COMMISSIONER OF INCOME TAX, CHENNAI Vs. SAKUNTHALA RANGARAJAN

JUDGEMENT

(1.) Challenge in this Tax Case Appeal, is to an order made by the Income Tax Appellate Tribunal in I.T.A.No.411/Mds/2015, dated 09.10.2015, by which, the Tribunal has dismissed the appeal preferred by the revenue.

(2.) The assessee is the Founder-Chairman of Veltech Group of Educational Institutions, Avadi. There was a search, in the premises of the educational institutions run by the Trust, in which, the assessee is one of the Trustees. The assessee's premises were also searched under Section 132 of the Act on 27.08.2008. For the AY 2009-10, the assessee filed a return of income on 31.07.2009, disclosing a total income of Rs.3,50,07,409/-. He filed a revised return of income on 29.10.2009, disclosing a total income of Rs.4,38,44,341/-. Subsequently, a revised return was filed on 22.12.2010, declaring a total income of Rs.1,29,32,780/-. According to the department, the difference in the income originally returned and the revised return, represented capital gains of Rs.3,09,11,561/- on the sale of land, at Morai Village, Ambattur Taluk originally offered, but withdrawn, in the revised return. During the course of the original assessment proceedings, the assessee contended that the land sold by him, at Morai village is an agricultural land and therefore, contended that the profit on sale of such agricultural land is not liable to tax.

(3.) According to the assessee, the land is situated at a distance of more than 8 km from the nearest Avadi Municipality and the land being agricultural land, profit on sale of such land is not liable to tax. The department found that the land is not agricultural land, it was sold to a Trust and the assessment was completed, by bringing the entire capital gains of Rs.3,09,11,561/-, as originally offered, in the return of income, and accordingly, determined the income at Rs.4,38,44,341/-. On appeal, the Commissioner of Income-Tax (Appeals), vide his order, dated 23.08.2011 in I.T.A.No.336/10-11, confirmed the assessment of capital gains, on the sale of the land, at Morai village.