TaxTMI 
TaxTMI 
2017 (4) TMI 190
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....h, Panaji (ITAT), thereby the respondent-Revenue Department's appeals have been partly allowed and so also the Cross Objections filed by the Assessees. That resulted into reversal of the order passed by the Commissioner of Income-Tax (Appeals) (CIT) dated 8.4.2013 for the Assessment Year 2007-08. The Income Tax Officer, had by order dated 6.6.2014 Ward 2(3) under Section 143(3) read with section 147 of the Income Tax Act, 1961 (IT Act) therefore, revived the returns by showing the Long Term Capital Gains liabilities under Section 45 of the IT Act and initiated penalty proceedings under Section 271(1)(c) of the IT Act and further directed initiation of action for filing inaccurate particulars of income. 3. The Assessees' appeals, was allowed by the CIT(A) by order dated 8th April, 2013, and the findings given based upon the records and the Judgments of this Court, by observing as under : "6. Since the facts of this case are identical to that of CIT vs. Smt. Debbie Alemao & CIT Vs. Minguel Chandra Pais, respectfully following judgment of the jurisdictional Bombay High Court, the AO is directed to delete the the addition made as Capital Gains arising on sale of agricultural ....
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.... was never re-opened by the Department and, therefore, we are proceeding to deal with the above 12 appeals. LIST OF CASES Sr. No. Name of the party Tax Appeal No. Vendor No. 1 Pundalik Khaunte TXA/86/2014 15 2 Sudha Khaunte TXA/83/2014 16 3 Prabhakar Prabhu Shastri TXA/12//2015 1 4 Gajanan Guinde TXA/82/2014 10 5 Shailesh Guinde TXA/85/2014 11 6 Archana Guinde TXA/81/2014 12 7 Radhesh Guinde TXA/80/2014 13 8 Sonia Guinde TXA/84/2014 14 9 Gopal Venkatesh Prabhu TXA/10/2015 3 10 Shankar Dalal TXA/1/2015 17 11 Gauri Dalal TXA/2/2015 18 12 Shama Pai TXA/16/2015 4 6. The appellants are individuals deriving income from salaries and income from other source (interest income). The Appellants are also co-owners of an ancestral agricultural land in Canacona Taluka along with other family members. The Agricultural land is called "VATTORIANT" or "VADTURY" measuring 2,18,250 sq. meters within the limits of village panchayat of Loliem in Canacona Taluka, South Goa District which was sold by the Appellants vide sale deed No. 39/2008 dated 19.2.2007. On 30.7.2007, the Appellant filed their return of income declaring an income f....
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.... containing documents to be relied upon at the time of the hearing. The Appellants also filed an application of additional evidence. On 01.04.2014, a site inspection was ordered to be carried out by the Tribunal. On 7.08.2014, the Revenue filed their report of the site visit. On 08.05.2014, the Appellant filed its reply to the report. 06.06.2014, the Tribunal disposed off the aforesaid appeals and cross objection filed by the parties by a common order. The Tribunal held that proceedings under Section 147 read with 148 were validly initiated. As per the appellant the Tribunal fails to consider the Judgments of CIT V. Debbie Alemao and Joaquim Alemao (196 Taxman 230 HC Mumbai/Tax Appeal 1/2006 and Tax Appeal 2/2006) and CIT Vs Minguel Chandra Pais and Anr (282, ITR 618 HC Mumbai/Tax Appeal 1 of 2002). The judgments relate to sale of agricultural land in Goa and are also from the jurisdictional High Court of Mumbai. 8. The definition of "capital" includes certain properties but also excludes agricultural land in India, as specifically defined/explained under Section 2(14)(iii) of the IT Act. The term "long-term capital gain" is also settled, which means capital gain arising from the ....
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....ture" while dealing with the transfer of property of such agricultural lands. 12. For the purposes of such transfer of land, in our view, we have to consider the provisions of the Code in question and so also the definition so provided to deal with the concept of "agricultural land". There is no issue that the land owners require to transfer the property within the framework of laws. Under the Code, there is no bar that an agriculturist and/or one who possesses agricultural land cannot transfer such land to any third party who is not agriculturist. Nothing contrary has been pointed out and/or placed on record that any permission and/or formalities are required to be completed before transfer of such lands. Under the Code, a transfer could be made to a non-agriculturist and/or to a person whose activities are not related to agricultural project or purpose. There is no question of raising any objection by third party, if the owner of such land decides to transfer the ancestral agricultural property/land to a third party by a common sale deed. The assessee had received the consideration. Admittedly, the property was not divided and/or sub-divided. Admittedly, before transfer of the p....
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.... from the capital gain is the only option, on fact and the law. 14. The Supreme Court Judgment so read, definitely requires to be used and utilized. The position of law is clear, so also the terms like "agriculture" and/or "agricultural land", "ancestral agricultural land. The assessees have been using it for agricultural purpose as claimed. Hence, the burden lies upon the Department to disprove and/or place material on record to show that activities or no activities or do use or no use of such land not fall within the ambit of "agriculture" so defined under the Code. The decision taken by the Revenue Department by overlooking this provision and Code is impermissible, unacceptable and so the demand and the penalty. 15. This Court further requires to consider that a person who wants to use such agricultural land for any non-agricultural purpose, requires to submit an application to the concerned Authority, which is subject to the order/decision and/or permission if sanctioned, such agricultural land can be used and converted into and/or usable for nonagricultural purpose and not otherwise. By any act or inaction of unauthorised use of such agricultural land to non-agricultural pur....
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.... On the contrary, adverse findings are given by the Department solely based upon the so called inspection initially taken at the stage of assessment by the concerned officer and later on by the Tribunal members. We are not going into the aspect of powers of the Tribunal to conduct inspection and give its own finding for the first time. This is in the background that the parties themselves requested the Appellate Authority to have inspection of the land. Such party cannot, therefore, and/or agitate any issue with regard to the inspections so made. Therefore, we are not dealing with the inspection report on merits, in the peculiar facts and circumstances of the case, as it was done at the instance of the assessees. But the fact that this inspection reports, in no way, has considered the purpose and object of the Code and the definition of "agriculture" so liberally mentioned. The relevant part of the report, reads thus : "... The above property is bounded on the Southern side by a rain water gutter which quoins the Arabian Sea. On the western side of the property is Arabian Sea. The property is hill area on the Western side and plain on the Eastern side. I could see old trees such a....
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....ed in respect thereof. But, as whole report itself and the findings given by the Tribunal(ITAT) about the nature of land and its use, without considering the definition and the provisions of the Code, we are not inclined to proceed further. The finding of facts so recored by the Tribunal itself confirms the position that the case of the assessees fall within the ambit of definition of "agriculture" as defined under the Code. The property requires to be treated as agricultural land and its' activities are "agricultural" in nature. 20. Submission is made by the learned Counsel appearing for the respondent-Department supporting the impugned orders so passed against the Assessee that the matter be remanded back for consideration as this factual aspect always goes to the root of the matter in view of the Judgment of the Supreme Court referred above to ascertain the nature and use of such land as "agricultural land" and/or "non-agricultural land". We are not inclined to accept this submission at this stage of the proceedings, specifically when the whole approach of reassessing and/or visiting the land by holding inspection after more than 2 to 3 years of the transfer of the property....