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TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 115
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....vised return was filed on 22/12/2010, declaring a total income of Rs. 1,29,32,780/-. According to the department, the difference in the income originally returned and the revised return represented capital gains of Rs. 3,09,11,561/- on the sale of land, at Morai Village, Ambattur Taluk originally offered, but withdrawn, in the revised return. During the course of the original assessment proceedings, the assessee contended that the land sold by him at Morai village is an agricultural land and therefore, contended that the profit on sale of such agricultural land is not liable to tax. 3. According to the assessee, the land is situated at a distance of more than 8 km from Avadi Municipality and the land being agricultural land, profit on sale of such land is not liable to tax. The department, on verification, found that the land is not an agricultural land and it was sold to the Trust and the assessment was completed, by bringing the entire capital gains of Rs. 3,09,11,561/-, as originally offered, in the return of income, and accordingly, determined the income at Rs. 4,38,44,341/-. On appeal, the Commissioner of Income-Tax (Appeals), vide his order, dated 23/8/20....
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...., accepted in the scrutiny assessment, and also the fact that a source of investment has been made made by the assessee, the appellate authority held that the land in question, is an agricultural land, situated at a distance more than 8 Kilometres, from the nearest Municipality (Avadi). The appellate authority has further observed that it is evident from the letter No.5729/2013/A1, dated 3/8/2013, from the Tahsildar, Ambattur that she had made independent enquiries with regard to the distance of the land in question, from the nearest Municipality (Avadi), result of which, clearly proved that the land in question is not situated within a distance of 8 Kms from the nearest Municipality. The appellate authority has further held that no reason has been assigned by the Assessing Officer, in the assessment order, as to why, he has not accepted the report of the Tahsildar. With regard to the report of the Inspector that the land in question is situated at a distance of 5.5 Kms submitted before the Assessing Officer, the Commissioner of Income Tax (Appeals) held that the route used by the inspector to reach the land is a private road laid and maintained by CRPF and on the facts and circums....
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....ery 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 Village is 5.5 Kms only. 2.6 The CIT(A) has failed to note that the Assessing Officer had followed the direction of the Hon'ble ITAT and by examining all evidences placed before them and passed the order in accordance with law. 9. Upon considering the evidence adduced by the assessee and the Department and following the decision of the Punjab and Haryana High Court in CIT v. Satinder Pal Singh reported in 229 CTR 82, the Income Tax Appellate Tribunal, Chennai, dismissed the appeal filed by the revenue. Against which, the instant Tax Case Appeal has been filed, on the following substantial questions of law, (i) Whether on the facts and in the circumstances of the case the tribunal was right in holding that the distance between the land sold by the assessee situated at Morai and the end of the Avadi Municipality is beyond 8 Kms by ignoring the evidences collected by the department through the inspector of the department as per which the distance is 5.5 Kms as meas....
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....Rajesh, learned counsel for the appellant further submitted that if the distance is measured between the end of Avadi Municipality and the assessees land, in straight line, on horizontal plane, the distance is less than 8 Kms and therefore, the land cannot be treated as an agricultural land. He also submitted that measuring the distance via CRPF Road, is permissible and that the same cannot be rejected, on the ground that it is not a public road. 13. Heard the learned counsel appearing for the appellant and perused the materials available on record. 14. On the issue, as to whether, the agricultural land sold by the assessee, is situated more than the distance of 8 Kms from Avadi Municipality and as to whether, that the same falls within the definition, agricultural land, it is necessary to have a cursory look at few provisions, referred to, by the appellant. Section 2(14)(iii) of the Income Tax Act, reads as follows: (iii) agricultural land in India, not being land situate- (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area com....
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.... that the land is situated more than 8 Kms, from Avadi Municipality, the appellate authority, at Paragraph 7 of the order in I.T.A.No.432/13-14, dated 28/11/2014, categorically held that the land in question, is an agricultural land situated, at a distance of more than 8 Kms, from Avadi Municipality. The appellate authority has further held that from the letter No.5729/2013/A1, dated 3/8/2013, of Mrs.M.Bhushna Devi, Tahsildar, Ambattur, it could be seen that independent enquiries have been made, regarding the distance of the land in question, from the nearest Municipality (Avadi), result of which, clearly shows that the land in question is not situated, within a distance of 8 Kms from the nearest Municipality. The appellate authority has also held that no reason has been assigned by the Assessing Officer, in the assessment order, for not accepting the report of the Tahsildar. 18. Adverting to the report of the Departmental Inspector that the land in question is situated at a distance of 5.5 Kms and while observing that the route used by the Inspector to reach the land is a private road, laid and maintained by CRPF, the appellate authority held that public have no free access to ....
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.... property from the nearest Municipality limit is not acceptable. It is to be noted that the distance to be measured from the accessible road and not from the road made under the control of the CRPF. 6. In our opinion, Tahsildar is the competent authority to issue certificate, which is to be accepted. Further, the distance of agricultural land has to be measured in terms of the approach by road and not by a straight-line distance on horizontal plane or as per crows flight as held by the Punjab & Haryana High Court in the case of CIT vs. Satinder Pal Singh (229 CTR 82). In view of this, the AO has no material to prove the contention of the assessee that the distance of the land as on date of sale has to be held more than 8 kms. From the nearest Municipality, is not correct. Therefore, the assessee has to prove one essential condition that the land owned by him or her is situated at a distance more than 8 kms. from the nearest Municipality, which was proved by the assessee. To sum up, in our opinion, the distance has to be measured in terms of the approach by road and not by a straight-line distance on horizontal plane or as per crows flight. Further, the assessee has also ....
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....on 2(14)(iii)(b) of the Act 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 urbanization of that area and other relevant considerations. 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 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 urbanization. Such a course would be illusory. It is in pursuance of the aforesaid provision that notification No.9447, dated 6.1.1994 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 other than agricultural land. Once the statutory ....
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....ould the measurement be taken, by approach road? 26. In Kunhunarayanan v. Aravindakshan reported in 1974 KLT 300, in the case of shifting of Kudikidappu under the Kerala Land Reforms Act, 1964 and dealing with Section 78(2)(e)(ii) of the Act, directing that the new site should be "within a distance of one mile from the existing Kudikidappu, the Kerala High Court held that the distance has to be calculated by some road or pathway over the which a person will have a right to approach the alternative site when proceeding thereto from the site of the existing Kudikidappu". 27. In a given case, the agricultural land is located in a village X and if there is a lake, measuring 4 Kms x 6 Kms, by length and breadth and if on the banks of the lake, the outer limits of the nearest municipality starts, one has to visualise distance which a person has to travel, through an approach road, generally used by public. It cannot be contended that the distance between the land and the nearest municipality has to be measured in straight line or horizontal plane or by any crow flight/aerial distance. 28. For illustration, A person may have a shop in Fort Road, on the eastern side. I....