TaxTMI 
TaxTMI 
2015 (11) TMI 1372
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.... situated at a distance of more than 8 km from the nearest Avadi Municipality and therefore the profit on the sale of such land is not liable to tax. 2.3 The C!T(A) erred in the land sold was situated at a distance of 10Kms from the nearest Avadi Municipality based on the VAO's certificate without any evidence with respect to Village administrative records. 2.4 The C!T(A) erred in the land sold was situated at a distance of 10Kms from the nearest Avadi Municipality based on the Metropolitan Transport Corporation (Chennai) Ltd's letter dated 20.12.2010 wherein it was stated that the bus route No.61B,61K,61D and 61E playing between Avadi and Morai Village is 10 KMs. From the letter itself it was established that various route are available to reach Morai village and hence it will not be treated as concrete evidence for measuring distance between Avadi and Morai village. 2.5 The C!T(A) has failed to note that the Assessing Officer had clearly established that the land was very much within 8 Kms from the Avadi Municipality. He deputed three Income-tax Inspector to ascertain actual distance and as per their report, the distance between Avadi Municipality and Morai Villa....
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....as defined under sec 2 (14) of I.T. Act. There is no certificate from the Revenue Authorities, no evidence showing agricultural operations, agricultural receipts, agricultural expenses and any agricultural income or loss that was made. Even in response to the report of the Inspector of income-tax after joint verification, the appellant has not produced any evidence to establish the land as an agricultural land. No evidence has also been produced during the appellate proceedings to establish that the land that was transferred was agricultural land. I therefore, agree with the A. O. that the land transferred by the appellant cannot be treated as an agricultural land. Since the land that is transferred is not established to be an agricultural land the issue of its location would be immaterial for the computation of LTCG." 3.1 The assessee further went on appeal to the ITAT. The assessee filed a certificate from the Public Transport Department as per which the land was situated at a distance of more than 8 kms from Avadi limits. The assessee had also filed a certificate from the VAO that the land was given on lease to M/s. Vel Horticultures Ltd for doing agricultural operations. As ....
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.... set aside the orders of the lower authorities and remand the matter back to the file of the. Assessing Officer for readjudicating the issue afresh after verifying all the documents and thereafter passing a speaking order. Needless to mention that the Assessing Officer shall allow proper opportunity of hearing to the assessee. Thus, the grounds of appeal of the assessee are allowed for statistical purposes." 3.2. In the set aside assessment made afresh, the AO has relied on the decision of Supreme Court in the case of Sarifabibi Mohamad Ibrahim V ClT (204 ITR 631) and has stated that the assessee's land was not agricultural land, as it does not fulfil the criteria laid down by the court in the aforesaid decision. The AO has also stated in the assessment order that the land was barren when the Inspector inspected the land, and the buyer was not an agriculturist and the land was situated in a developed area. The AO completed the assessment u/s.143(3) rws 254 rws 153A of the Act by denying the assessee's claim of exemption on the profit on sale of the land at Morai village and the profit was brought to tax as capital gains as the land was not agricultural land at an amount ....
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....come-tax(Appeals) held that the assessee's land in question is an agricultural land situated at a distance of more than 8 kms from the nearest Avadi Municipality and the profit on sale of such land is not liable to tax and he deleted the addition on account of capital gains in the hands of the assessee on account of transfer of the said land. Against this, the Revenue is in appeal before us. 5. We have heard both the sides and perused the material on record. The main argument of the Department is that the land sold by the assessee is a capital asset, as it is situated within the distance of 8 kms. from the nearest Municipality limit (Avadi). For arriving at a conclusion, the AO disputed the certificates issued by the Deputy Surveyor Ambattur Taluk and General Manager, Metropolitan Transport Corporation (Chennai) Ltd., as per which the land was situated at a distance of more than 8 kms. from Avadi Municipality. The AO has also disputed the lease deed between the assessee, other family members and M/s. Vel Horticultures leasing the land for agricultural operations, which had been accepted in the scrutiny assessment and as a source of investment made by the assessee. The AO has als....