TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 395
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....e that during the course of assessment proceeding, the AO noted that these two assessees have sold lands, in which they were having 1/4th share. The lands were purchased on 17-8-2007 admeasuring 2.58 hectare, which was sold on 31-1-2008 for a total consideration of Rs.1,88,13,156/-. These two partners were having 1/4thshare in the above stated land which was situated in Mouza Khadka village. The AO found that as per the straightline method, the distance of the agricultural lands sold are situated beyond 8 KMs from the Municipal Limits of the City of Nagpur. Therefore, he viewed that the land in question is capital asset within the meaning of Section 2(14)(iii)(b) of the Act. Accordingly, he brought the gain to tax by computing capital gain. 5. Being aggrieved, both these assessee preferred appeal before the CIT(A), wherein the CIT(A) after passing a detailed order held that the findings of the AO are correct. Hence, both these assessee are now in appeals here before the Tribunal. 6. Having heard the rival parties and perusing the material on record, we found that on similar facts in case of Sanjay Nagorao Paidlewar & Nitish Rameshchandra Chordia Vs. ACIT, listed under ITA Nos.112....
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....f learned CIT(A) has also been considered by the Hon'ble Punjab and Haryana High Court and has observed that the principle of measurement of distance is considered as straight line distance on horizontal plane or as per crow's flight then it would have no relationship with the statutory requirement of keeping in view the extent of urbanization. Such a course would be illusory, which is in pursuance of the aforesaid provision that Notification No.9447 dated.6thJanuary, 1994 has been issued by the Central Government. In respect of the State of Punjab, at item No.18, the sub-division Khanna has been listed at serial No.19. It has inter alia been specified that area upto 2 kms. from the municipal limits in all directions has to be regarded as other than agricultural land. Once the stator guidance of taking into account the extent and scope of urbanization of the area has to be reckoned while issuing any such notification then it would be incongruous to the argument of the Revenue that the distance of land should be measured by the method of straight line on horizontal plane or as per crow's flight because any measurement by crow's flight is bound to ignore the urbanization which has ta....
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.... the learned DR and found that the measurement has to be adopted by the approach road and not by straight line method. Reliance was also placed on the decision of the Hon'ble Punjab andHaryana High Court in the case of Satinder Pal Singh (supra). 13. In case of ACIT Vs. M/s Shagun Infrastructure Pvt. Ltd., decided in ITA No.209/Nag/2009, for assessment year 2006-07, vide order dated 27-6-2011, the Nagpur Bench of the Tribunal has held that the land in question which was situated more than 8 kms. from the local municipal limit and is clearly agricultural land in terms of Section 2(14)(iii) of the Act,, therefore, any income from such land including profit arising from sale of such agricultural land is not assessable as income. 14. In case of ACIT Vs. Gaurav Khandelwal, decided in ITA No.195/Agra/2010, for assessment year 2006-07, the Agra Bench of the Tribunal following the decision of Mumbai Bench in case of Laukik Developers (supra) and the decision of Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra), held that the distance of 8kms has to be measured by approach road distance and not by straight line distance on horizontal plane. Similar view has b....
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....ees. 16. Regarding the issue in regard to whether the sale consideration out of agricultural income is assessable as business income or not, once we have held that this was an agricultural land and, therefore, any consideration out of sale of agricultural land, which is not assessable as the land was situated beyond 8 kms., therefore, the direction of the learned CIT(A) that the surplus may be treated as business income, has become now meaningless. Even and otherwise, this issue is also decided by various High Courts including the Hon'ble Bombay High Court. Though learned CIT(A) has placed reliance on the decision of the Hon'ble Bombay High Court in case of Gopal Ramnarayan Kasat, reported in 9 Taxman.com 236 (Bom), however, in a latest decision the Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbie Alemao, reported in (2011) 331 ITR 59, has held that the land which was shown as agricultural land in the revenue records and never sought to be used for non-agricultural purposes by the assessee till it was sold has to be treated as agricultural land, even though no agricultural income was shown by the assessee from this land and, therefore, no capital gain was taxable on th....