TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 1117
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd the method prescribed under the provisions of section 11 of the General Clauses Act, 1897. 2. During hearing, we have heard Smt. Mrudula Bajpai, learned CIT DR, who represented the Department supporting the assessment order. On the other hand, in the case of Shri Satish Shukla, Shri S.S. Sheetal, learned Advocate, appeared whereas nobody represented Shri Rakesh Shukla in spite of service of notice. Mr. Sheetal pointed out that the impugned issue is covered in favour of the assessee by the order of the Tribunal on identical issue which is arising out of the sale of the same property being the co-owners. The learned counsel placed on record the copy of the order of the Tribunal dated 31.8.2012 in the case of ITO vs. Ashok Shukla (ITA No. 207/Ind/2012). The assertion made by the learned counsel was not controverted by the Revenue being a matter of record. 3. We have considered the rival submissions and perused the material available on record. So far as the non-appearance in the case of Shri Raksh Shukla, in spite of service of notice, is concerned, therefore, we have no option but to proceed ex parte qua this assessee and tend to dispose of the appeal on the basis of material av....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions and perused the material available on record. The facts, in brief, are that the assessee is an advocate practising in High Court of Madhya Pradesh at Indore. The assessee earned income from house property, pension being Ex-MLA in State Legislative Assembly, declared income of Rs. 4,04,690/- on 5.9.2008. The assessee claimed exemption from capital gains on sale of land by claiming the same to be agricultural land situated in the revenue record of village Lasudia Parmar (Teh. Sanver) bearing Khasra No. 184, etc. The stamp duty and registration fees were borne by the purchaser and the sale consideration amounting to Rs. 1,29,21,582/- was received through cheque. The Assessing Officer concluded that the impugned land is situated within 8 kms from the municipal limit and then mentioned the provisions of section 10(37) of the IT Act which are applicable in the case of compulsory acquisition, therefore, is not applicable to the facts of the case as the land was sold by private deal and no exemption u/s 54B of the Act was claimed. So far as the argument of the learned CIT DR and observation of the Assessing Officer that since the land was not cultivated by the assessee himself and was....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the municipal limit. From this angle also, there is no mistake in the conclusion drawn in the impugned order. We further find that some cases like Laukik Developers; 303 ITR (AT) 356 have been relied upon in the impugned order/assessment order wherein the issue was examined with respect to section 80IB of the Act whereas the issue before us pertains to section 2(14) with respect to agricultural income, therefore, not applicable to the facts of the present case. The learned CIT DR placed reliance on the decision of the Hon'ble Gujarat High Court in Balkrishna Hariballabhadas vs. CIT; 138 ITR 245. We find that in that case, the land was situated within municipal limits of Ahmedabad and the surrounding land was developed and since the land was not agricultural land, the gains from sale of such land was held to be exigible to capital gains tax. However, the land in question is clearly agricultural land situated beyond 9 kms from the municipal limit, therefore, this case may not help the revenue, moreso one fact pertinent to mention here that part of the same land, owned by one of the brothers, was treated as agricultural land, therefore, it is quite unjustified to treat part of the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xtaposition with the judicial pronouncements discussed hereinabove and the intention of the legislature along with relevant sections, we are of the considered opinion that a particular land is agricultural land or not depends upon so many factors. Any agricultural income derived from agricultural operations will qualify for agricultural income. So far as capital gains on the sale of such land is concerned, it also depends upon factors like location of the land, use of the land, distance from municipal limit, whether land use was changed, etc. If all these factors are cumulatively kept in mind, one clear fact is oozing out that the impugned land is situated beyond the prescribed limit from the municipality, recorded as agricultural land in the revenue record, agricultural operation was done by one of the brothers, we are of the considered opinion that the no capital gains tax is exigible on sale of such land. So far as the objection of the learned CIT DR that the Tehsildar is not a competent authority for measuring the distance, we are not satisfied with such submission especially when the Inspector of the department of Income tax and Tehsildar both have certified that the land is s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntal planes or as per crow's flight because any measurement by crow's flight is bound to ignore the urbanisation which has taken place. Tribunal was therefore justified in holding that distance of 2 kms from the municipal limits of city of Khanna has to be reckoned for the purposes of s. 2(14)(iii) by measuring the same as per the road distance and not as per straight line distance on a horizontal plane or as per crow's flight - Laukik Developers v. Dy. CIT (2007) 108 TTJ (Mumbai) 364 : (2007) 105 ITD 657 (Mumbai) approved." The above conclusion by the Hon'ble High Court clearly supports the case of the assessee. In the case of Lalsingh & Others (supra) the Hon'ble High Court concluded that "the report of the Tehsildar having certified that the assessee's land was 8 kms away from the municipal limit, the land constituted agricultural land entitling the assessee to exemption u/s 54B of the Act. 7. If the assessment order is analysed, we are of the view that the learned Assessing Officer is more guided by section 45 of the Act which speaks about capital gains arising from the transfer of capital asset. Section 54B of the Act speaks about non-charging of gains of the cases where the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....corded as agricultural land in the revenue record is to be considered as agricultural land until proved otherwise. Admittedly, the term "capital asset" has an all embracing connotation and includes every kind of property as generally understood except those are expressly excluded from the definition. It is exactly the case here because section 2(14)(iii) expressly defines agricultural land with regard to its location and distance from the municipal limit. It seems that the learned Assessing Officer has not examined the documents produced by the assessee establishing the distance of land beyond prescribed municipal limit and more specifically when Khasra number, etc. has been duly mentioned in the report of Tehsildar. So far as the argument of the learned CIT DR that the land was sold at a substantial amount is not the relevant factor to prove that it was non-agricultural land because it depends upon so many factors. Even in the grounds of appeal, the revenue has raised a ground that the documentary evidences produced by the assessee belong to the land of Shri Rakesh Shukla, brother of the assessee. We are not convinced with this argument also because the total land is adjoining ....