Case Law Details

Case Name : Shri G.Ramkumar Vs. Deputy Commissioner of Income Tax (ITAT Chennai)
Appeal Number : ITA No. 1584/Mds/2011
Date of Judgement/Order : 14/03/2012
Related Assessment Year : 2008- 09
Courts : All ITAT (4231) ITAT Chennai (211)

During the course of inquiry by the Assessing Officer, the land revenue authorities had categorically stated that as per revenue records no crop was cultivated/ agricultural activity undertaken on the land owned by the assessee. We find that no concrete evidence has been brought on record by the assessee to controvert the finding of facts recorded by the lower authorities, except production of statements of neighbors of the assessee .

A perusal of the same show that the statements alleged to be made by the neighbors of the assessee are vague and sketchy. There is no mention of the crops grown on the land and the activities undertaken by the assessee for cultivation of crops on the land in question. Be that as it may, the statements from neighbors cannot be considered as evidence superior to revenue record which clearly shows that there was no cultivation of crop / agricultural activity on the land in question owned by the assesse in the past two years preceding the date of sale. The learned counsel for the assessee during the course of his submission placed on record photocopies of some bills to show that agricultural activity was undertaken by the assessee on the land in question. However, these bills were never produced either before the Assessing Officer or before the learned Commissioner of Income Tax(Appeals). These bills / invoices are nothing but an afterthought to fill the lacuna. Therefore no reliance can be placed on such bills either. The assesse/ appellant has further claimed deduction on account of cost of improvement incurred during 1982-83. In support of his claim, the assessee has not filed any documentary evidence before the Assessing Officer to show the expenditure or the nature of improvement carried out. Since the assessee has miserably failed to prove that the land in question was agricultural land and he had cultivated crops in the land, we see no infirmity in the order of the learned  Commissioner of Income Tax (Appeals) and uphold the same. We therefore dismiss the appeal of the assessee.

INCOME TAX APPELLATE TRIBUNAL, CHENNAI

ITA No. 1584/Mds/2011 – (Assessment Year : 2008- 09)

Shri G.Ramkumar Vs. Deputy Commissioner of Income Tax

Date of Pronouncement : 14th March, , 2012

O R D E R

PER VIKAS AWASTHY, JUDICIAL MEMBER:

The present appeal has been filed by the assessee impugning the order dated 22.06.2011 relevant to the assessment year 2008-09 passed by the learned Commissioner of Income Tax(Appeals)-I, Coimbatore.

2. The facts of the case in brief are that the assessee alleged that he is the owner of agricultural land. The assesse/appellant filed return of income for the assessment  year 2008- 09 on 31.03.2010. The same was taken up for scrutiny under section 143(3). The assesse and his co-owners sold 1.81 acre of land in the relevant previous year. The assessee was having 1/3rd share in the land. From his share of sale consideration, the assessee purchased another piece of agricultural land and claimed exemption under section 54B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) to the extent of investment made. The Assessing Officer disallowed the entire claim of the assessee under section 54B and computed capital gains. The assesse further claimed expenditure incurred towards improvement of land during the year 1982-83. The said expenditure was also disallowed by the Assessing Officer.

3. Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax(Appeals) impugning the additions and dis allowances made by the Assessing Officer. The learned Commissioner of Income Tax(Appeals) after going through the facts of the case and documents on record observed as under:-

During the course of appellate proceedings, the learned A.R. submitted that there is no extra evidence available regarding agricultural operations done for the cultivation of crops in the lands owned by the appellant. The A.R. stated that neighbour certificates were available and could be produced. The A.R. was asked to produce any form of evidence to show that the land was used for agricultural purposes. The A.R. was given opportunity to prove that the cultivation of crops has been done, by furnishing proof of purchase of seeds, fertilizers, pesticides etc. The appellant could not produce any evidence even regarding sale of agricultural produce. The Assessing Officer has given sufficient opportunity to the assessee to prove the claim of deduction under section 54B. Section 54 deals with the capital gains on transfer of land used for agricultural purpose not to be charged in certain cases. The A.R. could not produce any evidence to show that in the past two years preceding the date of sale, the appellant and his family carried agricultural operations in the land. In the absence of credible evidence to show that the land was used for agricultural purposes in the two years immediately preceding the date on which the transfer took place, the claim of the appellant for exemption under section 54B cannot be entertained and the disallowance made by the Assessing Officer is confirmed.

4. Aggrieved by the order of the learned Commissioner of Income Tax(Appeals), now the assessee has come in appeal before us.

5. The learned counsel for the assessee submitted that the assessee is an agriculturist and the land is an agricultural land. The CIT(A) and the Assessing Officer failed to take this fact into consideration and disallowed exemption under section 54B of the Act. The Assessing Officer erred in holding that the land is not agricultural land. He further submitted that the Assessing Officer has erred in disallowing the expenditure incurred by the assessee towards the improvement of land.

6. On the other hand, the learned D.R. contended that the assessee miserably failed to show that the land in question is agricultural land and he was conducting agricultural operations or was cultivating crops. Learned D.R. further submitted that the Assessing Officer conducted inquiry with the revenue authorities having jurisdiction over the area under consideration. The Village Administrative Officer, Pulikulam Village, Coimbatore (North) provided details which conclusively prove that no crop was cultivated in the land owned by the assessee from July, 2006 to June, 2008. Further, enquiry from Tahsildar, Coimbatore (North) revealed that no agricultural activity was carried on by the assessee in the land owned by him. The learned D.R. also submitted that a perusal of revenue records (Chitta Adangal) revealed that no agricultural operations were being done in the two years immediately preceding the date on which the transfer took place.

7. The learned A.R. submitted that certificates from the neighbors were produced before the learned Commissioner of Income Tax(Appeals) to show that the land in question is agricultural land but the learned Commissioner of Income Tax(Appeals) failed to take note of the same.

8. We have heard the submissions of both the parties and have gone through the documents on record. The assessee is claiming exemption from capital gain tax on transfer of land used for agricultural purposes. The relevant extract of the provisions of Section 54B(1) is reproduced herein below:-

“54B(1): Subject to the provisions of sub-section (2) where the capital gain arises from the transfer of a capital asset being land which in the two years immediately preceding the date on which the  transfer took place, was being used by the assessee or a parent of his for agricultural purposes and the assessee has within a period of two years after that date, purchased any other land for being used for agricultural purposes then, instead of the capital gain being charged to income tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section.”

9. As per the above provisions of sub-section (1) of section 54B, it is essential that for claiming the benefit of exemption both the following conditions should be satisfied:-

(i) That the capital asset sold should have been used either by the assessee or his parents for agricultural purposes in the two years immediately preceding the date on which the transfer took place; and

(ii) That the assessee should purchase within a period of two years from the date of transfer of original asset, another land for agricultural purposes.

It is evident from the records that the assessee has not satisfied the condition no.1 (supra).

The Assessing Officer had made a detailed enquiry to ascertain the nature of the land and the crops cultivated on the land owned by the assessee. During the course of enquiry by the Assessing Officer, the land revenue authorities had categorically stated that as per revenue records no crop was cultivated/agricultural activity undertaken on the land owned by the assessee. We find that no concrete evidence has been brought on record by the assessee to controvert the finding of facts recorded by the lower authorities, except production of statements of neighbours of the assessee . A perusal of the same show that the statements alleged to be made by the neighbours of the assessee are vague and sketchy. There is no mention of the crops grown on the land and the activities undertaken by the assessee for cultivation of crops on the land in question. Be that as it may, the statements from neighbours cannot be considered as evidence superior to revenue record which clearly shows that there was no cultivation of crop / agricultural activity on the land in question owned by the assesse in the past two years preceding the date of sale. The learned counsel for the assessee during the course of his submission placed on record photocopies of some bills to show that agricultural activity was undertaken by the assessee on the land in question. However, these bills were never produced either before the Assessing Officer or before the learned Commissioner of Income Tax (Appeals). These bills / invoices are nothing but an afterthought to fill the lacuna. Therefore no reliance can be placed on such bills either. The assesse/ appellant has further claimed deduction on account of cost of improvement incurred during 1982-83. In support of his claim, the assessee has not filed any documentary evidence before the Assessing Officer to show the expenditure or the nature of improvement carried out. Since the assessee has miserably failed to prove that the land in question was agricultural land and he had cultivated crops in the land, we see no infirmity in the order of the learned  Commissioner of Income Tax (Appeals) and uphold the same. We therefore dismiss the appeal of the assessee.

10. In the result, the appeal of the assessee is dismissed.

Order pronounced in the open court at the time of hearing on 14th March, 2012.

More Under Income Tax

Posted Under

Category : Income Tax (25028)
Type : Judiciary (9886)
Tags : Capital Gain (332) ITAT Judgments (4410)

Leave a Reply

Your email address will not be published. Required fields are marked *