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2016 (3) TMI 269 - ITAT CHANDIGARH

2016 (3) TMI 269 - ITAT CHANDIGARH - TMI - Capital gains - calculation of number of trees - Held that:- On going through copies of jamabandi the Assessing Officer has noticed that khasra No.494 & khasra No.573/1 measuring 0-10-98 & 0- 53-00 are reflected as bagicha i.e. apple orchard and remaining khasra Nos.496, 499 & 500 are either banjar kadim or under agriculture crops. We are in agreement with this finding of the Assessing Officer, which he has arrived after a totally scientific method appl .....

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ntiary value, specially in the presence of Jamabandi, which is an actual proof of land holding and cultivation thereon. In this view, we confirm the order of the learned CIT (Appeals) to the extent of number of trees to be 99 as against 142 claimed by the assessee. - Decided against assessee

Computation of cost of acquisition and improvement to be taken for computing capital gain - Held that:- The cost of improvement, in case of a tree can only be those expenses which are incurred eit .....

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for the loss of likely earning. As we have earlier mentioned that this approach may be appropriate for estimating the amount of compensation, but for the purpose of computing the capital gains, this is not the right approach. In view of the above, we uphold the order of the Assessing Officer. - Decided against assessee - ITA No.947/Chd/2014, ITA No.948/Chd/2014, ITA No.949/Chd/2014, ITA No.950/Chd/2014, ITA No.951/Chd/2014, ITA No.952/Chd/2014, ITA No.953/Chd/2014, ITA No.954/Chd/2014, ITA No.9 .....

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the CIT (Appeals) were against the order of the Assessing Officer made under section 143(3) r.w.s. 254 of the Income Tax Act, 1961 (in short 'the Act'). 2. Since the facts and circumstances are identical in all the appeals, the same were heard together and are being disposed off by this consolidated order for the sake of convenience. The decision given in the case of Jai Chand in ITA No.947/Chd/2014 shall apply mutatis mutandis to all the appeals. ITA No.947/Chd/2014 : 2. Briefly, the f .....

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sidering the entire income from compensation i.e. ₹ 67,46,129/- as income from 'other sources' as against the claim of the assessee as 'agriculture income'. The learned CIT (Appeals) decided the issue in assessee's favour, however, on an appeal filed by the Department before the I.T.A.T., Chandigarh Bench in ITA No.1161/Chd/2010 dated 24.11.2011, the matter was restored back to the file of the Assessing Officer with the direction to compute the income in the hands of th .....

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was pleaded that the assessee was having 142 number of trees on his land. In this view, prayer was made to compute the cost of acquisition/improvement in this manner. Rejecting the contention of the assessee the Assessing Officer considered the number of trees in his land to be 99, on the basis of compensation of land described in Jamabandi filed by the assessee. Further, the assessee considered the cost of acquisition to be ₹ 2500/- per tree, being the basic value of tree and expenses in .....

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the assessee has failed to furnish any evidence in support of suggested calculation of cost of acquisition. Further he held that the Assessing Officer has estimated the cost of acquisition and number of plants as based on copies of Jamabandi and based his calculation of number of plants as per unit land in consultation with Revenue or Horticulture Department. 5. Aggrieved by this, the assessee has come in appeal before us, raising the following revised grounds of appeal : "1. The learned C .....

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r a period of 25 year at a cost. 4. The learned CIT(A) has wrongly confirmed the learned A.O.'s rejection of claim of Net Present Value of the fruit growing trees because the compensation of loss in case of natural calamities is always calculated on this method. 5. That Ld. C1T(A) has wrongly confirmed the entire compensation as full value of consideration. 6. That the assessee/appellant reserves the right to amend/alter/add any ground in support of his claim." 6. The learned counsel fo .....

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ade justifying the number of trees and cost of acquisition/improvement of trees given by the assessee, to be correct. 7. The learned D.R. relied on order of the Assessing Officer as well as that of learned CIT (Appeals) and further argued that the Assessing Officer has been generous enough to give the benefit to the assessee in term of cost of acquisition/improvement being the cost of tree till the age it becomes fruit bearing. In this way, it was prayed to confirm the order of the learned CIT ( .....

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'capital gain'. 9. While computing capital gains under the said circumstances, two disputes, have arisen. First is with regard to number of trees. In the present case, the claim of the assessee is that there were 142 trees, while the Assessing Officer has considered there being only 99 trees. The second dispute is with regard to cost of acquisition and cost of improvement per tree to be taken for computing the income under the head 'capital gain'. In the present case, the assesse .....

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reby it is certified that the assessee was having land which was wholly occupied by fruit bearing trees of apples, grapes, chulli, etc. However, the Tehsildar has not given the number of trees. The assessee claimed that he was having land measuring 5 bighas and 6 biswas, therefore, it was estimated that 142 apple trees were standing at the time of lease. We observe that there is no documentary evidence with regard to the number of trees. Even in the lease agreement entered between the assessee a .....

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, however, rebuttable. No material is brought on record to rebut the entries shown in the relevant Jamabandi. The assessee had not produced any copy of Khasra, Girdawari relevant to the period under consideration for the reason best known to him. The Assessing Officer has made a detailed analysis of cultivation as shown in Jamabandi of different khasra numbers, during the assessment proceedings. The land is either certified to be having bagichas, i.e. orchards, or being banjar kadim, i.e. barren .....

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no cost of acquisition can be attributed to the same. After considering the Jamabandi, the Assessing Officer come to a conclusion that the land containing bagichas were 0-63-98 hectares, on conversion which comes to 8.7 bighas and the assessee's 1/3rd share at 2.9 bighas. As per agreement made by the assessee and his 2 brothers with M/s Jaypee Karchamm Hydro Corporation Ltd. (JKHCL) New Shimla, the khasra Nos.494, 496, 499, 500 & 573/1 were taken on rent by the second party. On going th .....

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sing Officer has applied 25 number of apple trees per bigha on the basis of consultation from revenue/horticultural authority, which even the assessee has not objected to. On this basis, the Assessing Officer has arrived at 99 number of trees. We do not find any fault in this. The evidence filed by the assessee in terms of certificate of Tehsildar or that of a retired IAS officer is of no evidentiary value, specially in the presence of Jamabandi, which is an actual proof of land holding and cult .....

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ase, we must mention that the issue is only that of computation of capital gain. The mode of computation of capital gain is provided in section 48 of the Act, which to the extent necessary for adjudicating the present case, reads as under : 48. The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :- (i) expenditure .....

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wholly and exclusively in connection with transfer. The only dispute is with regard to the cost of acquisition and cost of improvement thereto. The basis adopted by the assessee at arriving at a figure of ₹ 85,600/- per tree as cost of acquisition and improvement is that he has taken ₹ 100/- as the initial cost of planting a single tree and further ₹ 300/- per tree is taken as the recurring cost of maintenance in the term of irrigation, treatment for improvement, etc. This amo .....

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years and adding the basic value of tree to this figure, an amount of ₹ 85,600/- per tree is arrived at. 13. After going through the method adopted by the assessee at arriving at the cost of acquisition and the cost of improvement, we do not find ourselves in agreement with the same. What the assessee has done is to arrive at the Net Preseent Value of likely earning for the remaining life of trees. This method may be in consonance with arriving at an amount to be estimated for getting comp .....

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pit, digging, filling of pit, cost of material like fertilizer, insecticide, pesticides @ ₹ 100/- per tree as asked for by the assessee has been accepted by the Assessing Officer. Further, the maintenance cost of tree or recurring cost till the tree becomes fruit bearing, i.e. for 8 years have also been accepted by the Assessing Officer @ ₹ 300/- per tree per annum. These expenses are in the form of irrigation, treatment for improvement of yield and fruit quality, watch and ward, wee .....

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