TaxTMI 
TaxTMI 
2022 (3) TMI 830
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.... Commissioners of Income-tax (Appeals), in relation to the captioned assessment year 2013-14. Since these appeals are based on similar facts and common grounds of appeal, we are proceeding to dispose them off by this consolidated order for the sake of convenience. The grounds as well as facts narrated in ITA No.477/SRT/2019, for AY.2013-14, in the case of Printisha Pravinbhai Patel have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the assessee in lead case ITA No.477/SRT/2019, for AY.2013-14, are as follows: "(1) That on facts, in law, and on evidence on record, the learned CIT(A) ought to have held that the agricultural land sold is not a "capital asset" within the meaning of section 2(14) of the Act, and hence no Capital Gains is chargeable to tax. (2) Alternatively,and without prejudice to the above ground, the learned CIT(A) has grievously erred in adopting the cost of acquisition as on 1/4/1981 at Rs. 200/- per sq. mtr. as against Rs. 380/- per sq. mtr. adopted by the appellant for calculating the LTCG." 4. The relevant material facts, as culled out from the material on record, are as follows. In ....
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.... 9. Aggrieved, the issue was taken up before the first appellate authority for relief. The ld CIT(A) partly allowed the appeal of the assessee by enhancing the fair market value (FMV) from Rs. 42.60 per sq. meter, to Rs. 200 per sq.meter. Aggrieved, the assessee is in further appeal before us. 10. Shri Mehul K. Patel, Learned Counsel for the assessee submitted before us written submissions, which are reproduced below: "Assessee e-filed Return of Income for A.Y.2013-14 on 28/03/2014 declaring a Total Income of Rs. 2,68,160/-. Assessee along with other co-owners have sold Agricultural Land situated at R.S. No.159 at Sultanabad, Dumas, Surat on 15/02/2013 and offered long term capital gains of Rs. 2,68,158/- at the time of filing Income Tax Return for the year under consideration. The Ld. A.O. referred the matter to the DVO u/s 55A of the Income Tax Act, 1961 for valuation of cost as on 01/04/1981 and computed the indexed cost of land at Rs. 1,46,846/- instead of Rs. 13,10,172/- and made an addition of Rs. 11,63,296/-. However, during the course of appeal before CIT(A), an additional ground of appeal was raised, stating that the Assessee was unaware of the fact that Asse....
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....-clause (ill) of clause (14) of section 2 of the Income-tax Act, 1961 (43 of 1961), in the Gazette of India, Extraordinary, Part II, section 3, sub-section(ii), dated 13-2-1991 under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. SO 91 (E), dated 8-2-1991, for specifying certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such notification became available to the public; And whereas copies of the said Gazette were made available to the public on 13-2-1991; And whereas the objections and suggestions received from the public on the said draft the notification have been considered by Central Government; Now, therefore, in exercise of the powers of conferred by item (B) of clause (ii) of the proviso to sub-clause (c) of clause (1A) and item (b) of sub-clause (iii) of clause (14) of section 2 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue and Insu....
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....g with the Notification No. (SO 9447) (File No.164/3/87-ITA.I) dated 06.01.1994. The municipal limits of Surat were increased from Piplod to Sultanabad, Dumas in the year 2006 as stated by the AO himself in the Remand Report dated 29/8/2017 reproduced on pages 55 & 56 of the order of CIT(A). Further during the appellate proceedings, the learned CIT (A) directed the AO to depute Inspector and measure the actual shortest road distance from Piplod up to the impugned property sold. The Inspector's Report dated 18/2/2019 and the AO's 2nd Remand Report dated 21/2/2019 are reproduced on page 63 of order of CIT (A), and the Inspector has reported that the shortest road distance is 11.5 kms. In view of the above, the learned CIT (A) has also given a finding on page 68, para 8.5.2 of his order that as per the Notification dated 6/1/1994, the impugned land is beyond 8 Kms, however, he has dismissed this ground on the reasoning that as on the date of sale, the said land was falling within the limits of Surat Minicipal Corporation as enhanced in 2006. 8.Hence, the short point for consideration of this Hon'ble Tribunal is that for the purpose of deciding the limits of Munici....
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....name) which has population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year. (2) The reference to municipal limits or the limits of cantonment board in the schedule to this notification is published in the official gazette. (Notification No. 9447/F.No.164/3/87-ITAT) On perusal of the "Explanation" Municipality means: (1) any area which is comprised within the jurisdiction of municipality, (whether known as a municipality, municipal corporation notifies area committee, town area committee, town committee or by any other name) which has population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year. (2) The reference to municipal Limit in the schedule is published in the official Gazette. And now if the explanation is read with the schedule, it means municipal limit of Surat up to 8 Km. Nowhere, the notification states that municipal limits as on 06/01/1994 have to be restricted. In fact, such an interpretation would be absurd as t....
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.... Municipal Corporation and thereby it is complying with the Notification No. (SO 9447) (File No.164/3/87- ITA.I) dated 06.01.1994. Learned Counsel submits that there is no such Notification published by the CBDT in the Official Gazette after the issue of the above Notification. Now in view of the above stated Notification dated 06/01/1994, particularly Explanation 2 of the Notification, the Tribunal Judgments of Ahmedabad, Jaipur and Indore Bench are favoring to the assessee. The ld Counsel also submits that Hon`ble Karnataka High Court judgment is also favoring to the assessee on the same issue. Therefore, we note that Assessee's Land is not covered by the definition of Capital Assets and as a result not Liable to Capital Gain Tax. 13. We note that there is no dispute regarding sale consideration agreed/received by the assessee. Only issue of disagreement between the assessing officer and the assessee is the FMV as on 01-04-1981 to be taken as cost .of acquisition. Therefore, based on the facts narrated above, Learned Counsel for the assessee invited our attention to the order dated 11.08.2015, passed by the Division Bench of ITAT Ahmedabad, in the case of Akash Deep Farms ....
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....8 100/1 Agri 26.04.05 26,18,467 24.07.08 2,43,25,103 2,17,06,636 5. 94/2 Agri 20.07.05 3,85,216 24.07.08 39,10,897 35,25,681 3,99,65,826 *transaction at Sr.No. 2 is Offered to tax as Long term capital gains i.e Rs. 79,26,870/- (after indexation) From the above lucid chart it is seen that the assessee has made a total profit of Rs. 3,99,65,826/- from sale of the lands situated at Kaneti and Telav villages of Sanand Taluka of Ahmedabad District during the year. From these sale transactions the assessee has offered to tax only the gains resulting from transaction no.2 as Long term capital gains since the land in question has been considered as Non-agricultural. The balance i.e Rs. 3,99,65,826 - Rs. 81,21,060 = Rs. 3,18,44,766 has not been offered for tax and claimed as exempt u/s 10(1) as agricultural income." 4. The assessee has contended that this land was situated beyond 8 KMs. of municipal area. It was an agriculture land, and therefore, it is to be excluded from the definition of "capital asset" provided in section 2(14)(iii) of the Income ....
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....that these decisions were not accepted by the Department. Considering the entire submissions and reports referred earlier, this issue can be divided in two parts-(l) while computing distance from municipal limit, which distance- air distance or road distance to be considered. (2) Which municipal limit should be considered for computing distance from agriculture land- municipal limit on the date of sale or municipal limit on the date of issue of the notification by the government or municipal limit as on date. As regards the first part of the issue, appellant submitted decision of honourable Punjab and Haryana High Court in which it is clearly held that it is the road distance from municipal limit and not air distance to be considered. Several tribunal decisions have also upheld this view. There is no judicial decision contrary to this view. Even if Department has not accepted these decisions, these are binding on the appellate authorities. Respectfully following these decisions assessing officer is directed to compute distance of the agricultural lands sold by the appellant by taking road distance from the limits of Ahmedabad Municipal Corporation. ....
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....ng certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such notification became available to the public; And whereas copies of the said Gazette were made available to the public on February 13, 1991; And whereas the objections and suggestions received from the public on the said draft notification have been considered by the Central Government; Now, therefore, in exercise of the powers conferred by item (B)of clause (ii] of the proviso to sub-clause (c) of clause (JA] and item (b) of sub-clause (iii] of clause (14] of section 2 of the Income-tax Act, 1961 (43 of 1961], and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue and Insurance] No. S.O. 77(E], dated February 6, 1973, the Central Government having regard to the extent 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 municipalit....
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....ns and if the distance is beyond 8 km, the agricultural lands sold will be outside the purview of capital asset and hence no capital gains can be charged on the same. This ground is accordingly disposed off." 6. Before us, limited dispute is whether the distance for identifying the geographical location of the agriculture land is to be taken by road or by aerial. Second fold of dispute is whether the municipal limit enhanced by the State Government is to be considered as starting point or it is to be taken from notification issued by the Central Government dated 6.1.1994. The ld.CIT(A) has held that notification issued on 6.1.1994 by the Central Government is to be considered. 7. Ld.DR relied upon the order of the AO. On the other hand, the ld.counsel for the assessee contended that Hon'ble Punjab & Haryana High Court in the decision referred by the ld.CIT(A) in the case of CIT Vs. Satinder Pal Singh, 229 CTR 82 has held that distance requires to be computed 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 ....
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....sts in respect of earlier periods. 2. The matter has been examined in light of judicial decisions on the subject. The Nagpur Bench of the Hon. Bombay High Court Vide order dated 30.03.2015 in ITA 151 of 2013 in the case of Smt. Maltibai R Kadu has held that the amendment prescribing distance to be measured aerially, applies prospectively i.e. in relation to assessment year 2014-15 and subsequent assessment year. For the period prior to assessment year 2014- 15, the High Court held that the distance between the municipal limit and the agricultural land is to be measured having regard to the shortest road distance. The said decision of the High Court has been accepted and the aforesaid disputed issue has not been further contested. 3. Being a settled issue, no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this issue before various Courts/Tribunals may be withdrawn/ not pressed upon. 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 ....