDO PACIFIC HOTELS LTD. AND ANOTHER. ANNEXURE-R1(o) TRUE COPY OF THE DEED OF CONVEYANCE DATED 20.11.2006 EXECUTED IN FAVOUR OF SHAJI THOMAS. ANNEXURE-R1(p) TRUE COPY OF SURVEY MAP PREPARED BY SHRI D.RAJAN, LICENSED SURVEYOR. ANNEXURE-R1(q) TRUE COPY OF THE POSSESSION CERTIFICATE ISSUED BY THE VILLAGE OFFICER, KUMARAKOM DATED 17.05.2007 FOR THE PROPERTY IN RE-SY.NOS.306/5 AND 1/5. vku/- [ true copy ]

K. Vinod Chandran & Ashok Menon, JJ. ------------------------------------------------------- I.T.A.No.61 of 2014 ------------------------------------------------------- Dated, this the 16th day of July, 2018 JUDGMENT Vinod Chandran, J: The Revenue is in appeal from the order of the Tribunal, on the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in equating “water-logged area” with “backwaters” and is not the above approach and the conclusion perverse and wrong? 2. Whether, on the facts and in the circumstances of the case, is not - i) the very approach of the Tribunal equating or treating waterlogged area with backwaters factually and legally wrong? ii) the Tribunal wrong to have equated the finding of the Assessing Officer that “33.13 ares as shown in the revenue records as backwater (Kayal)” as “the impugned land as water logged area: based on the submission of the assessee? iii) the Tribunal wrong to have held 3.13 ares (0.818 acre) as water tank available in an agricultural land and are not the above findings based on submissions and surmises, perverse?

ITA.61 of 2014 - 2 - 3. The Tribunal for the reasons stated in the grounds right in law and fact in holding that “that portion of the land cannot have different character from that of the main land” “same treatment has to be given” and are not the findings tested in the light of the grounds raised perverse and illogical? i) Did the assessee discharge the burden of proof; ii) Should not the Tribunal have put the assessee to proof? 2. The assessee sold 130.73 Ares of land, lying contiguously, but registered in the name of the assessee in two Thandapers as per the Transfer of Registry Rules. 97.60 Ares is registered under one Thandaper and 33.13 Ares in another Thandaper; the latter being backwaters [Kayal]. The Assessing Officer found that 97.60 Ares of land was agricultural land. However with respect to 33.13 Ares, the finding was that it is a water-logged area, being comprised in the backwaters and, hence, there could be no classification as an agricultural land. Capital gains were sought to be assessed on that portion of land, which was held to be water-logged and part of backwaters.

ITA.61 of 2014 - 3 - 3. The Tribunal found that the contention of the assessee that the Kayal portion was used for irrigating the other portion was acceptable. It was found that the Kayal land has acquired the character of a water tank, used for the irrigation of the other land. It is submitted by the learned Senior Counsel appearing for the Revenue that the said finding was merely on the submission of the assessee and there was nothing to establish the same. 4. We have to notice that the Assessing Officer had accepted the fact that 97.60 Ares of land sold by the assessee is agricultural land. In fact, the said finding was also on proof of specific agricultural operations having been undertaken in the said land. The adjacent land which is lying as Kayal land and water-logged, would only have made the adjacent land more fertile and admittedly it was not used for any other purpose. The adjacent land remaining as water-logged and comprised within the backwaters, sold along with the agricultural land, could be deemed to be only agricultural land. We are, hence, not inclined to interfere with the orders of the Tribunal. We answer the

ITA.61 of 2014 - 4 - questions of law, which are more on facts, against the Revenue and in favour of the assessee. The appeal stands dismissed. No costs. Sd/- K.Vinod Chandran Judge Sd/- Ashok Menon vku/-

Judge [ true copy ]