2016 (5) TMI 1582 - AT - Income Tax

Nature of land sold - Capital asset or agricultural land - Whether land disposed of by the assessee was agricultural land and situated beyond 8 KMs radius of the municipal limit? - HELD THAT - The assessee filed the return of income and claimed that he sold two pieces of agricultural land for an amount, by two sale deeds registered in the office of the Sub- Registrar, Neelankarai. The assessee appears to have produced copies of chitta-adangal maintained by the State Government, to establish that the land sold by the assessee is agricultural land. The Assessing Officer accepted the claim of the assessee without any discussion in the assessment order. The copies of chittaadangal said to be filed before the Assessing Officer are not available in the file of this Tribunal. Therefore, we are unable to examine classification of the land by the State Government. Without knowing the classification of the land, this Tribunal is of the considered opinion that the matter cannot be adjudicated at this stage. Therefore, the classification of the land has to be examined after referring to the adangal or Village Account No.2 maintained by the State Revenue Department. In the absence of copies of the extract of adangal, this Tribunal is of the considered opinion that the matter needs to be examined by the Assessing Officer for better appreciation of the facts. Therefore, this Tribunal do not find any merit in the appeal filed by the assessee.

Summary

Issues:
Classification of land sold by the assessee as agricultural land for tax assessment purposes.

Analysis:

Issue 1: Classification of land sold by the assessee as agricultural land

The appeal was against the order of the Principal Commissioner of Income Tax-6, Chennai, pertaining to the assessment year 2006-07. The contention was that the Assessing Officer did not examine the nature of the land sold by the assessee, leading to the Principal Commissioner invoking powers under Section 263 of the Income-tax Act, 1961. The Principal Commissioner directed the Assessing Officer to re-assess after providing a reasonable opportunity to the assessee. The assessee claimed to have sold two pieces of agricultural land, supported by documents like chitta-adangal. However, the copies of these documents were not available for examination by the Tribunal. The Tribunal emphasized the importance of knowing the land classification and suggested referring to adangal or Village Account No.2 maintained by the State Revenue Department for a proper examination. As the necessary documents were not available, the Tribunal concluded that the matter needed further assessment by the Assessing Officer for a better understanding of the facts, ultimately dismissing the appeal of the assessee.

In conclusion, the Tribunal dismissed the appeal as the classification of the land sold by the assessee as agricultural land could not be properly adjudicated without the necessary documents for verification. The Tribunal highlighted the importance of examining the classification through official records maintained by the State Revenue Department for accurate assessment.