TaxTMI 
TaxTMI 
TaxTMI 
2012 (6) TMI 236
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.... 3,50,000/- income for other sources. 4. It is prayed that an order of the ld. CIT(A) be cancelled and that of the AO be restored. 5. The appellant craves to add or amend any grounds of appeal before the appeal is heard or disposed. 2. The Department has also taken the following additional grounds:- 1. The ld. CIT(A) has erred in holding that the land was self-cultivated and was situated beyond 8 Kms from the local limits of Municipality without mentioning the name of Municipality and thus holding that the said land was not a capital asset as per provisions of section 2(14)(iii)(b) of the Income-tax Act, 1961. 2. The ld. CIT(A) has erred in granting relief to the assessee on the basis of additional evidences furnished by the assessee during appellate proceedings even though the filing and entertaining of additional evidence by the ld. CIT(A) was strongly objected by the AO. 3. Apropos ground No. l of the grounds of appeal and both the additional grounds of appeal, the Assessing Officer perused the return of income filed by the assessee and noted that the assessee had received his l/3rd share (Rs. 13,89,711/-) in the enhanced com....
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....set as per the provisions of section 2(14)(iii)(b) of the Income-tax Act. Since the asset sold is a not a capital asset, provisions of section 45(5) are not applicable. In view of this, the addition of Rs. 13,89,711/- made by the AO is deleted, allowing assessee's plea on this ground." 5. In support of appeal, the ld. Departmental Representative objected to the admission of the additional evidence by the ld. CIT(A); He invited our attention to Rule 46A(2) of the Income-tax Rules and submitted that the ld. CIT(A) has admitted Patwari's Certificate as additional evidence without recording in writing the reasons for its admission, as required by Rule 46A(2) and, therefore, the order of the CIT(A) in this behalf should be vacated. His second submission was that the findings of the ld. CIT(A) that the land in question was not situated within the prescribed limit of Municipal Committee was also liable to be vacated for the reason that the ld. CIT(A) has not identified any municipality in this behalf and, therefore, his findings that the land in question was not situated within the prescribed limit of the municipal committee was completely untenable. He further submitted that the land in....
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....at the time of filing of the return of income Tax by the assessee, the assessee inadvertently filed in computation of the total income said gain of enhanced compensation as capital loss by taking the cost of the land at indexed cost. Thus while going through the abovesaid facts the land in question is not the capital asset within the meaning of Section 2(14)(iii)(b) and accordingly the taxability of the gain arising out on the enhanced compensation u/s 45(5)(b) does not arise. It is submitted that the addition of Rs. 13,89,711/- should be deleted as this amount not a capital gain within the provisions of section 45 of the Income-tax Act, 1961. Ground No. 4 (Additional ground 1) The ITO held that the ld. CIT(A) has erred in holding that the land was self-cultivated and was situated beyond 8 Kms from the local limits of Municipality without mentioning the name of Municipality and thus holding that the said land was not a capital asset as per provisions of section 2(14)(iii)(b) of the Income-tax Act, 1961. Considering the additional grounds taken by the appellate, the assessee again approached the appropriate authority for certifying the fact that whether the captioned asset in qu....
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.... the ld. CIT(A) has not recorded any reasons while admitting additional evidence. Besides, Rule 46A(1) of the Income-tax Rules specifies the circumstances under which additional evidence can be admitted. The assessee could not state before us as to how its case is covered by any of the circumstances enumerated in sub-rule (1) of Rule 46-A. The order of the ld. CIT(A) is also silent as to how the claim of the assessee for admission of additional evidence is covered by any of the clauses of Sub-rule (1) of Rule 46A. In this view of the matter, the order of the CIT(A) admitting the additional evidence without recording the reasons, is vacated and the matter is restored to him with a direction to consider and adjudicate upon the issue of admissibility of the additional evidence strictly in conformity with the provisions of Rule 46A of the Income-tax Rules. 8. The ld. CIT(A) has also held that the land in question is not a capital asset for two reasons. One, the land in question is not situated within the prescribed limits of a municipality. Two, the land in question was under cultivation at the relevant point of time. 9. As regards the finding of the ld. CIT(A) that the land in quest....
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....by any other name) or a cantonment board, as the Central Government may specify in this behalf, is not excluded from the definition of "capital assets" and is therefore capital asset within the meaning of section 2(14). In order to consider the applicability of section 2(14)(iii), three issues have to be considered. They are: (i) Whether the land in question is agricultural land as it is agricultural land alone which is excluded from the definition of "capital asset" provided it is not covered by section 2(14)(iii)(a)/(b). (ii) Whether the agricultural land is situated within the jurisdiction of a municipality (whether known as municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board as the agricultural land situated with the jurisdiction of such a municipality is excluded from the definition as the agricultural situation within the jurisdiction of such a municipality or a cantonment board is not excluded from the definition of "capital asset": section 2(14)(iii)(a); (iii) Whether the agricultural land is situated in any area within such distance, not being eight kilometres, from the local ....
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.... u/s 2(14)(iii)(b), i.e., within prescribed distance from the local limits of Panchkula municipality (whether known as municipality; municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and therefore is a capital asset for the said reason also, we find that the ld. CIT(A) has recorded the finding that the land in question is not situated within the prescribed limits of a municipality and therefore not a capital asset without specifying the name of the municipality from the local limits of which the distance of the area in which the land in question is situated, has been considered by him and therefore it is also not known as to whether he has at all taken the nearest municipality for the aforesaid purpose. In this view of the matter, his finding as aforesaid cannot be sustained in the absence of specification of the name of the concerned municipality. Secondly, it is the case of the Department that the CBDT has issued a notification in terms of section 2(14)(iii)(b) and that the land in question is situated in Village Kundli being an area adjoining the local limits of Panchkula municipality, which has alrea....
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.... of interest under section 28 vis-a-vis interest under section 34, additional compensation under section 23(1A) and solatium under section 23(2) of the 1894 Act, would be extremely difficult after all these years, will not be done." 15. In view of the foregoing, the issue raised in Ground No. 2 is also restored to the file of the CIT(A) for a fresh decision in conformity with law. Ground No. 2 taken by the Department is treated as allowed for statistical purposes. 16. Apropos ground No. 3, the assessee has shown agricultural income amounting to Rs. 3,50,000/-. The Assessing Officer however treated the same as non-agricultural income with the following observations:- "5. The assessee has declared agricultural income of Rs. 3,50,000/-. He was asked to furnish girdawari and form J in support of agricultural income vide this office questionnaire dated 21.5.2008. He has furnished copy of fard of land along with his letter dated 25.8.2008. On 27.10.2008 he was again asked to furnish girdawari of land and documentary evidence of sale of agricultural produce and details of expenses incurred to earn agricultural income. In spite of reminder issued on 4.11.2008, he could not furnish any d....