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TMI Blog2016 (7) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in levying the capital gain tax on sale of agricultural land, though there was no notification from the Central Government for fixing the limit of Municipality u/s 2(14)(111)(b) of this Income Tax Act 1961 and even though the appellant is offered the income wrongly which is against the provisions of the law. 3. On the fact and circumstances of the case, the CIT (Appeal) erred in not following the principle of natural justice, without providing an opportunity to the appellant against the remand report of the AO which is bad in law and the order is liable to be squashed. 4. For these and other reasons which may be adduced at the time of hearing, the appellant prays before this Honorable Bench to cancel the taxability of capital gain on sale of agriculture land which is offered by the appellant due to ignorance of law. 5. The appellant craves, leaves to add, to alter, to amend and to delete any of the grounds during the course of hearings. 3. Briefly facts of the case are that the assessee is an individual and filed return of income on 05/10/2012. Admittedly, there was no scrutiny assessment against the original return. Subsequently, notice u/s 148 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l so noted that when asked by AO to produce evi dence for incurring development expenditure during the course of assessment proceedings, the appellant filed a letter dated 24/10/2014 stating that he was withdrawing claim of development expenditure. The appellant also failed to submit any prove of carrying out agricultural activities. Further it is noted that he has failed to explain whether reinvestment was made during stipulated period. Even during appellate proceedings the appellant failed to produce any evidence to substantiate his claim. Therefore the claim of appellant u/s 54B which was disallowed by AG is justifiable and hence sustained. 11. It is seen that during assessment proceedings the appellant was unable to produce evidence that agricultural activity was carried out on the land acquired by him during financial year 2003-04 and sold during financial year 2007 relevant to AY under appeal. Now during appellate proceedings he claims that the land was outside limits of municipal authority and therefore it is not a capital asset u/s 2(14) of the Act. All these go to show that the appellant has no evidence which he can file in order to substantiate his claim either before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SECTION 2(1A) , PROVISO, CLAUSE (II)(B) AND SECTION 2(14)(III)(B) : URBANISATION OF AREAS Notification No. ISO 94471 (File No. 164/3/87-ITA.I)J, dated. 6-1-1994 Whereas a draft notification was published by the Central Government in exercise of the powers conferred by item (B) of clause (ii) of the proviso to sub-clause (c) of clause (IA), and item (b) of sub-clause (iii) of clause (14), of section 2 of the Income-tax Act, 1961 (43 of 1961), in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated February 13, 1991, under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. S.O. 9 1(E), dated February 8, 199 1, for specifying certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such notification became available to the public; And whereas copies of the said Gazette were made available to the public on February 13, 1991 And whereas the objections and suggestions received from the public on the said draft notification have been considered by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Government cannot be accepted. It is not the contention of the assessee that the lands were situated beyond 8 KMs radius from the end of the limits of BBMP. Further, the ratio laid down by the Hon ble jurisdictional High Court in the case of Madhukar (supra) is not applicable to the facts of the present case. Further there is one more dimension to the issue. In the original return filed, there was no claim of exemption from capital gains in respect of sale of this land. It was only during the reassessment proceedings that this claim was made before the AO. It is settled principle of law that re-assessment proceedings cannot be used by the assessee for his benefit. New claims/deductions cannot be allowed in the re-assessment proceedings. The issue concluded in original assessment proceedings cannot be re-agitated in the re-assessment proceeding as held by the Hon ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (1992)(198 ITR 297). The relevant part of the judgment is as under: Indeed, in the reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for deduction of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee would be entitled to take all contentions including the contention regarding taxability of the said income. Thus, the assessee cannot now contend in the revised return for the first time that the entire income is outside the purview of taxability in view of section 10B of the Act. At the most, the assessee can claim exemption in respect of that part of income derived under section 80HHC by pressing into service section 10B of the Act which is sought to be revised and not on the entire income. In view of the above discussion, we have to hold question No. 1 formulated hereinabove partly in favour of the Revenue since the said question is concluded which encompasses within itself the entire income and 11 hence we will have to clarify here that it is only escaped income which is the cause of action for issuing notice under section 148 which can be the subject-matter of consideration and the assessee would be fully justified in raising all such claims including the taxability of the income to the extent of reopening of assessment. Clarifying this aspect, we answer question No. 1 in the negative formulated hereinabove, i.e., in favour, of the Revenue, and agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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