THE COMMISSIONER OF INCOME TAX vs. SHRI NAGAPPA NAGARAJ

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ITA/437/2009HC KarnatakaKAHC01058101200909 March 2015Bench: S.SUJATHA,VINEET SARAN7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found that the Tribunal did not properly consider the evidence regarding whether the properties were agricultural and used for agricultural purposes. Therefore, the matter was remanded.

What were the facts?

The assessee sold agricultural land and claimed exemption under Section 54B of the Income Tax Act. The Revenue appealed the Tribunal's order which allowed the exemption.

What were the issues?

Whether the properties sold and purchased were agricultural lands and used for agricultural purposes to attract Section 54B exemption.

Which sections of the Income-tax Act were involved?

Section 54B,Section 2(14)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 9TH DAY OF MARCH 2015

PRESENT

THE HON’BLE MR.JUSTICE VINEET SARAN AND THE HON’BLE MRS.JUSTICE S.SUJATHA ITA No. 437 OF 2009 BETWEEN

1.

THE COMMISSIONER OF INCOME TAX C.R BUILDING, QUEENS ROAD, BANGALORE

2.

THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-7 (1), BANGALORE ...APPELLANTS (By Sri: K V ARAVIND, ADV.)

AND

SHRI NAGAPPA NAGARAJ PROP. MANJUNATHA TABLE BRICKS

2 GARUDACHAR PALYA, MAHADEVAPURA POST, BANGALORE ... RESPONDENT (By Sri: S PARTHASARATHI, ADV. )

***

ITA FILED U/S.260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 17-4-2009 PASSED IN ITA.NO.384/BANG/2008, FOR THE ASSESSMENT YEAR 2003-04, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.384/BANG/2008,DATED 17-4-2009 AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE-7(1), BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY.

3 THIS APPEAL IS COMING ON FOR FINAL HEARING THIS DAY, VINEET SARAN, J. DELIVERED THE FOLLOWING:

JUDGMENT

This is an appeal filed by the Revenue against the order passed by the Tribunal. Assessee – respondent holds agricultural land, part of which he sold in the assessment year in question, which is 2003-04. The Assessee –respondent claims that the transaction attracts the provisions of Section 54B of the Income Tax Act, 1961 (in short ‘the Act’) and he is thus entitled for exemption on the income derived from such sale.

2 This appeal was admitted on the following substantial questions of law:

4 “(a) Whether the Tribunal was correct in holding that the property sold by the assessee cannot be treated as income of the assessee under the head ‘income from business’ as held by the Assessing Officer without considering and recording a finding in this regard?

(b) Whether the Tribunal was correct in proceeding to hold that the assessee should be allowed exemption to the extent of property purchased by the assessee within the stipulated time of sale without recording a finding as to whether the property sold were agriculture property when the certificate produced by the Village Accountant did not disclose the correct picture about the agriculture operation?”

3 We have heard the learned counsel Mr. K.V.Aravind, for the appellants and learned counsel Mr. S.Parthasarathi, for respondent. Perused the records.

4.

The learned counsel for both the parties agree that the entire dispute in the present appeal hinges upon the fact as to whether the properties which were sold and also the properties which were purchased are the agricultural lands as per Section 2(14) of the Act and also as to whether the same were being used for agricultural purpose so as to attract the provisions of Section 54B of the Act. The learned counsel for both the parties have also stated that though the evidence from both sides were adduced before the Assessing Authority, which formed part of paper book of the Tribunal, but there is no discussion with regard to such evidence on the basis of which the Tribunal has come to a finding that the properties in question which were sold and purchased by the Assessee were agricultural properties and were used for agricultural purposes. The learned counsel for both the

6 parties thus jointly stated that the matter be remanded back to the Assessing Authority for considering such question of fact afresh after taking into account the evidence which was lead by the parties.

5.

In such view of the matter, the appeal is allowed. The order dated 17.04.2009 passed by the Tribunal in ITA No.384/Bang/2008 as well as the order of the Authorities below are hereby quashed. The matter is remitted back to the Assessing Authority with a direction to consider the matter afresh in the light of the observations made herein above.

In view of the fact that the questions, which have been referred for decision of this court, have to be decided afresh in the light of the evidence adduced by the parties by the Assessing Authority, we are not answering the questions

7 framed at the time of Admission of this appeal and the same shall be looked into by the Assessing Authority.

SD/- JUDGE

SD/- JUDGE

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