SHRI H HANUMANTHAPPA vs THE INCOME-TAX OFFICER

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

ON THE 14TH DAY OF NOVEMBER, 2018

BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH

AND

THE HON'BLE MR. JUSTICE K. NATARAJAN

INCOME TAX APPEAL No.11 of 2011

BETWEEN:

SHRI.H. HANUMANTHAPPA, No.224, 4TH CROSS, 4TH BLOCK, BASAVESHWARANAGAR, 4TH STAGE, BANGALORE - 560 079.

... APPELLANT

(BY SRI A. SHANKAR & M. LAVA, ADVOCATES)

AND:

THE INCOME-TAX OFFICER, WARD 8(3), 3RD FLOOR, JEEVAN SAMPIGE BUILDING, SAMPIGE ROAD, MALLESHWARAM, BANGALORE – 560 003.

... RESPONDENT

(BY SRI K.V. ARAVIND, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 02-09-2010 PASSED IN ITA No.681/BANG/2010, FOR THE ASSESSMENT YEAR 2004-05, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA No.681/BANG/2010, DATED 02-09-2010 TO THE EXTENT HELD AGAINST THE APPELLANT, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS INCOME TAX APPEAL COMING ON FOR HEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING:

J U D G M E N T

The appellant is an individual deriving income from commission agency in vegetables. He was also an agriculturist growing vegetables and had coconut plantations. He filed his return of income as an individual for the Assessment Year 2004-05 declaring total income of Rs.45,000/-. Subsequently, he filed a revised return of income under the head ‘income from other sources’ and income from capital gains on the land acquired by Bangalore Development Authority (‘BDA’ for short). He claimed exemption under Section 54B of the Income Tax

Act, 1961 (‘Act’ for short). That the land was originally purchased for a sum of Rs.1,61,055/-. He incurred an amount of Rs.2,10,000/- as ‘improvement expenses’ by drilling bore-well etc., The land was acquired by the BDA for a sum of Rs.11,93,076/-. Thereafter, he computed capital gains of Rs.4,60,204/- and claimed exemption under Section 54B of the Act as ‘investment on agricultural land’. The Assessing Officer re-computed the total income and assessed the same at Rs.4,44,550/- as against the declaration of income by the assessee as Rs.45,000/-. Aggrieved by the same, an appeal was filed before the Commissioner of Income Tax (Appeals)-II, Bangalore. The appeal was partly allowed. The First Appellate Authority directed the Assessing Officer to withdraw an amount of Rs.3,00,000/- from the exemption claimed under Section 54B of the Act, since the sale consideration has been paid after filing of the return of income and partial relief was granted insofar as the cost of improvement is concerned. Aggrieved by the same, an appeal was preferred before

the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, Bangalore. The Appellate Tribunal partly allowed the appeal. Aggrieved by the same, the present appeal is filed by the assessee.

By the order dated 22.11.2011, the appeal was admitted to consider the following substantial question of law: “ Whether the finding of the Tribunal that there is no compliance of provisions of Section 139(4) of the Act eventhough reinvestment is made within three years from the end of the financial years in which the transaction took place on 6.8.2003, is perverse and arbitrary?”

Learned counsel for the appellant contends that the question of law is since covered by the judgment of this Court reported in (2009) 32 DTR Judgments 243 in the case of Fathima Bai vs. Income Tax Officer, wherein the Division Bench held that the contention of the Revenue that

the deposit in the scheme should have been made before the initial due date and not the extended due date, was an untenable contention. Therefore, the appeal was allowed in favour of the assessee.

Under the circumstances, since the substantial question of law is covered by the aforesaid judgment, the same is accordingly answered in favour of the assessee and against the Revenue. Consequently, the order of the Tribunal is set aside. The appeal is accordingly disposed off.

SD/-

SD/- JUDGE

JUDGE

mv CT:AM

SHRI H HANUMANTHAPPA vs. THE INCOME-TAX OFFICER