9911796707
TMI Blog2015 (1) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... about the extent of 3 acres being jointly held by the brothers and hence observation. Therefore, we clearly conclude that in our opinion, 1 acre and 20 guntas of land are taxable in the case of Shri Raghavalu, while the rest are exempt as they are covered by the provisions of section 2(14)(iii) of the I.T. Act. We direct the AO to rework the relief to the assessee accordingly. Decided partly in favour of assessee. - ITA No. 706/Hyd/2014, ITA No.658/Hyd/2014, ITA No.770/Hyd/2014, C.O. No. 56/Hyd/2014 - - - Dated:- 31-12-2014 - Shri P. M. Jagtap And Smt. Asha Vijayaraghavan,JJ. For the Petitioner : Shri G. V. V. S. Murthy, Advocate For the Respondent : Shri Rajat Mitra, (DR) ORDER Per Asha Vijayaraghavan, J.M. These are cross appeals by the assessee and the Revenue against the order of the CIT(A)VII Hyderabad dated 18.02.2014 relating to A.Y 2007-08 passed u/s 143(3) r.w.s. 153A of the Act. 2. Brief facts of the case are that the assessee is an individual. During the A.Y, the assessee was partner in M/s Venkata Kanaka Durga Metal Industries (new firm PAN: AAFFV 4080 Q), and in addition to personal building materials business income and agricultural in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.20 guntas and his brother E. Kotaiah utilized another acre 1.20 guntas (total acre 3.00 guntas) for establishing the metal stone crushers and stocking yard for spalls, metal, metal dust, labour quarters etc. This is evidenced by the entries of land transfer of 1 acre 20 guntas to the firm and back (on closure of stone crusher) in the appellant s books. The remaining agricultural land of acres 15.04 guntas had been utilised for carrying agricultural activity till the sale took place. The stone crusher was closed in 2004 and the total land was under cultivation. * The agricultural lands sold by the appellant were free hold agricultural lands and the appellant cannot change the character of the said land as quarry land without express permission from the Mines and Geology Deptt.for carrying out crushing activity and storage, labour quarters etc. Acre 1.20 guntas were utilised and balance land was totally utilised for carrying out agricultural activity. * If there was mining activity in this land, the appellant would have carried on mining as this is more beneficiary. Further the actual leased land for quarrying was theGovt. Land which was distinct and separate. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer Ward-1 Karimnagar, ITAT Visakhapatnam in Tadavarthi Kanakavalli vs. Income Tax Officer, Ward-1 Tenali and ITAT Jodhpur Bench in the case of Income Tax Officer Ward 3(3) vs. Smt. Usha Chhajer. In the remand report the AO stated that the assessee did not furnish any evidence for the agricultural activities undertaken. A statement was also recorded from him on 29.01.2013 and in this statement the assessee stated that he does not have any evidence. As regard the additional evidence of lease deeds granted by the Deptt. of Mines and Geology, the AO stated that the quarry lands totallying 5 hectares owned by the Govt. of AP and not by the assessee. The AO also stated that this survey number do not form part of the land sold by the assessee. Finally, the AO requested that the claim of the assessee that the land is agricultural land may not be considered. The copy of the remand report was given to the assessee and his objections were called for. The assessee vide his letter dated 24.01.2013 objected to the conclusion drawn by the AO and stated that: The lands are agricultural lands and they are so classified in the revenue records and were also subjected to payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee was carrying out agricultural operations and agricultural income was being returned consistently over the past several years. At para 11.6 the CIT (A) observed that the assessee for establishing the metal stone crushers and stocking yard for spalls, metal, metal dust, labour quarters etc. and the assessee had stated that the quarry was closed in the year 2006 and was shifted. The CIT expressed his doubt that the land which was put into use as quarry land for storage of metal stone crushers and stocking yard for spalls etc.,cannot be reused for agriculture. The observations were made by the ld CIT at para 11.7. 5. Finally, the ld CIT (A) concluded that it was reasonable to hold that out of the assessee s 16 acres 24 guntas land, 3 acres can be held as non agricultural land and the balance 13 acres can be treated as agricultural land. The CIT, therefore held that sale proceeds of 3 acres of land amounting to ₹ 30.00 lakhs are taxable, while the rest are exempt as they are covered under the provisions of section 2(14)(iii) of the I.T. Act, 1961. Aggrieved the assessee is in appeal before us. 6. The main point for consideration as raised by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 The ground of cross objection are as follows: 1. The ld.CIT(A) erred in law and on facts while reducing the extent of agricultural land to Ac.13.02 guntas as against actual extent of Ac.14.22 guntas [after reducing the area of Ac.1.20 guntas covered for crushing machinery etc. Falling to appellant s share] for purposes of working out capital gains that was exempt u/s.2(14)(iii) of the Income- tax Act 1961 out of total sale proceeds of Ac.16.02 guntas agricultural lands on mere surmises and assumptions. 2. The ld.CIT(A) erred in determining the taxable capital gains at ₹ 30,00,000/- being sale proceeds of 3 acres, as against Ac 1.20 guntas set apart by appellant himself, falling to appellant s share as was not covered within the definition of agricultural land under section 2(14)(iii) of Income-tax Act 1961 holding the same as covered for machinery and crushing activities without any bias. 3. Any other ground or grounds of cross objection that may be urged at the time of hearing. Consequent to our decision in ITA No.706/Hyd/2014 the cross-objection raised by Shri E.Kotaiah, in C.O.No.56/Hyd/2014 is allowed. Order pronounced in the Open Court on 31st De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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