DEVON PLANTATIONS AND INDUSTRIES LTD., vs. THE DY. COMMISSIONER OF INCOME TAX

THE DY. COMMISSIONER OF INCOME TAX

THE COMMISSIONER OF INCOME TAX

The appeal was admitted by a bench of this Court vide order dated 09.11.2018 on the following substantial questions of law: “(i) Whether the appellant was entitled to adjust the indexed cost of acquisition under the second proviso to Section 48 of the

Whether the findings of the Tribunal “that it was incumbent on the appellant to allege during the assessment proceedings that the trees which were now sold were in existence prior to 01.04.1981” and “no such material / evidence was brought on record before the Tribunal or the lower authorities” is perverse, contrary to the record and illegal?"

Facts leading to filing of this appeal briefly stated are that the assessee is a Company engaged in tea/coffee business and owns estates in the State of Karnataka. For the assessment year 2007-08, the business income of the assessee was worked out as per Rule 7B and Rule 8 of the Income Tax Rules. The assessee had declared short term capital gain of Rs.78,412/- from sale of shares and long term capital loss on coffee futures exchange of Rs.7,200/-. The

During the course of the re-assessment proceedings, it was found that the assessee was wrongly reporting income from capital gains, as the assessee had adopted wrong methods of indexation of sale of timber. The case was re-opened for assessment. The Assessing Authority, by an order dated 30.09.2014, completed the assessment and held that 30% of the total sale consideration should be taken as capital gain for the Assessment year 2007-2008 and Assessment year 2008-2009.

The Assessee filed appeals before the Commissioner of Income Tax (Appeals), who by order dated 10.08.2016, dismissed the appeals preferred by the Assessee in respect of the Assessment years 2007-

The learned counsel for the assessee submitted that the finding recorded by the Tribunal in this regard is perverse, as the same is based on surmises and conjectures. It is further submitted that the matter deserves to be remanded to the Assessing Officer, as the issue requires factual adjudication afresh. In support of the aforesaid submission, learned counsel places reliance on a decision of this court in the case of TATA COFFEE LIMITED vs. THE JOINT COMMISSIONER OF INCOME TAX (2012) 211 TAXMAN 7 (Kar).

Learned counsel for the Revenue submitted that all the contentions of both the parties may be kept open and the Assessing Officer may be directed to re-do the assessment, in accordance with law. 8. We have considered the submissions made on both sides and have perused the record. 9. After perusal of the record, in our considered opinion, the factual controversy between the parties requires adjudication afresh, in the light of the material available on record. The impugned orders passed by the Tribunal / Commissioner of Income Tax (Appeals) as well as by the Assessing Officer are hereby quashed. The matter is remitted to the Assessing Officer to make a fresh assessment again.