2018 (4) TMI 1842 - AT - Income Tax

Long term capital gain on sale of agriculture land - transfer of land in the year under consideration - only 10% of the sale consideration was received during the year and balance 90% consideration was received on 14.08.2008 i.e. AY 2009-10 - Benefit of investments in new agriculture land u/s 54B construction of house u/s 54 F invested subsequent to the receipt of money against sale of agriculture land - HELD THAT - As assessee admitted that factual finding with regard to the assessees land being included and covered in the disputed lands before the High Court were not available on record but at the same time contended that the same could be established by the assessee by placing relevant material and evidence on record subject to verification by the department of the same. As assessee requested therefore that the issue be restored to the Assessing Officer so as to enable the assessee to establish the identity of the facts of the present case with that in the case of Rajiv Kumar 2016 (7) TMI 184 - ITAT CHANDIGARH - As for the affidavit regarding postponement of handing over of possession of land by the sellers to the buyers only on receipt of complete consideration the Ld. counsel for assessee stated that no such affidavit was filed in the case of Parshotam Kumar which was also an identical case decided on the lines of Rajiv Kumar(supra) following the said decision. We restore the issue back to the Assessing Officer for the limited purpose of enabling the assessee to establish the identity of the facts of the present case with that in the case of Rajiv Kumar(supra) and Purshotam Kumar (supra) . Claim of exemption u/s 54B 54F - Considering fair market value of property and relating to grant of benefit of cost of improvement of land cannot be adjudicated at this juncture. These issues are therefore also restored to the Assessing Officer to be adjudicated upon afresh after deciding the main issue in the present appeal as per our directions with regard to ground No.1 raised by the assessee. The grounds of appeal Nos.2 to 4 are also therefore allowed for statistical purposes.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Taxability of the entire sale consideration as Long Term Capital Gains in the impugned assessment year.
3. Eligibility for exemptions under sections 54B and 54F of the Income Tax Act.
4. Adoption of indexed cost of land.
5. Reopening of assessment under section 148.

Detailed Analysis:

1. Condonation of Delay:
The appeal was delayed by 457 days. The assessee claimed the delay was due to the non-receipt of the original order from the CIT(Appeals), which was only received on 5.12.2016 after a request was made on 28.10.2016. The Ld. DR opposed, stating the order was dispatched on 17.9.2015 by Speed Post and not returned. The assessee provided an affidavit and evidence that the order was never received and mentioned that the records of Speed Post delivery were not available. The Tribunal found the explanation satisfactory, noting the assessee’s illiteracy and agricultural background, and condoned the delay.

2. Taxability of Sale Consideration:
The Assessing Officer taxed the entire sale consideration of ?3,68,96,010/- in the impugned year, based on the registration of the sale deed and the handing over of possession. The assessee argued that only 10% of the sale consideration was received in the impugned year, with the balance received in the next year. The Tribunal referred to a similar case (Rajiv Kumar vs. ITO) where it was held that the transfer could not be said to have taken place until the final payment was received. The Tribunal restored the issue to the Assessing Officer to verify if the facts of the present case matched those in Rajiv Kumar’s case.

3. Exemptions under Sections 54B and 54F:
The assessee claimed exemptions for investments in new agricultural land and construction of a house. Since the main issue of taxing the entire capital gain in the impugned year was restored to the Assessing Officer, the Tribunal also restored these exemption claims for fresh adjudication after the main issue is decided.

4. Indexed Cost of Land:
The assessee disputed the adoption of the indexed cost of land based on the value on 1-4-1981. This issue was also restored to the Assessing Officer for fresh adjudication in line with the decision on the main issue.

5. Reopening of Assessment:
The assessee raised an issue regarding the reopening of the assessment under section 148 but did not make any arguments. Consequently, this ground was dismissed.

Conclusion:
The appeal was partly allowed for statistical purposes. The main issue of taxing the entire sale consideration in the impugned year was restored to the Assessing Officer for verification against the facts of the Rajiv Kumar case. The related issues of exemptions and cost of land were also restored for fresh adjudication. The ground regarding the reopening of the assessment was dismissed due to lack of arguments.