2021 (10) TMI 1050

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....t Year (AY) 2013- 14. In both the appeals, the Revenue raised identical grounds of appeal, the facts in both the appeals are common, the ld. CIT(A) decided appeal of both the assessees by common order, therefore, with the consent of parties, both the appeals were clubbed, heard and are decided by consolidated order to avoid conflicting decision. For appreciation of facts, the fact in ITA No.258/SRT/2018 in Shri Manubhai Rajabhai Dhameliya is treated as lead case. The grounds raised Revenue are as under: "1. Whether, on facts and in law the ld. CIT (A) was justified in allowing the appeal of the assessee as not appreciated that even the word road distance does not constitute the distance followed by the traffic Rules. 2. On the basis of ....

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....nd should not be treated as capital asset. The assessee again vide reply dated 24.02.2016 submitted that method to measure to distance is not provided in the definition of capital asset and therefore, the distance has to be measured by road. To support his submission, the assessee relied on various case laws. The assessee also relied on CBDT Circular No.17/2015 dated 06.10.2015 wherein it was clarified that distance has to be measured aerially in respect of agricultural land. The assessee explained that after the decision of Hon'ble Bombay High Court in Smt. Maltibai R Kadu 374 ITR 531 (Bom), the CBDT issued said circular and clarified that distance between the Municipal limit and agriculture land to be measured aerially. The assessee submi....

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.... of the Income tax. On the submission of assessee, the ld.CIT(A) sought Remand Report from the AO. The AO was directed to depute the Inspector to visit the impugned land and to make actual measurement of actual distance of land from the limits of SMC and to take the measurement in the present of assessee. The AO deputed the Inspector who visited on the spot and furnished the Remand Report wherein he measure the distance by road at 8.8 kms. The ld.CIT(A) after considering the submission of the assessee, report of Deputy Executive Engineer, the report of Inspector held that the land is situated beyond 8 kms from the limit of SMC, hence falls within the exemption provided under the definition of capital asset under section 2(14) of the Act and....

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.... Court in Smt. Maltibai R Kadu (supra) clarified that w.e.f 01.04.2016 the measurement of distance to be taken aerially. Thus, the concept of aerial distance was brought by way of Finance Act, 2013 would apply prospectively i.e. in relation to A.Y. 2014-15. These facts are clarified in para 2 of Circular No.17/2015. The ld.AR further submits that prior to that the distance was measure through road distance as held by Hon'ble Bombay High Court in Smt. Maltibai R Kadu (supra) the decision has been accepted by the Revenue and issue was not further contested. The ld.AR further submits that during the pendency of appeal, the ld.CIT(A) sought Remand Report from AO with the direction to AO to depute the Inspector for measurement of distance. The I....