VARUNA SURESH HARCHANDRAI,MUMBAI vs. ASST CIT CIR 14(1), MUMBAI

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ITA 366/MUM/2014Status: DisposedITAT Mumbai31 March 2017AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the land in question was agricultural land, not a capital asset as defined under Section 2(14) of the Income Tax Act. This decision was based on previous ITAT rulings concerning co-owners of the same land.

What were the facts?

The assessee was a shareholder in an agricultural land which the Assessing Officer (AO) treated as non-agricultural land for capital gains purposes. The assessee contended that the land was agricultural in nature at the time of sale.

What were the issues?

The primary issue was whether the land sold by the assessee was agricultural land or a capital asset for the purpose of computing capital gains.

Which sections of the Income-tax Act were involved?

Section 2(14)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI SANDEEP GOSAIN

For Appellant: Shri Nitesh Joshi & Vipul Mody
For Respondent: Shri Saurabh Kumar, DR
Hearing: 14.03.2017Pronounced: 31.03.2017

सुनवाई की तायीख / Date of Hearing : 14.03.2017 घोषणा की तायीख /Date of Pronouncement : 31.03.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 15.1.2014 is against the order of the CIT (A)-25, Mumbai dated 23.12.2013 for the assessment year 2010-2011.

2.

In this appeal, assessee raised two grounds in toto and they revolve around the solitary issue relating to the agricultural nature of the asset sold by the assessee in the year under consideration. Brief facts include the assessee is a 1/4th shareholder of the said agricultural land and the same was held by the AO as „non- agricultural land‟ and invoked the provisions relating to the capital gains. On these facts, Ld Counsel for the assessee filed a copy of the order of the Tribunal, dated 20.1.2017, in the cases of Mr. Mohit Suresh Harchandrai vs. ACIT (ITA No.364/M/2014); Mr. Nihal Suresh Harchandrai vs. ACIT (ITA No.365/M/2014) and Mr. Niranjan Suresh Harchandrai vs. ACIT (ITA No.367/M/2014), who are the shareholders of rest of the agricultural land. Bringing our attention to para 10 of the said order of the Tribunal, Ld Counsel for the assessee read out the following:-

“10........Moreover, in the present case neither there is any cogent evidence to rebut the presumption of truth attached with the revenue record maintained by the department nor any verification was conducted by AO during assessment to rebut the documentary evidence placed on record by the assessee to falsify contention of the assessee. The authorities below have not given any cogent and convincing reason for disbelieving the documentary and considered opinion, prima facie establish that the land in question was an agricultural land within the provisions of the Act at the time of sale to the purchaser. Since, in our considered opinion the assessee has been able to establish that the land in question at the time of its sale was an agricultural land and not a capital asset within the definition of section 2(14) of the Act, the Ld CIT (A) has wrongly affirmed the findings of the AO. We, therefore, set aside the impugned order and allow this ground of appeal of the assessee.”

3. From the above, it is the finding of the Tribunal that the land in question is an agricultural land and not a capital asset within the meaning of definition of section 2(14) of the Act. While delivering its decision, ITAT applied the judgment of the Hon‟ble Apex Court in the case of Smt. Sarifabibi Mohmed Ibrahim vs. CIT (1993) 204 ITR 631 (SC).

4. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited decision of the Tribunal (supra), we are of the opinion, the land in question is the same and the said land therefore constitutes an „agricultural land‟ as per the finding of the Tribunal in the case of co-owners of the land (supra). Thus, in our considered opinion, the claim of the assessee is proper. Accordingly, the orders of the AO / CIT (A) stand to be reversed and in favour of the assessee. Accordingly we order. Thus, the grounds raised by the assessee stand allowed in favour of the assessee since, they are covered by the above cited decision of the Tribunal.

5. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 31st March, 2017.

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