Ita/47/2018 Of Jik George v. The Income Tax Officer, Ward-2

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 15 DAY OF NOVEMBER 2021 / 24TH KARTHIKA, 1943 (AGAINST THE ORDER IN I.T.A NO.82/COCH/2016 DTED 17.04.2018 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN ITA NO. 47 OF 2018 APPELLANT/S: JIK GEORGEIC,TROPICANA ZION APARTMENT, RAILWAY STATION PO, THIRUVALLA 689111 BY ADVS.ANIL D. NAIRSREEJITH R.NAIRACHYUT K PADMARAJ RESPONDENT/S: THE INCOME TAX OFFICER, WARD-2THIRUVALLA 689101 BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 15.11.2021, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: -2- J U D G M E N T Heard learned Advocates Mr. Anil D Nair and Mr. JoseJoseph, for parties. 2.Mr. Jik George/Assessee is the appellant. TheIncome Tax Officer, Ward-2, Thiruvalla/Revenue is therespondent. 3.The subject matter of the appeal relates to disputesarising from the return filed by the assessee for the assessmentyear 2010-11. The assessee being aggrieved by the order of theTribunal dated 17.04.2018 has filed the instant appeal. Thecontroversy relates to the claim of assessee to treat the assetsold by the assessee in the subject financial year as agriculturalland but not a capital asset, which question has been answeredby the Tribunal as follows: “6.4So in the facts and circumstances of the case, wefind that the land was not actually or ordinarily usedfor agricultural operations on or around the relevanttime of sale and there was no agricultural activitiescarried on by the assessee in the said land so as to holdit as agricultural land. Further, when the basic natureof the land is found to be of non agricultural land, theother argument of the assessee regarding the status ofthe property whether it is situated within themunicipal limits or outside the municipal limits isirrelevant. A non agricultural land whether inside themunicipal limits or outside the municipal limits or evenin a remote village is a capital asset and transfer of thesame for generating income is liable for capital gainstax. In the facts and circumstances of the case, we areinclined to uphold the order of the lower authoritiesand dismiss this ground of the assessee. Thus thisground of appeal of the assessee is dismissed. 7. The next ground for our consideration is that the Ld.CIT(A) erred in rejecting the appeal filed by theassessee without adjudicating the following groundsraised before him: 2. The learned Income-tax Officer has erred in nottaking into consideration the indexed value ofcompound wall of Rs.26,333/- in calculatingCapital Gain on sale of item No. 2 property, eventhough the said document clearly shows theexistence of compound wall. 5. The learned Income-tax Officer has erred inestimating the market value of residential housein measuring 2000 sq. ft. at Rs.1,00,000/- anddetermining the indexed cost at Rs.4,75,187/- onlyas against the indexed cost of Rs.9,48,000/-claimed by the appellant. 8. These grounds were raised by the assessee before the CIT(A). However, the CIT(A) omitted to consider thesegrounds while adjudicating the appeal of the assessee.Hence, these two grounds are remitted to the file of theCIT(A) to give a finding on this issue. Thus Ground No. 2and Ground No. 5 are partly allowed for statisticalpurposes.” The assessee has raised the following substantial question of law for consideration; “i.In the facts and circumstances of the case, oughtnot the Tribunal have held that the appellant wasentitled for exemption from capital gains as theproperty sold was the agricultural land situated beyondthe limit prescribed in Panchayath.” 5.The counsel appearing for parties invite the 8. These grounds were raised by the assessee before the CIT(A). However, the CIT(A) omitted to consider thesegrounds while adjudicating the appeal of the assessee.Hence, these two grounds are remitted to the file of theCIT(A) to give a finding on this issue. Thus Ground No. 2and Ground No. 5 are partly allowed for statisticalpurposes.” The assessee has raised the following substantial question of law for consideration; “i.In the facts and circumstances of the case, oughtnot the Tribunal have held that the appellant wasentitled for exemption from capital gains as theproperty sold was the agricultural land situated beyondthe limit prescribed in Panchayath.” 5.The counsel appearing for parties invite the attention of this Court to the unreported judgment dated11.12.2017 in I.T.A No.251 of 2015 which has considered a question arising under Section 2(14) of the Income Tax Act.The unreported decision answered the question in favour ofthe Revenue and against the assessee. It is stated by thecounsel that the reasoning and conclusions recorded in I.T.ANo.251 of 2015 squarely cover the question of law formulatedin the instant appeal. ITA NO. 47 OF 2018 -5- The statement is placed on record and accepted. Thequestion is answered in favour of Revenue and against theassessee. Income Tax Appeal is dismissed. Sd/-S.V.BHATTIJUDGE Sd/-BASANT BALAJIJUDGE JS -6- APPENDIX OF ITA 47/2018 PETITIONER'S ANNEXURES: ANNEXURE P1 TRUE COPY OF THE ASSESSMENT ORDER DTD.23.3.2013 FOR THE YEAR 2010-11 ISSUED TO THEAPPELLANT ANNEXURE P2 TRUE COPY OF THE ORDER DATED 5.1.2016 OF THE COMMISSIONER OF INCOME TAX (APPELLATE),FOR THE YEAR 2010-11 ISSUED TO THE APPELLANT. ANNEXURE P3 TRUE COPY OF THE ORDER DATED 17.4.2018 OF THE INCOME TAX APPELLATE TRIBUNAL FOR THE A.Y.2010-11.