AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1311
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....appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are that assesse is an individual and derived her income under the head income from house property and income from other sources. The assessee filed its return for the assessment year under consideration on 29.3.2010 declaring a total income of Rs. 35,62,070/-. The case was selected for scrutiny and accordingly, notice u/s. 143(2) of the I.T. Act, 1961 dated 25.8.2010 was issued and served upon the assessee. In response to the same, the A.R. of the assessee attended the assessment proceedings from time to time and filed all the documents as called for in respect of sources of income disclosed in the return of income. After examining and verifying the same, the AO passed an order u/s.143/(3) of the I.T. Act, 1961 dated 19.12.2010 assessing the total income at Rs. 5,24,16,940/- within the following additions as against the returned income of Rs. 35,62,070/-. i) On account of Long Term Capital Gain on sale of agricultural land Rs. 4,88,38,251/- ii) Disallowance of expenses incurred on earning commission and interest income Rs. 24,872/- 4. Aggrieved with the aforesaid order o....
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....bmitted that the after the death of Sh. Swatantar Kumar on 14.05.1995, his share was inherited by Alka Jain and her son Sourabh Jain legal heir of the deceased of Sh. Swatantar Kumar. Thus, after the inheritance, Smt. Alka Jain become the owner of 4 bigha and 6 Biswa and Sourabh Jain becomes the owner of remaining 2 bigha 4 Biswa. It was further submitted that the total land of 6bigha and 10 biswa was sold to for the total sales consideration of Rs. 7,50,00,000/- vide agreement to sell dated 07th May, 2008 and assessee's share out of the proceeds is Rs. 4,96,15,384/-. Since the land sold by the assesseewas agricultural land beyond 8 kms from Municipal limits, no capital gain tax was offered by the assessee. Ld. Counsel of the assessee further submitted that the AO had issued a show cause notice to the assessee on 23.11.2011 which was replied by the assessee vide letter dt.. 29.11.2011 and it was submitted that the said land is an agricultural land as defined u/s 2(14) of the Income Tax Act and therefore it does not fall within the meaning of capital asset and hence not liable for capital gain under section 45 of the Income Tax Act. In this regard, the assessee also submitted a ....
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....om the Tehsildar, Gurgaon in which it was certified that land is situated more than 8.5 Kms away from the nearest municipal limit. The Ld. CIT(A) sent the application under Rule 46A as well as evidences to the Ld.AO for comments and verification and called for a remand report. The AO during the remand proceedings sent his inspector three times on 4.3.2013, 5.3.2013 and 8.3.2013 to visit the Tehsildar office for confirmation of certificate issued by him and it was confirmed by Tehsildar that the certificate was issued by his office only. However, Ld. AO in remand report reiterated its stand of denying exemption. The assessee filed a rejoinder (PB page no. 85) to the remand report clarifying each of the issues raised by the AO. The Ld. CIT(A) admitted the additional evidences filed by the assessee and gave a categorical finding in para 10.1 onwards of its order and deleted the addition made by the AO wherein the CIT(A) has categorically held that: i.) Appellant had declared agricultural income in earlier years and the same has been accepted by the department also. (PB Pg. 58-62) ii.) Sale deed produced by the assessee clearly shows that the land sold is an agricultural land.(PB Pgs....
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....led by her for the year's preceding the year of sale of land has shown agricultural income as part of her gross total income. Section 2(14)(iii) deals with the issue of classification of agricultural land as a capital asset. The same reads as under: "(14) "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include- [iiiJ 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 committee, 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, urbanisation of that area and other relevant considera....
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....he Tehsildar is direct distance only as nowhere in his certificate it has written that the same is either through road etc. Thus having got anything adverse in this respect it has to be presumed that it is the direct distance only. Further the inspector of his Circle visited the office of Tehsildar three times. Had there been such a doubt the department could have enquired from the Tehsildar. The AO having failed to do so cannot allege the appellant of having not specified anything when she has got a specific certificate from the Tehsildar. As a result this ground of appeal is allowed and the addition made by the AO of Rs. 4,88,38,251/- is deleted. 8.1 From the above, we find that assessee has sold agricultural land bearing khasra NO.204 (1-10),205(0-12),134/2(2-7),135/1(2-1) measuring 6 bigha 10 biswas situated within the revenue estate of village Haiderpur, Viran, Tehsil and District Gurgaon Haryana on the basis of jamabandi and mutation No. 3471. Out of the said land, the assessee was registered owner of two bigha and two biswa on the basis of jamabandi for the year 2002-03 and remaining land measuring 4 bighaand 8 biswa was recorded in the name of Sh. Swatantar Kumar husband ....
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....dated 18.02.2008 was also filed before Tehsildar Gurgaon regarding the certificate for confirmation of municipal limit and population of the village HaiderPur and the said application was marked to Patwari on 02.05.2008. The Patwari submitted his report enclosed at PB Pg. 8 and it was clarified that the land is situated more than 8KMs from the municipal limit of Gurgaon. In addition to the same, assessee also asked the AO in case still there is any doubt to verify the same from the Tehsildar by making independent inquiry u/s 131 of the Act. But AO ignored all the above evidences and certificates made addition of Long Term capital gain Rs. 4,88,38,251/- (Rs. 4,96,15,384/- - 7,77,133/-) and passed the assessment order u/s 143(3) of the Act, 1961 pm 19.12.2011. Aggrieved by the assessment order, assessee preferred an appeal before the Ld. CIT(A) and submitted all the facts and evidences produced before the Ld.AO. The Assessee also filed application under Rule 46A and submitted the copy of certificate from the Tehsildar, Gurgaon in which it was certified that land is situated more than 8.5 Kms away from the nearest municipal limit. We note that Ld. CIT(A) sent the application under Rul....