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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश आदेश /O R D E R आदेश आदेश
PER MAHAVIR SINGH, VP:
These two appeals by the Assessee are arising out of the common order passed by the Commissioner of Income Tax (Appeals)-2, Chennai in & 238/2013- 14/A.Ys.2008-09 & 2009-10/CIT(A)-2 dated 10.04.2018.
The assessments were framed by the Income Tax Officer, Business Ward – I (1), Chennai, u/s.143(3) of the Income Tax Act, 1961 (hereinafter “the Act”) for the Assessment
:: 2 :: I.T.A Nos.:1945 & 1946/CHNY/2018 Years 2008–2009 and 2009-2010 vide order of even date 20.03.2013.
The first common issue on merits in these two appeals of the Assessee is as regards to the order of the Commissioner of Income Tax (Appeals) in confirming the action of the Assessing Officer in holding that the agricultural land sold by these two Assessees are capital assets in nature attracting capital gains and also by invoking the provisions of Section 50C of the Act.
The above issue is common in both the appeals of the Assessee and hence these two appeals were heard together and as the facts and circumstances are also identical, these two appeals are clubbed and disposed off by this common order for the sake of convenience and brevity.
As the facts being identical in both these appeals, we will first take up in the case of Shri.
Chakrawarti Bafna for the Assessment Year 2008 – 2009.
The brief facts of the case are that the Assessee is an individual, filed his return of income for the Assessment
:: 3 :: I.T.A Nos.:1945 & 1946/CHNY/2018 Year 2007 – 2008 on 28.03.2008. Thereafter, he has not filed his return of income for the relevant Assessment Year 2008 – 2009. A notice u/s.148 of the Income Tax Act, 1961 was issued to the Assessee on 29.02.2012. In response to this notice, the Assessee filed return of income on 31.03.2012 admitting a total taxable income of Rs.64,367/-. A notice u/s.148 of the Act was issued for the reason that the Assessee has not disclosed the long term capital gains arising out of the sale of land. During the course of the assessment proceedings, the Assessee was asked to explain, as to why the sale consideration received by the Assessee on account of the sale of land be not treated as capital gains arising out of the same. The Assessee sold property No.1 at Survey No.2072 vide registered sale deed dated 10.10.2007 for a recorded sale consideration of Rs.22,08,540/-. The Assessee also sold property No.2, Survey No.2058, vide agreement dated 17.08.2007 for a consideration of Rs.7,25,000/-. The Assessing Officer taking the Assessee’s share in property No.1 [Assessee is a Co-owner with his brother Shri.
:: 4 :: I.T.A Nos.:1945 & 1946/CHNY/2018 Shalbhadra Bafna in this land] computed the long term capital gain as under:
Property - I
Sale consideration u/s.50C of = 7,82,743 the Income Tax Act, 1961 53,29,516/5127= 1039.5 x 753
Less : Indexed Cost = 1,89,186 45,000 / 1000 x 763 x 551 /100
Taxable LTCG = 5,93,557 Property – II Sale consideration u/s.50C of = 17,45,320 the Income Tax Act, 1961 1039 x 1679
Less : Indexed Cost = 4,16,308 45,000 / 1000 x 1679 x 551 / 100 Taxable LTCG = 13,29,012 Total LTCG 5,93,557 + = 19,22,569 13,29,012
Aggrieved, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals).
Before the Commissioner of Income Tax (Appeals) the Assessee contended that these lands are agricultural lands in nature which fulfill the conditions laid down u/s.2(14)(iii) of the Act and hence these are not capital
:: 5 :: I.T.A Nos.:1945 & 1946/CHNY/2018 assets liable for capital gains but the Commissioner of Income Tax (Appeals) noted that the lands sold falls in the municipality area of Mandsaur town in the District of Mandsaur, Madhya Pradesh and therefore, he confirmed the action of the Assessing Officer in assessing the lands as capital asset, exigible to capital gains. The Commissioner of Income Tax (Appeals) also stated that no evidence were filed before either the Assessing Officer or the Commissioner of Income Tax (Appeals) that the Assessee is carrying out agricultural operation on the impugned lands.
Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Assessee is in appeal before the Tribunal.
We have heard the rival contentions and have gone through the facts and circumstances of the case. The Assessee before us filed a paper-book consisting of page Nos.1 to 149 in which copies of the sale deed of the agricultural land situated at Survey No.2072 at Mandsaur and Survey No.2058 at Mandsaur is filed. The Assessee
:: 6 :: I.T.A Nos.:1945 & 1946/CHNY/2018 had filed the details of the agricultural land held by the Assessee along with his brother Shri. Shalbhadra Bafna and Shri. Siddharth Bafna. As per the details given below, the Assessee also filed a copy of the certificate issued by the Office of the Patwari [Village Administrative Officer], Mandsaur, Madhya Pradesh which is at page Nos.63 and 64 and the translation copy is available at page No.64 which reads as under:
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“Office of Patwari [VAO] Halka No.25, Mandsaur (M.P.) Serial Q/……………… Dated 19.01.2013 This is to certify that the agriculture land Survey No.2058-2059, 2072, 2074/1 in the name of Chakrawarti S/o Sampatlal Bafna distance of above land from Municipality, Mandsaur viz BPL Choraha, Rewas Devas, Road 500 Quarter to Pratapgarh Choraha Road their the above Survey land No….land situated, the distance is 10 KM.
K.L. CHANDEL (P.H.No.25, Tehsil Mandsaur)” =======================
The learned Counsel for the Assessee also stated that in the Assessee’s brother case, the co-owner of Shri.
Siddharth Bafna, the Commissioner of Income Tax
:: 7 :: I.T.A Nos.:1945 & 1946/CHNY/2018 (Appeals) has accepted that this is an agricultural land and had deleted the addition by holding that the lands are agricultural land, vide his order No.ITA No.143/2014- 15/A.Y.2008-09/CIT(A)-2; dated 14.03.2018 which is at page No.137 of the paper-book for the same Assessment Year 2008 – 2009 vide paragraph No.9, as under:
“9. On perusal of the Remand Report submitted by the Assessing Officer , as per the translation of the Sale Deed submitted by the Appellant in the paper book, it is ascertained that the impugned lands are agricultural lands. The Appellant had also offered agricultural income received from the same for taxation for the Assessment Years 2002 – 2003 to 2006-2007 as per the statement of the total income filed in the paper book.
Since, it is established the impugned lands are agricultural in nature, it is hereby held that the additions on account of the Capital Gain on the sale of the said lands, are not applicable and hence the same are deleted. Therefore, the ground of appeal is allowed.”
When these facts were confronted to the learned Senior Departmental Representative, he relied upon the orders of the Assessing Officer and that of the Commissioner of Income Tax (Appeals)
After hearing the rival contentions and on going through the case records including the Revenue’s records
:: 8 :: I.T.A Nos.:1945 & 1946/CHNY/2018 and the report of the Patwari [VAO], the Revenue’s record shows that this land has produced Soya Beans at the land at Survey No.2072 and Guava Fruit at the land at Survey No.2058. Even, the land is away from the municipality limits as certified by the VAO. We also noted that the Commissioner of Income Tax (Appeals) in the Assessee’s brother case, who is the co-owner of the land, has already deleted the addition. Hence, taking a consistent stand, we delete the addition and hold that the land in question is an agricultural land and allow the appeal of the Assessee.
Similar are the facts for the Assessment Year 2009 - 2010. Hence, taking a consistent view, we delete the addition on the long term capital gain [LTGC] added by the Assessing Office and confirmed by the Commissioner of Income Tax (Appeals).
The next common issue in these two appeals of the Assessee is as regards to the order of the Commissioner of Income Tax (Appeals) in confirming the action of the Assessing Officer in making an addition of cash deposits at :: 9 :: I.T.A Nos.:1945 & 1946/CHNY/2018 Rs.7,89,500/- in the Assessment Year 2008 – 2009 and Rs.3,39,100 in the Assessment Year 2009 – 2010 as unexplained cash credit u/s.68 of the Act.
We have heard the rival contentions and have gone through the facts and circumstances of the case. We have also gone through the Assessment Order and the order of the Commissioner of Income Tax (Appeals) and the arguments of the learned Counsel for the Assessee that these cash withdrawals are the sources of cash deposits.
We noted that the Commissioner of Income Tax (Appeals) has categorically given a finding that the Assessee could not substantiate the linkage of the cash withdrawals of that of the cash deposits. For this, the Commissioner of Income Tax (Appeals) has recorded in paragraph No.24, as under:
“24. I have gone through the above contentions of the Appellant, however, in the absence of the relevant books of accounts and the corresponding details, the mere submissions cannot be accepted. As could be noticed from the impugned assessment orders, the Appellant Assessee had failed to produce any such detail before the Assessing Officer. As far as the cash credits are concerned, the entire onus is :: 10 :: I.T.A Nos.:1945 & 1946/CHNY/2018 on the Assessee to categorically and specifically mention the sources of such cash deposits in the relevant of accounts which should further be substantiated with the relevant documents. In the absence of such books of accounts and the relevant documents, any submissions made in this regard are just narratives only which do not have any evidentiary value. In the present case of the Appellant, no such books of accounts or the relevant documents / papers have been produced by the Assessee to substantiate the contentions raised in the written submissions. Hence, in my considered opinion, the genuineness of the said cash deposits could not be established by the Assessee. Accordingly, the additions made by the Assessing Officer are confirmed.”
Even before us, the Assessee could not substantiate these cash deposits vis-à-vis cash withdrawals and hence we confirm the order of the Commissioner of Income Tax (Appeals) on this issue and this issue in the Assessee’s appeal is dismissed.
Similar are the facts for the Assessment Year 2009 consistent view, we dismiss this issue.
:: 11 :: I.T.A Nos.:1945 & 1946/CHNY/2018
The next common issue in these two appeals is as regards to the issue of reopening u/s.147 of the Income Tax Act, 1961.
However, the learned Counsel for the Assessee has not argued on this issue and hence it need not be adjudicated.