TaxTMI 
TaxTMI 
2014 (1) TMI 1860
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....sideration of Rs. 1.04 crores i.e. @ 26 lacs per bigha. This land was allotted to him by Govt. in 1972 on his retirement from defence services. Assessee claimed this land to be agricultural land which is out of scope of definition of capital asset u/s 2(14). He claimed that land is covered by exclusions in clause (iii) of section 2(14) and not covered by sub clauses (a) and (b) of this clause as it is situated in village Machwa where population is less than 10,000/-. This village Machwa is also out of Jaipur Municipal Corporation and it was more than 8 kms beyond the limits of Jaipur Municipal Corporation as on 6.01.1994 when the notification (P. B. Page 1) was issued under sub-clause (b), though now the distance is 2-3 kms. only due to extension of limits of Jaipur Municipal Corporation. The sale deed (P.B. page 5-10) was not registered till the end of 31.3.2008. He also purchased bonds eligible u/s 54 EC in Feb. 2008 for a sum of Rs. 50 lacs. The Assessing Officer however, mentioned in her order that the Property is situated within limits of Jaipur Municipal Corporation as per certificate of Tehsildar. Further, property is used for residential/ commercial purpose and not for agri....
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....s very deep (3 to 4 kms.) from the main road and the assessee's land was only 250 mtrs. Further there is a lane approaching the assessee's land. * In the immediate vicinity of the assessee's land, multistoried buildings are being constructed. It is not the position of the other land. In view of the said reasons, the assessee contended that FMV of the land as on 1.4.1981 should have been taken by computing the same as per principle laid down in Jahanganj Cold Storage v. Asstt. CIT [2011] 45 SOT 74/9 taxmann.com 261 (Agra) (TM). Accordingly, the value comes to Rs. 18,87,477/- as per the following calculation below : Ld.CIT(A) however considered Rs. 10,000 per bigha i.e. Rs. 40,000/- as against the assessing officer's valuation of Rs. 10,800/- per bigha @ Rs. 2,700 per bigha. The assessee has taken ground no. 2 in this respect. Department has also taken ground no. 2 for increasing the price per bigha as on 1.4.1981 to Rs. 10,000/-. 3. Let us now come to the grounds of the assessee's appeal. As regards ground no.1, ld. A/R of the assessee Shri Sandeep Jhanwar pointed out a typographical error in drafting of ground and requested to read the same by adding word &....
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....ers. It was not a relevant factor for this section to see that how the buyer intended to use the land as held in the various decisions including CIT v. Manilal Somnath [1977] 106 ITR 917 (Guj.), M.S. Srinivasa Naicker v. ITO [2007] 292 ITR 481/[2008] 169 Taxman 255 (Mad.) and Manibhai Motibhai Patel v. CIT [1981] 131 ITR 120/6 Taxman 218 (Guj.). In such circumstances, the observation that the nearby locations are getting developed as multistory project has no relevance in the present case. He further submitted that the land was situated beyond the boundaries of 8 Kms. of the limits of JMC as on 6.1.1994 (i.e. the date of issuing relevant notification No. 9447/F. No. 164/3/87-ITA-I dated 06/01/1994) as per the certificate on page 11 and trace of the site plan being produced during the course of hearing. The land has now come nearer to the boundaries covered in the jurisdictional limit of JMC due to extensions after 1994. He submitted that the question which is to be decided in this case is whether the said land would be covered by sub clause (b) of clause (iii) of section 2(14). He submitted that Under clause (b) power is given to Government to notify the area from the limit of Muni....
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....ew our attention towards the returns of income filed by the assessee in the subsequent years wherein agricultural income shown by the assessee in respect of the remaining part of land has been accepted by the department. 4. Ld. D/R on the other hand has supported the order of A.O. and ld CIT(A). He submitted that the land in question was capital asset u/s 2(14). He referred the findings given by the ld CIT(A) that 8 kms from the local limits was to be seen on the date of transfer and not on the date on which notification was published in official Gazette. He submitted that issue stands covered in the favour of Revenue by the decision of Hon,ble Cochin Tribunal in the case of Arun Sunny v. Dy. CIT [2009] 30 SOT 534 wherein it was held that the central government had issued the notification for the purpose of changing the character of the asset. The nature of the property had to be examined as on the date of transfer. Further, the transfer deed of the asset was executed during the year under consideration and therefore, the nature of the property whether it was a capital asset or not, had to be examined for the year under consideration. He submitted that ld CIT(A) has correctly held....
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....e of acquisition. Further reliance was made on decision of Hon'ble Apex court in CIT v. Gemini Pictures Circuit (P.) Ltd. [1996] 220 ITR 43/85 Taxman 594 where it was held that mere fact that the land in question was agricultural land could not be a ground to claim exemption u/s 2(14) of IT Act when it was situated within 8 kms of the local limits of Municipal Corporation. Since the land sold by the assessee was a capital asset, therefore, the surplus realized by the assessee on ale of land was assessable as capital gain. He also referred the findings of the ld. CIT(A) that the central government has the authority under section 507(a) of the Municipal Corporation act to declare any portion of a rural area as an urban area. The moment the power is exercised under section 507(a), the need for notification u/s 2(14)(iii)(b) would not arise. Similarly the moment the Central Government feels that a particular area within 8 kms of the limits of the municipality has to be treated as an urban area, the need for exercise of power u/s 507(a) would also cease. Thus two provisions are in a way complimentary to each other and at times overlap. Therefore it is not required that central Gover....
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....Smt. (Dr.) Subha Tripathi (supra), this Bench has already considered the similar matter in respect of land situated in the same village Machwa for the same assessment year. This Bench has found that the land is situated out of the limit of Jaipur Municipal Corporation and therefore, was not covered in sub-clause (a) of section 2(14)(iii). It has been held by this Bench that for the purpose of application of sub-clause (b) of clause (iii) of section 2(14) and to measure 8 KMs from the radius of Jaipur Municipal Corporation, the relevant date would be the date of notification i.e. 6.1.1994 and not the date of sale of land in question. We find that the 4 bigha land in question was part of total 16 bigha land of the assessee allotted to him by the Government in lieu of his retirement from defense services. As per the Government record in form of Girdawari which can be said to be conclusive evidence in this respect, the land was being cultivated by the assessee during the year under consideration and subsequently also. The assessee has shown Agricultural Income in the return of income of the previous year and also in the subsequent years which has been accepted. To further support this,....
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....(nearly 500mt.) whereas in the comparable case cited by the AO, the land was 3 to 4 kms away from the main road. (c) The land sold by Sh. Panna S/o Sh. Mahadev Jat was already in possession of the buyers and they were cultivating the land for past many years. The assessee submitted that all these factors make a lots of difference in the value of land. There cannot be any basis to make suitable adjustment for the above factors in case of land. According to the assessee when no comparable case is found, the Fair Market Value of the captioned land should be computed on the basis of reverse indexation in the manner approved by Third Member Judgment of ITAT Agra in the case of Jahanganj Cold Storage (supra). Accordingly, the value comes to Rs. 18,87,477/-. After considering the objections raised by the assessee, the ld. CIT(A) found that the case sited by ld. AO was not comparable. He however made his own estimation and adopted a rate of Rs. 10,000/- per bigha and took the Fair Market Value as on 1.4.1981 of the total land at Rs. 40,000/-. 8. We have heard the rival parties and considered the material on record. We find that value of land differs drastically due to its surroundings,....