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TMI Blog2019 (7) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... are heard analogously and are being disposed of by a common order. ITA No. 1851/Ahd/2013 A.Y. 2009-10: 2. The Revenue has filed following grounds of appeal:- 1a). The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in directing to treat the income from capital gain as long term capital gain (LTCG) amounting to Rs. 1,30,35,454/- instead of assessed by the AO as short term capital gain (STCG) amounting to Rs. 1,30,35,454/-,when the purchase deed was registered in 2005. 1b). The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in directing to allow deduction amounting to Rs. 58,25,310/- u/s.54 of the Act, out of long term capital gain of Rs. 1,30,35,454/- to ignore the fact that neither the original asset nor the new assetare in the nature of residence which is chargeable to tax under the head 'House Property income' & infact the 'newasset' has been specifically described as open plot of land' in the purchase deed. 2). The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in directing to treat Rs. 3,00,000/- only as business income and balance of Rs. 14, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, initially the assessee claimed for exemption u/s 54D. Since the assessee does not fall under the ambit of such exemption the same has been rejected. In appeal, the same deleted by the Learned CIT(A). It is pertinent to mention that the AO disallowed the entire amount of deduction u/s 54 of the Act, which was in respect of utilization of part of the Long Term Capital Gain arising out of the transfer of the residential house with land appurtenant thereto, for acquiring another residential house. In fact, it was the case of the assessee before the first appellate authority that the assessee claimed this deduction u/s 54D instead of Section 54. A deed of rectification was also executed relating to the description of the property and registered the same with the office of the Sub-registrar rectifying the schedule from "land" to "residential house with land appurtenant thereto". The same was also submitted before the first appellate authority by way of an additional evidence since the same was prepared after the assessment proceeding was over. The said plea was, therefore, accepted by the Learned CIT(A) and he, thus, directed the Learned AO to allow the deduction of Rs. 58,25,310/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was thus allowed. On the contrary, the Learned DR relied upon the order passed by the Assessing Officer. 6. We have heard the respective parties, perused the relevant materials available on record. It appears from the records that in fact the assessee purchased the property during F.Y. 1994-95 upon payment of Rs. 4,00,000/- by way of two account payee cheques drawn with the Bombay Mereantile Co-op Bank, possession whereof was handed over to the assessee by the vender. It is also a fact that the said property was ultimately registered by way of a sale deed on 16.12.2005; therefore the transfer of the capital asset was full and complete in so far as the provision of Income Tax Act are concerned in view of the expanded definition of the term "transfer" as contained in section 2(47)(v) of the Act. Thus, registration of the property which was acquired by the assessee in the F.Y. 1994-95 though executed in the Year 2005 by way of a registered deed is of no significance. Under Section 53A of the Transfer of Property Act, when the possession of the said immovable property has been taken over by the assessee in part performance of a contract, the transfer is complete. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was obtained and upon cross check of the description of the property with that of the Registered Sale Deed, the assessee had no other alternative but to execute a correction deed and to get it registered with the office of the Sub Registrar even at a substantial additional cost towards stamp duty and other charges. It was further clarified that the actual qualifying amount for deduction under the section was only Rs. 23,58,310/- as against the corresponding deduction of Rs. 1,23,65,260/- as inadvertently claimed in the return of income by the appellant when the appellant as become fair enough to admit said bonafide mistake having substantial tax effect. Having regard to this particular facts and circumstances of the case, we find no reason as to why legitimate claim of deduction should be treated as a colorable device or afterthought merely because rectification deed was executed and registered after the assessment order passed. The said plea of the assessee was duly taken care of by the Learned CIT(A) as we found from the order passed by him in its proper prospective. Relevant part whereof is as follows: "It is therefore, in my view, the appellant is justified for his cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear and specific and without any ambiguity so as to warrant interference.Thus the same is hereby upheld. Consequently, the appeal fails and is accordingly dismissed. 7. Next ground of appeal relates to the order passed by the Learned CIT(A) in granting the Learned AO to treat Rs. 3,00,000/- only as business income and balance of Rs. 14,23,000/- as agricultural income of the assessee. 8. The case of the assessee is this that the assessee has been the legal and factual owner or the user by operation of law of huge area of agricultural land measuring about 500 bighas situated at Village Hirapur and Rasulpura. Substantial portion of the same was controlled by the assessee and also legally owned by him in his name part of which was also inherited by the assessee where agricultural operation was carried on for last so many years. Certain agricultural lands which was inherited by the assessee after the demises of his parents was also substantiated by documentary evidence such as death certificates. Certain agricultural land was also acquired by virtue of the order of a competent Court. Since the substantial part of the agricultural land as narrated above came into his possession duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey No. 262 at village Hirapur Tal. Sanad (Extract No. G 0108032), the appellant is one of the owner and Kharif crop of wheat was cultivated on 11 Hector 11 Acre 88 sq. mt. area in F.Y. 08-09. It is therefore the appellant's income from agricultural activities is not doubted. The only issue remain is the reasonability of Rs. 17,23,000/-from total sale consideration of crop of Rs. 23,58,310/- in the absence of complete evidence of expenditure incurred by appellant. As per the account, the total expenditure of Rs. 6,35,310/- for total receipt of Rs. 23,58,310/- are only 26.93% which is not a correct picture. Hon'ble Gujarat high court in a recent decision in the case of Special Land Acquisition Officer Vs. Kodasbhai Jevabhai Namdar(2002) held that "in the process of land acquisition while taking land value as on market value and the same is increased by value of crop existing on land, in this regard in the absence of any details evidences available of agricultural expenditure, the same istaken at 50% of value of crop and the same is reasonable." In the case ofappellant such detail is partly available but partly not with evidences. It istherefore a reasonable percentage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operative part of the order in quantum appeal which is as follows: ........[4.3.3.C] It is, therefore, the appellant's income from agricultural activities is not doubted. The only issue remain is the reasonability of Rs. 17,23,000/- from total sale consideration of crop of Rs. 23,58,310/- in the absence of complete evidence of expenditure incurred by appellant As per the account, the total expenditure of Rs. 6,35,310/- for total receipt of Rs. 23,58,310/- are only 26.93% which is not a correct picture. Hon'ble Gujarat High Court in a recent decision in the case of Special Land Acquisition Officer Vs Kodasbhai Jevabhai Namdar (2002) held /that "in the process of land acquisition while taking land value as on market value .and the same is increased by value of crop existing on land, in this regard in the absence of any details/evidences available of agricultural expenditure, the same is taken at 50% of value of crop and the same is reasonable/" In the case of appellant such details is partly available but partly not with evidences. It is, therefore, a reasonable percentage of 40% of theexpenditure if taken, it will result into agriculture expenditure ofRs. 9,43,324/- (40% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce. Even the learned CU (Appeal) has directed to treat Rs. 3,00,000/- as taxable income as income from undisclosed source. Further, the judgement relied upon by the assessee in his submission is not squarely applicable in this case as they are different and fact and circumstance of the case. [6] In view of the discussion made in the foregoing paragraphs, it is clear that the assessee had consciously and deliberately furnished inaccurate particulars of income to the tune of Rs. 75,10,144/- and hence it is liable for penalty u/s. 271(1)(c) of the Act. 8. Therefore, I am satisfied that this is a fit case for levy of penalty u/s 271(1)c) of the Act. The maximum penalty lea viable @ 300% of the tax sought to evaded works out to Rs. 50,60,533/- and minimum penalty @ 100% comes to Rs. 16,86,851/-. Looking to the facts of the case, I levy minimum penalty of Rs. 16,86,851/- u/s. 271(1)(c) of tie I.T. Act. In appeal, the penalty was in turn confirmed by the first appellant authority. Hence, the instant appeal before us. While confirming the same the Learned CIT(A) observed as follows: "10.3 I have noticed that the argument of the assessee is too technical and thus difficult to dig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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