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Facts
The assessee filed a return of income u/s 139(1). The case was reopened u/s 147/148 for AY 2010-11, and the AO added Rs. 17,47,345/- as capital gains from the sale of land, based on stamp duty valuation. The CIT(A) confirmed this addition via an ex-parte order, alleging non-compliance with hearing notices.
Held
The Tribunal found that the land in question was agricultural, located more than 32 km from the municipal limit, and thus not subject to capital gains. It also noted issues with the CIT(A)'s ex-parte order and the definition of 'transfer' under Section 2(47). The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.
Key Issues
1. Whether the land sold by the assessee was agricultural land, thereby exempting it from capital gains tax. 2. The validity of the ex-parte order passed by the CIT(A) and proper service of hearing notices.
Sections Cited
139(1), 147, 148, 2(47)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR
(नििाारण वर्ा / Assessment Year : 2010-2011) Anirban Dutta, Vs ITO, Court Compound, Burdwan Palashan, Dist : Purba Bardhaman PAN No. :AKVPD 6128 R (अपीलार्थी /Appellant) (प्रत्यर्थी / Respondent) .. नििााररती की ओर से /Assessee by : Shri Soumitra Choudhary, AR राजस्व की ओर से /Revenue by : Shri Ashutosh Kumar, Sr. DR सुनवाई की तारीख / Date of Hearing : 27/03/2025 घोषणा की तारीख/Date of Pronouncement : 21/04/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order dated 13.05.2024, passed by the ld. CIT(A). National Faceless Appeal Centre(NFAC), Delhi for the assessment year 2010-2011.
At the outset, on perusal of the appeal record, it is found that the appeal of the assessee is filed belatedly by only 1 day. Looking to the facts and circumstances of the case, the delay of one day in filing the present appeal is hereby condoned and the appeal is admitted for hearing.
3. The assessee in its appeal has raised following grounds :- 1. For that in view of the facts and circumstances of the case and others weight of evidence on record, the Order Passed by CIT(A), NPAC, Delhi in Appeal case No CITIA)/Bwn/10087/2015-16 on dismissing Appeal alleging non-compliance of notices of hearing sent by E-mail instead of sent by Regd Speed post when notices of hearing of Appeal case has not received. Appellant's in E-mail and/or notices of hearing received by Appellant's Lawyer's E-mail and keeping in view that all Income Tax proceedings are Quasi-Judicial in nature and as per code of Civil Procedure notices of hearing would be sent by Registered post and as such notices of bearing ought to have sent to Appellant by speed post so as to allow the appellant an opportunity of being heard.
2. For that CIT(Appeals), NPAC, Delhi has sent notices of hearing of aforesaid appeal case No CITIAI/Bwn/10087/2015- 16 to Appellant in E-mail and CIT (A), NFAC, Delhi has in his Onder stated that notice have been duly served but Appellant is denying of receipt of notices of hearing of allforesaid Appeal case and on the other hand CIT(Appeals), Burdwan prior too transfer this above appeal has made Part hearing of Appellant's Appeal where written submission has been submitted before CITIA), Burdwan and CIT(A) NPAC Delhi while passing Order has not mentioned of above fact of written submission as submitted before CITIA), Burdwan in course of hearing of Appeal Case before CIT(A), Burdwan.
That in view of facts of the case and in law, Capital Gain determined by A.O on alleging sale of Share of Partners 15% on forceblely ousted by partners of Hazra Group and Other Partner Ashok Kumar Koner on creating dispute and also took help of Political Parties and this regard a sale Deed dated 24.07.2009 has been executed by Partners of Dutta Group is only to release right, title and interest in Kali Sankar Rice Mill in favour of Hazra Group and other Partner Ashok Kumar Koner and such transfer as per definition of Sec. 2(47) is not transfer even if in artificially extended sense. Ld. CIT(A), NPAC, Delhi while passing ex parte order has not gone through the assessment Order and written submission of Appelant and as such Ex parte order does not stand under Law, 4. For that CIT(A) NPAC has failed to discuss the grounds of Appeal
while passing ex parte Onder on dismissing Appeal No. CIT(A)/Bwn/10087/2015-16 as such Appellant has been deprived of getting natural Justice
5. For that A.O. while initiated proceedings u/s 148 in respect for Asstt. Year 2010-11 has misconceived of fact and Law that the Appellant with other two partners while ousted from partnership Rice Mill where Dutta Group had 47% share in Rice and Partners of Dutta Group has to execute a Sale Deed for releasing 47% share of Dutta Group in favour of Partners of Kali Shankar Rice Mill where Deed Valued at Rs.30,00,000/- and Partners of Dutta Group as per Audited A/cs upto 23.07.2009 where standing Balance of partner of Dutta Group was Rs. 300000/- after adjustment Loss of Rice Milling business of Rs 2,64,378/ upto 23.07.2009. More so A.O. has fail to look into definition Sec. 2(47) when in this sale Deed is to relinquishing right, title and interest of 47% share of Rice Mill. This Sale Deed is not a transfer Deed and as such Capital Gain calculated is not valid under Law. The A.O. has not bought in his record any proof that the ousted partners of Dutta Group were paid more than there standing balance upto 23.07.2009.
6. For that the Appellant craves the right to Add any other Ground or Grounds either before or at the time of hearing.
The only issue raised by the assessee in the various grounds of appeal
is against the order of the ld. CIT(A) dismissing the appeal of the assessee on non-compliance of the notice and thereby confirming the addition made by the AO on account of unexplained income of Rs.17,47,345/-.
5. Facts in brief are that the assessee filed return of income u/s.139(1) of the Act declaring total income at Rs.1,63,897/-. The case of the assessee was reopened u/s.147 of the Act by issuing notice u/s.148 of the Act on 10.05.2013, which was duly served on the assessee. The assessee did not make compliance to the said notice despite repeated opportunities being given. The AO observed that the assessee was a partner of Kalisankar Rice Mill along with seven other partners on 20.03.2007. All the partners purchased a piece of land at RS Ratna, Mouza Palason Dist Bardnaman at a cost of Rs.4 lakhs from Smt. Haripriya Gupta. Thereafter some dispute arose between the co-owners and three partners retired from the firm by relinquishing their shares of 47% which was taken up by the remaining partners. The AO noted that the three retiring partners including the assessee were holding major shares of the land and the said shares were sold to remaining partners for Rs.30,00,000/- on 24.07.2009 as is evident from the sale deed. Thus, the stamp duty value of the property was estimated at Rs.53,92,034/-. Accordingly, the capital gain was calculated by the AO which has been tabulated by the AO in page 3 of the assessment order. The proportionate capital gain was computed and added to the total income of the assessee assessing thereby adding Rs 17,47,345/-. In the appellate proceedings, the ld.CIT(A) confirmed the order of the AO. Now, the assessee has filed the present before the Tribunal.
6. After hearing the rival contentions of the parties and perusing the material on record, I find that the impugned land was an agriculture land which was sold by the assessee along with other partners(their respective shares) for a consideration of Rs.30 lakhs, the market value of which was Rs.53,92,034/-. Accordingly, capital gain was computed at Rs.17,47,345/- I note that the said land is located in a village which is more than 8 kilometers from the local municipality limit. I note that on the basis of certificate from the Department of Revenue, State Government of West Bengal, the land is at a distance of 32 kms from the local municipality and the land was stated to be the agricultural land. Even on the basis of English Translation of the above purchase deed in Bengali, which was done by the Interpreter of the Hon’ble Calcutta High Court, copy of which is placed at pages 42 to 51 of the Paper Book, I find that the said land is an agricultural land. Considering the facts, I am not inclined to restore the issue to the file of AO or to CIT(A) as a very small issue is involved in the present case and no meaningful purpose would be served by restoring the issue except the same would be involving unnecessary wastage of time, manpower of the department. In my opinion, no capital gain is attracted on the land which is more than 32 kms from the municipality of Bardhaman District. Accordingly, I set aside the order of the ld. CIT(A) and direct the AO to delete the addition so made in this regard.