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Income Tax Appellate Tribunal, VIRTUAL COURT
O R D E R PER M. BALAGANESH (A.M): This appeal filed by revenue in for Assessment Year 2013-14 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-36, Mumbai in appeal No.CIT(A)-36/IT-118/ACIT-24(1)/2016-17, dated 30/08/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/03/2016 by the ld. Assistant Commissioner of Income Tax -24(1), Mumbai (hereinafter referred to as ld. AO).
The revenue has raised the following grounds of appeal:-
1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in allowing the claim of the assessee vide revised computation of income, stating that no Capital Gains arise from sale of the impugned land which was claimed to be agricultural land.
2. Whether on the facts and in circumstances of the case and in law the Ld.CIT(A) was justified in not giving the AO an opportunity to examine the revised claim of the assessee, in violation to Rule 46A of the Income Tax Rules, 1962. 3. The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the AO be restored.
3. None appeared on behalf of the assessee. We have heard the Ld. DR and perused the materials available on record. We find that the assessee is a partnership firm and filed its original return of income 30/03/2015 for the AY 2013-14 declaring total income of Rs. 4,77,77,170/-, which was duly processed u/s 143(1) of the Act. We find that the assesee firm is engaged in the business of investing activity in real-estate. The return filed by the assessee was selected for scrutiny by issuance of notice u/s 143(2) of the Act. During the course of scrutiny assessment proceedings, the assessee filed a revised computation of income as time limit for filed revised return u/s 139(5) of the Act had already expired. In the said revised computation of income filed before the Ld .AO during the course of assessment proceedings, the assessee claimed that it had erroneously offered capital gains arising from the sale of agricultural land to tax, which is actually exempt from tax. The Ld. AO did not even whisper about the filing of this revised computation in the assessment order and accepted the returned income at Rs. 4,77,77,170/- and completed the assessment u/s 143(3) of the Act dated 23/03/2016. The assesee accordingly before the Ld. CIT(A) made a claim of exemption from capital gains on sale of agricultural land by placing reliance on the decision of Hon’ble Jurisdictional High court in the case of CIT vs Pruthvi Brokers and shareholders Pvt.Ltd reported in 349 ITR 336, wherein it was held that although, the Ld. AO is entitled to grant deduction only on the basis of a revised return and not on the basis of a letter requesting an amendment to the return filed, the appellate authorities are entitled to consider the claim and to adjudicate the same. It is not necessary that the deduction be allowed, only if a revised return income would have been filed. Accordingly, the assessee pleaded that there is no prohibition on the powers of the appellate authorities to entertain any additional claim, which according to them arises in the course of proceedings and is relevant for the decision of the matter. Accordingly, the assessee pleaded that its claim to carry forward short term capital loss of Rs. 2,09,09,645/- instead of Rs. 49,09,645/- by filing revised computation of income shall be sustained. The assessee also placed reliance on yet another decision of Hon’ble jurisdictional High Court in the case of Balmukund Acharya vs DCIT reported in 310 ITR 310 (Bom). The assessee also placed reliance on the CBDT circular No. 14 (XL-35), dated 11/04/1955, wherein the board has directed all the AOs to give eligible deductions /exemptions to the assessee as per provisions of law and do not take advantage of ignorance of assessee. The assessee virtually pleaded that the capital gains erroneously offered from sale of agricultural land of Rs. 2,36,89,342/- in the original return of income filed requires to be excluded from the taxable income.
We find that the assessee had sold agricultural land situated at Balyakheda, Indore district for Rs. 2,93,35,000/- during the year under consideration and the said land was purchased by the assessee during the financial year 2009-10 for Rs. 41,87,859/-. We find that the assesee had furnished the copy of panchayat certificate and the purchase agreement of the land under consideration before the lower authorities. We find that the assessee had pleaded that the agricultural land situated at Balyakheda, Indore district is more than 8 kilometers away from the limits of Indore municipal corporation. In support of his contention, the assessee provided the local panchayat copy to prove that the said land is an agricultural land and that the same is situated beyond 8 kilometers from the municipal limits. Accordingly, the assessee had pleaded that the transfer of said land would be outside the ambit of definition of capital asset u/s 2(14) of the Act.
We find that the Ld. CIT(A) had duly gone through the entire records of the assessee together with the documentary evidences submitted with regard to the sale of the said land, which was already on record before the Ld. AO and categorically held that the land sold was actually an agricultural land and that the same was situated outside the prescribed limits of the municipal corporation. Accordingly, he held that the said land is eligible to be treated as an agricultural land and would be outside the definition of capital asset u/s. 2(14) of the Act and correspondingly held that the transfer of the said land would not be liable for capital gains. The said categorical finding of fact made by the Ld.CIT(A) has not been controverted by the Ld. DR before us. Hence, we do not deem it fit to interfere in the order of the Ld. CIT(A) in this regard. Accordingly, the appeal of the revenue is dismissed.
In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on this 11/11/2020