TaxTMI 
TaxTMI 
2014 (2) TMI 733
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....IT(A) ignored the certificate issued by Tehsildar. Mr. Verma contended that the Tribunal has decided that the certificate of Tehsildar for revenue purposes is more authentic for which our attention was invited to the order dated 31.8.2012 (ITA No. 207/Ind/2012). Reliance was also placed on the decision in Smt. Sharifa Bibi Mohd. Ibrahim; 204 ITR 631 (SC) by submitting that the impugned land is not an agricultural land. On the other hand, the learned counsel for the assessee filed a certificate issued by Tehsildar by pleading that the Inspector as well as Tehsildar both have taken the distance from MR-11 as per which the distance more than 8 km from the municipal limit. The learned Sr. DR contended that MR-11 cannot be considered for this purpose. In reply, the learned counsel for the assessee explained that at the time of sale i.e. 1.9.2008, MR-11 was not in existence and was constructed later on for which the work order dated 16.9.2010 was produced. The learned counsel also produced a map attested by Tehsildar, certifying that the impugned land is beyond the prescribed limit and is 2 kms away from the by-pass road. 3. We have considered the rival submissions and perused the mat....
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....T(A) considered the facts and documents filed by the assessee and concluded as under :- "4.1 The crux of the issue involved is agitated through ground No. 1 & 2 and other grounds are broadly consequential in nature. The issue to be decided is whether the A.O.'s action in denying the claim of exemption of capital gain arising on sale of land sold is justified in facts and circumstances of the case or not. Further for deciding this issue two issues are to be examined firstly, whether the land sold can be said to be agricultural land or not and secondly whether the same was situated at a distance of more than 8 kms from Indore Municipal limit or not. 4.1.1 In the course of discussion it was emphasised by the AR present that from the order passed by A.O. it clearly emerges that A.O. has proceeded with the set mind that such sale consideration was to be brought to tax as long term capital gain and thus has proceeded to reject all the certificates and documents produced by the appellant in support of both of his claims that the land was agricultural land and was situated beyond 8 kms from the Municipal limit. It was emphasised that there was absolutely no reason on record to reject....
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....ils of Khasra No. And particulars of the land sold being available on record of A.O., the Inspector should have been directed to measure the distance upto the land sold and from the Inspector's report, it is not very clear which point in Arandiya village has been considered by him from measuring such distance. Thus it was concluded that the land being clearly agricultural as per State Govt. record the same could not have been otherwise treating merely because no agricultural income was reflected in the income tax return filed for which the appellant has given valid explanation and the land being situated clearly beyond 8 kms the A.O.'s action in levying long term capital gain on sale of such land and treating the same as capital asset within the meaning of section 2(14) was improper both in facts and in law. 4.2 Coming to the first issue whether the land sold was agricultural in nature, the issue has to be necessarily decided in favour of the appellant. Firstly, Tahsildar in the certificate dated 19.4.2011 directly sent to the A.O. which has been relied by him has categorically stated that various crops were taken on for the year 2005-06 to 2010-11 as detailed attached khasra. F....
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....half. 4.3.1 Proceedings further, the Inspector's report indicating the distance also cannot be accepted as the correct measure of distance of land sold on the date of sale, as such distance has been measured by him through road net work which was not in existence and in any manner cannot be attached more significance and importance from the certificate issued by State PWD Department who have the relevant records and are authorised in the matter. Thus on the basis of above discussion the distance of village Arandiya from outer limit of Municipal Corporation through shortest route is held to be 7.8 Kms. 4.3.2 Further it was contended before A.O. that the land sold was situated in the village Arandiya and there is clear merit in the contention of the appellant that the distance has to be measured from the outer limit of IMC to the actual location of land. The distance of land from the road is clearly stated at more than 500 meters from the road in the sale deed executed in the year 1996. It is stated that the distance of the agricultural land sold from main road was more than half kms. Thus in the facts of the appellant's case on the basis of evidence available on record, it is ....
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....cal to the ground raised by further submitting that firstly the assessee has to prove that any agricultural operation was done by the assessee as the assessee himself is not doing any agricultural operation being advocate. It was also pleaded that the Tehsildar is not a competent authority to issue a certificate regarding distance of land from the municipal limit. A plea was also raised that the land was sold to developer. Our attention as invited to various pages of the paper book. Reliance was placed on the decision in 138 ITR 245 (Guj), 136 ITR 621 (Guj), 185 ITR 318 (Ker.), 220 ITR 43 (SC) AND 176 ITR 523 (Bom). On the other hand, the learned Counsel for the assessee defended the impugned order by submitting that the impugned land was inherited by all the brothers and was also sold as a composite sale being composite land. It was explained that one of the brothers was carrying out agricultural operation and it is not necessary that every brother will tilt the land himself. A plea was also raised that the Assessing Officer as well as the Inspector of the Income Tax Department visited the land, the map was prepared by the Inspector himself. The learned counsel took us to various ....
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....ook) it has been mentioned that the land is situated 9.7 kms by road from the municipal limit by a straight distance method. The map of the land (page 10) was prepared by the Income Tax Inspector himself, therefore, disregard to such document is not justified. A certificate has been issued by the Executive Engineer, Public Works Department (page 11 of the paper book) wherein it has been specifically mentioned that the impugned land is 9.6 kms from the municipal limit. The Land Revenue Officer (Tehsildar) had also mentioned the Survey No. 95 Area 4.22 acre, Survey No. 96/1 area 1.20 acre and has mentioned that the land in question is about 10 kms from the municipal limit and the population of the village is about 2000 persons. The assessee has also produced a certificate from the land Surveyor (page 14) wherein it has been mentioned that the impugned land is situated at 9.09 kms from the Municipal limit. The assessee has also placed on record the google map (page 13). All these certificates clearly say that the impugned land is situated beyond 9 kms from the municipal limit, therefore, as per section 2(14)(iii) of the Act, the impugned agricultural land is situated in the revenue re....
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....al gains. However, in the impugned case, the facts are altogether different, therefore, may not help the revenue. A decision from Hon'ble Kerala High Court in Kalpetta Estates Ltd. Vs.CIT; 185 ITR 318 was relied upon. In that case, it was held that burden of proof is on the assessee to prove that the land was agricultural land at the time of transfer and forest lands were acquired with the intention of extending plantation. Since no agricultural operation was carried out, it was held that it gives rise to capital gain on the sale of such land. In the case of Sarifa Bibi Mohd. Ibrahim; 136 ITR 621 (Guj) the land was situated near railway station and was sold on square yard basis to housing society. The profit from the sale of such land was held to be assessable to capital gains tax. Keeping in view the location and other attendant circumstances, it was held to be assessable to capital gains tax. 5. The learned counsel for the assessee relied on the decision of the Hon'ble Bombay High Court in CIT vs. Smt. Debbie Alenao and Joaquiml Alenao; (2011) 331 ITR 59 (Bom) wherein the land, in question, was shown in the revenue record as agricultural land and no permission was taken for co....
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....ld as under :- "The maximum distance prescribed by sc. 2(14)(iii)(b) which may be incorporated in the notification could not be more than 8 kms from the local limits of municipal committee or cantonment board, etc. The notification has to take into account the extent of and scope for urbanisation of that area and other relevant considerations. The reckoning of urbanisation as a factor for prescribing the distance is of significance which would yield to the principle of measuring distance in terms of approach road rather than by straight line on horizontal plane. If principle of measurement of distance is considered 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 urbanisation. Such a course would be illusory. It is in pursuance of the aforesaid provision that Notification No. 9447 dt. 6th Jan., 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 o....
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....changed or not. Just because after the sale, the purchaser was going to put the land to non-agricultural use, it does not mean that on the date of sale the land has ceased to be agricultural land. If in the revenue record, the particular land is recorded as agricultural land and till the date of sale, it is exploited as agricultural land and the owner of the land has not taken any step to indicate his intention to exploit the land for non-agricultural purposes then such land to be regarded as agricultural land. The purpose for which such land is sold is not of much importance and weight. If the department is in a position to prove that it was used as agricultural land as a stop gap arrangement and its land use was changed before the sale then the situation may be different. Whether the land is an agricultural land or not is essentially a question of fact. A close reading of section 2(14)(iii)(a) seems to suggest that it is the population of the municipality that has to be taken into account and not the population of any area within the municipality. It may be that a municipality may comprise of many villages, wards and street and each assessee may claim that the limit of population....
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....75 (P&H), Laukik Developers; 303 ITR 356 (Mum); CIT vs. Satinder Pal Singh (201) 229 CTR 82 (P&H), etc. along with Smt. Devvie Alenao & Joaquiml Alenao (2011) 331 ITR 59 (Bom), Kalpetta Estates Ltd. vs. CIT; 185 ITR 318 (Ker.), Sharifa Beevi Mohd. Ibrahim; 136 ITR 621 (Guj.); Bal Krishna Hari Vallabhdas; 138 ITR 245, etc. The assessee in the present appeal also produced the revenue Khasra Paanchshala issued by the office of Tehsildar evidencing that during the relevant period the assessee grew various crops from the impugned land. A Rin Pustika, in the name of the assessee, bearing no. 3719 was also kept on record. The assessee has also filed an affidavit in which it has been sworn that the land in question was purchased in the year 1996-97 and was sold as per the sale deed. It has been further mentioned that the land is situated approximately 9 kms from the municipal limit and in para 3 various crops, vegetables were grown as mentioned by Halka Patwari, therefore, the contention of the Assessing Officer that no crop was grown is not substantiated. So far as the contention of the learned Senior DR that MR 10 was wrongly mentioned, the learned counsel for the assessee produced a cer....