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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), Bathinda,[in brevity the ‘CIT (A)’],order passed u/s 250(6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y.
2009-10. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward-1(2)& 1(1)Bathinda, [in brevity ‘the AO’] order passed u/s 143(3) of the Act. 2. The assessee has taken the following grounds:
“1. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the re- opening the assessment on the basis of vague information.
2. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the re- opening assessment as the reasons recorded to re-open the case are no reasons in the eye of law.
3. That the learned Pr. CIT, Bathinda erred in giving sanction to re-open the case mechanically and without application of mind on the facts of the case. So, the re-opening is liable to be quashed.
4. That on the facts and in the circumstances of the case and in law, the notice issued u/s 148 was not served upon the assessee. So, the reassessment is liable to be quashed.
5. That on the facts and in the circumstances of the case and in law, as the learned AO has not considered the relevant documents supplied during the course of assessment proceedings. So, the re-opening as well as reassessment is liable to be quashed.
6. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not considering the indexed cost of acquisition of agricultural land in 2003-04 for Rs. 187300/- and its indexed cost for deduction at Rs. 235440/-.
7. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not giving the deduction of indexed cost of improvement of the agricultural land as per law on Rs. 600000/-. The department should have kept in view the time gap of 30 years when the expenditure was made.
That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not allowing the claim u/s 54B for Rs. 1297430/-for the purchase of agricultural land in the name of wife Smt. Kuldeep Kaur particularly when his only son died before the purchase and only daughter is married. Even the income is assessable u/s 64 of the Act in the hands of the assessee.
That the assessee has purchased the agricultural land for Rs. 1297430/- inthe name of wife Smt. Kuldeep Kaur benami with his own money out of the sale proceeds of the agricultural land. So, the assessee is entitled to deduction u/s 54B of the Act. This is further supported by the fact that the assessee was present in the Tehsil for the registration of purchase deed not the wife.
That in any case, the sale proceeds of agricultural land sold in financialyear 2008-09 in question is agricultural income. So, it is tax free income. Accordingly, the addition made as income from other sources u/s 69A is liable to be deleted.
That as the agricultural land sold belongs to the HUF of the assessee, sothe assessment should have been made in the hands of the HUF of the assessee not in individual status. So, the assessment is liable to be quashed.
That any other relief may kindly be granted to the assessee to whom she is found entitled at the time of hearing of appeal.”
When the matter was called for hearing, none was present on behalf of the assessee. The hearing notice was served through RAPD / Registered Post& through Notice Server of Income Tax Department. In view of the above and considering the nature of dispute, we proceed to dispose the appealex-parte qua the assessee after hearing the learned DR and on the basis of material available on the record.
Brief fact of the case is that the assessment was completed with addition of capital gain amount to Rs.32,55,640/- . The assessee claimed the deduction u/s 54B and 54F of the Act. The combined order was passed by the ld. CIT(A) related to Sh. Sukhdev Singh and assessee. The appeal was filed against the order of the ld. AO. The ld. CIT(A) considered the assessee’s submission and enhanced the deduction u/s 54B and 54F of the Act and re-calculated the long-term capital gain, amount to Rs.30,42,890/-. Being dissatisfied on the appeal order the assessee filed an appeal before us.
5. The ld. DR fully relied on the order of the revenue authorities.
We heard the submission of the ld. DR and consider the orders of the revenue authorities. The assessee first agitated the additional ground in legal issue related to jurisdiction for reopening of assessment u/s 148 of the Act before ITAT.
From verification of the record, we find that the assessee hadagitated the grounds on merits before the ld. CIT(A) but not the legal grounds. The grounds which were taken before the ld. CIT(A) is duly reproduced as below: “1. That the learned AO erred in re-opening the case of the assessee keeping in view the facts and circumstances of the case.
That the learned AO erred in re-opening the case of the assessee for the sale of 25 Bigha 7.5 Biswa agricultural land at the outskirt of Bathinda in individual status whereas the agricultural land belongs to the HUF status. Accordingly, the reopening of the case as well as re-assessment in individual status is liable to be quashed.
3. That the sale of agricultural land in question is not liable to long term capital gain as it is not a capital asset as the same is beyond 8 km from the Municipal Limits of Bathinda.
4. That the learned AO erred in not considering the expenses of Rs. 600000/- in financial year 1987-88 for the improvement of agricultural land in question withdrawn from saving bank account of my father which was produced before him. The learned AO should have also allowed the cost inflation index of this improvement. The learned AO should have considered the old period of 28 years before rejecting the claim for the production of documentary evidence to that effect.
That the learned AO has erred in not giving the deduction u/s 54B(2) for Rs.4000000/- for the purchase of agricultural land in V. Gumtikalan within two years of the sale of the agricultural land in question. In the alternative, he should have given the deduction of Rs. 2572145/- for the purchase of agricultural land in own name as well as in the name of wife as only daughter is already married for which purchase deeds were filed before him. He should have considered the peculiar facts of the case.
6. That the learned AO erred in not giving the deduction of Rs. 925000/- u/s 54F keeping in view the facts and circumstances of the case. The learned AO should not have rejected the valuation report of the registered valuer filed during the course of assessment proceedings.
7. That in section 54B(2) and 54F(4), only section 139 is mentioned. So, the learned AO should have allowed these re- rolling benefits as within two years of the sale of agricultural land. The learned AO erred in not considering the judgments produced before him during the course of assessment proceedings for the allowance of these re-rolling benefits and should have taken a liberal view in view of the policy of the government to empower women. 8. That any other relief may kindly be granted to the assessee to whom he is found entitled at the time of hearing of appeal.” 6.1 The legal ground is agitated first time before the ITAT. On the issue of admission of additional grounds, we have considered the ground and perused the material on record. We find that the ground raised
is legal in nature. Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. [1998]
97. Taxman 358/229 ITR 383, has held that the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. It has further held that if as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of the item. We are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld.
CIT(A). All the issues are kept open for adjudication. Accordingly, we remit back the matter to the ld. CIT(A) for further adjudication de novo.
In the result, the appeal of the assessee bearing is allowed for statistical purposes.