KUMAR RASIKLAL MEHTA,MUMBAI vs. ASST CIT 16(2), MUMBAI

PDF · subscribers
ITA 2679/MUM/2015Status: DisposedITAT Mumbai01 February 2016AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the issue of whether the land was situated beyond the prescribed limit from the municipality/panchayat samiti was not ascertainable and had not been examined by the lower authorities. Therefore, the entire issue requires reconsideration.

What were the facts?

The assessee claimed exemption for capital gains on the sale of agricultural land, stating it was not a capital asset. However, the Assessing Officer added the gain to the total income after the assessee withdrew the claim. The CIT(A) denied the assessee's ground regarding the calculation of gains.

What were the issues?

Whether the agricultural land sold qualifies as a capital asset and is exempt from tax, and whether the lower authorities properly examined the location of the land in relation to municipal limits.

Which sections of the Income-tax Act were involved?

Section 2(14)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI

Before: Shri Joginder Singh,

For Respondent: Shri V.S. Jadhav-DR
Hearing: 21/01/2016

आदेश / O R D E R

1.

The assessee is aggrieved by the impugned order dated 12/01/2015 of the Ld. First Appellate Authority, Mumbai, the only ground raised in this appeal pertains to rejecting the claim of capital gain, arising out of, sale of agricultural land which is not a capital asset as per section 2(14) of the Income Tax Act, 1961 (hereinafter the Act), and further refusing to entertain the ground taken for such claim that the same is exempt from taxation.

2.

During hearing of this appeal, the ld. counsel for the assessee, Shri R.K. Sinha, advanced arguments which is identical to the ground raised by raising a question whether the assessee can take a ground for taxability of capital gain before the ld. Commissioner of Income Tax (Appeals), which was denied to the assessee by further contending that the land is situated beyond the prescribed limit of municipality/panchayat samiti.

2.1. On the other hand, the ld. DR, Shri V.S. Jadhav, though defended the conclusion arrived at in the impugned order but added that the case requires relook by the ld. Assessing Officer.

2.2. I have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is an individual filed return of income on 02/10/2010 declaring total income of Rs.2,32,700/-, which was processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny, therefore, requisite notice was issued to the assessee and the same was responded. The assessee submitted the requisite details which were checked by the ld. Assessing Officer. While doing so, it was observed that the assessee has claimed long term capital gain of Rs.9,14,998/- on sale of agricultural land which was claimed exempt u/s 2(14) of the Act. The assessee was asked to furnish the details of sale of such land and further as to why the same should not be treated as taxable income. As per the Revenue, the assessee vide letter dated 05/03/2013 withdrew the claim and offered the sale proceeds for taxation. The amount of Rs.9,14,998/- was added to the total income of the assessee and thus the income was revised to Rs.11,47,698/-.

2.3. On appeal, before the ld. Commissioner of Income Tax (Appeals), the assessee challenged the addition of capital gain and also that the assessee has wrongly calculated the gains. However, as per the assessee, the said ground was not allowed to be agitated.

It is also noted that whether the land was situated beyond the prescribed limit from the municipality or the taluka panchayat is also not ascertainable from facts, even the issue has not been looked into from this angle by the ld. Assessing Officer or the ld. Commissioner of Income Tax (Appeals). Even the assessee only before this Tribunal has raised this issue, therefore, in all fairness, I am of the view, that the whole issue requires reconsideration at the level of the ld. Assessing Officer, therefore, this appeal is remanded back to the file of the ld. Assessing Officer. The assessee is directed to furnish the facts/necessary evidence, to substantiate his claim, along with the exact location of the land, period of holding of such land with the assessee or any other attendant facts/evidence before the ld. Assessing Officer. The ld. Assessing Officer is directed to examine the claim of the assessee and after providing due opportunity of being heard, decide the case in accordance with law, thus, the appeal of the assessee allowed for statistical purposes only.

Finally, the appeal of the assessee is allowed for statistical purposes only.

This order was pronounced in the open in the presence of ld. representative from both sides at the conclusion of the hearing on 21/01/2016.

More judgments on Section 2(14)

All 1,130 judgments and leading authorities on Section 2(14) →

Recent GST High Court judgments

Search GST case law →