2015 (9) TMI 755

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....') in ITA No.4733/Del/2011 for the Assessment Year ('AY') 2006-07. 4. During the course of the assessment proceedings, the Assessing Officer ('AO') noted that on 9th September, 2005, the Assessee had sold a property admeasuring 5.9625 acres located at Village Ghata, Tehsil Sohna, District Gurgaon. The stand of the Assessee was that the capital gain from the sale of the said land is not taxable because the land was agricultural land which did not fall within the definition of capital asset under Section 2(14) of the Act. 5. According to the Assessee, the land did not fall within a distance of 8 km from the outer limit of the Gurgaon Municipality. The Assessee produced a certificate of the patwari in terms of which "in the year 2006 Gha....

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....urgaon municipality to Village Ghata where the land was located." Accordingly, the AO held that as per Section 2(14)(iii)(b) of the Act, the agricultural land sold by the Assessee was a capital asset. He accordingly made an addition of Rs. 7,75,12,500/- to the income of the Assessee as long term capital gains. 6. The CIT (A) rejected the certificates relied upon by the AO and the Assessee. He concluded that "the distance of agricultural land, in terms of Section 2(14)(iii)(b) has to be measured along the road and not as per crow's flight/ aerial distance." However, the CIT (A) observed that "the distance is to be taken from the local limits from the Municipal Corporation to the 'area' in which the land is situated and not ....

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....lage Ghata in which the land was located. On the strength of the certificate produced by the Assessee from the former Additional Director General, CPWD that the distance of the land from the outer limit of the Gurgaon Municipality was 10.4 Kms, the ITAT held that the land owned by the Assessee did not fall within Clauses (a) or (b) of Section 2 (14) (iii). 9. In Commissioner of Income Tax v. Lal Singh 325 ITR 588 (P&H) a report had been given by the Tehsildar measuring the distance of the land, with reference to its khasra number, from the outer limit of the municipality. The Punjab and Haryana High Court was of the view that there was no justification for the AO ignoring the said report of the Tehsildar and going by the Report of the In....