Itxa/1362/2012 Of Shri Ratanshi Mulji Patel v. Commissioner Of Income Tax - Xxii

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1362 OF 2012 …. Shri Ratanshi Mulji Patelv/s.Commissioner of Income Tax-XXII ...Appellant ...Respondent … Mr.S.C.Tiwari for the Appellant.Mr.N.C.Mahanty for the Respondent. ... CORAM : S.C.DHARMADHIKARI & A.A. SAYED, JJ. DATED : 26 NOVEMBER 2014 P.C. This Appeal challenges the order passed by the Income Appellate Tribunal dated 18 July 2012 in Income Tax Appeal No.5499/Mum/2011. The Assessment Year is 2008-09. 2.Income Tax Appeal No.5499/Mum/2011 for the Assessment Year was instituted and filed by the Revenue. 3.The Revenue was aggrieved and dissatisfied with the order of the Commissioner of Income Tax (Appeals), First Appellate Authority, dated 27 May 2011. The only point that the Tribunal was required to consider was whether the land can be said to be an agricultural land within the meaning of section 2(14)(iii) of the Income Tax Act, 1961 (for short IT Act). 2/6 itxa-1362-12.doc 4.In dealing with that contention and issue raised before it by the Revenue, the Tribunal found that the Assessee derived income from the house property, capital gains and income from other sources. During the year under consideration he has shown exempt income of Rs.58,11,000/-, as capital gain arising from sale of agricultural land. The Assessing Officer asked the Assessee to furnish the details and nature of exempt income alongwith supporting evidence. In response, the Assessee furnished the relevant details and submitted that the same is on account of sale of agricultural land being 50% share of the Assessee at Mouje Bhothali, PH No.74, Tahsil: Nagpur (Rural),District: Nagpur. The total sale consideration was stated to be Rs.1,20,00,000/- and the Assessee's share being 50% i.e. Rs.60,00,000/- In the said property, the exempt income of Rs.58,11,000/- after reducing cost of acquisition was claimed. 5.The Assessing Officer found that the Assessee decided to sell the land within 11 months from the date of purchase. The date of purchase is 17-11-2005. The Assessee received part sale-consideration on 1-10- 2006. Further the Assessing Officer found that the Assessee had sold the land to Shri Vishal Nanaji Kondavar 3/6 itxa-1362-12.doc and Shri Pramod Satyanarayan Agarwal of Kondavar Group of Builders. It is in these circumstances and not being satisfied about the location of the land, that the Assessing Officer passed an order adverse to the Assessee. 6.This order was reversed by the Commissioner and he relied upon the fact that the land was recorded in the Revenue Record as agricultural land and remained so in the immediate next year. Therefore, the gain on the land is not taxable, being covered under section 2(14)(iii). It is only this question, which fell for consideration by the Tribunal in the given facts and circumstances. After noting all these facts and finding firstly that the Assessee failed to submit any proof or record of the land being not situate within the jurisdiction of Municipality or within the required distance of the Municipal limits of the City of Corporation of Nagpur. Secondly, no agricultural operation was ever carried out by the Assessee on the land in question. He decided to sell it. He decided to sell it because the Commissioner was fully aware, yet overlooked the fact, that the location of the land is on a National Highway and on Nagpur-Wardha Road. Wardha Road is one of the developing area due to prestigious projects that are taking shape adjoining this road. There 4/6 itxa-1362-12.doc 4/6 itxa-1362-12.doc is a Special Economic Zone, MIHAN, Cargo Hub, then there is an International Airport and project of Housing Development by M/s.Sahara Housing Corporation, there is a Cricket Stadium, stated to be State of the Art, namely, Vidharbha Cricket Association Stadium (Jamtha) and a Five Star Hotel known as Sun-N-Sand. It is in these circumstances that none of the ingredients of section 2(14)(iii) pressed into service by the Assessee are satisfied. It is such a finding of fact on which the Tribunal agrees with the Assessing Officer and because of non-production of the relevant and material document, then, we do not think the Appeal raises any substantial question of law. 7.To be fair to Mr.Tiwari, learned Counsel for the Assessee, he submits that the Appeal raises two questions of law, which can be termed as substantial. In that regard he submits that the Tribunal has erred in holding that gains arising to the Appellant/Assessee on the sale of agricultural land in question are chargeable to tax under the head “Profit and gains of business or profession” and not exempt from the charge on tax due to exclusion from definition of “capital asset”. In other words, the land having been acquired for a non-agricultural user, but sold thereafter does not mean the same is held as Stock-in-trade and not an Investment. itxa-1362-12.doc 8.Mr.Tiwari, therefore, submits that he be allowed to agitate this question as well and it arises from the finding of the Tribunal. 9.We are unable to agree with him, because the Tribunal had before it an Appeal of the Revenue and raising only one question whether the Commissioner was justified in holding that the gain on sale of agricultural land at Nagpur is exempted from tax, as the same falls under section 2(14)(iii) of the IT Act. There was no cross-appeal and there could not have none. There was no cross-objection. From the order passed by the Tribunal, one does not find any attempt to invoke the Tribunal's powers as an Appellate Authority and conferring in it inherently or on identical terms as are to be found in Order XLI Rule 33 of the Civil Procedure Code,1908. The principles analogous to this provision could be invoked so to render complete justice, then, that should have been invoked by the Assessee before us. That having not been invoked and the Tribunal resting its conclusion only on the applicability of section 2(14)(iii), we do not consider Mr.Tiwari's alternate contention. 6/6 itxa-1362-12.doc 10. As a result of the above discussion, the Appeal fails, as it does not raise any substantial question of law. It is dismissed. No costs. (A.A. SAYED, J.) (S.C.DHARMADHIKARI,J.)