2017 (6) TMI 404 - HC - Income Tax

Matter remanded back for a fresh consideration - whether the sale of the land was actually of an agricultural one or not? - whether a new ground was taken for the first time by the assessee that the land was an agricultural land? - addition invoking Section 50C - Held that - All that the Tribunal has done is only to remand the matter back to the Assessing Officer for a fresh consideration on this question of fact. As a matter of fact, the Commissioner (Appeals) also remanded the matter back for re-computation of the capital gains, after deleting the addition. When a question of fact is remanded to be adjudicated, to the Assessing Officer, we do not think that a question of law would arise. Therefore, the appeal is dismissed.

Summary

Issues:
1. Whether the Tribunal was correct in setting aside the issue to the Assessing Officer to verify the claim of the respondent-assessee regarding the agricultural nature of land.
2. Whether the Tribunal was justified in setting aside the issue to the Assessing Officer without appreciating the conversion of agricultural lands into house sites by the respondent-assessee.

Analysis:
1. The respondent-assessee sold land in the form of house site plots and filed an income tax return for the assessment year 2006-2007. The assessment order invoked Section 50C, and the Commissioner (Appeals) partially allowed the appeal by disallowing a deduction claimed for the cost of improvement.
2. Both the assessee and the Revenue filed separate appeals, which were allowed by the Tribunal for statistical purposes. The Tribunal remanded the matter back for fresh consideration on the question of whether the land sold was agricultural. The Revenue appealed this decision.
3. The main argument of the Revenue was that the Tribunal should not have entertained a new ground raised by the assessee regarding the land being agricultural, as it was not admitted before the Assessing Officer. However, the High Court noted that the Tribunal only remanded the matter for a fresh consideration of this factual question, which does not give rise to a legal issue.
4. The High Court emphasized that when a question of fact is remanded for adjudication to the Assessing Officer, it does not raise a legal question. Therefore, the appeal was dismissed, and any pending petitions were also dismissed. No costs were awarded in the case.