SH. VIRENDER KUMAR,JAGADHRI vs. ITO, W-2, YAMUNANAGAR

PER DIVA SINGH,JM

The present appeal has been filed by the assessee assailing the correctness of the order dated 13.07.2017 of ld. CIT(Appeals) Panchkula pertaining to 2007-08 assessment years on the following grounds : 1. That authorities below has erred in law and facts in reopening the assessment u/s 148. 2. The learned CIT (Appeals) has erred in law and facts in confirming an addition of Rs. 1,04,44,875/- being long term capital gain on sale of agriculture land measuring 39 kanal6 marla for a consideration of Rs. 1,06,96,969/-. 3. That learned CIT (Appeals) has erred in law and facts in adopting indexed cost of land valued on the basis of land value on 1-4-1981 at Rs. 2,52,094/-. 4. That learned CIT (Appeals) has erred in law and facts in confirming the AO action by not allowing the benefit of improvement cost of land. 5. That learned CIT (Appeals) has erred in law and fact in not allowing the deduction u/s 54B/54F as per the provisions of law.

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the issue in appeal before the CIT(A) and the order on account of similar handicap of the assessee was passed without considering necessary evidences. Accordingly, it was his limited prayer that in the interests of substantial justice, the assessee may be permitted to file fresh evidences under Rule 29. The fresh evidences, it was submitted, are mentioned at Sr.No. 6, 7 and 8 of the Paper Book filed and consists of evidences of purchases of agricultural lands which is relevant for deciding the issues. The prayer for admission of fresh evidences, it was submitted, was supported by copy of the affidavit dated 05.10.2017 available at pages 4 and 4 (wrongly given the same number) in the Paper Book alongwith an application. It was his submission that the evidences may be admitted. 3. A perusal of the affidavit shows that the assessee avers that ; 1. That I am an agriculturist and agriculture operations is my only source of Income. That during the year 1-4-2006 to 31-3-2007. I had sold my joint ancestral land held in the name of Naresh Kumar and Virender Kumar measuring 39 Kanal 06 Maria to Bhagirathi Realtors Private Limited for a consideration of Rs. 2,13,93,937/- on 25-8-2006. 2. That I have not filed my Income Tax returns as no Income was chargeable to tax as per my understanding. That on receipt of notices from Income Tax Department I sought advice from advocate who was practicing in Civil Courts advised that as the land which had been sold by me is outside Limits and is used for agriculture operations and the sale of the same do not attract any income Tax. 3. That I had invested Rs. 1,01,74,126/- in purchase of other agriculture land pursuant to sale of agriculture land in question detailed in para 1 above. 4. That I should be allowed to file sale deed and agreements which were not filed earlier during the course of assessment proceedings.

3.1 The assessee, it is seen that as per the application on record, stated that joint ancestral land was sold which had been in the name of Naresh Kumar and Virender Kumar measuring 39 Kanal 06 Marla to Bhagirathi Realtors Private Limited for a consideration of Rs. 2,13,93,937/- on 25-8- 2006. It was stated that the assessee was 50% owner of the property as such only 50% of sale consideration was assessable in his hands. The ld. AR clarified that the assessee has not been filing his Income Tax Returns as no Income according to the assessee was chargeable to tax. It has also been pleaded that the assessee was also not aware of the provisions of Income Tax Act that on receipt of notices from Income Tax Department the assessee sought advice from an Advocate who was practicing in Civil Courts and was advised that as the land which had been sold is outside Municipal Limits and is used for agriculture operations the sale of the same thus did not attract any income Tax. Inviting attention to paras 1.6 to 1.9 of the same, the ld. AR submitted

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that the assessee has invested the entire sum for purchase of another agriculture land and thus was eligible for claiming deduction u/s 54B. The assessee being ignorant of the legal position though has made investment of the amount in agricultural land failed to substantiate his claim. Accordingly the fresh evidences in these peculiar facts and circumstances, it was his prayer, may be admitted. Reliance was also placed upon the decision of the High Court in the case of CIT Vs Text Hundred India Private Limited 351 ITR 57. Accordingly, it was his prayer that the issues may be remanded to the AO. 4. The ld. Sr.DR invited attention to the impugned order and submitted that the CIT(A) rejecting the assessee's appeal has relied upon the view taken in the case of Shri Naresh Kumar i.e. the brother of the assessee. Parties were required to address the fate of the aforesaid order of the CIT(A) dated 05.08.2016 in the case of the assessee's brother. Both the parties were unaware of the fate of the said decision, however, ld. AR submitted that in the light of the evidences which are relevant and crucial to decide the issue, which facts may not and need not be necessarily identical may be directed to be considered. The AO, it was submitted, can look into the aspect whether the said facts were identical or not. 5. We have heard the rival submissions and perused the material available on record. It is seen that in the facts of the present case, the assessee received sale consideration of Rs. 1,06,96,969/- and the assessee did put-forth the claim before the CIT(A) that after the demise of his father Shri Gurmukh Singh who had inherited the land from Shri Bakhtawar Singh wherein at times the name of the father of Shri Gurmukh Singh, the name of Shri Des Raj has written as he was his biological father as Shri Gurmukh Singh had been adopted by Shri Bakhtawar Singh who in-turn had inherited the land from his father Shri Maru Ram in 1965 as per the assessments made. The correctness of these is not being decided in the present proceedings. The fact remains that related issues are stated to be addressed in the appeal of Shri Naresh Kumar, i.e. the case of the brother of the assessee in 2007-08 assessment year on which reliance has been placed by the CIT(A). It is not known whether the relief under Section 54B was an issue therein or not. The fresh evidences which the assessee seeks to file in the present proceedings which consists of copy of Purchase of land 98 Kanal 19 Marla for Rs. 43,29,063/- (page

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19-23), copy of purchase of land 605 kanal for Rs. 2,80,59,238/- (page 24-33) and copy of purchase of land and agreement to sell for Rs. 1,13,42,650/- ( page 34-42). The fresh evidences in the light of the decision of the High Court in the case of Text Hundred India Pvt. Ltd. is admitted and the issue is restored back to the file of the AO with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. Said order was pronounced in the Open Court at the time of hearing itself. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 20.03.2018.

Sd/- Sd/-

(ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR Asstt. Registrar ITAT,Chandigarh.