TaxTMI 
TaxTMI 
2013 (8) TMI 760
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....g 4.52 acres at Enannallur Panchayat, were agricultural lands in nature. 2.2 The learned CIT(Appeals) erred in relying upon fresh evidence in the form of the letter issued by Shri K. Ganesan, dated 07.07.2007, without giving the Assessing Officer a reasonable opportunity of examining and rebutting the same, as per Rule 46A of the Income Tax Rules,1962. 2.3 The learned CIT(Appeals) has erred in relying upon the contents and the bonafides of the letter dated 07.07.2007, ignoring the fact, that, the idea of converting the said land into plots finds mention, for the first time in the agreement dated 20.08.2007, only. 2.4 The learned CIT(Appeals) has erred in not holding, that, the said land was a 'capital asset' as per the provisions of section 2(14)(iii) of the, Income Tax Act, 1961, as the said land is situated at a distance of 4.5 kilometres only from the municipal limits of Kumbakonam, which is within the notified distance of 5 kilometres for the Kumbakonam municipality." Whereas supporting the order of Commissioner of Income Tax (Appeals) in principle, the assessee's cross objections are as below:- "1. The Grounds ....
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....ites case law of ITAT Chennai in ITA No.1614/M/2010 dated 4.5.2012 titled as ITO v. Shri Bakthavatsalam Gowtham to submit that even an unregistered agreement involving transfer of possession amounts to transfer for the purpose of sec.2(47)(v) of the Act. Further to contest the Revenue's arguments that for measuring distance so as to determine the nature of asset transfer under sec.2(14) of the Act; crow's flight method had to be adopted, the assessee cites case law of CIT v. Satinder Pal Singh (2010) 229 CTR (P&H) 82. In light thereof, a prayer has been made by the assessee to reject the instant appeal. 4. Brief facts of the case are that the assessee is an HUF. It is managed by its Kartha, namely, Shri M. Narayanan. On 30.11.1959, it had acquired a parcel of agricultural land measuring 4.52 acres through a registered settlement deed, situated in village Enallure, Kumbakonam Taluk, Thanjavur Distt. There is no issue between the parties that the said taluk is a municipality and upto a distance of 5 kms therefrom, the adjoining lands have been notified as 'capital assets'. 5. It is noticed from the file that on 20.4.2007, the assessee entered into an agreement to sell the afore....
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....hat the JCIT was of the view that the date of transfer had to be taken as 28.8.2007 instead of 20.4.2007 (supra) in view of the fact that there was no evidence in support of the agreement and held that only an amount of Rs.5 lakhs had been paid; whereas in the month of August 2007, the assessee had received a sum of Rs. 15 lakhs. He was also of the opinion that the land in question was agricultural earlier, but converted to non-agricultural used for housing lay out as approved by the village panchayat. Further, the assessee had contended in sec.144A proceedings that the land was situated at a distance of 5.1 KMs, if travelled by road. The said plea had been turned down by the JCIT by observing that since the road was zigzag as per the google map, 'crow fly' method had to be adopted which would reduce the distance to 4.5 KMs ie. within 5 KMs notified by the municipality which would make the land liable to be treated as a capital asset. Accordingly, the Assessing Officer finalized the assessment computing long term capital gains of Rs.31,34,170/- vide order dated 21.12.2010. 8. Aggrieved, the assessee filed appeal. In the course of lower appellate proceedings, it also filed a l....
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....However, this does not have any bearing on the character of the land on the date of sale agreement in the hands of the appellant 8. I have carefully considered the facts of the case and the submission of the AR. I have also gone through the decisions relied on by the Assessing Officer and the AR. I have also perused the documents furnished by the appellant viz. Chitta, patta book, distance on Google Map etc. The authorized representative of the appellant has also drawn my attention to the various decisions delivered on the similar issue by several authorities in favour of the appellants as under:- 1. KASTURI vs. CIT 251 ITR 532 (Mad.) 2. T K Thayylu vs. CIT (2011) [202 Taxman 531 (Ker)] 3. 14 Taxman.com 120 Karnataka 4. C Ravi vs. DCIT (2010) 325 ITR 417 (Ker) 5. Radha Soawami vs. CIT (1992) 193 ITR 321 6. Satindra Paul Singh vs. CIT ITA of 2009 (P&H) 9. The Authorized Representative of the appellant has also drawn my attention to the letter issued by ShriK.Ganesan, the purchaser of the land from the appellant dated 7.7.2007 which is quoted as under:- &n....
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....r judicial decisions as mentioned supra. Keeping in view of the ratios held in various higher judicial pronouncements and respectably following the above decisions, the appellant is not liable to capital gains on the agricultural lands sold to Shri K Ganesan. Therefore the Assessing Officer is directed to delete the addition made on account of capital gains tax in the case of the appellant treating the sale of agricultural lands as capital asset. The appellant succeeds on this issue. 11. In the result, the appeal is ALLOWED." It is in this backdrop of facts that the Revenue is in appeal, whereas, the assessee has preferred cross objection supporting mainly the findings under challenge before us. 10. We have given our thoughtful consideration to the rival contentions and perused the case law as well as the paper book on record. The facts of the case have already been narrated herein above. The first argument advanced by the Revenue is that the land in question is not agricultural. As we have already discussed, the assessee's petition under sec.144A of the Act has been disposed of By JCIT vide order dated 20.12.2010(supra). It transpires that in the said order, ....
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.... the provisions of this section is that there should be parting of possession of an immovable property in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, which reads as under after amendment made in 2001: "Part performance. 53A. Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed thereof or by the law for the time being in force, the transferer or any person claiming under him shall be....
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....ethod. In this regard, we reiterate our discussion herein above that the assessee's specific contention was that actual road distance between municipality and the land transferred was 5.1 kms ie. more than the notified area limit of 5 KMs. The assessing authority as well as the JCIT exercising jurisdiction under sec.144A of the Act were of the view that 'crow fly' method would be more appropriate according to which the distance is 4.5 KMs only. In this backdrop, we find that the very argument has been rejected in case law of Satinder Pal Singh (supra) and the relevant observations read as follows :- "5. Having heard the learned counsel we are of the considered opinion that the views expressed by the Tribunal on the principle of measurement merits acceptance. There is statutory guidance available in Section 2(14)(iii) of the Act. It would be profitable to read the aforesaid provision which is as under: "2.14 "capital asset' means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include - xxxxxxxx (iii)agricultural land in India, not being land situate- &....
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.... 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 taken place. Moreover, the judgement of the Mumbai Bench appears to have attained finality. Keeping in view the principle of consistency as laid down in Radhasoawami Satsang v. CIT(1992) 193 ITR 321, we are of the view that the opinion expressed by the Tribunal does not suffer from any legal infirmity warranting interference of this Court. Accordingly question No. (1) is answered against the Revenue and in favour of the assessee by upholding the order of the Tribunal. 7. The other two questions being based on pure findings of fact would not constitute substantive question of law and the findings recorded by the Tribunal are hereby affirmed. The appeals accordingly stand disposed of." A perusal thereof makes it clear that there is no force in the argument of the Revenue ....