AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 656
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....the land having been sold for a consideration of Rs. 103.16 lacs to a real estate company, brought to tax u/s. 2(24)(vi) r/w s. 45 of the Act by the Assessing Officer (AO). In appeal, the assessee sought consideration of the additional evidence by way of a report from the Tehsildar, which was not admitted by the ld. CIT(A) in-as-much as the assessee could not show that he was prevented by sufficient cause in not adducing the said evidence before the AO and, thus, satisfy the condition of r. 46A(1) of the Income Tax Rules, 1962 ('the Rules' hereinafter). The limited issue, it was accordingly urged before us by the ld. counsel for the assessee, Sh. Sehgal, is the sustainability in law, in the facts and circumstances of the case, of the non-admission of the said evidence by the first appellate authority, adduced by the assessee before him. Relying on the decision in Tek Ram (thro' LRs) v. CIT [2013] 357 ITR 133 (SC), it was submitted by him that the same ought to have been admitted and, consequently, considered by the ld. CIT(A), so that direction/s to that effect be issued thereto; the same having a direct bearing on the character of a part (measuring 16 Kanals, 1.5 Marlas) of the la....
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....bility of the additional evidence at the appellate stage, denied by the ld. CIT(A) for being not in terms of rule 46A of the Rules, mandatory in character. This is as, de hors the same, the subject land sold by the assessee during the year is, on the basis of the material on record, in law not an agricultural land, i.e., is a capital asset, capital gains on the transfer of which is liable to tax as income. Per the said additional evidence, the assessee seeks to establish that a part of the land sold, i.e., 16 K, 1.5 M, is outside the 2 km distance (from the municipal limit of Goraya) and, thus, not a capital asset under the Act. The gain arising on its' transfer could be brought to tax only if it qualifies to be a capital asset u/s. 2(14) of the Act. The said evidence, it is argued, has a direct bearing on the finding as to the subject land being a capital asset and, thus, of prime relevance and, therefore, ought to have been admitted by the ld. CIT(A), and for which he has power under rule 46A(4) of the Rules. [And, in any case, by the Tribunal u/r. 29 of the Income Tax (Appellate Tribunal) Rules, 1963]. This sums up the assessee' case. We have, as would apparent from the case as ....
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....e court could pronounce a judgment satisfactorily. That is, the requirement of the court to enable it to pronounce a judgment does not refer to pronouncement of judgment one way or the other, but is only to the extent whether satisfactory pronouncing of the judgment on the basis of the material on record is possible. In sum, where therefore the appellate court considers that such an additional evidence would be necessary for proper adjudication of the matter, i.e., where it cannot, in the absence of the said evidence, pronounce a judgment satisfactorily, it is to invoke its' discretion even if the evidence being furnished before it is for the first time, and there has been no denial of opportunity by the authority below (i.e., before whom it ought to have been furnished) for adducing the said evidence. This, then, explains the law in the matter. Determination 3.4 The next issue, therefore, is if the said evidence is liable to be admitted in the facts and circumstances of the case, or not so. In our considered opinion, the said admission stands rightly denied and, in any case, the said evidence is not liable to be admitted. We hold so for more than one reason, which we detail he....
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....tion. This would be even otherwise necessary as it is only when so marked, that the latter is enabled to make his comments on the subject matter of the report. Further, the report, by hand, appears to be signed by one 'Naya Ram', whose capacity is not clear. Needless to add, the report does not bear any stamp or the number by the office of the Naib Tehsildar, so as to regard it as an official communication by the said office. C. The report is, even otherwise, vague. It states of certain khasra numbers as falling within the Nagar Panchayat, Goraya, and others at a distance of 2 km. therefrom and, thus, outside the municipal limit. We have, in so stating, gone through both the report in vernacular, as well as its' english translation (which though is not, as required to be, certified by a competent person), as well as the assessee's application. That is, it does not clarify as to how the stated distance is measured, and if the same (stated as 2 km) is from the municipal limits of Goraya. Then, again, the requirement of law is that the distance should exceed the two kilometers, i.e., even assuming that to be the prescribed distance u/s. 2(14)(iii). D. Next, the sale deed - the e....
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....unless the context otherwise requires,- (14) "Capital assets" means- (a) property of any kind held by an assessee, whether or not connected with his business or profession; (b) any security held by ...., - but does not include - (i) .... (ii) ... (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 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 kilometers, 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 kilometers, 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 kilometers, from the local limits of any municipalit....
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.... assessee may become liable to be admitted in pursuance of r. 46A(4) of the Rules or r. 29 of the Appellate Tribunal Rules. In the facts of the instant case the entire land is sold as one, contiguous piece of land, i.e., sold as part of the same transaction (i.e., comprised in one sale deed); to the same buyer (M/s. T. M. S. Real Estate (P.) Ltd., Phagwara); at the same rate; for the same purpose, which appears to be the development of real estate. And, in any case, going by the sale rate, i.e., Rs. 35 lacs per acre, for non-agricultural purposes. There is in fact no contention, much less it's substantiation, at any stage, of the intended user of the land by the buyer as being for agricultural purposes, i.e., as to the stated purpose of its' purchase, or the use to which it was actually put subsequently. A good part of the land (7K, 10M) being admittedly a capital asset, the question that arises is: Could the character of the two parts of the same land, put to the same use, be different merely because of a difference in their distance from a specific location? How could it be that a part of the same land is nonagricultural, and the other, agricultural, as it falls outside the 2 k....
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....gs, for all intents and purposes, an urban land, sold for being developed into a real estate by a company in the said business. Reference here is made to the decision by the Apex Court in Sarifa Bibi Mohamed Ibraham & Ors. v. CIT [1993] 204 ITR 631 (SC). In the said decision the Apex Court emphasized the need to have regard of the entirety of facts and circumstances of the case in arriving at a decision one way or the other; it finding the circumstances, as obtaining in that case, against, outweighing that in favour of the assesee's case of having sold an agricultural land, and held it to be not an agricultural land at the time of its' sale and the profit arising there-from as liable for assessment as capital gains. The land, in the present case, in our view, on the basis of the material on record, and irrespective of the distance of a part of it from the municipal limit (of Goraya), i.e., within or outside the stated, prescribed limit of 2 kms., is sold by the assessee to T.M.S. Real Estate (P.) Ltd., the buyer, as a non-agricultural land. The said distance, it needs to be appreciated, considering the area of the land under consideration (16K, 1.5 M), would be, where so, breache....
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....i Deoraj & Co. v. CIT (supra) and Text Hundred India Pvt. Ltd. (supra), being themselves based on several decisions, mostly by the Apex Court itself. In Tek Ram (supra), the Hon'ble Court was of the view that a satisfactory pronouncement of the judgment required the perusal of the documents produced by the appellant and, accordingly, set aside the matter back to the Hon'ble High Court for the purpose. This is precisely what has been explained to be the law in the matter (refer para 3.3 of this order). In the instant case, though, the decision on merits is based on a registered document, based on the collector rate applicable to urban land, with the stated sale consideration agreeing with the collector rate for property falling within municipal limits. In fact, the basis of the prescription of the distance stated in the certificate, i.e., population, as well as the manner of ascertaining the distance, is not specified. Further, an examination of the facts, given the law in the matter, the same is found as of no moment as the subject land, even if outside the prescribed limit, qua which evidence is being led, would be of little consequence in the facts and circumstances of the case, ....