JIK GEORGE vs. THE INCOME TAX OFFICER, WARD-2

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 15TH DAY OF NOVEMBER 2021 / 24TH KARTHIKA, 1943 (AGAINST THE ORDER IN I.T.A NO.82/COCH/2016 DTED 17.04.2018 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN ITA NO. 47 OF 2018 APPELLANT/S: JIK GEORGE IC,TROPICANA ZION APARTMENT, RAILWAY STATION PO, THIRUVALLA 689111 BY ADVS. ANIL D. NAIR SREEJITH R.NAIR ACHYUT K PADMARAJ RESPONDENT/S: THE INCOME TAX OFFICER, WARD-2 THIRUVALLA 689101 BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 15.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA NO. 47 OF 2018 -2- J U D G M E N T Heard learned Advocates Mr. Anil D Nair and Mr. Jose Joseph, for parties. 2. Mr. Jik George/Assessee is the appellant. The Income Tax Officer, Ward-2, Thiruvalla/Revenue is the respondent. 3. The subject matter of the appeal relates to disputes arising from the return filed by the assessee for the assessment year 2010-11. The assessee being aggrieved by the order of the Tribunal dated 17.04.2018 has filed the instant appeal. The controversy relates to the claim of assessee to treat the asset sold by the assessee in the subject financial year as agricultural land but not a capital asset, which question has been answered by the Tribunal as follows:

ITA NO. 47 OF 2018 -3- “6.4 So in the facts and circumstances of the case, we find that the land was not actually or ordinarily used for agricultural operations on or around the relevant time of sale and there was no agricultural activities carried on by the assessee in the said land so as to hold it as agricultural land. Further, when the basic nature of the land is found to be of non agricultural land, the other argument of the assessee regarding the status of the property whether it is situated within the municipal limits or outside the municipal limits is irrelevant. A non agricultural land whether inside the municipal limits or outside the municipal limits or even in a remote village is a capital asset and transfer of the same for generating income is liable for capital gains tax. In the facts and circumstances of the case, we are inclined to uphold the order of the lower authorities and dismiss this ground of the assessee. Thus this ground of appeal of the assessee is dismissed. 7. The next ground for our consideration is that the Ld. CIT(A) erred in rejecting the appeal filed by the assessee without adjudicating the following grounds raised before him: 2. The learned Income-tax Officer has erred in not taking into consideration the indexed value of compound wall of Rs.26,333/- in calculating Capital Gain on sale of item No. 2 property, even though the said document clearly shows the existence of compound wall. 5. The learned Income-tax Officer has erred in estimating the market value of residential house in measuring 2000 sq. ft. at Rs.1,00,000/- and determining the indexed cost at Rs.4,75,187/- only as against the indexed cost of Rs.9,48,000/- claimed by the appellant. 8. These grounds were raised by the assessee before the

ITA NO. 47 OF 2018 -4- CIT(A). However, the CIT(A) omitted to consider these grounds while adjudicating the appeal of the assessee. Hence, these two grounds are remitted to the file of the CIT(A) to give a finding on this issue. Thus Ground No. 2 and Ground No. 5 are partly allowed for statistical purposes.” The assessee has raised the following substantial question of law for consideration; “i. In the facts and circumstances of the case, ought not the Tribunal have held that the appellant was entitled for exemption from capital gains as the property sold was the agricultural land situated beyond the limit prescribed in Panchayath.” 5. The counsel appearing for parties invite the attention of this Court to the unreported judgment dated 11.12.2017 in I.T.A No.251 of 2015 which has considered a question arising under Section 2(14) of the Income Tax Act. The unreported decision answered the question in favour of the Revenue and against the assessee. It is stated by the counsel that the reasoning and conclusions recorded in I.T.A No.251 of 2015 squarely cover the question of law formulated in the instant appeal.

ITA NO. 47 OF 2018 -5- The statement is placed on record and accepted. The question is answered in favour of Revenue and against the assessee. Income Tax Appeal is dismissed. Sd/- S.V.BHATTI JUDGE Sd/- BASANT BALAJI JUDGE JS

ITA NO. 47 OF 2018 -6- APPENDIX OF ITA 47/2018 PETITIONER'S ANNEXURES: ANNEXURE P1 TRUE COPY OF THE ASSESSMENT ORDER DTD.23.3.2013 FOR THE YEAR 2010-11 ISSUED TO THE APPELLANT ANNEXURE P2 TRUE COPY OF THE ORDER DATED 5.1.2016 OF THE COMMISSIONER OF INCOME TAX (APPELLATE),FOR THE YEAR 2010-11 ISSUED TO THE APPELLANT. ANNEXURE P3 TRUE COPY OF THE ORDER DATED 17.4.2018 OF THE INCOME TAX APPELLATE TRIBUNAL FOR THE A.Y.2010-11.