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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश आदेश /O R D E R आदेश आदेश
PER MAHAVIR SINGH, VP:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-14, Chennai in dated 15.10.2019. The Assessment was framed by the Income Tax Officer, Non-Corporate Ward – 13(4), Chennai for the Assessment Year 2011 – 2012 u/s.143(3) r.w.s. u/s.147 of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide his order dated 22.12.2018.
The first issue in this appeal of Assessee is as regards to the order of the Commissioner of Income Tax (Appeals) confirming the action of the Assessing Officer in treating the agricultural land sold by the Assessee as ‘capital asset’ liable for long-term capital gain as against claim of the assessee that the land was agricultural land which would be exempt under the Act. For this, the Assessee has raised ground no. 2(a) which read as under:
“(2)(a) The learned Commissioner of Income Tax (Appeals) erred in non-granting of relief u/s.10(1) as exempt income in regard to sale of agricultural land and erred in making assessment under the head capital gain in entirety and without prejudice erred in not granting relief u/s.54F of the Act and the appellant claim for relief is justified by binding decision.”
3.1 The material facts are that the assessee is resident senior citizen. The Assessee owned an agricultural land near lake side situated at Jalladampettai Village, Sholinganallur Taluk, Kancheepuram District, Door No.41 and bearing survey No.106/8 and measuring about 27 cents by way of settlement executed by her late mother Smt. Arasmmal and registered as a document dated 12th July, 1994 in the office of the District Registrar, Chennai in document No.436. This property was sold by the assessee to M/s. St. John Educational & Research Trust on 28.02.2011 for a consideration of Rs.99,85,000/-, though it is registered in the sum of Rs.68,85,000/- as per guideline value.
3.2 The Assessee made a cash deposit of Rs.31,00,000/- in his bank account during the previous year 2010 – 2011, relevant to the Assessment Year 2011 – 2012 but no return of income was filed.
Accordingly, notice u/s.148 of the Act, dated 28.03.2018 was issued by the Assessing Officer. In consequence to this notice, the Assessee filed her return of income on 17.05.2018 admitting a total income of Rs.3,56,080/- under the head “long-term capital gains” arising out of sale of the above stated agricultural land. The Assessing Officer noted that as per Sale Deed the assessee received consideration of Rs.68,85,000/- but claimed deduction u/s.54F of the Act for Rs.92,67,792/-. The same was on account of investment of Rs.95,00,000/- made by the assessee to purchase / construct another house property. However, in the absence of satisfactory documents forthcoming from the assessee, in this regard, Ld. AO denied the deduction as claimed by the assessee u/s 54F.
During appellate proceedings, the assessee, inter-alia, raised a plea that the land under consideration was an agricultural land which was not a capital asset and thus, no capital gains would arise from sale thereof. The evidences submitted by the assessee were subjected to remand proceedings wherein the assessee produced documents like Patta, Chitta and Adangal to substantiate the claim.
It was scrutinized and the Patta of neighboring land bearing Sl.
No.108/4A was also submitted showing it as an agricultural land. The field enquires made by the ward inspector revealed that the land was under cultivation before the purchaser built the school. The photographs also confirmed that the rice cultivation was being done in surrounding agricultural land. Therefore, upon scrutiny, it was found by Ld. AO that the land was under cultivation.
However, considering the fact that the assessee admitted gains in the return of income and any fresh claim could be made by means of fresh return of income only, the claim could not be entertained. The income declared in the return could not be undone during appellate proceedings. Therefore, this plea was rejected.
Proceeding further, considering the fact that the assessee admitted receipt of on-money of Rs.31 Lacs, the same was to be assessed as ‘income from other sources’ which would not be eligible for any deduction u/s 54F. Since the assessee could not file satisfactory documentary evidences towards claim u/s 54F, the same was rightly denied by Ld. AO. Aggrieved, the assessee is in further appeal before us.
Our finding and Adjudication
Upon due consideration of material facts, the undisputed position that emerges is that what the assessee has sold is an agricultural land. In the remand report, it is the finding of Ld. AO that the land was under cultivation before the same was sold by the assessee. The relevant observations in the remand report were as under: -
As per the directions of the Commissioner of Income Tax (Appeals), the Assessee was requested to provide additional evidences, documents in support of their submissions before the Commissioner of Income Tax (Appeals) and the Assessee’s representative appeared and produced the relevant agricultural land. It was scrutinized and the patta of neighbouring land bearing S.No.1098/4A was also submitted showing it as agricultural land.
Further, the field enquiries made by the Inspector of this ward also confirms that the said land was under cultivation before the purchaser built the School [St. John’s Public School]. The photographs also confirm that the rice cultivation is being done even now in the surrounding agricultural lands. Therefore, on scrutiny and enquires it is found that the land sold was under cultivation.”
The Remand Report called for in the case of Smt. Gajalakshmi alias L. Ambujam – PAN:AYTPG 5036H – A.Y.2011 – 2012 is submitted herewith for kind perusal of the Commissioner of Income Tax (Appeals).”
The learned Counsel for the Assessee has also filed a notification issued by the Government of Tamilnadu dated 19.07.2011, wherein the village Jalladampettai, Sholinganallur is described with boundaries as under:
Division Boundaries Existing Existing Ward Assembly No. North West – Clock Local Body / Division No. Constituency wise 191. Pillaiyar Koil Street, Periyar Street, Vethachalam Street, Village burial ground, Sai
3rd Ganesh Nagard, Street, Sai Ganesh Ngar, Jalladampettai All Wards Sholinganallur 25th Cross Street, Sai Ganesh Nagar, 28 Cross Street, East Pallikkaranai Lands, ESA Hostel, Jalladampettai – Perumbakkam Road, Pallavan Nagar NagathAmman Koil Street, Pallavan Nagar Pillaiyar Koil Street, Puthu Nagar, 5th Street, Puthu Nagar Thiruvenkadam Street, Medavakkam – Sholinganallur Road, Thiruvalluvar Nagar, Bharathiyar Street, Jalladampettai – Medavakkam Link Road, Nesavalar Nagar Periyar Road, Jansi Rani Street, Jeyachandran Nagar 2nd Main Road, Aasan College, Bharathiyar Street, R.G. Nagar 1st Street, R.G. Nagar Main Road, R.S. Nagar Thilagar Street.
On the basis of the same, Ld. AR submitted that as per the notification, the village in Jalladampettal was brought within the Chennai City Municipality Corporation w.e.f. 19.07.2011 only which is much after the date of sale of land by the assessee. The revenue could not controvert this fact.
The Ld. DR has raised a plea that gains were admitted by the assessee in the return of income and fresh claims could be made only by way of revised return of income. However, CBDT in circular dated 11.04.1955 has observed that the officers of the department should not take advantage of ignorance of assessee as to his rights.
It is one of their duties to assist the taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard, the officer should take the initiative in guiding a taxpayer, where proceedings or other particulars before them indicate that some refund or relief is due to him. The department should freely advise the assessee as to their rights and liabilities and as to the procedure to be adopted for claiming refund and reliefs.
Further the Hon’ble Bombay High Court in CIT V/s Pruthvi Brokers and Shareholders Pvt. Ltd. (349 IT 336) noted that even if no claim is made before Ld. AO, the same could be made before appellate authorities and the jurisdiction of appellate authorities to entertain such a claim has not been negated by the Hon’ble Supreme Court in Goetz India Ltd. Vs CIT. In fact, the Hon’ble court has made it clear that the judgment would not impinge on the powers of Tribunal u/s 254 of the Act. Considering all these factors, the Hon’ble High Court of Madras in CIT V/s Perlo Telecommunication & Electronics Components India Pvt. Ltd. (TCA No. 413 of 2014 dated 20.09.2021) dismissed revenue’s appeal. Respectfully following the same, we would hold that Ld. CIT(A) was not right in law to dismiss the otherwise eligible claim of the assessee. We order so. Accordingly, since the land sold by the assessee was an agricultural land, the same could not be brought to tax merely on the ignorance of the assessee. The on-money as admitted by the assessee has also been received as well as accepted by revenue to have arisen out of the sale of land. Therefore, the character of the same would remain the same i.e. agricultural income. The other grounds relating to deduction u/s 54F has been rendered infructuous. The stay application has also become infructuous.
The appeal stand allowed in terms of our above order. The stay application stand dismissed as infructuous.
Order pronounced on 08th March, 2022.