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TMI Blog2012 (6) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... i for the Appellant. Anil Chadda for the Respondent. ORDER D K Srivastava, Accountant Member The appeal filed by the Department is directed against the order passed by the CIT(A) on 21.1.2010, on the following grounds: 1. Whether on the facts and circumstances of the case, ld. CIT(A) erred in deleting the addition made by the AO of Rs. 13,89,711/- on account of capital gain as the assessee had self-claimed the capital loss on this land in his return. 2. Whether on the facts and circumstances of the case, ld. CIT(A) erred in deleting the addition made by the AO of Rs. 16,64,226/- on account of income from other sources as interest received on enhanced compensation as the assessee had self-claimed the capital loss on this land in his return. 3. Whether on the facts and circumstances of the case, ld. CIT(A) erred in deleting the addition made by the AO of Rs. 3,50,000/- income for other sources. 4. It is prayed that an order of the ld. CIT(A) be cancelled and that of the AO be restored. 5. The appellant craves to add or amend any grounds of appeal before the appeal is heard or disposed. 2. The Department has also taken the following additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the Assessing Officer, admitted the aforesaid certificate as additional evidence and held on that basis that the land in question was not a capital asset within the meaning of section 2(14)(iii)(b) of the Income-tax Act as it was (i) "under cultivation"; and (ii) not "situated within the prescribed limit of municipal committee" and, therefore, the gains arising on receipt of enhanced, compensation following its acquisition was not liable to be taxed as income from capital gain. The relevant portion of the order passed by the ld. CIT(A) in this behalf reads as under:- "6. Applying the principles of natural justice, the additional evidence so submitted is being admitted. 7. It is clear from the Patwari's certificate that the land acquired was under cultivation and was situated within prescribed limit of municipal committee. As such, it was not a capital asset as per the provisions of section 2(14)(iii)(b) of the Income-tax Act. Since the asset sold is a not a capital asset, provisions of section 45(5) are not applicable. In view of this, the addition of Rs. 13,89,711/- made by the AO is deleted, allowing assessee's plea on this ground." 5. In support of appeal, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich levies the taxes on the enhanced compensation received by the assessee but fail to go through the word 'transfer of capital asset' in section 45(5) as well as 45(1) of the Income-tax Act, 1961. The definition the capital asset is well defined in section 2(14)(iii) of the Income-tax Act, 1961. The extract of the section 45(1), 45(5) and 2(14)(iii) is enclosed at Annexure-1 for your ready reference. The assessee approached the Tehsildar, Panchkula vide their letter dated 19.8.2009 to certify the exact situation of the land in question at the time of acquisition of the land. After verification it was certified that the land in question was not in limits of municipality as well as it was beyond the radius of 8 kilometers of the limits of municipality. The copy of the letter together with the certificate on the same is enclosed at Annexure 2. It is further submitted that at the time of filing of the return of income Tax by the assessee, the assessee inadvertently filed in computation of the total income said gain of enhanced compensation as capital loss by taking the cost of the land at indexed cost. Thus while going through the abovesaid facts the land in question is not the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof to the AO for his comments, submitting of same evidence before the Tribunal did not amount to additional evidence within the meaning of rule 29 of ITAT Rules and there was no violation of the said rule in admitting the same. The copy of the same is enclosed at Annexure 12. Therefore, we request the ITAT to acknowledge the evidence as regular and continuing and affirm the deletion of the additions made by the AO, by the ld. CIT(A)." 7. We have heard both the parties and carefully considered their submissions. As regards the admission of additional evidence, the provisions of Rule 46A(1) of the Income-tax Rules are absolutely clear. It mandates that no evidence shall be admitted under sub-rule (1) of Rule 46A unless the CIT(A) records in writing the reasons for its admission. We have already reproduced above the relevant portion of the order of CIT(A). Its bare perusal shows that the ld. CIT(A) has not recorded any reasons while admitting additional evidence. Besides, Rule 46A(1) of the Income-tax Rules specifies the circumstances under which additional evidence can be admitted. The assessee could not state before us as to how its case is covered by any of the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or (ii) situated in any area within such distance, not being eight kilometres, from the local limits of any municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board, as the Central Government may specify in this behalf, is excluded from the definition of "capital asset" u/s 2(14). However, agricultural land, being land (i) situated within the jurisdiction of a municipality (whether known as a municipality; municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board, or (ii) situated in any area within such distance, not being eight kilometres, from the local limits of any such municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board, as the Central Government may specify in this behalf, is not excluded from the definition of "capital assets" and is therefore capital asset within the meaning of section 2(14). In order to consider the applicability of section 2(14)(iii), three iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any return u/s 139(5) revising his claim, as aforesaid. Judgment of the Hon'ble Supreme Court in Goetze India v. CIT [2006] 284 ITR 323/157 Taxman 1 (SC) is quite apposite in which it has been held that no new claim can be made by an assessee without taking recourse to revised return under section 139(5). We find that the assessee has not filed any evidence before the AO to prove either his ownership over the land in question or the character of the land being agricultural land. All these aspects have not: been considered by the ld. CIT(A). In view of the forgoing, the order passed by the CIT(A) is set aside and the matter is restored to his file with the direction to dispose of the matter afresh in conformity with-law after giving reasonable opportunity of hearing to both the parties. 13. Apropos the submission of the ld. DR that the land in question is situated in an area as notified by the CBDT u/s 2(14)(iii)(b), i.e., within prescribed distance from the local limits of Panchkula municipality (whether known as municipality; municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and therefore is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) with a direction to decide the matter afresh in conformity with the judgment of the Hon'ble Supreme Court in CIT v. Ghanshyam (HUF) , [2009] 315 ITR 1/182 Taxman 368 (SC) in which the following principles have been laid down by the Hon'ble Supreme Court:- "Having settled the controversy going on for last two decades, we are of the view that in this batch of cases which relate back to the assessment years 1991-92 and 1992-93, possibly the proceedings under the Land Acquisition Act, 1894, would have ended. In a number of cases we find that proceedings under the 1894 Act have been concluded and taxes have been paid. Therefore, by this judgment we have settled the law but we direct that since matters are decade old and since we are not aware of what has happened in the Land Acquisition Act proceedings in pending appeals, the recomputation on the basis of our judgment herein, particularly in the context of type of interest under section 28 vis-a-vis interest under section 34, additional compensation under section 23(1A) and solatium under section 23(2) of the 1894 Act, would be extremely difficult after all these years, will not be done." 15. In view of the foregoing, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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