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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – 13, Chennai, dated 19.09.2016 and pertains to assessment year 2012-13.
The only issue arises for consideration is assessment of capital gain.
Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee purchased an agricultural land on 15.07.2010 and sold the same in September, 2011. The assessee claimed that the gain arising out of the sale of land is exempted from taxation. The Assessing Officer, however, assessed the gain as short term capital gain. According to the Ld. counsel, the Assessing Officer has not considered the issue raised by the assessee with regard to exemption as agricultural land. Even though the Tahsildar, Tiruttani Taluk certified that the land in question was cultivated with coconut and gingelly, the Assessing Officer rejected the claim of the assessee only on the ground that the assessee has paid advance tax of `10,50,000/-. According to the Ld. counsel, a mere payment of advance tax made by the assessee wrongly cannot be a reason for disallowing the claim of the assessee. If the land in question is agricultural land and the gain is not taxable, either the omission made by the assessee or the payment of advance tax made by the assessee cannot be construed that the assessee is liable for taxation. The provisions of Income-tax Act have to be strictly viewed and construed in respect of levying tax. Unless the assessee is assessable under the provisions of Income-tax Act, according to the Ld. counsel, merely because the advance tax was paid, it cannot be a reason for levying of tax. Therefore, the CIT(Appeals) is not justified in confirming the order of the Assessing Officer.
Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative, submitted that the assessee claimed the land in question as agricultural land. It appears that the assessee has also produced a letter from Tahsildar, Tirutanni taluk. The Tahsildar, Tirutanni, in fact, clarified that the land in question was cultivated with coconut and gingelly in the year 2011-12 corresponding to Fasal year 1419 and 1420. According to the Ld. D.R., the Assessing Officer rejected the claim of the assessee on the ground that the assessee himself paid the advance tax of `10,50,000/-.
Since the land was purchased in July, 2010 and sold in September 2011, the Assessing Officer levied short term capital gain. As per revenue records, the sole authority to determine the municipality limit is State Government and the lands are within 8 KMs of Tirutanni Municipality. Therefore, according to the Ld. D.R., the CIT(Appeals) has rightly confirmed the order of the Assessing Officer.
We have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that the land in question is agricultural land. For the purpose of considering whether the land in question is agricultural land or not, the classification of the land by the State Revenue Department has to be ascertained. Both the authorities below had no occasion to examine the classification of land by State Revenue Department.
The Tahsildar, Tirutanni taluk, in a letter dated 04.02.2015, which was extracted in the assessment order has clarified that the assessee was cultivating coconut and gingelly in the said land during the year 2011-12. It is not known whether any source of irrigation is available or the assessee himself created a source for irrigation either by digging well or putting up a borewell. These facts are not brought on record. This Tribunal is of the considered opinion that for the purpose of examining the claim of the assessee whether the land in question is agricultural land or not, the classification of land by the State Revenue Department has to be examined. The relevant adangal extract, which would throw some light regarding cultivation, has also to be examined. Since such document is not available on record, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh and bring on record the classification of land by the State Revenue Department and cultivation made by the assessee and thereafter decide the issue in accordance with law, after giving a reasonable opportunity to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 9th March, 2017 at Chennai.