AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 104
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....d to assess the surplus amount on sale of agricultural land as business income 4. Brief facts of the case are that the assessee along with three co-owners Shri Sanjay Nagorao Paidlewar, Shri Shishir Shankarrao Diote and Shri Shankarrao Jairamji Diote had purchased land on 10-04-2007 being agricultural land of 1.22 hectares at Mouza Pipla S.No. 90/1, PH 38 at Tah. Dist. Nagpur for an aggregate consideration of Rs. 29,40,420/-, the proportionate share in the cost of the assessee being Rs. 7,35,105/-. The said property was sold on 15-04-2008 for Rs. 80 lacs. The proportionate share of the assessee in the said sale transaction was thus Rs. 20 lacs. Assessee has claimed that the profit from sale of land in question is exempt from tax as it is an agricultural land and not a capital asset according to the provisions of section 2(14) of the Act. Assessee has stated that the actual distance between the property at mouza Pipla, S.No. 90/1, PH 38 at Tah. District Nagpur and the municipal jurisdiction is more than 8 km and furnished a certificate from the Patwari in support of its claim. AO rejected the assessee's claim holding that the property in question was within the specified distance o....
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....n hereby specify the limit of distance. Therefore, the reckoning of urbanization as a factor for prescribing the distance is of significant which would yield to the principle of measuring distance in terms of approach road rather than by straight line on horizontal plant. If principle of measurement of distance is considered straight line distance no relationship with the statutory requirement of keeping in view the extent of urbanization. Such a course would be illusory. It is in pursuance of the aforesaid provisions that notification No.9447 dated 6-1-1994 has been issued by the Central Government. In respect of the city of Nagpur at item No.35 has been specified that area distance of about 8 kms. for the corporation limit in all direction. Reliance was placed on the decision of Hon'ble Punjab and Haryana High Court in the case of CIT Vs. Satinder Pal Singh, reported in 229 CTR 82 (P&H), copy of the same was also filed. It was also submitted that the Hon'ble Punjab and Haryana High Court has clearly held that the distance has to be measured as per approach road and not as per straight line method or crow flies. After considering the submissions and perusing the material on record....
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.... same has to be treated as business receipt not capital receipt for the purpose of capital gain. Reliance was also placed on the decision of Hon'ble Bombay High Court in the case of DCIT Vs. Gopal Ramnarayan Kasat, reported in 9 Taxman.com 236 (Bom). Accordingly, the AO was directed to bring the surplus amount to tax as business income. Now, these three assessees are in appeals here before the Tribunal. 6. Detail submissions have been advanced on behalf of the assessees. Attention of the Bench was drawn on copy of written submission placed in the compilation as well as on various other documents. Reliance was placed on various case laws, which have been mentioned in the written submissions. Reliance was also placed on the arguments advanced by another counsel for another assessee, which was advanced on the same lines. It was further submitted that learned CIT(A) has ignored the certificate of Patwari by which it was clearly certified that the land in question is located beyond 8kms. from municipal limit. Learned CIT(A) has not considered the decision of the Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra). It was further submitted that the various be....
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....er Section 80I of the Act and those decisions are not applicable on the facts of the present case. 8. In reply, learned counsel of the assessee stated that various decisions of various benches of the Tribunal are directly on the issue. Regarding the decisions which are given in respect to Section 80I of the Act, it was submitted that the language is the same and, therefore, the exemption clause has to be read as harmoniously. Therefore, these decisions have been relied upon. 9. We have heard rival submissions and considered them carefully. We have also considered the written submissions filed on behalf of both the parties i.e. assessees and department and have also perused the relevant material on record, on which our attentions were drawn. We have also taken into consideration the various case laws relied upon by the learned AR as well as learned CIT DR. After considering the submission and perusing the material on record, we found that the issue in respect to whether the agricultural land in question is an asset within the meaning of Section 2(14) or not, have already been decided by the Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh(Supra). This decisio....
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....s DCIT, reported in (2007) 108 TTJ (Mumbai) 364, was also taken into consideration by the Hon'ble Punjab and Haryana High Court and found that the decision of the Tribunal has attained finality. 11. In case of Laukik Developers (supra), the Mumbai Bench of the Tribunal has observed that once the principle of measuring distance has been settled namely that the distance of the agricultural land belonging to the assessee-respondent has to be measured in terms of by approach road and not by a straight line distance on horizontal plane or as per crow's flight. Accordingly, the Hon'ble Punjab and Haryana High Court held that the distance has to be measured by approach road and not by straight line distance on horizontal plane or as per crow's flight. In case of Laukik Developers (supra), the assessee disputed that the distance for the purpose of Section 80IB(10) has to be measured through straight line distance on horizontal plane and not by approach road. The Mumbai Bench of the Tribunal has held that the issue regarding distance to be measured with regard to road distance or a straight line distance is covered with the decision of the Pune Tribunal in the case of Mangalam Inorganics (....
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....1, for assessment year 2007-08 vide order dated 18-8-2011. In this case also it has been held that the distance has to be measured by approach road and not through crow's flight or straight line method. In case of Smt. Savithri Ammal Vs. ITO, decided in ITA No.487/Mds/2012, vide order dated 12-7-2012 again it has been held that the distance has to be measured as per the approach road and not by straight line method. Similar view has been expressed in case of ITO Vs. Shri Chaganlal Lalji Aswin Business, decided in ITA No.857/Mds/2011, for the assessment year 2007-08, vide order dated 18-2-2011. In case of ITO Vs. M/s Ranjit Rattan Mehra (HUF), decided in ITA No.442/Asr/2011 for assessment year 2008-09, the Amritsar Bench of the Tribunal has taken a view that the distance of 8 kms has to be measured through the approach road and not through the straight line method. While holding so, the decision of the Hon'ble Punjab and Haryana High Court in case of Satinder Pal Singh (supra), was taken into consideration and another decision of the same High Court in case of CIT Vs. Lal Singh & Others, reported in (2010) 228 CTR 575 was also taken into consideration and has allowed the issue in fa....
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....in question was shown as agricultural land in the revenue record. Whether there was any agricultural income or not, is not the moot question to decide the issue, however, the important factor is to be decided as to whether the character of the land is agriculture or not. Undisputedly, in the revenue record and as per the Patwari certificate, the land in question is agricultural land. Therefore, the sale consideration was not taxable on the sale of said land i.e. either on account of capital gain or on account of business income. 18. Even we found that this issue has been decided by the Hon'ble Apex Court while confirming the order of the Hon'ble Delhi High Court in the case of DLF United Limited, 217 ITR 337. The facts in the case of DLF United Limited (supra) were that the DLF limited purchased agricultural land from various farmers in the ear and shown exemption, however, the AO treated the sale consideration as revenue receipt. Upto the stage of Tribunal, the order of AO was confirmed, however, the Hon'ble Delhi High Court held that the land in question was of agricultural land and therefore, any receipt on account of sale of agricultural land is not taxable. This decision of t....