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Facts
The assessee, a trust, failed to file a return for AY 2013-14. Based on information about a property sale, the AO initiated reassessment proceedings. The AO added the sale proceeds of Rs. 5.22 crore and denied a claim for agricultural income of Rs. 7,35,930.
Held
The Tribunal noted that the assessee failed to provide sufficient evidence to prove the agricultural nature of the land and to substantiate the claim for agricultural income. Additionally, legal grounds challenging the reassessment were raised for the first time before the Tribunal.
Key Issues
Whether the reassessment proceedings were valid and whether the addition of sale proceeds and denial of agricultural income were justified.
Sections Cited
147, 148, 144, 139(1), 250
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2013-14 is directed against the order dated 28.10.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of the Assessment order dated 29.09.2021 passed u/s.147 r.w.s.144 of the Act.
Brief facts of the case are that the assessee is a trust and did not file return of income for A.Y. 2013-14 u/s.139(1) of the Act. Based on the information available with the AO about sale of immovable property for a consideration of Rs.5.22 crore vide agreement dated 24.09.2012, notice u/s.148 of the Act was issued followed by validly service of statutory notices for carrying out the re-assessment proceedings. During the course of hearing, assessee submitted the sale deed along with 7/12 extract for the agricultural income earned during the year and also to prove that the land sold was used for the agricultural produce. However, since the assessee was unable to produce the distance from the Government authority to prove the difference between the Local Municipality and the location of the land sold, the addition was made for the sale proceeds of Rs.5.22 crore and also the claim of agricultural income of Rs.7,35,930/- was denied assessing income at Rs.5,29,35,930/-.
Aggrieved assessee preferred appeal before ld.CIT(A) and filed various details but failed to succeed. Now the assessee is in appeal before this Tribunal.
Ld. Departmental Representative vehemently argued supporting the orders of the lower authorities.
With the assistance of ld. Departmental Representative we have perused the record and notice that two issues have been raised. Firstly, regarding the addition of sale proceeds of Rs.5.22 crore and secondly, on the denial of claim of agricultural income earned by the assessee at Rs.7,35,930/-. We notice that the assessee made partial compliance to the notices of hearing issued before ld.CIT(A). However, from perusal of para 6.6 and 6.7 of the impugned order, we notice that the assessee did not bring forth any new evidence or material to substantiate its claim. For the sake of convenience, we reproduce para 6.6 and 6.7 of the impugned order below :
“6.6. The appellant has attempted to demonstrate that the land was indeed used for agricultural purposes by submitting a 7/12 extract indicating the presence of 10 coconut trees and producing some bills for the purchase of fertilizers and seeds. However, considering the size of the land (0.62 hectares) and the limited number of trees, the evidence is not sufficient to conclusively establish the land as being primarily used for agricultural purposes. Moreover, once the land is determined to be within the specified urban limits, the question of whether agricultural operations were carried out becomes irrelevant under the provisions of the Income Tax Act, as capital gains tax applies regardless of the land's usage. 6.7.During the appellate proceedings, the appellant did not bring forth any new evidence or material to substantiate its claims beyond what was already submitted during the assessment. Therefore, the findings of the Assessing Officer, based on the material available on record and judicial precedents cited, remain uncontroverted.”
From perusal of the above finding of ld.CIT(A), we notice that the assessee could only furnish 7/12 extract but other details have not been furnished which could prove that the land sold was an agricultural land and it is not a capital asset and whether the assessee has actually earned agricultural income. We also notice that the assessee has raised legal grounds challenging the validity of the re-assessment proceedings carried by the ld.AO for the first time before us. Under these given facts and circumstances, we deem it appropriate to remit all the issues raised before us in the instant appeal to the file of ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide reasonable opportunity of hearing. If required ld.CIT(A) shall also call for a remand report and after obtaining the comments from the JAO shall decide the issues in accordance with law and pass a speaking order. Grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 07th day of May, 2025.