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Income Tax Appellate Tribunal, DELHI BENCH: “A”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI O.P. KANT
Date of hearing 25.02.2019 Date of pronouncement 14.03.2019 ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 12/12/2011 passed by the Ld. Commissioner of Income-tax (Appeals)-I, Dehradun [in short ‘the Ld. CIT(A)’] for assessment year 2009-10, raising following grounds: “That CIT(A), Dehradun, as well as Income Tax Officer, Ward-1, Rishikesh is erred to decide that capital gain arisen from sales of agriculture land is not exempted under section 2(14) of the I.T. Act, 1961. While land in question is agriculture land and situated more than 8 km from municipal limit, also land is continuously plough for agriculture operation. Therefore, addition of Rs.13,300,000/- is against the law and fact of case.”
2. Briefly stated facts of the case are that, the assessee being an individual, filed return of income on 09/03/2010 declaring taxable income of Rs.2,57,710/- along with agriculture income of Rs.1,32,75,160/-. The case was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (in short ‘the Act’) was issued and complied with. The assessment was completed on 12/12/2011 rejecting the claim of the agriculture income on sale of the land amounting to Rs.1,32,75,160/-. On further appeal, the Ld. CIT(A) upheld the finding of the Assessing Officer. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above.
We have heard the rival submission of the parties and perused the relevant material on record, including the paper book containing pages 1 to 114 filed by the Ld. counsel of the assessee. In the computation of the income filed, the assessee has shown sale of agricultural land for Rs.1,35,45,000/-out of which cost of acquisition of the land amounting to Rs.2,27,840/- has been deducted and balance amount to Rs.1,32,74,160/-was shown as exempt under section 2(14) of the Act. The assessee filed various documents, including copy of agreement to sale, copy of sale deed, copy of Khasara No. of the land and other details in respect of the land sold and contended before the lower authorities that (i) Land admeasuring 0.617 hectare bearing Khasra No. 58, 59 and 59 AM situated at village Padaratha, Dhanpra, District Haridwar (Uttrakhand) was purchased by the assessee on 03/07/2006 for a total consideration of Rs.2,45,000/-from Mrs. Savita Gupta and Mrs. Krishna Sharma.
(ii) The said land was given to Sri Rampal for cultivation as tenant as per the agreement between the parties, according to which the assessee was entitled for 1/5th of the agriculture produce. The assessee claimed to have received 3 bags of wheat on 07/05/2007 and four bags of wheat on 02/05/2008 and in addition, he claimed to have received Rs. 1000 in cash from him on 2/8/2008. (iii) The assessee made an agreement to sale this land on 05/08/2008 to M/s Metro Electricals Private Limited for consideration of Rs.1,35,41,000/- and sale deed was executed on 21/10/2008 .
According, to the Department, the land was converted to non-agricultural/industrial by the state government on 03/10/2008 in pursuance to the industrial policy for establishing megaproject in the state announced vide notification, dated 20/12/2006. As the sale deed for transfer of the land has been executed on 21/10/2008, thus, at the time of the sale, the land was not agriculture and, thus, it cannot be allowed as agriculture income in the hands of the assessee. Further, according to the Department, though the land was marked as agriculture in the revenue record, but there is nothing on record to show that it was being actually used for agricultural purposes, when the assessee purchased it. According to the Department, neither the assessee nor the person from whom the land is purchased are agriculturists. The assessee has not shown any agriculture income in the return of income filed for assessment the 2008-09 and shown only in meagre income of Rs.1000 in the assessment year under consideration and that too is not in conformity with Sh. Rampal for sharing of agriculture produce. According to the Department, the assessee was aware of the announcement of the industrial policy for establishing megaproject and thus purchased the land for the purpose of making profit on sale and not for the purpose of agriculture operation.
Before us, the learned counsel filed an application for admission of following documents as additional evidences under Rule 29 of the ITAT Rules, 1963: 1. Information obtained under RTI Act from Nayab Tehsildar Haridwar, dt. 16.07.2012; 2. Copy of letter dated 13.08.2013 & 03.09.2013 issued by PRO Lekhpal Dhanpura Haridwar; 3. Copy of Khasra Khautauni
The learned counsel submitted that in the paper book, above application has been filed on the direction of the Bench on the last date of hearing.
We have seen the above documents and find that these are part of the land revenue record in respect of the land. According to the document as on the date of the sale deed i.e. 21/10/2008, the land was in the nature of the agriculture and nature of the land of the Khasra No. 58 and 59 has been changed to nonagricultural on 12/10/2009 and 05/05/2010 respectively. These evidences are in contradiction of the document relied upon by the Department to claim that land was converted into nonagricultural/industrial on 03/10/2008. In view of the above facts, we find it appropriate to admit above documents as additional evidences and restore the matter to the file of the Ld. CIT(A) for deciding whether the land was converted to nonagricultural/industrial on or before the date of the sale deed i.e. 21/10/2008. We direct the Ld. CIT(A) to carry out Inquiries as deemed fit in the matter and find out when the state government already announced the land as nonagricultural/industrial, then change in the revenue record was only a matter of giving effect of the order of the state government. The issue of land situated more than 8 km from the municipal limit raised by the assessee in the grounds may also be examined by the Ld. CIT(A) . The Ld. CIT(A) is directed to provide adequate opportunity of hearing to both the assessee as well as to the Assessing Officer and then decide the issue in accordance with law. Accordingly, the sole ground of the appeal is allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 14th March, 2019.