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2022 (5) TMI 1281 - AT - Income TaxRevision u/s 263 - CIT-A revising the assessment order framed u/s.143(3) r.w.s. 147 - nature of land sold by assessee that being agricultural land or not? - HELD THAT - Admittedly, the assessee has carried out agricultural activity which is assessee s family traditional vocation. It is clear that in the sale deed the properties clearly defined as agricultural land in the schedule of property. Even the AO during original assessment proceedings noticed the chitta and adangal i.e., records for the relevant Fasli year and same was accepted by the AO during assessment proceedings. The assessee has cultivated this land and grown paddy from 2001 to 2004 and for this produced a copy of the adangal record for S.No.255 256 issued by the Tehsildar office, Solinganallur Taluk, Kancheepuram Dist. The assessee s land is agricultural land and he has cultivated till 2004 but sold this land in 2005. Even otherwise the AO has considered all these documents and formed an opinion that the land sold is agricultural land. Now, the PCIT want to review the order on same set of facts, which according to us is not permissible under law. The AO has taken one view and that is the only permissible view in view of the above given facts that the land sold by assessee is agricultural land and we find no error in the assessment order or prejudicial in the assessment order to the Revenue. Hence, we reverse the revision order passed by PCIT and uphold the assessment order - Appeal of assessee allowed.
Issues:
1. Revision of assessment order by Principal Commissioner of Income Tax under section 263 of the Income Tax Act, 1961. 2. Determination of whether the land sold by the assessee qualifies as agricultural land for exemption from long term capital gains. 3. Compliance with High Court directions for fresh decision on merits by the Tribunal. Issue 1: Revision of Assessment Order The appeal stemmed from the revision order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, challenging the assessment order framed by the Income Tax Officer (ITO) for the assessment year 2006-07. The PCIT found the original assessment to be erroneous and prejudicial to the Revenue's interest due to lack of proper enquiry and verification by the Assessing Officer (AO). The PCIT directed the AO to redo the assessment after providing an opportunity to the assessee. The Tribunal was tasked with reviewing this revision order. Issue 2: Qualification of Land as Agricultural The core issue revolved around whether the land sold by the assessee qualified as agricultural land, thus exempting it from long term capital gains. The AO, during the original assessment, accepted the claim of the assessee that the land in question was indeed agricultural land based on documents provided, including chitta, adangal, and certificates from State Revenue Authorities. The PCIT, however, contended that the assessment lacked details of crops harvested and agricultural activities, prompting the revision. The Tribunal assessed the evidence presented, including the assessee's cultivation records and sale deed descriptions, concluding that the land was agricultural and upheld the original assessment. Issue 3: Compliance with High Court Directions The Tribunal considered the directions of the High Court to review the appeal afresh, taking into account the material placed by the assessee on the assessment record. The High Court emphasized affording the assessee an opportunity for a fresh decision on merits. The Tribunal examined the evidence, including revenue records, cultivation history, and property descriptions, to determine the agricultural nature of the land sold. Ultimately, the Tribunal reversed the revision order by the PCIT, upholding the original assessment and allowing the appeal of the assessee. This detailed analysis encompasses the issues of revision of the assessment order, qualification of the land as agricultural, and compliance with High Court directives, providing a comprehensive overview of the legal judgment delivered by the Tribunal in this case.
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