TaxTMI 
TaxTMI 
2019 (6) TMI 1086
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....wners sold their shares to the assessee and other two co-owners. Thus, all three land owners thereafter sold this land on 26.3.2013 for a consideration of Rs. 1,71,00,000/-. The assessee has 1/3rd share. For the purpose of charging stamp duty, the sub-Registrar has valued the property for payment of stamp duty on transfer of this land at Rs. 4,72,71,900/-. The AO got information about this through annual information wing. He issued a notice under section 148 of the Act on 6.5.2016. In response to this notice, the assessee wrote a letter to the AO that return filed on 31.3.2016 be treated as filed in response to the notice under section 148. During the assessment proceedings the assessee filed a reply to the AO vide letter dated 28.8.2017. It is pertinent to take note of this letter, which reads as under: 1) "I have sold Agriculture land situated At: village Bhiwaldi, which was purchase by me on 29/03/2007 and 15/10/2010 and same was sold on 26/03/2013. On receipt of the notice I have filed my return of income on 31/03/2016 declaring total income from capital gain Rs. 1378330/- and tax on total income Rs. 469980/- paid wide challan no.00001, BSR code: 0292036 dated 31/03....
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....ing 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; or (b) in any area within the distance, measured aerially: (i) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (ii) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (iii) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation: For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published b....
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....pose of valuation. He has reported that the land is situated within 8 kms. from municipal limit which is evident from Google map also. This finding of the ld.CIT(A) is factually incorrect. Firstly, Junior Engieer Shri Nikhil Roy is not a competent person to give any certificate determining geographical situation of the assessee's property form the municipal limit. Revenue official under the Gujarat Land Revenue Code 1879 is the competent officer for issuing such certificate. The assessee has annexed such certificate from Talati-cum- mantry of this village and certificate is available on page no.20 of the paper book. He took us through this certificate, which reads as under: "Running English Version of Certificate in Gujarati from Gram Panchyat dtd. 22/11/2017 certifying the distance of agricultural land of aJQove 10 kms. from the Municipal limit. BHUVALADI GRAM PANCHYAT Village-Bhuvaladi, Tal.Daskroi,Ahmedabad-382430 JavakNo.  ....
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....f in ITA No.2138/Ahd/2012 where one us was author (Judicial Member). On the strength of these documents, he contended that the assessee has sold agriculture land. In order to prove status of the land, the assessee has produced copy of the Form No.7/12 i.e. documents maintained by the State Revenue Officials exhibiting record of rights of the landholders under Gujarat Land Revenue Code, 1879. This fact, according the ld.counsel for the assessee has not been disputed by the AO. Thus, he emphasized that the assessee sold agriculture land which was situated beyond 8 kms. from municipal limit, and on sale of this land, if any profit arose to the assessee, then it is not taxable. 8. On the other hand, the ld.DR contended that certificate of Junior Engineer is available on record who observed that situation of this land is within 8 kms. Contrary to this, the assessee has annexed certificate of Talati-cum-mantry on page no.20, but he gave his opinion on estimate basis. In his opinion, this land is situated about 10 kms. away from the municipal limit. He further contended that talati-cum-mantry is an elected officer and not revenue official and therefore this certificate should not be....
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....of, and scope for urbanisation of the areas concerned and other relevant considerations, hereby specifies the areas shown in column (4] of the schedule hereto annexed and falling outside the local limits of municipality or cantonment board, as the case may be, shown in the corresponding entry in column (3] thereof and against the State or Union Territory shown in column (2] thereof for the purposes of the above mentioned provision of the Income-tax Act, 1961 (43 of 1961]. . Gujarat 1. Ahmedabad Area upto a distance of 8 kms. From the municipal limits in all directions Expln1(2) - the reference to 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 the notification is published in the official Gazette." From the above, it is clear that the land situated within 8 kilometers from Ahmedabad municipal corporation limit is urban land and to be treated as capital asset. However land situated outside 8 km limit will be agricultural land not to be treated as capital asset. For computing the distance of 8 km, the municipal limit is also defined. Since municipal limit is dynamic ....
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....mputed for identifying the geographical location of the agriculture land from the municipal limit is concerned, it is to be measured by road, and if the distance is beyond 8 KMs, then that land would not fall within the definition of capital asset. He further pointed that Hon'ble Bombay High Court has also concurred with this view in the decision of CIT Vs. Nitish Rameschandra Chordia, 57 taxmann.com 394. He placed on record copy of this decision. In this decision, the Hon'ble Bombay High Court has specifically laid down that the distance is to be measured by road and not as per crow's flight. The ld.counsel for the assessee pointed out after this decision of the Hon'ble Bombay High Court, the Board has issued circular bearing nos.17/2015 and accepted the decision. He placed on record copy of the circular. 8. We have duly considered rival contentions and gone through the record carefully. The definition of "capital asset" has been provided in section 2(14) of the Act. Sub-clause (a) and (b) of Section 2(14)(iii) contemplates that if an agriculture land is in India, and it is situated at a distance of more than 8 KMs. from the local limit of any municipality cantonment boar....
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....n. This may be brought to the notice of all concerned. [F. No. 279/Misc./140/2015-ITJ] (D S Chaudhry) CIT (A&J), CBDT" 9. Thus, if the finding of the ld.CIT(A) is being examined in the light of the circular, then one thing is clear that the distance is to be measured by roads in this accounting year. The land sold by the assessee is situated beyond 8 KMs. of the municipal limit. 10. Next objection of the AO was that the State Government has enhanced the municipal limit in 2006 and the distance is to be measured from new boundary of the Ahmedabad Municipal Corporation Limit. AMC limit was extended upto Sarkhej since 2006. The ld.CIT(A) has examined this aspect, and has observed that perusal of sub-clause (b) of section 2(14)(iii) would indicate that the municipal limit is to be taken from the area which has been notified by the Central Government in its gazette notification. Central Government has notified the area on 6.1.1994, and from that notification, the agriculture land of the assessee was situated beyond a distance of 8KMs." 10. In the light of the above, let us examine the facts of the present case. Both the Revenue authorities have not....