SHRI PREETAM,JAIPUR vs. ITO, ALWAR

PER SHRI KUL BHARAT, JM.

These two appeals by the two different Assessee are directed against the

different orders of Ld. CIT (A), Jaipur, both dated 03.02.2017 pertaining to

assessment year 2012-13. Since the common issues are involved, both the appeals

2 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

were taken up together and are being disposed of by way of consolidating order for

the sake of convenience and brevity.

First we take up ITA No. 191/JP/2017, pertaining to the A.Y. 2012-13.

The grounds raised by the assessee are as under :-

“1. The Ld. CIT(A) has erred on facts and in law in uploading the order of the AO in assessing the income from long term capital gain on sale of agricultural land at Village Karoli acquired by the Government under the Land Acquisition Act, 1894 at Rs. 3,98,30,439/- by:

(a) Ignoring that the capital gain on such acquisition is exempt u/s 10(37) of the Act and assessee has fulfilled all the conditions for claiming such exemption for which evidence was available before him, (b) Ignoring that the agricultural land acquired is not a capital asset being situated more than 8 kms from the Municipal Limits of District Alwar and thus not liable to tax under the Income Tax Act, 1961, (c) Considering the sale consideration of the agricultural land acquired at Rs. 4,06,48,147/- whereas the actual considered awarded is only Rs. 2,88,20,401/- and (d) Ignoring the assessee has declared the income under the head ‘Long term Capital Gain’ after claiming exemption u/s 54 under misconception. 2. The assessee craves to alter, amend and modify any of the grounds of appeal. 3. Necessary cost be allowed to the assessee.”

scrutiny assessment despite issuance of service notice. No one appeared on behalf

of the assessee. Therefore, the Assessing Officer passed an order u/s 144 of the

I.T. Act, 1961 dated 11/03/2015. Thereby, the Assessing Officer computed the

capital gain at Rs. 3,97,92,348/- and disallowed the claim u/s 80C of Rs. 1 lakhs.

Thereby, the Assessing Officer computed taxable income at Rs. 4,00,64,291/-

,against the income declared at Rs. 1,71,943/-. Aggrieved by this order the

3 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

assessee preferred an appeal before Ld. CIT(A), who after considering the

submissions dismissed the appeal.

term capital gain. At the time of hearing the Ld. Counsel for the assessee

vehemently argued that the Assessing Officer as well as Ld. CIT(A) did not

considered the facts in right perspective. He submitted that the grievances of the

assessee are twofold, firstly, the asset which was transferred was an agricultural

land. Therefore, was not within the definition of capital asset. Secondly, even if it

was a capital asset, the asset was compulsory acquired by the Government.

Therefore, capital gain on such acquisition is exempt u/s 10(37) of the Act. The Ld.

Departmental Representatives opposed the submissions and submitted that the

Assessee is required to demonstrate, as to how this land cannot be termed as capital

asset. In rejoinder ld. Counsel for the assessee drew our attention at Page No. 32 of

the Paper Book, where report by sub-Tahsildar Tapukara District Alwar, Dated

2/3/2017, where it is stated that the land is 75 Kms. away from the Municipal

Committee, Alwar and 11 kms. from the Bhiwadi Municipal Counsel. However, after

some hearing on the issues the Respective Representatives of the parties agreed

that the issue may be restored to the file of the Assessing Officer for decision afresh

on the issue of whether the land was falling within the municipal limit or not if the

same was falling within the prescribed Limit of municipality whether acquisition of

such land was compulsorily by the State Government.

authorities below. We have given thoughtful consideration to submissions of the

respective parties. There is no dispute with regard to the fact that asset which was

4 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

transferred as per the assessee if it was an agricultural land would not fall within the

definition of the capital assets in terms of section 2(14) of the Act. Secondly, if the

land was compulsorily acquired by the State Government, therefore, exemption u/s

10(37) would be available to the assessee. There is no evidence available on the

record from both the parties to support whether the land is a capital asset or not

and whether the land is an agricultural land as per the provision of the Income-tax

Act or not. The assessee had not appeared before the AO and did not file the

relevant documents. Under these facts we deem it proper and in the interest of

justice to restore this issue to the file of the Assessing Officer for decision afresh.

The Assessing Officer is directed to verify the claim of the assessee whether land

was an agricultural land at the time acquisition/transfer and if not whether the

assessee is entitled for exemption u/s 10(37) of the Act in case the acquisition was a

compulsory acquisition by the State Government. The Assessing Officer would make

enquiry from the concerned revenue officials and provide opportunity to the assesee

for placing supporting evidence on record. Ground no. 1(a) to (d), the assessee’s

appeal is allowed for statistical purpose.

by the assessee in support of such claim. Therefore, this ground is dismissed.

Assessment Year 2012-13.

The assessee has raised the following grounds of appeal.

5 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

“1. The Ld. CIT(A) has erred on facts and in law in upholding the order of the AO in assessing the income from long term capital gain on sale of agricultural land at Village Karoli acquired by the Government under the Land Acquisition Act, 1894 at Rs. 1,33,79,866/- by:

(a) Ignoring that the capital gain on such acquisition is exempt u/s 10(37) of the Act and assessee has fulfilled all the conditions for claiming such exemption for which evidence was available before him, (b) Ignoring that the agricultural land acquired is not a capital asset being situated more than 8 kms from the Municipal Limits of Districts Alwar and thus not liable to tax under the Income Tax Act, 1961 and (c) Ignoring that assessee has declared the income under the head ‘Long Term Capital Gain’ after claiming exemption u/s 54 under misconception. 2. The assessee craves to alter, amend and modify any of the grounds of appeal. 3. Necessary cost be allowed to the assessee.”

argument as were addressed in ITA No. 191/JP/2017. The facts are identical in

this appeal, there is no change into facts and circumstances are pointed out by the

Revenue. Therefore, taking a consistent view, our finding in ITA No. 191/JP/2017 in

para 4 as reproduced as under:-

“4. We have heard the rival contentions, and gone through the order of the authorities below. We have given thoughtful consideration to submissions of the respective parties. There is no dispute with regard to the fact that asset which was transferred as per the assessee if it was an agricultural land would not fall within the definition of the capital assets in terms of section 2(14) of the Act. Secondly, if the land was compulsorily acquired by the State Government, therefore, exemption u/s 10(37) would be available to the assessee. There is no evidence available on the record from both the parties to support whether the land is a capital asset or not and whether the land is an agricultural land as per the provision of the Income-tax Act or not.

6 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

The assessee had not appeared before the AO and did not file the relevant documents. Under these facts we deem it proper and in the interest of justice to restore this issue to the file of the Assessing Officer for decision afresh. The Assessing Officer is directed to verify the claim of the assessee whether land was an agricultural land at the time acquisition/transfer and if not whether the assessee is entitled for exemption u/s 10(37) of the Act in case the acquisition was a compulsory acquisition by the State Government. The Assessing Officer would make enquiry from the concerned revenue officials and provide opportunity to the assesee for placing supporting evidence on record. Ground no. 1(a) to d, the assessee’s appeal is allowed for statistical purpose.” The above finding would apply to this appeal as well. The AO would decide the issue accordingly. 10. Ground no. 2 is also general in nature and needs no separate adjudication.

material in support of this claim. Therefore, this ground of the assessee’s appeal is

dismissed.

purposes.

Order pronounced in the open court on Wednesday, the 3rd day of May 2017.

Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½ (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 03/05/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

7 ITA Nos. 191 & 192/JP/2017 Shri Preetam L/H of Shri Dayaram, Alwar. & Shri Laxmi Narayan, Alwar.

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत