TaxTMI 
TaxTMI 
2024 (2) TMI 892
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.... was processed under Section 143(1) of the Income Tax Act 1961 (the Act). Later, the case was selected for scrutiny under CASS and notice dated 28th August 2015 under Section 143(2) of the Act was issued. Subsequently, a notice dated 15th January 2016 under Section 142(1) of the Act was issued to petitioner calling upon to furnish copy of the agreement for purchase and sale of the agricultural lands. Petitioner was also called upon to furnish details of agricultural produce in the previous years and income offered in the return of income with documentary evidence and show cause as to why the capital gain earned or accrued should not be taxed as per the provisions of the Act. Therefore, by notice dated 12th February 2016 petitioner was also called upon to show cause as to why the sale of land should not be brought to tax as no agricultural activity were undertaken on the land under consideration. By another notice dated 7th March 2016 under Section 142(1) of the Act petitioner was asked to explain the applicability of Section 50C of the Act in respect of the sale of the land under consideration. 3. Petitioner, on its part, vide letter dated 24th February 2016, submitted, and whic....
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....ed 29th March 2016 accepted petitioner's contention that actual carrying on of agricultural operations is not a necessary condition for deciding that a particular parcel of land was agricultural land. At the same time, CIT(A) rejected petitioner's claim on the solitary ground that petitioner has failed to furnish any evidence to show that the land sold by petitioner have been referred to as agricultural land in Government records. We have to note that in his order itself, the CIT(A) has observed that petitioner had submitted additional evidences by way of confirmation letter dated 6th May 2016 from Talati and from Gram Sevak. The documents issued by the Talati referred to the parcels of lands as "शेतजमीन" which means agricultural land. Therefore, it was not correct on the part of CIT(A) to come to a conclusion that there was no evidence to show that the land was referred to as agricultural land in Government records. In the order the CIT(A) has also recorded that the AO was requested to comment on the admissibility of the documents submitted by petitioner and was requested to furnish his reply on 20th March 2019. Despite reminder being sent....
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....ure of a particular land as agricultural land, however, he has rejected assessee's claim on the solitary ground that the assessee has failed to furnish any evidence to show that the lands sold by the assessee have been referred to as agricultural land in Government record. Qua the aforesaid observation of learned Commissioner (Appeals), it must be observed that in the course of proceedings before the learned Commissioner (Appeals), the assessee has furnished certain document by way of additional evidences which are as under:- (a) Confirmation letter from Talati dated 06.05.2016 stating that all the plots at Village "Aase" sold by the appellant were agricultural land; (b) Confirmation letter from Talati dated 06.05.2016 stating that all the plots at Village "Ardhe" sold by the appellant were agricultural land; (c) Letter from Gram sewak, Group Gram panchayat of the census of the villages." 7. In fact, learned Commissioner (Appeals) has not only acknowledged filing of documentary evidences before him, but has also called for a report from the Assessing Officer on the additional evidences filed by the assessee. As observed by the learned Commissione....
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....e file of the Assessing Officer for de novo adjudication after examining the evidences filed by the assessee and conducting enquiry, if necessary, with the concerned authorities of the Government to find out the true nature and character of the land sold. Only after the Assessing Officer comes to a conclusion on the basis of material brought on record that the lands sold by the assessee are not in the nature of agricultural land, hence, come within the purview of "Capital Asset" as defined u/s 2(14) of the Act, then the question of applicability of section 50C of the Act would arise. In such event, the Assessing Officer has to compute the capital gain by applying provisions of section 50C of the Act after following the procedure laid down in sub-sections (2) and (3) of the said provision. Needless to mention, the Assessing Officer must allow reasonable opportunity of being heard to the assessee before deciding the issue. Accordingly, grounds no. 1 to 5, are allowed for statistical purposes." 7. Despite the matter being remanded for denovo consideration and the ITAT directing the AO to grant reasonable opportunity of being heard before deciding the issue, an assessment order date....
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....me evidence on record to establish its claim that the land sold is in the nature of agricultural land, revenue authorities are duty bound to verify the authenticity of such evidence and if they want to reject petitioner's claim, they must bring contrary material on record to disprove petitioner's claim. As there is nothing on record to indicate that the AO has conducted any enquiry to verify the nature of land sold by petitioner. whether agricultural or otherwise, the AO has failed in his duty to examine the evidence in the proper perspective. 8. Mr. Sharma submitted that because the ITAT has directed the AO to adjudicate denovo, the AO was entitled to disregard the findings of the CIT(A) in its entirety. We do not agree with Mr. Sharma's submission that the AO was being directed to deal with the entire matter on its own merits. The order of the ITAT must be read and understood in the proper context and in law. All that is stated in the order itself. There was considerable force in the submission of Mr. Jain that the order must be read as restricting the scope of the AO only to question the evidence filed by petitioner and nothing more, and to ascertain whether the land would no....
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....he last preceding census of which the relevant figures have been published before the first day of the previous year; **************************************** None of these provisions require that it has to be used for agricultural purpose. Only Section 10(37) and Section 54B of the Act provide for agricultural activity to be carried out and these sections read as under: Section 10(37): In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ******************************************************* ******************************************************* (37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head "Capital gains" arising from the transfer of agricultural land, where- (i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2; (ii) such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual o....
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....********************** (emphasis supplied) It is nobody's case that petitioner's case falls under these two categories. Further, the ITAT has in its order stated "............... It is evident, the Revenue authorities have not conducted any enquiry to verify the nature of land sold by the assessee, whether agricultural or otherwise. In fact, the evidences furnished by the assessee have not at all been examined in proper perspective....................... and restore the issue to the file of the Assessing Officer for de novo adjudication after examining the evidences filed by the assessee and conducting enquiry, if necessary, with the concerned authorities of the Government to find out the true nature and character of the land sold. Only after the Assessing Officer comes to a conclusion on the basis of material brought on record that the lands sold by the assessee are not in the nature of agricultural land, hence, come within the purview of "Capital Asset" as defined u/s 2(14) of the Act, then the question of applicability of section 50C of the Act would arise." Therefore, it is obvious that the matter has been restored to the AO only to examine the evidence fil....