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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI
Before: SHRI R.K.PANDA & SHRI SUDHANSHU SRIVASTAVA
PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER:
1. This appeal has been preferred by the assessee against order dated 31.05.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-Ghaziabad {CIT(A)} and pertains to assessment year 2010- 11.
(Anil Kumar) 2.0 The brief facts of the case are that the assessee is a farmer and was the owner of a piece of land said to be agricultural in nature and measuring about 7,300 square meters at village- Ibrahimpur, Junaidpur urf Maujpur, Distt.- Bulandshahar, Uttar Pradesh. As per the Annual Information Report, the assessee had sold immovable property having a circle rate of Rs. 1,38,70,000/- during the year under consideration. Since the assessee had not filed any return of income and there was no response to the query raised by the Income Tax Department in this regard, reassessment proceedings u/s 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) were initiated by issuing a show cause notice.
2.1 It was the submission of the assessee before the Assessing Officer (AO) that the impugned land was agricultural land and, therefore, no capital gains tax was chargeable on the sale of such land. However, the assessee could not substantiate before the AO that the land in question was agricultural in nature and nor could the assessee substantiate that he had objected to the circle rate of Rs. 1,38,70,000/-. Accordingly, after allowing benefit of (Anil Kumar) indexation, the capital gains was computed at Rs. 1,11,01,840/- by the Assessing Officer.
2.2 The assessee’s appeal before the Ld. First Appellate Authority was also dismissed and now the assessee is before this Tribunal against the order of the Ld. CIT (A) and has raised numerous grounds which are as under:-
“That the CIT (A) Ghaziabad did not appreciate that the A.O. has wrongly assessed the income of the appellant in the assessment year 2010-11, hence, the impugned order of Ld. Commissioner of IT (Appeal) is against the principal of natural justice.
That the Ld. Commissioner of Income Tax (Appeals) failed to appreciate that the agricultural land sold by the appellant, does not fall within the definition of capital assets u/s 2 (14) (iii) (a) as the same is situated at village- Ibrahimpur Junaidpur urf Maujpur, Dist- Bulandshahar, which has population of 4,132 as per population census- 2011.
That the Ld. Commissioner of Income Tax (Appeals) failed to appreciate that Khurja Master Plan 2021 is not a notified plan and it is only a proposal for achieving an objective of planned development of the area of Khurja (Anil Kumar) upto 2021, hence the agricultural land sold situated in the area declared as Industrial Land in Khurja Master Plan 2021 cannot loose its agricultural status unitill re-notified after its industrial use.
That the Ld. Commissioner of Income Tax (Appeals) wrongly appreciated the verdict of Hon’ble High Court of Allahabad in CIT vs. Smt. Sanjeeda Begum which clearly defines that agricultural land situated outside the municipal limits as well as outside the notified area u/s 2(4) (iii) (b), therefore, the same was not included in the definition of capital assets as given in section 2 (14) (iii) and no capital gain was eligible to tax.
That the Ld. A.O. as well as Ld. C.I.T.(A.) both despite being fact finding authorities failed to appreciate that the appellant has never received the income as assessed by the Ld. AO in assessment year under consideration and the said Sale Deed was got prepared by M/s Arshiya and in the said sale deed the amount of consideration was shown as Rs. 1,38,70,000/-, whereas the appellant herein has received a consideration of Rs. 38,10,900/- only and M/s Arshiya has never paid Rs. 1,38,70,000/-, in cash or in any other manner in consideration of above said agricultural land.
(Anil Kumar) 6. That M/s Arshiya acquired the above said agricultural land in 2008-2009, violating the legal procedures and by showing illegally said land as industrial land whereas the said land was the agricultural land at the time of its purchasing since all the land acquired by the M/s Arshiya was notified on 16-11-2010 as a Free Trade Warehousing Zone vide Extraordinary Gazette Notification No. 2364, published by the Ministry of Commerce and Industry, Government of India.
That the transfer of above said agricultural land cannot be converted into industrial land by M/s Arshiya being an agricultural land of scheduled caste and the said land is still being shown as agricultural land only in the revenue records of the government.
That the appellant has already lodged a complaint with Economic Offence Wing of UP Government for investigation of aforesaid illegal act of M/s Arshiha in mentioning wrong amount in the sale deed of above referred agricultural land.
That the appellant craves leave to add, alter, omit to or from the fronds of appeal at the time of hearing of the appeal at any time before that as he may be so advised.”
(Anil Kumar) 3.0 The Ld. Authorised Representative (Ld. AR) submitted that this is a case where fraud was committed on the assessee by the purchaser of the land and that although in the sale deed the amount of consideration was shown at Rs. 1,38,70,000/-, the assessee had received Rs. 38,10,900/- only. Our attention was also drawn to the complaint filed by the assessee before the Economic Offences Wing of the Uttar Pradesh Government in this regard and also the application filed against victimization under money laundering. It was submitted that the matter of fact remained that the assessee had never received the amount as shown in the sale deed. It was further submitted that the land still existed as agricultural land and for this our attention was drawn to the copy of khasra placed in the paper book. The Ld. Authorised Representative also submitted that the land in question continues to be agricultural land as the assessee belongs to a scheduled caste and, therefore, his land cannot be converted for use as industrial land. The Ld. Authorised Representative also submitted that the land was situated outside the municipal limits of the Khurja Municipal Board and the population also was less than the prescribed limit of 10,000 (Anil Kumar) and, therefore, for this reason also the land was ‘agricultural land’ on which capital gains tax would not be attracted. It was prayed that the appeal of the assessee be allowed and the addition on account of capital gains be deleted. 4.0 In response, the Ld. Sr. Departmental Representative (Ld. Sr. DR) vehemently argued that both the lower authorities had held against the assessee and that their observations in this regard were very relevant. It was also submitted that the assessee’s action in filing the complaints etc. were post the dismissal of the assessee’s appeal by the Ld. CIT (A) and, therefore, it could be inferred that the complaints were filed with a view to get some relief at the stage of the second appeal. 5.0 We have heard the rival submissions and have also perused the material on record. The essential question before us at this juncture is whether the impugned land was agricultural land or not at the time of the sale. Section 2(14) of the Act defines ‘Capital Asset’ to mean property of any kind held by the assessee, whether or not connected with his business or profession; and any securities held by a foreign institutional investor which has invested in such securities in accordance