2020 (5) TMI 114 - AT - Income Tax

Rectification of mistake u/s 254 - Exemption u/s 10(37) - land was not used for agricultural purpose - HELD THAT - Regarding the contention of the assessee that section 10(37) does not require that every inch of a Khasra should be used for cultivation and if a particular Khasra of land is used for cultivation, then the condition prescribed in section 10(37) is fulfilled. We find that a view has been taken by the Bench regarding the interpretation and applicability of provisions of section 10(37) which was germane to the issue under consideration and a view so taken on appreciation of the facts of the case is not a matter which can be rectified/modified within the limited scope of section 254(2) of the Act. Fact remains that mere presence of 50 Amla trees on land measuring 1.01 hectare of land will not change or have any bearing on the final conclusion and findings so arrived at by the Bench. There is nothing on record to support the fact that the assessee was owning and using the land till the date of allotment letter dt. 20.11.2009 and therefore, there is thus no mistake in the factual findings of the Tribunal where it held that the land was transferred in the name of JDA in year 2008 on the basis of Khasra Girdwari which reflects the name of the JDA as the owner of the land. The basis of arriving at finding by the Coordinate Bench in A.Y 2009-10 that the capital gains is chargeable to tax in A.Y 2010-11 was on account of fact that the compensation was received by the assessee on 20.11.2009 and on that account, it was held that the capital gains shall be chargeable to tax in the A.Y 2010-11. The same cannot be taken as basis for stating that the assessee was owning and using the land till the date of allotment. Tribunal in case of ITO Vs. Smt. G.S. Lekha (2019 (4) TMI 1783 - ITAT COCHIN) Agricultural officer has certified the land to be agricultural land unlike in the present case where the land records show no agricultural operations were carried on the said land prior to the date of transfer. Therefore, the said decision doesn t support the case of the assessee. While holding so, the Tribunal has not considered the Khasra Girdawari for samvat year 2065 (2008) which shows cultivation of 50 amla trees. Thus, the agricultural operations were carried on the land prior to the date of transfer. Existence of amla trees is itself a proof of cultivation. Further, in the present case there is no dispute that land is an agricultural land. Hence, distinguishing the case laws relied by assessee by assuming incorrect facts is a mistake apparent on record. We find that the decision of the Coordinate Bench in case of Smt. G.S Lekha rendered in its peculiar facts have been duly considered and distinguished in the facts of the present case including the fact relating to amla trees. Therefore, we donot find any mistake apparent from record and the contention so advanced in this regard are rejected. We find that the Bench has duly considered all the relevant facts and material on record including Khasra Girdawari and affidavits of sh. Laxman Singh and Rameshwar Chaudhary and has thereafter arrived at a view and finding that no agricultural activities were carried out on the impugned land and the land was lying vacant for 4 years. If the contention of the ld AR is accepted, the same would result in reappreciation of material on record and review of the decision already taken by the Bench which is not permissible within the narrow confine of section 254(2) of the Act. In the result, the miscellaneous application is dismissed.

Summary

Issues Involved:
1. Denial of exemption under section 10(37) of the IT Act.
2. Ownership and usage of land till the date of allotment letter.
3. Consideration of Khasra Girdawari and agricultural operations.
4. Evaluation of additional evidence such as affidavits, electricity bills, and photographs.

Issue-wise Detailed Analysis:

1. Denial of Exemption under Section 10(37) of the IT Act:
The assessee challenged the order of the CIT(A) denying his claim of exemption under section 10(37) on the grounds that the land was not used for agricultural purposes. The Tribunal confirmed the CIT(A)'s order but the assessee contended that the Tribunal made mistakes in its findings. The Tribunal noted that the essential condition for exemption under section 10(37) is that the entire land must be used for agricultural purposes, not just a part of it. The Tribunal clarified that the interpretation of section 10(37) was germane to the issue and could not be rectified under section 254(2) of the IT Act. The Tribunal corrected the mistake regarding the size of the land owned by the assessee but maintained that the presence of 50 Amla trees on 1.01 hectares of land did not change the conclusion that the land was not used for agricultural purposes.

2. Ownership and Usage of Land Till the Date of Allotment Letter:
The assessee argued that the Tribunal ignored the fact that he was using the land until the allotment letter dated 20.11.2009, despite the land being transferred to JDA in 2008. The Tribunal found no evidence to support the assessee's claim of owning and using the land until the allotment date. The Tribunal upheld its finding that the land was transferred to JDA in 2008 based on Khasra Girdawari records, and the compensation received in 2009 was the basis for charging capital gains in AY 2010-11.

3. Consideration of Khasra Girdawari and Agricultural Operations:
The assessee contended that the Tribunal did not consider the Khasra Girdawari for 2008, which showed the cultivation of 50 Amla trees, proving agricultural operations. The Tribunal noted that the Khasra Girdawari for 2008 showed JDA as the owner, and there was no mention of Amla trees in the 2007 records. The Tribunal distinguished the case from the decision in ITO Vs. Smt. G.S. Lekha, where the land was certified as agricultural by an Agricultural officer, and compensation for trees was determined. The Tribunal found no mistake in its findings and rejected the assessee's contention.

4. Evaluation of Additional Evidence:
The assessee argued that the Tribunal did not consider other evidence such as electricity bills, affidavits, and photographs proving agricultural operations. The Tribunal stated that it had considered all relevant facts, including Khasra Girdawari and affidavits, and concluded that no agricultural activities were carried out on the land, which was lying vacant for four years. The Tribunal held that accepting the assessee's contention would require reappreciation of the material on record, which is not permissible under section 254(2) of the Act.

Conclusion:
The miscellaneous application filed by the assessee was dismissed, and the Tribunal's order was upheld. The Tribunal found no mistakes apparent on record that warranted rectification under section 254(2) of the IT Act. The order was pronounced on 28/04/2020.