TMI Blog2016 (11) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A). - Decided in favour of assessee. - I.T.A.No. 1337/Mds/2016 - - - Dated:- 10-11-2016 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D. S. SUNDER SINGH, ACCOUNTANT MEMBER Appellant by : Shri Supriyopal, JCIT Respondent by : Shri G. Seetharaman, CA O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER This appeal of the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-2, Chennai, dated 23.3.2016 for assessment year 2012-13. 2. The assessee filed the return of income for the assessment year 2012-13 electronically on 28.9.2012 declaring a total income of ₹ 2,13,43,800/-. The assessee was a Gastroenterologist and expired on 14.7.2013 and represented by his wife and legal heir, Smt. R.Chitralekha. The assessee has sold a property admeasuring 4.91 acres of vacant land at Krishnankaranai Village, Chengalpet Taluk, vide registered document No.13202/2011, SRO, Tiruporur for a consideration of ₹ 9,76,76,000/- to M/s East Coast Resorts and Farms (P) Ltd on 12.12.2011. The market value of the property as per the guideline value of SRO was ₹ 11,05,38,000/-. The assessee claimed the entire sale consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e located at a distance of more than nine kilometres from Mamallapuram Panchayat, and that the population of Krishnakaranai village is approximately 624. Another certificate dated 26.03.2015 from the VAO has also been, produced stating that the lands in question are located at a distance of approx. 24 kilometres from Uthandi, the outer limit of Chennai Corporation. The appellant has also produced the Survey Number-wise guideline values pertaining to Krishnakaranai village, as per which, the Survey Nos. of the lands in question have been categorised as 'Dry-Well/Bore Well irrigation class Il . 6.4. The appellant claims that during the period 2004-05 to 2008-09, he has returned positive agricultural income and the same has been duly shown in his capital account and also reflected in the Return of Income for these years for rate purposes. The appellant has enclosed the copies of his returns and the balance sheet for the relevant years from which it is seen that the net agricultural income (after debiting expenses like salary to care-takers etc.) is as follows: Assessment year Net agricultural income 2004-05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, since: (a) The land at Krishnakaranai is located in Thiruporur Taluk in Kancheepuram District. The nearest notified Municipality (to Krishnakaranai) is Chinglepet, which is 35.8 Km (i.e. beyond 8 km) from Krishnakaranai village. (b) The nearest Municipal Corporation is Chennai Corporation, with limit upto Uthandi, and Krishnakaranai village is located at a distance of 4 Km distance from Uthandi, as per the Certificate of VAO, Krishnakaranai, dt. 22.4.2015. (c) The nearest cantonment Board is Pallavaram and the distance between Pallavaram and Krishnakaranai is 44 Km 7. CONCLUSION: 7.1. It is a fact that the lands in question have been sold for a high price of ₹ 9,76,76,000/-. However, the fact remains that agricultural activities i.e. cultivation of trees and vegetables have been actually carried out in the lands as evidenced by the Adangal copies and the fact that positive income/loss from the said activities have been duly reflected in the Capital Account of the appellant and also reflected in the Returns of Income of the appellant, duly supported by the mention of the same in the DVO's report and photographs taken by the DVO during the inspection. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such entries can raise only a rebuttable presumption, they are, however, good prima facie evidence. Since all these considerations were kept in view by the taxing authorities in deciding the question of fact which was really for the assessing authorities to determine having regard to all the relevant evidence the High Court should have sent back the case to the assessing authorities for deciding the question of fact after stating the law correctly. 6. The ld. DR also relied on the decision of this Tribunal in the case of Aboo Bucker in I.T.A.No.1793/Mds/2013 dated 31.12.2015, wherein the Tribunal has observed as follows: In the present case, the purchaser of the property was a company by name M/s. Menakur Infrastructure Private Limited which is a registered company under the Companies Act, 1956, incorporated on 0410812004 vide registration No. U45204TN2004PTC053884 with an intention to develop housing projects, Information Technology Buildings and family housing construction in and around Chennai. The property sold is situated in Navalur which is a suburb in Chennai, it is situated in Kanchipuram Districtt, T amil Nadu, located south of the city of Chennai, along the Ol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1988 for carrying out agricultural operations. The assessee was carrying on agricultural operations in the said lands right from the date of acquisition of the lands. During assessment years 2006-07 to 2012-13, there was no positive agricultural income and the assessee did not declare any agricultural income. Merely because the assessee did not declare agricultural income, it is incorrect to construe that the assessee has not carried out any agricultural activities. The ld. AR also submitted that in revenue records Adangal, Chitta and Patta, it was mentioned that the lands in question were used for the purpose of agricultural activities. He further submitted that in the Survey Report of Registration Department Survey No.67/22, 67/8C 1D16A, 67/8C 1D16C,67/8C,1D16F and 67/8C1D19 the lands were categorized as Dry Well/Borewell irrigation Class-II . Further, the ld. AR referred the DVO s valuation report wherein he has annexed the photographs of the lands showing that in the said lands casurina trees, sappotta trees and mango trees were grown. The DVO in his report clearly mentioned that in the entire chunk of lands, agricultural activities were carried out. He, therefore subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In all the total property is in five pockets. Pocket 1 2 is located east of East Coast Road with a gap in between measuring approx 60-75 mtrs. The remaining property in pockets 3,4 5 are adjacent to each other and are located at a distance of 250-275 mtrs. from East Coast Road extending upto sea. Sappotte trees, casurina were seen densely planted in majority of the lands. Coconut and mango trees were seen. Apart from that, small portion of land measuring 300-400 sq ft was made ready for planting green vegetables. There is a thatched roof shelter and one mangalore tiled roof shed also existing for use of caretakers of the lands. Two storied RCC building is existing which is resembling a farmhouse as well as used for storage of materials. During inspection it is seen that no one is living in the house. 3 to 4 bags of manure materials were stored in the building. One bore well with motor were seen which is being used for irrigating the plantations. During the interaction with one of the worker, it was told by him that power connection for running the pumping motor is allotted under Full Subsidy Scheme . The DVO has given the plantation details also as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, as per the observation of the Hon'ble Supreme Court in the case cited supra also falls under the character of agricultural lands within the meaning of sec. 2(14) of the Act. 11. The Assessing Officer has relied on the decision of this Tribunal in the case of Aboo Bucker(supra) wherein the Tribunal held that the property sold by the assessee was a capital asset. While holding so, this Tribunal as made an observation that the property sold by the assessee was in the midst of developmental activities being carried out by the builders in promoting housing/information technology and agricultural activities were not being carried out either by the assessee or by any others in that area. In the case relied upon by the ld. DR, the Tribunal has given a finding that the lands were not used for agricultural land purposes. Therefore, the Tribunal held that it was a capital asset. The case law relied upon by the Assessing Officer cannot come to the help of Revenue in the instant case. In view of the above facts and circumstances, we hold that the lands sold were agricultural lands not being capital asset and therefore, confirm the order of the Ld.CIT(A). 12. In the result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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