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Income-tax Officer, Ward 3 (3) , Versus Shri Dipak Kalidas Pauwala,

2015 (8) TMI 1268 - ITAT AHMEDABAD

Claim of exemption u/s 10(37) - Addition of long term capital gains - treating assessee’s agricultural income under the head “other” sources - CIT(A) deleted the addition - Held that:- We reiterate that the assessee’s land is situated within the Surat municipal corporation limits u/s 2(14) (iii) (a) of the Act. The Revenue strongly relies upon the Assessing Officer’s finding denying the assessee exemption u/s 10(37) of the Act. This section reveals that there are four conditions to claim exempti .....

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ng the immediately preceding two years, we find that the revenue record form 7/12 as relied upon in the lower appellate proceedings forming part of record contains all details of the crops sown since financial year 2003-04. We deem it proper to observe that the same is public record prepared by agrarian authorities under respective land and tenancy laws which cannot be brushed aside without any specific evidence to the contrary. There is no such evidence much less a specific one forthcoming. The .....

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e file that assessee led sufficient oral evidence of the concerned panchas in favour of his plea of having cultivated the land. The TDS deduction form is not in order since it categorized assessee’s payment to be contractor bill in spite of the fact that it pertains to land transfer. The assessee’s three other co-owners namely – Smt. Mayuriben, Rekhaben and Geetaben have already been granted section 10(37) exemption in question. The Revenue fails to rebut all the above stated facts on record. We .....

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-II/387/2010- 11/176, reversing the Assessing Officer s action in adding long term capital gains of ₹ 1,46,75,120 and treating assessee s agricultural income of ₹ 1.77 lakhs under the head other sources; respectively, in proceedings under section 143(3) of the Income-tax Act, 1961 (for short the Act). 2. Facts of the case are in a narrow compass. The assessee - individual co-owned a parcel of land measuring 29,718 sq.mtrs. in RS No.192, Block No.305, village -Dindoli, Surat situated .....

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of ₹ 1,42,93,050/- u/s 10(37) including his agricultural income in question of ₹ 1.77 lakhs. 3. The Assessing Officer took up scrutiny. He received AIR information about the assessee having executed the sale deed in question. He sought for the necessary details i.e. cost of acquisition as on 1.4.1981, copy of 7/12 and 8-A revenue documents proving the assessee to be the land holder, income/expenditure account of the agricultural income, purchase and sale bills of seeds, fertilizer a .....

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ted in transfer documents in support thereof. He further stated that the land in question was used for agricultural purposes since long including the immediately preceding two assessment years as per form 7/12 produced on record from AY 2005-06. The assessee explained that once the impugned gain had arisen from compulsory acquisition, all four conditions u/s 10(37) stood fulfilled. He further stressed that since he was mainly an agriculturist, no income/expenditureaccount had been maintained reg .....

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7 lakhs. He took cognizance of the fact that the Surat municipal corporation had deducted TDS on the sale consideration and also that the sale deed did not categorise the land sold to be agricultural. The relevant revenue record in the form 7/12 documents was held to be sufficient. The Assessing Officer accordingly concluded in the assessment order dated 29.12.2010 that the assessee did not fulfil all necessary conditions to claim section 10(37) exemption as the land did not fall within 8 kilome .....

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or determining the cost of acquisition of the land as on 01.04.1981., as against the value of ₹ 100 shown by the appellant, (n view that both grounds of appeal are inter-related, I take them up together for discussion and disposal. 4.2 The main issue in the appeal of the appellant relates to the claim of exemption u/s 10(37) of the Act. The Assessing Officer has disallowed this claim of the appellant mainly for three reasons: (i) SMC has made TDS on the payment of amount on the land acquir .....

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being overlapping is more or less identical. 4.4 The appellant's submission, on the other hand, is that he has furnished copy of 7/12 Utara, which evidences cultivation of Uowar' on the land in the preceding two years; he has filed copy of Panchnama confirming the fact by the. Panchas before the TalatiMojeDindoli that on the impugned land Mowar' rind 'Tuar 'was cultivated by him; and he has filed confirmation from as many as nine individuals from the village Dindoli confirmi .....

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ived on account of compulsory acquisition of land, the appellant's submission is that the Assessing Officer has drawn wrong conclusion that since, the SMC has deducted tax on the payment no agricultural activity had been carried out. In this regard, it is also stated that at the time of making compulsory acquisition of the appellant's land, SMC was not required to ascertain whether agricultural operations for a period of two years were carried out on the impugned land before the date of .....

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ervation that the impugned land falls within 8 kms range of the SMC hence, exemption claimed u/s 10(37),is net allowable, is also not on correct appreciation of law, since the impugned land though is within the limits of SMC, as a matter of fact, does not fall within the 8 kms range of the SMC. It is, thus, stated by the appellant that u/s 10 (37), first condition is that the land in question should be situated within the jurisdiction of Municipality or corporation or within the 8 kms range from .....

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s ol crop grown during the Financial Years 2003-04, 2004-05 , 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10. In all the above years, the crop grown has been shown as Jowar'. The above document is in respect of survey no. 192 and Block no 305, of village Dindoli, Surat City and also records the names of the agriculturists; Geetaben Janakbhai Chokhawala, Dipakbhai Kslidasbhai Pauwala, Rekhnben Champaklnl Dalai and Mayuriben Asiitbhai Bookseller from the years 2003-04 to 2009-10. I also find t .....

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t the appellant is an agriculturist, which fact Assessing Officer has himself recorded in para- 3 of the assessment order, and, is further corroborated by the fact that the appellant has no other source of income, and he has also not properly considered the appellant's submission dated 28.12.2010 filed during course of the assessment proceedings. The third reason given by the Assessing Officer for rejecting the claim of the appellant u/s J.O (37) is the fact that the SMC has made deduction o .....

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icer at the same time, has to also see the certificate for the nature of payment, which is recorded as "contractor bill''. I, therefore, hold that the Assessing Officer has without making proper verification dismissed the claim of the appellant u/s 10(37) of the Act, and further, hold that copy of 7/12 Utara is a primary document issued by a State Government Authority, which cannot be rejected, unless it is established as a fake document:. In the light of the same, I hold that agric .....

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fills the first condition laid down u/s 10(37) of the Act. The second condition that such land during the period of two years immediately preceding the date of transfer was used for agricultural purposes by such individuals or HUFs or parents is evidenced by the copy of 7/12 Utara discussed above. The third condition is that the transfer should be way compulsory acquisition under any law. This condition has been fulfilled by the appellant and not disputed by the Assessing Officer as the land has .....

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h the parties and gone through the case laws. We reiterate that the assessee s land is situated within the Surat municipal corporation limits u/s 2(14) (iii) (a) of the Act. The Revenue strongly relies upon the Assessing Officer s finding denying the assessee exemption u/s 10(37) of the Act. This section reveals that there are four conditions to claim exemption i.e. the land has to be situated in an area referred to under section 2(14) (iii)(a) or (b). Such a land is to be used for agricultural .....

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