TaxTMI 
TaxTMI 
2026 (9) TMI 224
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....tal gain arising out of sale of office premises situated at Raigad, Maharashtra, instead of short term capital gain as was claimed in return of income. Further, a claim u/s. 10(37) of the Act with reference to receipt of enhanced compensation from the National Highways Authority of India on account of compulsory acquisition of land being an agricultural land. Thereafter, the ld.PCIT u/s. 263 of the Act held the above said assessment order as erroneous and prejudicial to the interest of revenue vide his order dated 26.03.2021 which is at page no.97 of the paper book, wherein he directed the AO to conduct a fresh assessment after proper verification. In pursuance of directions u/s. 263 of the Act by the ld.PCIT, the AO held the gain arising from the sale of office premises as short term capital gain for having not claimed in the return of income and denied claim of exemption u/s. 10(37) of the Act for not producing any documentary evidence to establish that agricultural operations were carried on, for not registering with any mandi for sale of agricultural produce and not being used for agricultural purposes during the two years immediately preceding the transfer, vide its order date....
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....subjected to detailed scrutiny by the Assessing Officer during the assessment proceedings for A.Y. 2015-16 and in the said proceedings the assessee had furnished elaborate submissions vide letter dated 11.10.2017 and drew our attention to pages 64 to 74 of the paper book explaining the nature of the land, the circumstances under which the land was acquired by NHAI, the extent of land acquired, the ownership of the land, and the basis for claiming exemption under section 10(37). Further, the assessee specifically furnished copies of the award proceedings, Chitta, Adangal and drew our attention to Pages 41-43 of paper book, and other revenue records demonstrating that the lands acquired by NHAI were agricultural lands. 5. He, further explains that an extent of 1.97 acres of agricultural land situated in various survey numbers had been compulsorily acquired by NHAI and compensation had been received therefor. He submits that the assessing officer while completing the assessment for the AY:2015-16 did not merely accept the claim of the assessee on the basis of the assessee's submissions but on the contrary did an independent verification and the same is specifically recorded in asse....
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....book which records that the assessee had claimed exemption under section 10(37) in respect of enhanced compensation of Rs. 5.23.29.323/ arising from acquisition of agricultural land. He argued that the Assessing Officer specifically noted that the genuineness of the claim and the agricultural character of the land had already been verified during the scrutiny assessment for A.Y. 2015-16 through departmental enquiry and Inspector verification. He submits that the observation in the impugned order that the assessee failed to establish the land was agricultural in nature or that agricultural operations were carried on for the prescribed period is wholly unsustainable. He concludes by submitting that the compensation received during A.Y.2016-17 constituted merely enhanced compensation arising from the same compulsory acquisition for which the original compensation had already been examined and accepted as exempt and further, once the eligibility of the land and satisfaction of the conditions under section 10(37) had been examined and accepted the original compensation, there was no justification for reopening the very same factual issues while assessing the enhanced compensation. He pr....
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....37 137/3B 536 13.24 137/3A 11 6 137/2 6 137/2 250 6 137/2 2.5 7 137/10 37 137/10B 1458 37 137/10 15 8 137/12 14 137/12B 448 11.03 137/12 5.5 9 137/19 23 137/19B 434 10.72 137/19 9.5 10 137/20 23 137/20 950 23 137/20 9.5 11 136/2B 22 136/2B 850 21.00 136/2B 4.4 10. The ld.DR submits with reference to above details that out of total extent of land in these survey nos., only a small portion is shown as under cultivation as per village record Adangal and the compensation amount of Rs. 4,01,99,790/- (Rs. 5,23,29,323 - Rs. 1,21,29,533) received by the assessee from NHAI in respect of the above survey numbers, not conclusively proved as to whether the land acquired by NHAI in these survey nos. are really under cultivation during the two years before the transfer. Further, she submits that out of the total compensation received of Rs. 5,23,29,323, in respect of amount of Rs. 1,21,29,533, the land acquired by NHAI is not an agricultural land but residential plot. She argued vehemently that in respect of the ....
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.... the AO deputed inspector of his office for verification of genuineness of claim of the assessee whether the land acquired by NHAI is an agricultural land or not? it is noted that the inspector caused an enquiry and reported that the land at issue is an agricultural land which is evident from para no.3 of the said order. Further, the AO raised a doubt whether any transfer by way of registration to the assessee or not?. In response to the said doubt the assessee has furnished an explanation stating that the sellers of the agricultural land in survey nos. 136/2A2, 2B, 136/2C2, 137/1B, 3B, 1Bad, 2, 10B, 10Bad, 12B, 12Bad, 19B and 137/20 handed over to the assessee on 30.05.2014 as per directions of Lok Adalat Thiruvallur. It was further explained that the District Revenue Officer, Thiruvallur, District of NHAI has caused an enquiry and decided that the assessee is rightly owner of above said properties and disbursed the compensation. Having considered the same issue in original assessment order for AY 14-15 with reference to enquiry by inspector of AO's office on the basis of details as furnished by the assessee, we find force in the arguments of ld.AR that the submissions of the ld.D....
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....e as 8.5 cents, 10.5 cents, 10 cents, 11 cents and 9.5 cents respectively. We agree with the reply offered by the Ld AR that when units are properly converted from hectares into cents, the cultivated extents are substantially larger and correspond with the extent of land owned and acquired. We find the correct conversion table furnished by the assessee is reproduced herein below S. No Land owned by assessee Land acquired by NHAI Survey Nos. Extent of land under cultivation as per Extent of land under cultivaton as per Adangal in hectre Adangal in Cents Survey No Extent in cents Survey No Extent in sq.mt. Extent in cents 1 136/2A 28 136/2A2 133 3.29 136/2A .085 21 2 136/2C 23 136/2C2 873 21.57 136/2C .105 25 3 137/1 25 137/1B 133 3.29 137/ .100 24.7 4 137/3 37 137/3B 536 13.24 137/3A .11 27 5 137/2 6 137/2 250 6 137/2 .025 6 6 137/10 37 137/10B 1458 37 137/10 15 37 7 137/....
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....in to tax. The only error was in the classification of the capital gain as Short-Term Capital Gain instead of Long-Term Capital Gain, and the case does not involve a new source of income, a fresh deduction, or an altogether new claim rather it concerns the correct characterization and computation of an already disclosed transaction. The assessee merely brought to the notice of the Assessing Officer that the gain had been inadvertently offered under the wrong head and requested that it be assessed in accordance with law on the basis of the facts already available on record. He vehemently argued that such correction of an inadvertent error cannot be equated with making a fresh claim so as to attract the ratio of Goetze (India) Ltd (supra). 19. He submits that it is now well settled that the appellate authorities, including the Commissioner (Appeals) and the Income Tax Appellate Tribunal, possess wide powers to entertain and adjudicate a legal claim even if the same was not made through a revised return. He referred to the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT and argued that the Tribunal has jurisdiction to examine a questi....
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....ed, then only the assessee became the owner and the resultant Capital Gain is only Short Term Capital Gain and prayed to dismiss the ground nos. 7 to 9 raised by the assessee. 23. In reply, ld.AR. Shri Anand, submits that the capital gain arising from the transfer of the office premises at Raigad constitutes Short-Term Capital Gain solely because the registered conveyance deed was executed on 13.02.2015 is legally unsustainable and proceeds on an erroneous understanding, argued that for the purposes of determining the period of holding under the Income-tax Act, what is relevant is the date on which the assessee acquired rights in the property and not merely the date on which the formal conveyance deed came to be executed. He submits that the assessee had acquired valuable and enforceable rights in the office premises as early as on 01.07.1995 pursuant to the Memorandum of Understanding entered into with the developer and prayed to allow ground no's 7 to 9 raised by the assessee. 24. Heard both the parties and perused the material available on record. We find the Assessing Officer who completed the original assessment under section 143(3) of the Act at page 94 to 96, we note t....
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.... the original assessment proceedings, the assessee furnished complete details relating to the acquisition of the office premises bearing Nos. D-105 and D-106 situated in Nandavan Complex, C & D Wings CHS Limited, Raigad, Panvel Taluk and District, Maharashtra and assessee explained and we find that a) The said premises had been booked and purchased in the year 1995 from M/s. Parjat Developers for a total consideration of Rs. 4.49,600/-. b) The Assessing Officer examined the details relating to the payment of sale consideration and specifically recorded that the consideration had been paid by the assessee on 01.07.1995 through cheque No.014056. c) The assessee further established that possession of the premises had been obtained after the issuance of the completion certificate by the competent authority during the period 1996-97. d) The assessee had also furnished several documents evidencing continuous possession and enjoyment of the property over a prolonged period, including copies of electricity bill payments, municipal tax receipts issued by the Panvel Municipal Council for various years commencing from 2004-05 up to 2013-14, and share certif....