SURMUKH SINGH Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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Joginder Pall, A.M. -
(1.) THESE cross-appeals--one of the assessee and another by the Revenue have been filed against the order of CIT(A), Jalandhar, for the asst. yr. 1999-2000. Since the issues involved in the cross-appeals are identical and are inter-related, both were heard together and are being disposed of by this consolidated order for the sake of convenience.
(2.) The first two grounds of assessee's appeal are as under:
(i) That the CIT(A), Jalandhar has erred in not allowing application under Rule 46A for production of additional evidence.
(ii) That on the facts and law of the case the learned CIT(A) has erred by taking compensation amount of land at Rs. 54,48,390 instead of Rs. 27,24,195 as determined by Addl. District Judge vide orders dt. 16th Sept., 2003.
The relevant facts of the case are that the assessee owned agricultural land at village Mansoorwala Dona. The said land was acquired by the Punjab Urban Development Authority (In short 'PUDA') and assessee was awarded compensation. Since the agricultural land acquired by the PUDA was situated within the municipal limits of Kapurthala, the compensation of Rs. 54,48,390 was liable to long-term capital gains. As the assessee had not filed the return, the AO initiated the proceedings Under Section 147 by issue of notice Under Section 148 on 16th March, 2006. In response to the said notice, the assessee had stated that a return of income already filed on 26th May, 2005 with ITO-II(2), Kapurthala, may be treated to have been filed in response to notice issued Under Section 148. In the said return, the assessee had declared income of Rs. 1,13,200. But the capital gains on acquisition of the land by PUDA had not been declared. There was no dispute about the fact that the land acquired by the PUDA was a capital asset and, therefore, the compensations received on its acquisition were liable to long-term capital gains.
(3.) FURTHER, the dispute related to the fair market value of the land as on 1st April, 1981 for the purpose of computation of long-term capital gains. The AO observed that on the basis of 26 sale instances of agricultural land of village Mansoorwal Dona, the fair market value of the land as on 1st April, 1981 worked out to Rs. 114 per Maria for which the indexed cost worked out to Rs. 400 per Maria. This was confronted to the assessee. There was no compliance with the notices issued under Sections 143(2) and 142(1) by the AO. Therefore, completed the assessment Under Section 144 and computed the long-term capital gains at Rs. 52,16,642 by taking the indexed cost as on 1st April, 1981 at Rs. 400 per Maria.;
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