Case Law Details
Mohit Suresh Harchandrai Vs. ACIT (ITAT Mumbai)
Assessing officer has decided the issue involved in this case without rebutting the direct and circumstantial evidence on record which is in favour of the assessee. No verification was conducted by the assessing officer to falsify the documentary and circumstantial evidence placed on record by the assessee. Even the persons who carried out the agricultural activities at the instance of the assessee were not examined to controvert the contents of the affidavits sworn by them. Before us, the counsel for the assessee placed on the record the copy of application dated 23-3-2010 under sub-section (1) of section 44 of Maharashtra Land Revenue Act, 1966 submitted by the purchaser of the land Shri Abhijit Bhandari for permission for using the land for horticulture or similar purposes. The contents of the said application further establish that the land in question was agricultural land in the year 2010 when the said application was moved. Further we find that the facts of the present case are different from the facts of the case of Smt. Sarifabibi Mohmed Ibrahim (supra) relied on by the learned Commissioner (Appeals) on certain material points. In the said case, the property was situated within the limits of Surat Municipality and at the distance of one kilo meter from Surat Railway station. A portion of the plot had already been converted to non-agricultural purposes after obtaining requisite permission from the concerned authority. The land was sold at per square yard basis to a co-operative housing society for constructing house and buildings. No agricultural operations such as growing of wheat, Bajra, jawar, rice or any other crop had been carried on for the last four years. On the other hand in the present case the land was sold to an agriculturist who later on converted the land for non-agricultural purposes after obtaining permission from the competent authority. Moreover, in the present case neither there is any cogent evidence to rebut the presumption of truth attached with the revenue record maintained by the department nor any verification was conducted by assessing officer during assessment to rebut the documentary evidence placed on record by the assessee to falsify contention of the assessee. The authorities below have not given any cogent and convincing reason for disbelieving the documentary and circumstantial evidence discussed in the foregoing paras which, in our considered opinion, prima facie establish that the land in question was an agricultural land within the provisions of the Act at the time of sale to the purchaser. Since, in our considered opinion the assessee has been able to establish that the land in question at the time of its sale was an agricultural land and not a capital asset within the definition of section 2(14) of the Act, the learned Commissioner (Appeals) has wrongly affirmed the findings of the assessing officer. We, therefore, set aside the impugned order and allow this ground of appeal of the assessee.
Full Text of the ITAT Order is as follows:-
These are the three appeals filed by the Appellants/assesses Shri Mohit Suresh Harchandrai, Shri Nihal Suresh Harchandrai and Shri Niranjan Suresh Harchandrai against three separate orders dated 23-12-2013 passed by the learned Commissioner (Appeals)- 25, Mumbai, for the assessment year 2010-11, whereby the learned Commissioner (Appeals) partly allowed the appeals filed by the assesses against assessment order dated 19-2-2013, 31-12-2012 & 31-12-2012 respectively, passed under section 143(3) read with section 147, 143(3) and 143(3)(ii) of the Income Tax Act, 1961 (for short ‘the Act’) respectively. Since all the three appeals are arising out of the transaction of sale of land by the assesses as co-owners, all the three appeals were clubbed, heard together and are being disposed of by this common order for the sake of convenience.
2. Brief facts which need necessary mention for adjudication of the issues involved in these appeals are that during the financial year 2009-10, the assesses being the owners-in-possession of land bearing GAT No. 929, area measuring 1-69-4 hectares situated at village Dhokawala, Taluka Alibag, District Raigarh sold their shares in the said land to Shri Abhijit Bhandari for a total consideration of Rs. 4,21,00,000. However, the assessee did not offer any capital gain on the sale of property in their income tax returns for the reason that the land sold does not fall within the preview of capital asset under section 2(14) of the Act, being an agricultural land. In case of assessee Mohit Suresh Harchandani, ITA No. 364/M/2013 the assessee filed its return of income for the assessment year 2010-11 declaring the total income of Rs. 19,75,502. The return was processed under section 143(1). However, on the basis of information received from ITO -14, Mumbai that the assessee had sold his asset i.e., share in the aforesaid land but not offered the capital gain to tax, the assessment was reopened and assessment order under section 143(3) read with section 147 of the Act, was passed determining the total income of the assessee at Rs. 1,16,57,086 after making addition of Rs. 96,81,584 as Long Term Capital Gain on sale of land.
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