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TMI Blog2019 (5) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... n thus are liable to be cancelled being bad-in-law. - Decided in favour of assessee. - I.T.A. No. 2613/KOL/2018 And I.T.A. No. 2614/KOL/2018 - - - Dated:- 3-5-2019 - Shri P.M. Jagtap, Vice-President (KZ) And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessees : Shri Subhas Agarwal, Advocate For the Department : Shri C.J. Singh, JCIT, Sr. D.R. ORDER PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE):- These two appeals filed by the two assessees are directed against two separate orders both dated 19.11.2018 passed by the ld. Commissioner of Income Tax (Appeals)-9, Kolkata for A.Y. 2011-12 and since a common issue is involved therein, the same have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. The relevant facts of the case giving rise to these appeals are that both the assesses are individuals, who were the co-owners of two pieces of land property situated at 41, Pudupakkam Village under Tirupporur Panchayat Union, District-Kancheepuram, Tamilnadu admeasuring 4 acres 19 cents having 50% share each. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s opposed to rural- as contended by the assessee. During the assessment proceedings, the assessee had stated that the said land was Rural since the same was situated about 21 kms away from the Tambaram Municipality and 25 kms away from Chennai Corporation on the date of sale. The assessee had produced certificates from the Tahsildar, Thiruporur in this regard. However, as per the report of the DDIT(lnv.) Unit-IV(1), Chennai the area of Chennai Metropolitan Area is much larger than what was stated by the Tahsildar in his report and the said land was situated at about 3 kms from the Chennai Metropolitan Area. Since this new fact places the sold land inside the distance limits specified by the Income Tax Act, 1961 for exemption from taxation it is clear gains are chargeable on the sale of the said land. This gives this office sufficient reason to believe that income in the form of capital gains has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. Hence, it is required to be reopened for assessment u/s 147 of the Income Tax Act, 1961 ...... (ii) Reasons recorded in the case of Manuwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 147/143(3) vide an order dated 22.03.2016, wherein the capital gain arising from the land as worked out at ₹ 4,48,27,660/- was brought to tax in the hands of the assessee for the same reasons as given in the case of Shri Naiyer Sultan. 3. Against the orders passed by the Assessing Officer under section 147/143(3), both the assessees preferred their appeals before the ld. CIT(Appeals) challenging the validity of the said assessments as well as disputing the additions made therein on account of long-term capital gain. After considering the submissions made by the assessees as well as the material available on record, the ld. CIT(Appeals) did not find merit in the preliminary issue raised by the assessees challenging the validity of the assessments made by the Assessing Officer under section 147/143(3) and upheld the assessments made by the Assessing Officer as valid for the following reasons given in his impugned order:- From the reasons recorded, it is clear that it is not mere' change of opinion' as alleged in the submission of the appellant. As the information was received after completion of original assessment proceedings, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said land was urban or rural agricultural land, the belief entertained by the Assessing Officer about the escapement of income and reopening of assessment on the basis of such belief was without independent application of mind by the Assessing Officer. In support of this contention, he relied on the following judicial pronouncements:- (i) Sheo Nath Singh vs.- ACIT (82 ITR 147) (Supreme Court); (ii) Ganga Saran Sons (P) Limited vs.- ITO (130 ITR 1) (SC); (iii)ITO vs.- Lakhmani Mewal Das (103 ITR 437) (SC); (iv)Cygnus Investments Finance Pvt. Ltd. (ITA No. 117/KOL/2018 dated May 18, 2018) 6. The ld. D.R., on the other hand, contended that specific information was received by the Assessing Officer from DDIT(Inv.), Chennai to show that the land sold by the assessees during the year under consideration was urban land and the gain arising from the sale thereof which was chargeable to tax in the hands of the assessees as long-term capital gain. He contended that the claim of the assessees for exemption of such gain thus was wrongly allowed by the Assessing Officer in the assessments orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer on the basis of information received in the form of a communication from DDIT(Inv.), Chennai, which stated that the area of Chennai Metropolitan region was much larger than what was stated by the Tehsildar in his report and the land sold by the assessees was situated at about 3 Kms from the Chennai Metropolitan area. On the basis of the said information, the Assessing Officer entertained a belief that the gain arising from the sale of the said land was chargeable to tax and the income of the assessees in the form of capital gains had escaped assessment. As rightly contended by the ld. Counsel for the assessees in this regard, the location of the land from the local limits of Channai Municipal Corporation was relevant to decide as to whether the said land was an agricultural land in India within the meaning of clause (iii) of sub section (14) of section 2 and the distance of the land from the Chennai Metropolitan area was not relevant in this context. The information received by the Assessing Officer regarding the location of the land being situated at about 3 Kms from the Chennai Metropolitan area thus was vague and irrelevant to decide the issue relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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