AI Drafter 
TaxTMI 
TaxTMI 
2016 (12) TMI 610
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....are land located at village Salingrampura, Tehsil- Sanganer, district- Jaipur to Shri Pankaj Chaturvedi, Prop. M/s Vinayak Land Developers vide sale deed executed on 21/09/2010 for sale consideration of Rs. 87,40,000/-, which was valued by the Sub-Registrar for charging of stamp duty at Rs. 89,47,500/-. It is submitted before the Assessing Officer by the assessee that sale proceeds of agricultural land at village Salingrampura was exempted and received in gift from brother Rs. 87,40,000/-. The assessee filed copy of the sale deed and evidence of acquisition of land as gift from his brother. The ld Assessing Officer also enquired from the Sub-Registrar, Sanganer-1 and Commissioner of Jaipur Nagar Nigam for stamp duty and to find out the distance from the municipal limit of the land sold. After considering the assessee's reply, the ld Assessing Officer has held as under:- (i) The assessee has concealed the fact regarding sale of above mentioned immovable property which was sold for a disclosed consideration of Rs. 87,40,000/- as against evaluated value by the Sub Registrar for charging stamp duty at Rs. 89,47,500/-. (ii) The assessee has not disclosed the above transaction eith....
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....me and the information was not filed in AIR as well as the assessee is not eligible for claiming deduction u/s 54F of the Act and has furnished fabricated document in the form of copy of sale deed by tempering page No. 2 wherein it was mentioned that the impugned land was located at more than 10 kms from the limits of Jaipur Nagar Nigam, Jaipur. Accordingly, the ld Assessing Officer calculated the long term capital gain at Rs. 75,85,570/-. 3. Being aggrieved by the order of the ld Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing as under:- "4.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. Ground no. 3(i) relates to the issue whether the land sold by the appellant is a capital asset within the meaning of section 2(14)(iii)(b). In this case, the Assessing Officer conducted inquires with the Sub Registrar, Sanganer-I and the Commissioner, Jaipur Nagar Nigam to ascertain the distance of the impugned land from the Municipal Limits of Jaipur Nagar Nigam. The reply given by the Tehsildar revealed that this land is situated around 5 kms from the local limit of the m....
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....limit of municipality existing on that date. Reliance was placed on the decision of Hon'ble ITAT, Jaipur Bench in case of Dr. Subha Tripathi in ITA No. 1129/JP/11 for AY 2008-09 dated 24.05.2013. It was further claimed that the certificate obtained by the AO do not specify as to what was the municipal limit of Jaipur as on 06.01.1994. Further, on 21.09.2010, when the agricultural land was sold, there was no direct approach road from Murlipura to Gram Saligrampura. It was requested that these facts may be directly got verified from office of Nagar Nigam/ Tehsildar Sanganer. These contention of the assessee are mentioned at Pg 8 of the CIT(A) order. Thereafter, the Ld. CIT(A) by relying on the two reports of the revenue authorities held that the land under consideration is a capital asset. It was submitted that the Ld. CIT(A) at Pg 10 of his order observed that assessee has stated that distance of 8 kms has to be ascertained from the date of sale. This is incorrect as assessee has claimed that distance is to be ascertained with reference to the limits of Municipality as existing on the date of notification and not on the date of sale. He further observed that AO has submitted two ....
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....ee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or (b) in any area within such distance, not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specified in this behalf by notification in the Official Gazette." 6.2 The above definition of capital asset to include the agriculture land was brought on the statue by the Finance Bill, 1970. It would therefore be relevant to refer to the statement of objects and reasons while introducing the amendment to the definition of capital asset contained in section 2(14) by the Finance Bill, 1970 reported in 75 ITR (St.) 69 and the relevant extracts reproduced as under: "Sub-clause (a) seeks to amend clause (14) of section 2 of the Income-tax Act which defines the term 'capital asset'. The amendment seeks to bring within t....
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.... column (3) thereof and against the State or Union Territory shown in column (2) thereof for the purposes of the abovementioned provision of the Income-tax Act, 1961 (43 of 1961). No. Name of the State or Union Territory Name of the municipality or cantonment board falling in the State/Union Territory mentioned under column (2) Details of areas falling outside the local limits of municipality or - cantonment board, etc., mentioned under column (3). 1 2 3 4 19. Rajasthan 7. Jaipur Areas up to a distance of 8 kms. from the municipal limits in all directions ** ** ** ** Explanation 1.(1) In this notification, "Municipality" shall mean any areas which is comprised within the jurisdiction of a Municipality (whether known as a municipality, municipal corporation, notified areas committee, town areas committee, town committee or by any other name) which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year. (2) The reference to municipal limits or the limit of Cant....
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....e definition of capital asset which is not located within the limits of the Municipality but located within the distance of 8 kms from the local limits. So far, the agricultural land which is located in the limits of Municipal Limits, the same will be treated as capital asset and no further requirement is to be examined. Since the land in question is located outside the local limits of Municipality, therefore, in order to determine whether the land in question falls under mischief of subclause (b) of Section 2(14(iii) of the Act, the distance of 8 kms has to be taken into account in terms of notification dated 6-01-1994. As per explanation 2 of the said notification dated 6-01-1994, the Municipal Limits is to be the limits as existing on the date on which the notification is published in the official gazette. We quote the explanation 2 of the notification (supra) as under:- "(2) The reference to the municipal limits or the limit of Cantonment Board in the Schedule to this notification is to the limits as existing on the date on which on which the notification is published in the official gazette." If the stand of the Revenue is accepted that the distance of 8 kms should....
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....on 2(14)(iii) of the Act, but also requires the fulfillment of the condition that the Central Government has issued a notification under this Clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a "Capital Asset. 11. In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, Clause (a) to section 2(14][iii] of the Act is not attracted. 12. However, though it is contended that it is located within 8 knits,, within the municipal limits of Dasarahalli City Municipal Council in the absence of any notification issued under Clause (b) to section 2(14)(iii) of the Act, it cannot be looked in as a capital asset within the meaning of Section 2(14)(iii)(b) of the Act also and therefore though the Tribunal may not have spelt out the reason as to why the subject land cannot be considered as a 'capital asset' be giving this very reason, we find the conclusion arrived at by the Tribunal is nevertheless the correct conclusion." 6.7 In light of above, the position in law is clear that section 2(14)(iii)(b) of the Act covers the situation wher....
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.... 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 up to 2 kms. From the municipal limits in all directions has to be regarded other than agricultural land. Once the statutory guidance of taking into account t....