RAGHAVAN NAIR Vs. ASST. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Petitioner is an assessee under the Income Tax Act (the Act) on the rolls of the first respondent. He received a sum of Rs. 1,28,43,192/- in the year 2014-'15 by way of compensation for a land acquired from him for the Kochi Metro Rail Project. The petitioner, at the relevant time was under the impression that the capital gains resulting from the acquisition of the land is exigible to tax under the Act. Consequently, in the return filed by the petitioner under the Act for the assessment year 201516, he has, disclosed the capital gains resulting from the acquisition of the said land and paid tax on that basis. For the said purpose, the petitioner has worked out the indexed cost of the land reckoning its fair market value as on

(2.) The first respondent issued Ext. P3 notice to the petitioner under Section 143(2) of the Act for scrutiny of the return filed by him. It is mentioned in Ext. P3 notice that the deduction claimed by the petitioner under the head 'capital gains' is the issue identified for examination. The petitioner sent a reply to Ext. P3 notice reiterating that the fair market value of the land as on

(3.) While so, the petitioner was served with Ext. P12 order dated 14.07.2017, by which the first respondent has completed the proceedings initiated in terms of Ext. P3 notice raising a demand for Rs. 9,95,070/- on the basis that the cost indexation of the land made by the petitioner cannot be accepted and that the fair market value of the land as on 01.04.1981 can be reckoned only at Rs. 1,400/- per cent for the purpose of cost indexation. According to the petitioner, after Ext. P6 notice, the first respondent had issued Ext. P11 notice also to the petitioner directing him to appear before him on