Rahul Bhandari v. The Income-tax Officer, Ward 6(2), Jaipur
[Citation -2019-LL-0930-80]

Citation 2019-LL-0930-80
Appellant Name Rahul Bhandari
Respondent Name The Income-tax Officer, Ward 6(2), Jaipur
Court ITAT-Jaipur
Relevant Act Income-tax
Date of Order 30/09/2019
Assessment Year 2013-14
Judgment View Judgment
Keyword Tags computation of total income • reassessment proceedings • agricultural purpose • escaped assessment • sale consideration • reason to believe • agricultural land • tangible material • sale of property • capital gain tax • municipal limits • exempted income • capital asset • sale of land • reopening of assessment • long-term capital gain
Bot Summary: AO in considering the report of Inspector of Income Tax/Village Patwari, Natata dated 03.12.2016 for assessing the location of the said agricultural land and, thereby, not considering the reports issued by Tehsildar/village Patwari, Natata dated 25.03.2014 in respect of the land sold in August 2012. Once the assessee has furnished the evidence to show that the land is situated beyond 8 km from the Municipal limit, then the AO was not supposed to form the belief that the land is situated within 5 km from the boundary of the Nagar Nigam Jaipur. Right in front of my land there was a stone quarry where mining use to happen they would cross through my land and then a government land to reach Saiwad road/Natata. A/R has submitted that once there was no direct access to the land, then the distance of the land has to be measured only from the road which connects the land. Secondly, as per the provisions of section 2(14)(iii)(b) it is clear that the distance has to be measured from Municipal limits to the area in which the land is situated and not to a particular piece of land sold by the assessee. Once the area is within 8 kms from the Municipal limits, then even if the particular land is beyond that distance of 8 kms, it will not be excluded from the definition of capital asset being an agricultural land. All these contentions of the assessee are only with respect to the particular land in question and no such dispute has been raised that the area in which the land is situated is beyond 8 kms from the Municipal limits.


IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC , JAIPUR BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA No. 746/JP/2018 Assessment Year : 2013-14. Shri Rahul Bhandari Income Tax Officer, 18, Golimar Garden, Vs. Ward 6(2), Sahkar Marg, Bais Godam, Jaipur. Jaipur. PAN No. ACGPB4996C Appellant Respondent Assessee by : Shri Rajeev Sogani Revenue by: Smt. Runi Pal Date of Hearing : 18.09.2019. Date of Pronouncement : 30/09/2019. ORDER PER VIJAY PAL RAO, JM : This appeal by assessee is directed against order dated 01.03.2018 of ld. CIT (Appeals)-2, Udaipur for assessment year 2013-14. assessee has raised following grounds of appeal :- 1(a) In facts and circumstances of case and in law, ld. CIT (A) has erred in confirming action of ld. AO in reopening assessment under section 147 of Income Tax Act, 1961. action of ld. CIT (A) is illegal, unjustified, arbitrary and against facts of case. Relief may please be granted by quashing assessment proceedings being illegal and without any basis. 2 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. (b) In facts and circumstances of case and in law, ld. CIT (A) has erred in confirming action of ld. AO in issuing notice u/s 148 of Income Tax Act, 1961, without obtaining proper sanction u/s 151 of Income Tax Act, 1961. action of ld. CIT (A) is illegal, unjustified, arbitrary and against facts of case. Relief may please be granted by quashing reassessment proceedings being illegal and without jurisdiction. 2(a) In facts and circumstances of case and in law, ld. CIT (A) has erred in confirming action of ld. AO in making addition of Rs. 2,18,564/- as alleged long term capital gain on sale of land, being agricultural land, not offered for taxation. action of ld. CIT (A) is illegal, unjustified, arbitrary and against facts of case. Relief may please be granted by deleting said addition of Rs. 2,18,564/-. (b) In facts and circumstances of case and in law, ld. CIT (A) has erred in confirming action of ld. AO in not providing opportunity of cross examination of persons, whose statements have been used against assessee for making addition of Rs. 2,18,564/-. action of ld. CIT (A) is illegal, unjustified, arbitrary and against principles of natural justice. Relief may please be granted by quashing action of ld. CIT (A) and deleting addition of Rs. 2,18,564/-. 3. In facts and circumstances of case and in law, ld. CIT (A) has erred in confirming action of ld. AO in considering report of Inspector of Income Tax/Village Patwari, Natata dated 03.12.2016 for assessing location of said agricultural land and, thereby, not considering reports issued by Tehsildar/village Patwari, Natata dated 25.03.2014 in respect of land sold in August 2012. action of ld. CIT (A) is illegal, unjustified, arbitrary and against facts of case. Relief may please be granted by accepting report issued by Tehsildar/village Patwari, Natata dated 25.03.2014 for assessing location of land. 4. assessee craves his right to add, amend or alter any of grounds on or before hearing. 2. At time of hearing, ld. A/R of assessee has submitted that assessee does not press ground no. 1(b) of appeal and same may be 3 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. dismissed as not pressed. ld. D/R has raised no objection if ground no. 1(b) of assessee s appeal is dismissed as not pressed. Accordingly, ground no. 1(b) of assessee s appeal is dismissed being not pressed. Ground No. 1(a) is regarding validity of reopening of assessment. 3. ld. A/R of assessee submitted that AO has reopened assessment by recording reasons that agricultural land sold by assessee is not excluded from definition of capital asset due to reason that it is situated within 5 KM from boundary of Nagar Nigam, Jaipur. He has pointed out that prior to reopening of assessment, AO conducted enquiry and assessee has submitted report of concerned Tehsildar showing agricultural land in question beyond 8 km from Municipal Limit of Jaipur and, therefore, it was not capital asset. Once assessee has furnished evidence to show that land is situated beyond 8 km from Municipal limit, then AO was not supposed to form belief that land is situated within 5 km from boundary of Nagar Nigam Jaipur. He has further contended that AO has referred to physical verification in reasons recorded. However, no such report is placed on record or confronted with assessee. Therefore, there was no matter with AO at time of recording reasons that land in question is situated within 8 km from Municipal limit and consequently income assessable to tax has escaped assessment. ld. A/R further submitted that AO has reproduced report of Inspector dated 3rd December, 2016 in assessment order which shows that prior to that report nothing was available with AO. Hence ld. A/R has 4 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. submitted that reopening not based on any tangible material which has direct nexus to reason to believe that income assessable to tax has escaped assessment. reopening was pre-mature as AO has not confronted with so called physical verification report with assessee to arrive at final opinion and belief of escapement of income. 4. On other hand, ld. D/R has submitted that AO has recorded reasons which revealed fact of sale of land by assessee along with other persons. This fact is not in dispute. Further, AO has conducted enquiry and also issued notice under section 133(6) of Act to assessee. Thus reasons were recorded after due verification of fact regarding actual distance of land from Municipal limits. He has relied upon orders of authorities below. 5. I have considered rival submissions as well as relevant material on record. AO has reopened assessment by recording reasons as under :- On basis of information brought on record, it was noticed that assessee has jointly with two persons sold land of 11 bigha 4 biswa situated at village-Natata, Patwar, Halka-Natata, Tehsil- Jamwaramgarh, Dist. Jaipur for sale consideration of Rs. 2,80,00,000/-, out of which assessee s part was Rs. 70,00,000/-. Enquiry was conducted by ITO (Intelligence)-I, Jaipur u/s 133(6) of I.T. Act, 1961 and in response to notices issued, assessee produced computation of total income and submitted that alleged agriculture land is situated beyond 8 KM from municipal 5 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. limits of Jaipur and therefore, it was not capital asset. From computation of income submitted by assessee it was found that assessee has shown Rs. 70,00,000/- as exempted income being received from sale of agricultural land. On physical verification it was found that alleged land i.e. Khasra no. 179/862 at Natata village is situated within 5 KMs from boundary of Nagar Nigam Jaipur hence land is capital asset and issue of capital gain is involved in this transaction. assessee has e-filed his ITR for A.Y. 2013-14 on 30.03.2014. On perusal of Income-tax return it is noted that assessee has not shown any capital gain on above transaction. land under consideration is capital asset for which assessee was liable to pay capital gain tax but he did not pay any tax. Therefore, in view of above facts, I have reason to believe that income of Rs. 70,00,000/- has escaped assessment and it is fit case to issue notice u/s 148 of I.T. Act, 1961. Thus AO has duly recorded facts regarding sale of land by assessee along with two other persons out of which assessee s share in sale consideration is Rs.70,00,000/-. This fact is not in dispute. Further, assessee has not declared any income on account of sale of property in return of income. AO has also conducted enquiry by issuing notice under section 133(6) to assessee as well as physical verification of land in question. Thus, prima facie reasons recorded by AO led to formation of belief that income assessable to tax in shape of capital gains has escaped assessment. This is not case of formation of belief on assumption of facts but AO has conducted proper enquiry to form belief that land in question does not fall in 6 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. exclusion clause of section 2(14) being capital asset. Therefore, at stage of recording reasons, AO is not required to establish sufficiency and correctness of reasons to believe that income has escaped assessment. It is only prima facie reasonable belief based on reasons recorded that income assessable to tax has escaped assessment. Once belief of AO is based on some facts recorded in reasons and these facts are not in dispute, then issue whether land in question is capital asset or not cannot be finally determined in reasons recorded but it is subject matter of assessment. Accordingly, I do not find any substance and merit in ground no. 1(a) of assessee s appeal to challenge validity of reopening. same is rejected. Ground No. 2 and 3 are regarding addition of Rs. 2,18,564/- sustained by ld. CIT (A) being long term capital gain on sale of land. 6. ld. A/R of assessee has referred to submissions made before AO and reproduced at page 7 of assessment order as under :- agricultural land I possessed had no access from Siawad Road. We had to come via Kukas as it was only motorable road during year 2012. Right in front of my land there was stone quarry where mining use to happen they would cross through my land and then government land to reach Saiwad road/Natata. Then on my left and right were niji Khatedari land. So one could access my land only from Kukas area and not Natata. I sold this land to Manglam Developers in 2012 who then in 2014 developed entire Township/Plotting Scheme and did all land development. To make this scheme saleable they made some road network. Some passes through this land. Further they with help of panchayat 7 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. Natata developed one more access road though government land and got access via Saiwad road. Which today is access to my land and it didn t existed in 2012. Thus distance measured through newly developed roads is not acceptable to me and I strongly oppose same. So patwari report submitted by me in year 2014 states distance to my land from Jaipur Nagar Nigam boundary in year 2012. To clarify same I did come to your office with my Laptop and measured distance via road on Google Earth as per position in 2012 and it was around 8.7 kms. I am also enclosing Super imposed maps of Google Earth and then JNN (Jaipur Nagar Nigam) map which will help you understand clear distance of my land from JNN boundary. I am also enclosing map of Jaipur Nagar Nigam. I would request you to allow me to cross examine Tehsildar and Natata patwari in your presence since their report matters most in this case and department is relying on one of reports issued by them where as I have submitted other contradictory reports issued by them. I would also like to bring to your notice that reporting from patwari and Tehasildar Jamwaramgarh should not be considered as Final document because maps and record of land they have are confined only to their Tehsil. In my case JNN boundary ends in Amer Tehsil, for which they don t have any land record and maps, so I have all doubts about their reporting. major part of their report is based on assumptions of JNN boundry. They should have consulted JNN and, Amer Tehsil before submitting report. Else there should be committee where in you have members from all concern departments you can give conclusive and accurate report. Most important point which I have been raising every time is that everything has to be seen in reference to 2012 and situation and road network existed then. 8 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. Thus ld. A/R has submitted that once there was no direct access to land, then distance of land has to be measured only from road which connects land. He has contended that land is situated beyond 8 kms from municipal limits. 7. On other hand, ld. D/R has relied upon orders of authorities below. 8. I have considered rival submissions as well as relevant material on record. Undisputedly land was sold by assessee to M/s. Manglam Developers who has developed entire township and plotting scheme on this land. land was transferred for non agricultural purpose and, therefore, it was no more agricultural land even at time of transfer when intention of parties was undisputedly to use land for non agricultural purpose. Secondly, as per provisions of section 2(14)(iii)(b) it is clear that distance has to be measured from Municipal limits to area in which land is situated and not to particular piece of land sold by assessee. Once area is within 8 kms from Municipal limits, then even if particular land is beyond that distance of 8 kms, it will not be excluded from definition of capital asset being agricultural land. Therefore, all these contentions of assessee are only with respect to particular land in question and no such dispute has been raised that area in which land is situated is beyond 8 kms from Municipal limits. Accordingly, in 9 ITA No. 746/JP/2018 Shri Rahul Bhandari, Jaipur. facts and circumstances of case, I do not find any merit or substance in ground nos. 2 and 3 of assessee s appeal. 9. In result, appeal of assessee is dismissed. Order is pronounced in open court on 30/09/2019. Sd/- (VIJAY PAL RAO) Judicial Member Jaipur Dated:- 30/09/2019. Das/ Copy of order forwarded to: 1. Appellant- Shri Rahul Bhandari, Jaipur. 2. Respondent ITO Ward 6(2), Jaipur. 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 746/JP/2018). By order, Assistant. Registrar Rahul Bhandari v. Income-tax Officer, Ward 6(2), Jaipur
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