2020 (10) TMI 1012 - AT - Income Tax

Addition of sale of agriculture land as capital asset - HELD THAT - In the present case it appears that the new evidence furnished by the assessee vide application dt. 10/08/2020, in the form a certificate issued by the Land Revenue Officer, goes to the root of the matter and very relevant to decide the present controversy. Therefore, in the interest of justice, the same is admitted. However, the said certificate was not available either to the A.O. or the Ld. CIT(A), we, therefore deem it appropriate to set aside the present case back to the file of the A.O. to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee and also by considering the new evidence, now furnished by the assessee.

Summary

Issues Involved:
1. Sustenance of addition of ?1,86,81,250 made by the A.O. by holding the sale of agricultural land as a capital asset.
2. Admission of additional evidence by the assessee under Rule 29 of ITAT Rules, 1963.

Issue 1: Sustenance of Addition of ?1,86,81,250:
The Assessee appealed against the CIT(A)'s order confirming the addition of ?1,86,81,250 made by the A.O. by treating the sale of agricultural land as a capital asset. The A.O. initiated proceedings under section 147 of the Income Tax Act due to non-compliance by the Assessee. The Assessee argued that the A.O. did not consider the cost of acquisition and improvement while computing capital gains, thus the computation was erroneous. The Assessee contended that the A.O. did not apply the provisions of section 48 correctly and failed to provide exemptions as per the Act. Despite the Assessee's submissions, the CIT(A) upheld the A.O.'s decision, leading the Assessee to appeal the matter.

Issue 2: Admission of Additional Evidence:
The Assessee sought to submit additional evidence under Rule 29 of ITAT Rules, 1963, related to a certificate from the Land Revenue Officer regarding the nature of the land sold. The Assessee explained that due to difficulties in obtaining the certificate earlier, it was not presented before the lower authorities. The Assessee argued that the new evidence was crucial in determining whether the land sold qualified as a capital asset. The Senior DR opposed admitting the additional evidence, emphasizing that the Assessee had sufficient opportunities to present it earlier. The ITAT acknowledged the relevance of the new evidence and admitted it, directing the case back to the A.O. for a fresh decision considering the new evidence and providing a fair hearing to the Assessee.

In conclusion, the ITAT allowed the Assessee's appeal for statistical purposes, emphasizing the importance of considering all relevant evidence and providing a fair opportunity for the Assessee to present their case. The decision highlighted the need for a thorough examination of facts and adherence to legal provisions in determining tax liabilities related to the sale of assets.