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TMI Blog2019 (11) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ld AR that only where the AO decided the issue of exemption u/s 10(37), it can be said to be a case of escapement of income. As we have stated above, the assessee has received the compensation on compulsory acquisition of land during the year and in absence of disclosure of such transaction in the return of income or any claim of exemption u/s 10(37) in the return of income, it is a clear case where the capital gains on such compulsory acquisition of land in respect of which the compensation has been received during the year has escaped assessment. The matter relating to assessee s eligibility for exemption u/s 10(37) is a matter of detailed examination and so long as prima facie, the AO has formed an opinion that the income received during the year has escaped assessment and such formation of belief is based on tangible and undisputed facts, there is no infirmity in the action of the AO in acquiring jurisdiction u/s 147 of the Act. Assessee in his appeal for AY 2009-10, the assessee has challenged the year of taxability of the compensation and has contended that the same falls in AY 2010-11 and again in AY 2010-11, the assessee is challenging the taxability of the compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural land along with construction was acquired by Jaipur Development Authority under the Land Acquisition Act 1894. The date wise event related to the acquisition of the land and building and the payment of compensation is tabulated as under:- Date Particulars 27-10-2005 Jaipur Development Authority issued notification u/s 4(1) of the Land Acquisition Act 1894 for acquiring the land and building. 20-12-2005 Survey u/s 4(2) of the land Acquisition Act was carried out. 29-04-2006 08-05-2006 Declaration u/s 6 of the Land Acquisition Act was made on 29-04-2006 stating the purpose of acquisition. This declaration was published in official gazette on 8-05-2006. 29-04-2008 Compensation of ₹ 9,50,734/- for acquisition of the building was received after deduction of TDS of ₹ 97,926/-. 12-05-2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue or the assessee. The reservation letter issued by the JDA on 12/05/2008, which simply a letter as per the policy of the JDA that 20% of residential land acquired and 5% of commercial land would be awarded to the assessee as a compensation against the acquisition of the land and residential as well as commercial plot was allotted vide letter date 20-11-2009 against acquisition of the land. The remaining amount on account of the lesser area under both the heads were made available by the JDA i.e. 20 sq. meter in residential and 5 sq. meter as commercial for which necessary compensation, calculated on the basis of the reserved price for both the lands at ₹ 84,000/- and after adjusting some payment of JDA and remaining amount of ₹ 69,555/- was shown as payable to the assessee. It is already held by the various courts that the land and building acquired under compulsory acquisition are two different assets. The compensation for the land was received by the assessee on 20-11-2009 which falls in A.Y. 2010-11. The case law referred by the assessee are squarely applicable, therefore, the Assessing officer is directed to assess the capital gain in A.Y.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of law. 7. It was further submitted that from the facts stated above it can be noted that the AO while reopening the assessment by referring to the direction of Hon ble Tribunal has not been considered the same in totality. A combined reading of Para 6 6.1 of the order of Tribunal clearly shows that it set aside the issue regarding claim of exemption u/s 10(37) in AY 2009-10 to the AO with two directions. First is that the AO is to decide afresh whether the assessee has carried out agricultural activity in the two years immediately preceding the date on transfer on the land which has been compulsorily acquired under the Land Acquisition Act and second is that in case the first issue is decided against the assessee, the capital gain can be assessed in AY 2010-11 and not in AY 2009-10. Therefore, without deciding the issue of claim of exemption u/s 10(37) in AY 2009-10, reopening of the assessment for AY 2010-11 is only a change of opinion and not following the direction of Tribunal ITAT. Hence, the notice issued u/s 148 is illegal bad in law. 8. It was further submitted that the AO in the reasons for reopening has mentioned part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thereafter, taking into consideration the directions of the Coordinate Bench where it was directed to assess the capital gains in AY 2010-11 and not in AY 2009-10, the AO has issued the notice u/s 148 of the Act. It is therefore a case where there was no disclosure of such transaction in the return of income and secondly, the return of income so filed was processed u/s 143(1) and no regular assessment was made, hence, there is no question of forming of an opinion by the AO prior to issuance of notice u/s 148 of the Act. The contention of the ld AR regarding change of opinion therefore cannot be accepted. The second contention of the ld AR that only where the AO has reason to belief that income has escaped assessment, notice u/s 148 can be issued. Another related contention raised by the ld AR that only where the AO decided the issue of exemption u/s 10(37), it can be said to be a case of escapement of income. As we have stated above, the assessee has received the compensation on compulsory acquisition of land during the year and in absence of disclosure of such transaction in the return of income or any claim of exemption u/s 10(37) in the return of income, it is a clear case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Sub- Tehsildar, Bagru and obtaining the Khasra Girdawri report which shows that the land under consideration was not used for the agricultural purpose during the period of two years immediately preceding the date of transfer. 13. It was further submitted that the AO for the first time required the assessee vide order sheet entry dt. 18.12.2017 to prove that land was used for agricultural purpose in the preceeding two years. On the same date, the Sub- Tehsildar, Bagru has attended before the AO along with Khasra Girdawari of samvat year 2064 to 2068 where the AO obtained a letter from the subregistrar. The letter of sub-registrar and Khasra Girdawari is reproduced at Pg 6 to 8 of the assessment order. The AO has not allowed any opportunity to the assessee to cross examine the sub-registrar when on that date itself the assessee has attended before him and the query was raised by the AO to furnish evidence to prove that land was used for agricultural purpose in the preceding two years. It was submitted that these facts shows that AO has made up his mind for making the addition. 14. Further, our reference was drawn to the relevant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid also indicates that agricultural operations were carried out on this land. - In the reassessment proceedings, assessee produced both the persons namely Laxman Singh and Rameshwar Chaudhary whose statements were recorded u/s 131 on 07.12.2017 where they admitted the fact of carrying out of the agricultural activity on the said land. Thus the assessee has furnished various evidence as stated above which proves that the land was used for agricultural purpose by the assessee. 16. It was further submitted that the AO has rejected the claim of the assessee only on the basis of report of Sub-Tehsildar and Khasara Girdawari for samvat year 2064 to 2068. The Khasra Girdawari was also available in course of assessment proceedings for AY 2009-10 but considering the various other evidences of use of agricultural land for agricultural purposes filed by the assessee, the issue was set aside by the Tribunal. If the issue was to be decided only on the basis of Khasara Girdawari than there was no reason for the Tribunal to set aside the issue to the AO. Therefore, the Khasra Girdawari cannot be the sole basis for holding that the land was not u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that land was agricultural land, Department has to lead evidence to controvert it. When the land is classified as agricultural land in Revenue papers and agricultural operations are found to have been carried on the date of transfer, there is a presumption that land is an agricultural land and the burden is then on the Department to rebut it. 21. With the aforesaid background let us look at the evidence in the present case. A perusal of the sale deed dt. 25th Nov., 2011 under which the property in question was transferred by the assessee to VISL clearly gives the description as land together with trees standing thereon. The relevant portion of the English translation of the sale deed, which is at pp. 29 to 39 shows that out of the total consideration of ₹ 1,69,14,391 a sum of ₹ 9,060 has been given value of trees that was standing on the land. There were about 77 to 80 coconut trees besides jack fruit trees in the property in question. This intrinsic evidence to show the character of the land was agricultural land, has not been noticed by the Hon ble A.M. Besides the above, the Agricultural Officer, Krishi Bhavan, Vizhinjam has certified in his certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r some days in the earlier year to preceding year. Mazid Khan Nisar Khan V. ITO 59 ITR 68 (Trib) (Pune) It was held that in this case the ITAT relied on the decision of Ramesh Narhari and held that even if the assessee cultivated only Kharif Crop in immediately preceding two years from the date of sale of the land condition set out in section 54B for claiming benefit of exemption was complied with. It was further held that it was not necessary that the land should have been used for agricultural purpose for full two years immediately preceding the date of transfer. It was sufficient if it was so used in the whole of the preceding year and for some days in the earlier year to preceding year. Though the above decisions are with reference to section 54B but the ratio laid down in these decision are squarely applicable to the facts of the present case. In view of above, assessee has fulfilled all the condition laid down in section 10(37) of the Act and therefore the long term capital gain on compulsory acquisition of the land is exempt from tax. Therefore, addition made by the AO and confirmed by Ld. CIT(A) be direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Girdawari for Vikram samvat 2065 and basis the same, the contention of the ld AR that growing of trees is a use of land for agricultural purposes and reliance on decision of the Coordinate Bench in case of G.S Lekha (supra). We find that Khasra Girdawari for Vikram samvat 2065 shows the name of JDA and not that of the assessee which demonstrates clearly that the land stood transferred in name of JDA. Further, if we look at Khasra Girdawari for Vikram samvat 2064, we find that there is no mention of Amla trees. Therefore, the affidavits of the assessee and that of the care taker Laxman Singh as well as of Rameshwar Chaudhary doesn t inspire any confidence and are clearly selfserving document in view of clear narration in Khasra Girdawaries which shows there were no Amla trees prior to year 2008. Further, regarding reliance on the Coordinate Bench decision in case of G.S Lekha (supra), we find that unlike in the said case where a sum of ₹ 9,060 was determined as value of trees standing on the land, there is nothing on record to suggest that there is any compensation which has been determined and awarded by the JDA for such Amla trees as part of overall land compensation. Secon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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