2021 (4) TMI 1156

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....ts and in law but in perverse. 2.The learned CIT(A) erred in upholding the validity of initiating proceedings u/s.147 though there is no escapement of income in this assessment year. 3.The learned CIT(A) erred in holding that capital gains arose in in this assessment year contrary to the provisions of Sec.2(47)(v) on a misconstrued fact of not giving possession. 4.The learned CIT(A) failed to appreciate that it is not mere wrong mentioning of section as 143(3) but making assessment by issue of notice u/s.143(2) without a valid return and there by erred in invoking Sec.292B to hold it is a curable defect instead of holding it to be invalid assessment. 5.The learned CIT(A) ought to have read the GPA with later sale Deed to verify about receipt of entire consideration and giving possession of the property and ought to have held that capital gains arose when GPA was executed. 6.The learned CIT(A) erred in holding that the property sold is a capital asset by referring to irrelevant decisions and holding it to be in a Municipality though it is only in a panchayat and continued to be an agricultural land at the time of GPA and also at the time ....

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....owed it to be registered. After sale the land might have given for lease and the verification did not state as to when the lease was given as the assessment is made during 2018-2019 and not in 2010-2011 or immediately. In the absence of providing such information to the appellant anti not narrating the contents of the enquiry report it is fallacious to hold an agricultural land to be non agricultural land. The appellant submit that the land transferred is not a Capital asset and is not assessable to Capital gains tax". 6.5.2 I have carefully considered the alternate grounds of appeal and contentions of the assessee, and examined the same in the light of the facts and the circumstances of the case, as emanating from the assessment record, and documentary evidence placed on record. 6.5.3 As seen from the assessment order, the AO has recorded clear finding of facts with regard to the nature of the property under transfer, and the relevant portion of the same is reproduced below for ready reference: i) The assessee was specifically asked to prove that the land in question was not a capital asset and does not fall within the purview of the Section 2(14)(iii)(a....

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....egally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or (iv) Cantonment Board as defined in section 358 of the Cantonments Act, 1924 (2 of 1924);} Article 243P of the Constitution: 243P. Definitions In this Part, unless the context otherwise requires, (a) Committee means a Committee constituted under article 243S; (b) district means a district in a State; (c) Metropolitan area means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be Metropolitan area for the purposes of this Part; (d) Municipal area means the territorial area of a Municipality as is notified by the Governor; (e) Municipality means an institution of self government constituted under Article 243Q; (f) Panchayat means a Panchayat constituted under Article 243B; (g) population means the population as ascertained at the last preceding census of which the relevant figures have been published Article 243Q of the....

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....the previous year; or (b) in any area within such distance, not being more than eight kilometres, 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, specify in this behalf by notification in the Official Gazette; 59. It is very clear from the above that the gain on sale of an agricultural land would be exigible to tax only when the land transferred is located within the jurisdiction of a municipality. The fact that all the expressions enlisted after the word municipality are placed within the brackets starting with the words 'whether known as' clearly indicates that such expressions are used to denote a municipality only, irrespective of the name by which such municipality is called. This fact is further substantiated by the provisions contained under clause (b) wherein it has been clearly provided that the authority referred to in clause (a) was only municipality. 60. We find force in the argument of the AR that clarifying within the brackets in the section 2(14)(iiil(a) is ....