SIDDHART DUBE,THE NILGIRIS vs. ITO INTERNATIONAL TAXATION, COIMBATORE

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ITA 2765/CHNY/2018Status: DisposedITAT Chennai16 November 2018AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Adangal extract, crucial for proving the agricultural nature of the land, was filed for the first time before the Tribunal and not with the lower authorities. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

What were the facts?

The assessee transferred agricultural land where tea was cultivated and claimed exemption under Section 54 of the Income-tax Act. The assessee also argued that the profit from the sale of such land is not taxable as it's not a capital asset.

What were the issues?

Whether the sale of agricultural land used for tea cultivation is a transfer of a capital asset and if the profit is taxable or exempt. Whether the Adangal extract filed at the appellate stage can be considered for re-examination.

Which sections of the Income-tax Act were involved?

Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Shri R. Clement Ramesh Kumar, Addl.CIT
Hearing: 12.11.2018Pronounced: 16.11.2018

Heard together (2 matters)

ITA No.2765/Chny/2018
S.P. No.322/Chny/2018

Read from the judgment's own cause title. This page is filed under one of them.

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

The appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -16, Chennai, dated 09.08.2018 and pertains to assessment year 2015-16.

2.

Shri Ashok A. Kulkarni, the Ld.counsel for the assessee, submitted that the assessee transferred agricultural land during the year under consideration. According to the Ld. counsel, in the agricultural land, wherein tea was cultivated by the assessee, a farm house was also constructed in the land. According to the Ld. counsel, the assessee has invested the capital gain on sale of agricultural land and claimed exemption under Section 54 of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. counsel, even if the sale proceeds were not invested for the purpose of exemption under Section 54 of the Act, still the profit on sale of agricultural land is exempted, therefore, it cannot be taxed.

Placing reliance on the Adangal extract, the Ld.counsel submitted that the assessee, in fact, cultivated tea plant, therefore, the sale of land in which tea was cultivated, cannot be construed to be transfer of capital asset. In other words, according to the Ld. counsel, the sale proceeds of sale of agricultural land wherein tea was cultivated, is exempted from taxation. On a query from the Bench, whether the copy of Adangal extract now filed before this Tribunal was filed before the Assessing Officer and the CIT(Appeals), the Ld.counsel very fairly admitted that the same was not filed before the CIT(Appeals).

3.

We heard Shri R. Clement Ramesh Kumar, the Ld. Departmental Representative also. The Assessing Officer as well as the CIT(Appeals) rejected the claim of exemption under Section 54 of the Act. Now, the assessee claims that what was transferred by the assessee is agricultural land wherein tea was cultivated.

This fact was not examined by the Assessing Officer as well as the CIT(Appeals). It is an admitted fact that the Adangal extract, a copy of which is available before this Tribunal now, was not available before the lower authorities. Therefore, the lower authorities had no occasion to examine whether the sale proceeds of sale of land, wherein tea was cultivated, was exempted from taxation or not.

4.

This Tribunal being a final fact finding authority, the facts have to be settled so that the appellate forum may appreciate the grievance of the parties in a better manner. Since the Adangal extract was filed first time before this Tribunal, this Tribunal is of the considered opinion that the Assessing Officer has to re-examine the matter. Accordingly, in the interest of justice, the orders of both the authorities below are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall re- examine the matter in the light of the Adangal extract and other documents that would be filed by the assessee and find out whether the land is agricultural land and the sale proceeds were exempted from taxation and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

5.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Consequently, the Stay Petition stands dismissed.

Order pronounced in the court on 16thNovember, 2018at Chennai.

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