A.SENTHIL KUMAR,COIMBATORE vs. ITO, COIMBATORE

आदेश / O R D E R

Ld. Counsel for the assessee submitted that assessee’s in 2. these appeals except for the assessee Shri. R. Rakkiappan, were joint owners of an immovable property measuring 4.78 acres situated at survey No.324/2, patta No.233 in Perurchettipalyam Village. Assessee to 22/Mds/2017. :- 3 -:

Shri. R. Rakkiappan, as per ld. Authorised Representative was one of the joint owners of another immovable property measuring 4 acres at S.F.No.322, Joint Patta 36, in the very same village, which was adjacent to the property held by other three assessee’s. As per ld. Authorised Representative all the assessee’s except Shri. R.

Rakkiappan had filed their returns for the impugned assessment year on 13.05.2015 pursuant to notices issued u/s.148 of the Act. As per ld. Authorised Representative Shri. R. Rakkiappan had filed his return on 19.06.2015. Referring to the reasons for issuing the notice u/s.148 of the Act, placed at paper book page no.2, ld. Authorised Representative submitted that ld. Assessing Officer had specifically mentioned the property sold to be within 8 kms from the Corporation limit of Coimbatore. As per ld. Authorised Representative assessee’s had on 06.05.2015, replied to the above said notice, pointing out that the lands sold were agricultural in nature and situated beyond 8kms of the Corporation limit. As per ld. Authorised Representative, however inadvertently, assessee’s while filing their returns of income, had failed to mention this fact. Nevertheless, according to him, during the course of assessment proceedings, assessee’s had clearly stated that the land sold was agricultural in nature and gains therefrom not exigible to capital gains tax. As per ld. Authorised Representative even before ld. CIT(A) assessee’s had specifically raised this ground. to 22/Mds/2017. :- 4 -:

Submission of the ld. Authorised Representative was that ld. Commissioner of Income Tax (Appeals) rejected this ground. As per ld. Authorised Representative, the ld. Commissioner of Income Tax (Appeals) erroneously held that he had no powers u/s. 251(1)(a) of the Act for considering such a claim, which reduced the income to nil.

As per ld. Authorised Representative reliance placed by the ld. Commissioner of Income Tax (Appeals) on the judgment of Hon’ble Apex Court in the case of Goetze (India) Ltd vs. CIT 284 ITR 323 was wrong. According to him, Hon’ble Apex Court had circumscribed the powers of ld. Assessing Officer only with regard to a fresh claim, but appellate authorities could consider a claim which was statutorily allowable to the assessee. Reliance was placed on the judgment of Hon’ble Apex Court in the case of National Thermal Power Co. Ltd vs. CIT 229 ITR 383.

Per contra, ld. Departmental Representative submitted that 3.

assessee’s in their respective returns had claimed deduction u/s.54B of the Act on the gains arising on sale of the land. According to the ld. Departmental Representative assessee itself had admitted the agricultural land to be lying within 8 Kms peripheral limits of Coimbatore Corporation. Thus, according to ld. Departmental Representative the claim made by the assessee before ld. to 22/Mds/2017. :- 5 -:

Commissioner of Income Tax (Appeals) was against its own admission, and rightly rejected.

"During the AY assessee has jointly sold an immovable property (land) situated at S.F.No.324/2, Patta No.233 to the extent of 4.78 acres in Perurchettipalayam village, for sale consideration of ₹71,70,000/- to M/s. Amresh Holdings Private Limited, Coimbatore through power of attorney arrangements. M/s. Amresh Holdings Private Limited is a company engaged in the business of developing real estate and it has purchased this land to construct residential/commercial establishments.

Further the said land is falling within 8Kms of distance from the area limit of Municipal Corporation 'of Coimbatore at the time of date of sale agreement. Therefore, sale proceeds of this land is not eligible to claim exemption as per provisions of section 2(14) of the IT Act. Therefore I have reason to believe that income in the form of LTCG accrued during the year has escaped assessment".

Assessee’s had given a reply wherein it was mentioned as under:-

‘’I am residing at the above address. I have sold my share of agricultural land to M/s.Shanmuga Su;ndaram AOP for ₹29,94,900/- by way of general power of attorney to one of the members of the AOP Mr.M.Ponnusamy on 16.10.2007. The, agricultural land is situated more than 8 Kms from the corporation limit. I had purchased an agricultural land for ·Rs.25,19,995/- in accordance with Section 54B of the Income Tax: Act, 1961 and also bought a vacant site for Rs.3,35,990/- in accordance with Section 54 F of to 22/Mds/2017. :- 6 -: the Income Tax Act, 1961. I have also spent an amount of Rs.19,77,928/ - for constructing a residential house. This amount of Rs.19,77,928/- was been received from my mother (Pappammal) through a joint construction agreement. I am now filing the return of income for the assessment year 2008-09’’. It may be true that in returns filed assessee’s had not have made a specific claim that agricultural land sold was beyond 8 km from Corporation limit. However, the returns were filed after the above referred reply which was available with ld. Assessing Officer. In the said reply assessee had mentioned that the agricultural land was situated more than 8 Kms from the corporation limit. Further, assessee’s had pressed such a claim before ld. Commissioner of Income Tax (Appeals). Ld. Assessing Officer was aware of the claim of the assessee that land sold was agricultural in nature. I cannot consider it as an altogether new claim made by the assessee. Coming to the judgment of Apex Court in the case of Goetze (India) Ltd (supra) relied on by the ld. Commissioner of Income Tax (Appeals) for rejecting the claim of the assessee, what I find is that the said judgment does not impinge on the power of the appellate authority for considering a fresh aground raised by the assessee. That apart, as already mentioned by me, assessee in pursuant to notice u/s.148 of the Act had made a specific claim that agricultural land sold were beyond 8km limit of Coimbatore Corporation limits. In the to 22/Mds/2017. :- 7 -: circumstances, whether surplus arising out of sale of agricultural land would be exigible to capital gains tax, in my opinion, requires to be adjudicated by the ld. Commissioner of Income Tax (Appeals). I therefore, set aside the orders of the ld. Commissioner of Income Tax (Appeals) and remit all the appeals back to his file for consideration afresh in accordance with law. Connected matters have also to be considered afresh by the ld. Commissioner of Income Tax (Appeals) based on his decision regarding the claim of the land sold being not exigible to capital gains tax.

In the result, appeals of the assessee are partly allowed for 5. statistical purposes.