Vinita Agarwal , Jaipur vs Department Of Income Tax

Vinita Agarwal , Jaipur vs Department Of Income Tax on 9 January, 2015 vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM vk;dj vihy la-@ITA No. 660/JP/2012 fu/kZkj.k o"kZ@Assessment Year : 2009-10 The A.C.I.T. cuke Smt. Vinita Agarwal, Circle-6, Jaipur. Vs. Plot No. 18, Bharat Mata Path, Jamnalal Bajaj Marg, C-Scheme,Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEZPA 6541 D vihykFkhZ@Appellant izR;FkhZ@Respondent izR;k{ksi.k@C.O. No. 57/JP/2012 (Arising out of vk;dj vihy la-@ITA No. 660/JP/2012) Smt. Vinita Agarwal, cuke The D.C.I.T. Plot No. 18, Bharat Mata Vs. Circle-6, Jaipur. Path, Jamnalal Bajaj Marg, C-Scheme, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEZPA 6541 D izR;k{ksid@Objector izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by : Mrs. Neena Jeph (JCIT). fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar (Advocate). lquokbZ dh rkjh[k@ Date of Hearing : 17/11/2014 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 09 /01/2015 2 ITA 660/JP/2012 & C.O.

57/JP/2012_ ACIT Vs Smt. Vinita Agarwal vkns'k@ ORDER PER: T.R. MEENA, A.M. The appeal by revenue and cross objection by assessee arise from the order dated 12/04/2012 of Ld. CIT (A)-II, Jaipur. Respective grounds of appeal as well as C.O. are as under:- Grounds in Revenue Appeal. "On the facts and in the circumstances of the case, the Learned CIT(A) has erred in:- (i) holding that the date of transfer of immovable property in the case of compulsory acquisition will be the date when final award was given to the assessee and not the date when the assessee extinguished her rights in the property by accepting terms of acquisition and made unconditional surrender of her rights in the land in pursuance of notification for acquisition of land. (ii) holding that in the matter of compulsory acquisition, capital gain process starts with notification for acquisition and culminates with grant of final award, which is contrary to the legal interpretation that capital gain/loss within the meaning of Sec. 2(47) of the Act, arises on the date of transfer of asset and it does not extend to the whole of the financial year like other heads of income.

(iii) allowing the benefit of exemption U/s 10(37) of the Act, despite the fact that assessee incurred no expenditure on agricultural operation and it was not possible to carry out agricultural operation without any expenditure. (iv) directing to apply Fair Market Value for the computation of capital gain instead of Reserve Price Declared by the JDA, ignoring the fact that on acquisition of land, many privileges and amenities 3 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal associated with the land are taken away in the process and therefore, 'Reserve Price' is fixed at more amount than 'Fair Market Value' to compensate the same. (v) allowing the benefit of exemption U/s 10(37) of the Act, which was not claimed by the assessee in her return of income." Grounds in Cross Objection "1. Under the facts and circumstances of the case, the learned CIT(A) has erred in dismissing the forth ground of the assessee that the learned Assessing Officer has erred in considering short term capital gain on the acquisition of land on the ground that the same was not pressed by the assessee whereas the fact is that the ground was not pressed because no capital gains were taxable in the case U/s 10(37) of Income Tax Act, 1961 .

2. Under the facts and circumstances of the case, the learned CIT(A) has erred in not accepting and deciding the fifth ground of the assessee that the learned Assessing Officer erred in determining short term capital gain at Rs. 3,00,35,000/- on the acquisition of the land notwithstanding the fact that the learned CIT(A) has given decision that no capital gains are taxable in the case of the assessee being exempt U/s 10(37) of the Income Tax Act, 1961 ." 2. All the grounds of revenue's appeal are revolving around capital gain determined by the Assessing Officer, which was deleted by the learned CIT(A). The learned Assessing Officer observed that the assessee had declared income from house property and long term capital gain and income from other sources, which is reproduced as under:- 4 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal a. Income from house property Rs. 27,128/- b. Income from capital gain Rs. 29,42,209/- i. Long term capital gain on sale of residential house on 06/10/2008 (1) Sale consideration Rs. 11,25,000/- Less-Transfer Expenses Rs. 30,488/- Rs. 10,94,512/- Less: Index purchase cost For F.Y.

2005-06 109300/497 x 582= Rs. 1,27,993/- Long term capital gain Rs. 966519/- (2) ii. Sale of commercial land on 26/12/2008 Sale consideration Rs. 22,00,000/- Less: Transfer Expenses Rs. 19,512/- Rs. 21,80,488/- Less: Index Purchase Cost For F.Y. 2005-06 174888/497 x 582= Rs. 2,04,798/- Long term capital gain Rs. 19,75,690/- C. Income from other sources Rs. 48,641/- Gross total Income Rs. 30,17,978/- The learned Assessing Officer gave reasonable opportunity of being heard on verification of the long terms capital gain, which was replied by the assessee vide various letters. The reply of the assessee of paragraph Nos. 4 to 9 is reproduced as under:- "4. That during the year under consideration the assessee has sold first property to M/s Agarwal Multitrade Pvt. Ltd. on 24/12/2008 for Rs. 44,00,000/- out of which the assessee 5 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal share was 50% and she received Rs. 22,00,000/- copy of sale deed is enclosed herewith. (Page No. 3 to 8) 5. The other property sold during the year was to Smt. Kalpana Jain, Smt. Mala Gupta and Smt. Nirmala Gupta for Rs. 22,50,000/- out of which the assessee's share was 50% and she received Rs. 11,25,000/- from his property.

Copy of sale deed is enclosed herewith. (Page No. 9 to 15) 6. For sale of above properties the assessee has paid brokerage to M/s Gendi Real Estate Pvt. Ltd., Jaipur Rs. 50,000/- which was a proportion between both the properties in the ratio of area sold. The area sold was 625 sq.mt. Residential area for Rs. 11,25,000/- and commercial area 400 sq.mt. for Rs. 22,00,000/-. Copy of receipt of brokerage payment is enclosed herewith (Page No. 16). 7. The above both properties sold by the assessee were purchased in financial year 2005-06 alongwith Smt. Pushpa Sharma. The assessee was 50% co-owner of this property. This property was purchased for Rs. 42,00,000/- and Rs. 2,56,000/- was incurred on stamp duty and other misc. expenses. The assessee's contribution was Rs. 22,28,000/- for purchase of this property for 50% share. Copy of purchase deed is enclosed herewith. (Page No. 17 to 23 8. The above property purchased by the assessee on 16/05/2005 was acquired by Jaipur Development Authority for special Economic Zone and in consideration of that the assessee was allotted 15680 sq.mt. residential and 3920 sq.mt. commercial land.

The assessee's share @ 50% was 7840 sq.mt. residential and 1960 sq.mt. commercial land. 6 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal So for total cost of Rs. 22,28,000/- the assessee has allotted 7840 sq.mt. residential land and 1960 sq.mt. commercial land. The details of allotted plots are mentioned in the sale deed in page No. 9 to 15. The letter of allotment from JDA will be submitted at the time of next hearing. 9. The assessee has calculated the cost of property sold by giving weightage in the ratio 100 for residential property and 250 for commercial property. Basis taken on average estimated sale price. The calculation of capital gain was made as under:- Total cost of property Rs. 22,25,000/- Commercial Area allotted 1960 sq.mt. X 250 (Weight average)= 49000 Residential Area allotted 7840 sq.mt X 100 (Weight average)= 78400 Total (Weight average area) = 127400 Weight average price per meter = Rs. 22,28,000 - 1,27,400 sq.mts. = Rs. 17.488 per mtr. Cost of residential 7840 sq. mtr. = 7840 x 100 X 17.488 = 13,71,050/- Cost of commercial 1960 sq. mtr. = 1960 x 250 X 17.888 = 8,56,950/- Therefore, the cost of residential land was Rs. 174.88 per mtr and cost of commercial area was Rs. 437.22 per mtr.

So the purchase cost of commercial land was taken at 437.22 X 400 sq.mtr = 174888/- and residential area was taken at 174.88 X 625 sq. mtr.= 109300/-. The learned A.R. for the assessee before the Assessing Officer had again submitted reply vide letter dated 11/11/2011, which is reproduced as under:- 7 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal "The property in question on which the assessee has declared capital gain income was purchased by the assessee on 21/4/2005, the copy of purchase deed is enclosed herewith. Which was converted in residential and commercial plot by JDA by lottery on 21/08/2008 and 22/05/2008. The assessee has sold converted plots in the same financial year just after taking the possession and allotment of the said land (within the period of 4- 5 months). So the assessee has calculated the capital gain on sold property only on prevailing rate by making basis of sale prices of the property hence, no capital gain tax is payable on sale." On 30/11/2011, the learned AR again appeared before the Assessing Officer and submitted his explanation, which is also reproduced as under:- "that the property in question on which the assessee has declared capital gain income was reproduced by the assessee on 21/04/2005, the copy of purchase deed was submitted.

This land was agricultural land and the assessee has used this land for agriculture purposes in F.Y. 2005-06, 2006-07 and 2007-08. The JDA has acquired this land under section 44 of JDA Act, 1982 (a law created by Rajasthan Govt.) and in consideration thereof the assessee was allotted commercial land and residential plots by lottery dated 21/08/2008 and 22/05/2008. So the new assets in the form of commercial plots and residential plots came into the existence and the date of allotment was in case of commercial plots was 22/05/2008 and some plots in 03/10/2008 on which the assessee has declared capital gain income and paid capital gain 8 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal taxes by assuming the value of old assets (agriculture land) as acquisition cost of property sold. In this regard our humble submission is that we have wrongly taken the cost of acquisition of old assets whereas the cost of acquisition of the assets sold should be taken in the fair market value on the date of allotment by the JDA which is 22/05/2008 in case of commercial plots and 21/08/2008 in case of residential plots and short term capital gain should be computed on sales price and there is no change in fair market value and sale price as the assessee has sold the property immediately after allotment from JDA.

Therefore, the assessee has not earned any capital gain income. But we have paid long term capital gain by assuming the cost of acquisition of old capital assets for the assets sold which was received in consideration of old assets and the capital gain income on which is exempt U/s 10(37) of the Income Tax Act, 1961 ." As per assessee's submission, the land was agricultural land and was purchased on 21/04/2005, which was acquired by the JDA and in lieu of it, residential and commercial plots were allotted on 22/05/2008, thus period of holding was more than three years. It is further submitted that during this period, the assessee was carrying agricultural operation, hence no capital gain could arise as per provisions of Section 10(37) of the Income Tax Act, 1961 (in short the Act). Part of the allotted property (residential and commercial) was sold on 24/12/2008 and 9 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal 03/10/2008. Thus, no tax liability would arise in the case of the assessee. The details submitted by the AR before the Assessing Officer, he concluded that the assessee purchased the property on 21/4/2005 vide notification dated 27/10/2005, the property was acquired by the JDA, in lieu of the acquisition of land, reservation letter was issued on 3/11/2006 to the assessee for the allotment of certain area of residential and commercial plots and by lottery dated 21/7/2008 ascertained the residential and commercial plot in village Khatwada, Tehsil Sanganer, district-Jaipur was allotted to the assessee.

The learned Assessing Officer gathered information U/s 133(6) from the JDA, the facts were emerged that the assessee Smt. Vinita Agarwal wife of Shri Umesh Agarwal and Smt. Pushpa Sharma wife of Shri Vinod Sharma purchased the agricultural land located in village Khatwara, Tehsil Sanganer, distt. Jaipur bearing khasara No. 410 area 3.72 hectare, khasara No. 433 area 0.04 hectare, khasara No. 434 area 0.91 hectare and khasara No. 436 area 1.73 hectare. Land Barani-1st bearing Khasara No. 437 area 0.22 hectare, 432/2873 area 0.12 hectare and khasara No. 432, 436/2871, 433/2872 in total 7.84 hectare land was purchased for Rs. 42 lacs and registration cost Rs. 2,55,200/-. 2.1 The JDA vide vide notification No. P.6(29)Navi/3/2004 dated 27/10/2005 signed by the Principal Secretary of the State was issued 10 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal for acquisition of land and in lieu of surrender without any consideration, compensation would be issued to the extent of 20% of residential and 5% commercial land. On 30/5/2006, the joint owner of this land i.e. Smt. Pushpa Sharma and assessee Vinita Agarwal surrendered the land before the Land Acquisition Officer.

The content of the letter is reproduced as under:- lsok es]a Jheku~ Hkwfe vokfIr vf/kdkjh] uxj fodkl ;kstuk,s]a t;iqjA ¼dejk ua- ,u&204] r`rh; eafty½ t;iqj fodkl izkf/kdj.k Hkou t;iqjA fo"k;%& Lis'ky bdksukWfed tksu ¼lst½ gsrq xzke dyokMk] rglhy lkaxkusj] ftyk&tiqj gsrq vokIr Hkwfe [kljk uacj 410] 433] 434]436]437]432@2873 dqy fdrk 6 dqy jdck 6-74 gsDVs;j lai.w kZ Hkwfe dks fu'kqYd lefiZr djus ds cnys fodflr Hkw[k.M ds vkoaVu i= tkjh djus ckcrA egksn;] mijksDr fo"k;kUrxZr izkFkhZ] }kjk viuh Hkwfe dks fu'kqYd lefiZr djus ds lac/a k esa bdjkjukek@?kks"k.kk&i=] 'kiFk&i=] {kfriwfrZ vuqc/a k i= o tekcanh uohure dh izfr i= ds lkFk izLrqr dj fuosnu gS fd mijksDr vokIr Hkwfe ds cnys jkT; ljdkj dh ifji= o t;iqj fodkl izkf/kdj.k ds fu.kZ; vuqlkj 25 izfr'kr ¼20 izfr'kr vkoklh; o 5 izfr'kr O;kolkf;d½ fodflr Hkw[k.M ds vkoaVu i= izkFkhZx.k ds uke ls tkjh djus dk Je djsa A izkFkhZ] iq"ik 'kekZ fofurk vxzoky layXu 1- bdjkjukek@?kks"k.kk i= 2- 'kiFk i= 3- {kfriwfrZ vuqc/a k i= 4 tekcanh dh uhoure izfr 5 igpku lacfa /kr nLrkost e; QksVks] igpku i=@MªkbZfoax ykbZlsal@jk'ku dkMZ dh izfr 11 ITA 660/JP/2012 & C.O.

57/JP/2012_ ACIT Vs Smt. Vinita Agarwal On 02/11/2006, the Amin of JDA office had reported as under:- dk;kZy; fVIi.kh t;iqj fodkl izkf/kdj.k fo"k;&Lis'ky bdksuksfed tksu esa vokIr Hkwfe lefiZr dh ,sot esa vkj{k.k i= nsus ckcr~ A 1- Hkwfe vokfIr vf/kdkjh ds Øekad Mh&257 fnukad 23-5-2006 ls izkIr i=koyh esa [kkrsnkju iq"ik 'kekZ iRuh fouksn 'kekZ o fofurk vxzoky iruh mes'k vxzoky ds }kjk Lis'ky bdksuksfed tksu gsrq xzke dyokM rglhy lkaxkusj tksu&11 dh vokIrk/khu Hkwfe [kljk ua- 410]433]434]436]437]432@2873 dqy fdrk 6 dqy jdck 6-74 gsDVs;j lai.w kZ ds ckcr eqvkots :I;s esa 20 izfr'kr vkoklh; o 5 izfr'kr O;kolkf;d Hkw[kaM ysus gsrq izkFkZuk i= e; okafNr leiZ.k nLrkostkr vkt fnukad 25-5-06 dks is'k fd;s A 2- Hkwfe vokfIr vf/kdkjh ls izkIr i=koyh esa rglhynkj dh fjiksVZ vuqlkj lefiZr Hkwfe ds cnys 20 izfr'kr vkoklh; {ks= ij 13480 oxZ ehVj o ikap izfr'kr O;kolkf;d {ks=Qy 3370 oxZehVj gksrk gSa A 3- vuq- 1@,u o 2@,u ds vuqlkj nLrkostksa dh tkap dh x;h ,oa mDr rF; lgh ik;s x;s A gLrk----- vehu ¼fnukad 2-11-2006½ Rglhynkj fMLiSp fyfid vkj{k.k i= fMLisp Øekad 91 fnukad 3-11-2006 ls tkjh fd;k x;k A vr% i=koyh vko';d dk;Zokgh gsrq Hkwfe vokfIr vf/kdkjh dks fHktok;s tkus gsrq vkns'kkFkZ izLrqr gSa A mik;qDr tksu ¼fnukad 3-11-2006½ On 03/11/2006, reservation letter issued in furtherance of allotment letter to be issued in pursuance to notification order No. P.6(29)Navi/3/2004 dated 27/10/2005.

According to reservation letter, the assessee was allotted 20% residential and 5% commercial land as 12 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal compensation of surrender of land without any consideration following the above notification of acquisition by the JDA. On 30/12/2006 subsequent to the issue of reservation letter, according to section 4(1) of notification/Circular No. P.6(29)Navi/3/2006 dated 30/12/2006, it was notified that now legally the sellers were prevented from making any legal dispute about the sale of the land. On 21/08/2008 vide lottery specific residential plot No. 15680 sq.mt. and commercial plot of 3920 sq.mt. was allotted at village Khatgwada, Tehsil Sanganer, district- Jaipur jointly to the assessee and her co-owner. On 03/10/2008 residential plot No. 624 area 1250 sq.mt in special economic scheme village Khatwada was jointly sold by the assessee and co-owner for Rs. 22,50,000/-. On 24/12/2008 the assessee and co-owner sold commercial plot No. 169 of area 800 sq.mt for Rs. 44 lacs. It has been observed by the Assessing Officer that the assessee had surrendered her right in the property on 30/5/2006 that too, without any consideration in pursuance of notification of acquisition dated 27/10/2005.

It means that for all practical purposes the assessee had surrendered/relinquished/extinguished her rights in the property purchased on 21/4/2005 (which had been acquired by the JDA by the notification dated 27/10/2005). The intention of the assessee about relinquishment and extinguishment of her rights in the property in 13 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal exchange of 20% residential and 5% commercial land was very much obvious from her surrender letter dated 30/5/2006. The reservation letter was issued on 3/11/2006 by the JDA and by notification dated 30/12/2006, the assessee's right in property were restricted from making any legal dispute about sale of the land. According to the Assessing Officer, the transfer was completed on 30/5/2006. The learned Assessing Officer further held that the assessee received the compensation for acquisition of land through lottery on 21/8/2008 as per Section 45(5)(a) of the Act, the consideration received on transfer of a capital assets on transfer by way of compulsory acquisition under any law shall be chargeable as income under the head capital gain of the previous year in which such compensation or part thereof or such consideration or part thereof was first received.

For the special economic zone, the JDA has acquired the land of village Jhai, Khatwada, Bagru Khurd, Paldi, Bhabhoria etc. and reserve rate fixed for the residential plot was Rs. 2800/- per sq.mt. and Rs. 5600/- per sq.mt. for the commercial plots. Thus, the compensation/consideration received on compulsory acquisition of the land of the assessee by the JDA and short term capital gain was worked out by the Assessing Officer as under:- 14 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal A. Cost of acquisition Rs. 44,56,000/- ½ Share of the assessee Rs. 22,28,000/- Sale Consideration Value of compensation- Residential area 7840 sq.mt.X2800 (reserve rate) = Rs. 2,19,52,000/- Commercial Area 1960 sq.mt. x 5600 (reserve rate) = Rs. 1,09,76,000/- Total amount of compensation Rs. 3,29,28,000/- Short term capital gain Rs. 3,07,00,000/- B. During the relevant previous year, the assessee and her co-owner sold 1250 sq.mt. of residential plot No. 624 for Rs. 22,50,000/- on 03/10/2008 and 800 sq.mt. of commercial plot No. 169 on 24/12/2008 for Rs. 44,00,000/-. Thus, the total share of the assessee becomes Rs. 33,25,000/- (1125000 + 2200000).

Short term capital gain/loss on the sale of the above plot is worked out as under:- Total sale consideration Rs. 33,25,000/- Cost of acquisition Of residential plot of 625 sq.mt. x 2800 = Rs. 17,50,000/- Of commercial plot of 400 sq.mt. x 5600 = Rs. 22,40,000/- Total cost of acquisition Rs. 39,90,000/- Short term capital loss Rs. 6,65,000/- Net Short term capital gain On acquisition of land by JDA Rs. 3,07,00,000/- Loss on sale of plots Rs. 6,65,000/- Rs. 3,00,35,000/- The learned Assessing Officer also found that the reserve rate applied for compensation for computation of capital gain was more that the DLC rate, therefore, on subsequent sale, there was loss. The assessee had not claimed any exemption U/s 10(37) of the Act. In case of the assessee, the property had been transferred in terms of Section 2(47) of the Act, on 30/05/2006 after that date, her rights had extinguished and the property had been treated as transferred. Had the assessee been in the possession of land that was illegal possession or 15 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal encroachment or trespass because she had no right over the property?

Thus, she does not fulfill the condition of carrying agricultural operations for two years preceding the date of transfer of the land by way of compulsory acquisition by the JDA. The assessee had also not submitted any evidence regarding expenditure incurred in carrying out the agricultural operations on the impugned land. The assessee has submitted before the Assessing Officer a Girdawari according to which the assessee was in possession of that land till 21/8/2008 but these facts were also not found correct by the Assessing Officer on the basis of JDA record on 03/01/2008 vide court order dated 29/12/2007. Thus, the Girdawari submitted by the assessee was totally false and carried no evidentiary value. Accordingly, she was not entitled for claim of exemption U/s 10(37) of the Act. Further the Hon'ble Supreme Court has held in case of Goetze (India) Ltd. Vs. Commissioner of Income Tax 284 ITR 323 (SC), A.O. cannot entertain claim of deduction otherwise than by filing a revised return. The assessee had not made claim u/s 10(37) in her return of income therefore, it cannot be allowed mere on the basis of reply made by the assessee.

The Assessing Officer finally assessed short term capital gain at Rs. 3,00,35,000/-. 3. Being aggrieved by the order of the Assessing Officer, assessee carried the matter before the learned CIT(A), who had allowed the 16 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal appeal in favour of the assessee by observing that basically issue pertained to the completion of the acquisition proceedings. The notification was issued on 27/10/2005 to acquire the land by the JDA for development of SEZ. However, this notification was not an order of acquisition. The Assessing Officer was of the opinion that the appellant had surrendered her rights in the said land vide letter dated 30/05/2006 to the Land Acquisition Officer. However, he found that it was a simply an unconditional offer for surrender of land and in absence of clear title or defects in the title of the property, this offer was liable to be rejected by the State Government. Many a times, the land requisitioned U/s 3 is not acquired by the State Govt. and it is released from acquisition and the possession is also returned to the owner.

The requisition of the land is not a transfer because the ownership remains with the owner. The Assessing Officer was of the opinion that the transfer was complete when all the rights in the said land had been relinquished. Further reservation letter had been issued to the assessee on 3/11/2006 (within 11 months from the date of notification). However, he found that in the present case, the process of acquisition was completed on 29/12/2007 through court order No. 643 dated 29/12/2007 and mutation was made on 3/10/2008. The appellant was awarded 15680 sq.mt. of residential plot and 3920 sq.mt of commercial plot at village Khatwada, Tehsil 17 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal Sanganer on 21/8/2008. Accordingly, he treated transfer of land was completed on 29/12/2007 and not on 30/05/2006 as alleged by the Assessing Officer. Though, the Assessing Officer has alleged that the appellant was disposed from the land w.e.f. 30/5/2006. However, there is no evidence to this effect brought on record by the Assessing Officer. Since the order of the court for acquisition of land was passed on 29/12/2007, the appellant continued to be in the possession of land for all practical purposes.

The reservation letter dated 3/11/2006 was only a part of the entire process of acquisition and it nowhere indicated that the land was taken into possession by the JDA on 3/11/2006. This letter enumerated only the terms and conditions for acquisition of land and the appellant remained in the possession of land till 29/12/2007. On perusal of the documents filed by the appellant, it was noticed by the learned CIT(A) that the LAO had passed an award U/s 12(1) on 22/06/2007 in consequence of notification dated 27/10/2005 and letter dated 23/12/2006, which was forwarded to the State Govt. for approval. The same was approved by the State Govt. on 2/07/2007 and the notice U/s 12(2) was issued to the various owners. It was further mentioned by the assessee before the learned CIT(A) that due to non- availability of land as proposed by the JDA, the area acquired was one step down. The land was finally transferred in the name of JDA. Thus, 18 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal going by the date of award (02/07/2007) or transfer of land in the name of JDA by 29/12/2007, the acquisition proceedings stood completed on 02/7/2007 or 29/12/2007 whereas date of purchase of land was 21/4/2005.

Therefore, the learned CIT(A) found that the appellant had satisfied the conditions as laid down in Section 10(37) of the Act. He relied on the following case laws:- (i) For A.Y. 1972-73, CIT Vs. Purshottambhai Maganbhai Hatheesing (HUF ) (156 ITR 150), for accessibility of capital gain and transfer was affected when possession was taken over pursuant to an award under the provisions of Land Acquisition Act . (ii) For A.Y. 1982-83, CIT Vs. Smt. Sheggy Abdulla (243 ITR 792), for accessibility of capital gain in assessment year and made award by the Collector and took the possession of land. (iii) For A.Y. 1970-71, Appala Narsamma Vs. CIT (168 ITR 17), for acceptability of capital gain. (iv) For A.Y. 1978-79, CIT Vs. Pandari Laxmiah (223 ITR 671), for vesting of land took place on the date of award. (v) For A.Y. 1971-72, CIT Vs. Cachar Native Joint Stock Co. Ltd. (223 ITR 754), for determination of compensation amount, the question of determination of capital gain did not arise. 19 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal (vi) For, A.Y. 1974-75, CIT Vs. Subodh Kumar Jain (221 ITR 802) for computation of capital gain and awarding of compensation and taking possession of land by the Sanchalak.

The learned CIT(A) further held that the assessee filed the copy of khasra Girdawari for agricultural operation to show that the crops of Chola and Bazra were grown in the said land as per Revenue record. It was argued by the assessee before him that other co-owner namely Smt. Pushpa Sharma was mainly handling the agricultural operations on the land jointly owned. The assessee also submitted that mere inclusion of lands in industrial zone without any infrastructure development did not and could not convert the agricultural lands into non-agricultural lands. He relied upon the Hon'ble ITAT Pune Bench's decision in the case of Haresh V Milani Vs. JCIT (111 TTJ 310) and held that merely the land in question was brought in industrial zone, could not be a determining factor by itself to say that the land was converted into use for non-agricultural purposes. He further held that extracts of 7/12 indicated that these lands were subjected to land revenue. The assessee has submitted extracts of records maintained by the land revenue authority wherein the land was classified as agricultural land and the nature of the crop and the persons, who cultivated the land at the relevant point of time.

When the lands were sold by the assessee 20 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal were duly mentioned and nothing was brought on record to show that the land was put in use for non-agricultural purposes by the assessee. The nature of crop produced was mentioned rice and jawar. It was also equally true that the assessee had not given any evidence of incurring any expenditure on agricultural operations carried out on the said land. No direct evidence had been produced by the assessee to show and establish that the agricultural produce in the nature of rice, jawar and animal feed grass were produced from the said land. On the other hand, no evidence had also been produced by the revenue to show and establish that the land was used for some other purposes other than agricultural purposes. It was nobody's case that the assessee had used the land for non-agricultural purposes before selling the same. The evidence in the form of extracts clearly showed that agricultural operations were carried out on the land in question. Merely because the assessee had not given any direct evidence of sale of agricultural produces, which were stated to have been consumed by the assessee for own purposes, was not sufficient to say that the land in question was not agricultural land when it was, therefore, he treated any capital gain arise from sale of agricultural land was exempted from tax.

Accordingly, the addition was deleted. He further relied upon the decision passed by the Hon'ble Delhi ITAT in the case of Lavleen 21 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal Singhal Vs. DCIT (111 TTJ 326). He further decided the assessee's claim made before the learned CIT(A) U/s 10(37) of the Act by considering the various case laws, which has also been challenged by the revenue in ground No. (v) and decided in favour of the assessee. Further, he also held that it is the agricultural land and is not a capital assets as per provisions of Section 2(14) of the Act. Further calculation of the capital gain of residential plot and commercial plot allotted to the assessee on the basis of reserve rate on the basis of land acquisition at village Jhai, Khatwada, Bagru, Khurd, Palri and Bhambhoria whereas the assessee's land was situated in village Kalwad, Tehsil- Sanganer, therefore, it has been held that the Assessing Officer was not justified in adopting the reserved price of other villages to case of assessee. Therefore, he accepted the consideration shown by the assessee as on selling of the part of both lands i.e. residential and commercial plots.

Therefore, he also deleted the addition, which was difference between the price calculated by the Assessing Officer and on which part land has been sold by the assessee. 4. Now the Revenue is in appeal as well the assessee is in C.O. before us. The learned Sr. D.R. supported the order of the Assessing Officer and argued that the learned CIT(A) has not applied the correct law in deciding the issue before him. As per Section 2(47) of the Act, 22 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal the definition of transfer has been amended w.e.f. 1/4/1988. As per this definition, the assessee has released/relinquished immovable property to the JDA on 30/5/2006. The assessee acquired agricultural land on 21/4/2005, the assessee did not carry out any agricultural activity as no evidence has been submitted before the Assessing Officer, even two years as prescribed U/s 10(37) of the Act has not been completed. Whatever the case laws relied upon by the learned CIT(A) are relevant to old law and has not considered the definition of transfer which came in the effect from 01/4/1985.

She particularly drawn our attention on definition of transfer i.e. exchange, relinquishment, extinguishment of any right, which has been perfectly analysed by the learned Assessing Officer to decide the case. Therefore, she prayed to confirm the order of the learned Assessing Officer. 5. At the outset, the learned A.R. for the assessee supported the order of the learned CIT(A) and reiterated the arguments made before the learned CIT(A) under the heads claim wrongly not allowed by the learned Assessing Officer, claim of exemption U/s 10(37) of the Act, date of transfer of land, possession of land, evidence of expenses regarding agricultural activities and legal position on this issue. He further argued that the condition of Section 10(37) of the Act has been fully met by the assessee as the land acquisition proceedings reached 23 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal its finality only on 29/12/2007. The assessee was not in complete possession of agricultural land from the date of purchase i.e. 15/5/2005 to 29/12/2007 and during this period, the assessee carried out agricultural operation for which Khasra Girdawari furnished from the concerned Patwari.

The assessee had carried out agricultural operation for a period of two years immediately before the date of acquisition i.e. 29/12/2007. He further argued that for calculation of compensation, the learned Assessing Officer has taken the reserve rate of JDA instead of fiar market value, which is very lower. Even reserve rate applied by the learned Assessing Officer of Jhai, Khatwada villages, whereas the assessee's land was situated in Kalwad, Tehsil- Sanganer, as per his calculation, this amount should not be more than Rs. 2,48,92,000/- and short term capital gain would work out to Rs. 2,26,64,000/-. The learned CIT(A) is empowered by law to entertain the deduction U/s 10(37) of the Act even which has not been claimed through the revised return. Therefore, he prayed to confirm the order of the learned CIT(A). The learned A.R. has not pressed the cross objection filed by the appellant. 6. We have heard the rival contentions of both the parties and perused the material on record. It is fact that the assessee purchased agricultural land on 15/5/2005, which was acquired by the JDA in 24 ITA 660/JP/2012 & C.O.

57/JP/2012_ ACIT Vs Smt. Vinita Agarwal pursuant to notification dated 25/10/2005. In lieu of the acquisition of land, reservation letter was issued on 3/11/2006 to the assessee for the allotment of certain area of residential and commercial plots. Vide letter dated 30/5/2006 both the co-owners had surrendered the agricultural land before the Land Acquisition Officer and requested to allot 25% of land acquired (20% residential and 5% commercial) developed plot as per JDA rule. The Amin on 2/11/2006 on ordersheet recommended compensation to the Tehsildar. On 3/11/2006, reservation letter was issued in pursuant to notification order dated 27/10/2005 and the assessee was allotted 20% residential and 5% commercial land in compensation of surrender of land. Both the co-owners were prevented from making any legal dispute about the sale of land, which was mentioned in the sale deed of the assessee dated 24/12/2008. On 21/8/2008, the specific residential plot of 15680 sq.mts. and commercial plots 3920 sq.mts. were allotted at village Khatwada, Tehsil- Sanganer, jointly to the assessee and her co-owner.

Residential plot No. 624 area 1250 sq.mts. was sold on 3/10/2008 and commercial plot No. 169 of area 800 sq. mts. Was sold on 24/12/2008. As per Section 2(47) of the Act has been inserted under the law w.e.f. 01/4/1985, which is reproduced as under:- 25 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal "2(47) [transfer, in to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment;][or] [(iva) the maturity or redemption of a zero coupon bond; or] [(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property.

[Explanation 1] For the purposes of sub-clause (v) and (vi), "Immovable property" shall have the same meaning as in clause (d) of section 269UA .] [Explanation 2.- For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting within an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that 26 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal such transfer of rights has been characterized as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India;]" It is a fact that the assessee has relinquished her right in the land by letter dated 30/05/2006 to the JDA. The learned CIT(A) has not considered Section 2(47) wherein other mode of transfer has been prescribed under the Income Tax law. According to it, the exchange/relinquishment of assets or the extinguishment of any right therein has been provided a mode of transfer.

The learned CIT(A) has applied general law, even case law referred by him was relevant to old law or pertained to earlier amendment made U/s 2(47) of the Act, which are squarely not applicable on the case of assessee. The transfer is complete even the assessee relinquished her rights in the land. The case law applied by the learned CIT(A) on the assessee's case were on assessability of compensation in the year. Here the moot question was to decide when transfer got completed, the compensation is to be assessed in the year in which it has been received. For determining whether the assessee was using the agricultural land for agriculture purposes during the period of two years immediately preceding the date of transfer, the date of transfer is material effect. When the assessee relinquished their rights in land on 30/5/2006, the assessee has not 27 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal completed two years and has not used the agricultural land for agriculture purposes. It is a fact that the compulsory acquisition proceedings were completed on 29/12/2007 and when award was passed by the Land Acquisition Officer U/s 12(2) of the Act.

The assessee was allotted residential and commercial plot on 21/8/2008 at village Khatwada, Tehsil- Sanganer, district- Jaipur. The assessee received the compensation on 21/8/2008. The learned Assessing Officer has adopted the reserve rate fixed for residential plot @ 2800 per sq. mt and Rs. 5600 per sq.mt for commercial plot on the basis of reserve rate fixed by the JDA for villages Jhai, Khatwada, Bagru, Khurd, Palri and Bhambhoria. The residential and commercial plots allotted to the appellant in the area of Khatwara. Therefore, the Assessing Officer concluded short term capital gain on the basis of reserve rate is justified. The learned CIT(A) was not justified by holding that agricultural land was not a capital asset on the basis of certificate issued by the Tehsildar, Tehsil- Sanganer, that land was situated in village Khatwada, which was beyond 8 K.M. from the municipal limit. Hence, the agricultural land in question was not a capital asset as per provision of Section 2(14) of the Act. The appellant has not challenged this issue before the Assessing Officer as no where the learned Assessing Officer 28 ITA 660/JP/2012 & C.O.

57/JP/2012_ ACIT Vs Smt. Vinita Agarwal had given the findings in assessment order. On verification of form No. 35, the assessee raised following grounds:- "1. Under the facts and circumstances of the case the learned Assessing Officer has erred in not allowing the claim of exemption U/s 10(37) of the Income Tax Act, 1961 on compulsory acquisition of land by the JDA. 2. Under the facts and circumstances of the case the learned Assessing Officer has further erred in taking the date of transfer of land as 23/05/2006 instead of 21/08/2008 and 03/10/2008 when the land was allotted in the name of assessee in consideration of acquired land as per provisions of Section 45(5) of the Income Tax Act, 1961. 3. Under the facts and circumstances of the case the learned Assessing Officer has further erred in taking the value of compensation at Rs. 3,29,28,000/- by taking the reserve rate for calculation instead of fair market value which is very very lower. 4. Under the facts and circumstances of the case the learned Assessing Officer has erred considering the short term capital gain whereas the assessee has earned long term capital gain.

5. Under the facts and circumstances of the case the learned Assessing Officer has further erred in determining the short term capital gain income at Rs. 3,00,35,000/- against the declared income. 29 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal 6. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." Even before us, the learned AR has not raised any technical ground and also this ground has not arisen on the basis of C.O., accordingly, we reverse the order of the learned CIT(A) and confirm the order of the learned Assessing Officer. 7. In the result, the revenue's appeal is allowed and C.O. of the assessee is dismissed. Ikfj.kker% jktLo dh vihy Lohdkj dh tkrh gS ,oa vihykFkhZ dh izR;k{ksi fujLr dh tkrh gSA Order pronounced in the open court on ......................... vkns'k dh ?kks"k.kk [kqys U;k;ky; esa fnukad 09/01/2015 dks dh xbZA Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated 09/01/2015. *Ranjan. vkns'k dh izfrfyfi vxzsf'kr@Copy of the Order forwarded to: 1. vihykFkhZ@The Appellant- The ACIT, Circle-6, Jaipur.

2. izR;FkhZ@ The Respondent- Smt. Vinita Agarwal, Jaipur. 30 ITA 660/JP/2012 & C.O. 57/JP/2012_ ACIT Vs Smt. Vinita Agarwal 3. vk;dj vk;qDr¼vihy½@The CIT(A)-II, Jaipur 4. vk;dj vk;qDr@ CIT, Jaipur 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File. vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar