TaxTMI 
TaxTMI 
2022 (3) TMI 830
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....lation 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 these ten appeals addition is made due to revising of cost of a....
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....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 Assessee has sold Agricultural Land and the same is not situated in urban area but the same is situated in rural ....
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....der 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 Insurance) No. SO 77 (E), dated 6-2-1973, the Central Government having regard to the extent of, and scope for urbanization of the areas concerned and other relevant considerations, hereby specifies the a....
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....6 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 Municipal Corporation, whether the limits as prevailing on the date of issue of Notification as on 6/1/1994 is to be applied, or whether the limits of Municipal Corporation prevailing on the Date of sale is to be applied. a) Now as on Dt. 06/01/1994, Surat City Limit was admitt....
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....ed 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 the municipal limits are decided by the State Authorities. It is pertinent to mention that the entire village of Sultanabad is comprised within the limit of Surat Municipal Corporation vide Collector of Surat letter No.19.06.2006 and notification dated 20.07.2006 declared by the Urban Development Authority. Vide Notification No.62/2008 d....
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...., 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 Pvt. Ltd in ITA Nos. 2138/AHD/2012 & 2564/AHD/2012, for the AY.2009-10, on identical and similar facts, whereby the issue relating to agricultural land sold was not treated a capital asset, within the meaning of section 2(14) of the Income Tax Act. The disputed issue whether the distance for identifying geographical location of the agricult....
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....as 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 Tax Act. Thus, any gain accrued to the assessee on sale of this land was not taxable. The ld.AO has rejected the contention of the assessee. 5. Dissatisfied with the action of the AO, the assessee carried the matter in appeal before the ld.CIT(A). The ld.CIT(A) has examined the issue in detail, and by way of reasoned finding held that gain arisen to the assessee on account of sale of agriculture land would not be taxable. Well reasoned f....
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....ion 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. As regards second part of the issue as to municipal limit as on which date is to be considered, it would be relevant to refer the relevant provision of income tax act as well as notification issued by government in this regard. 2(14) (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....
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....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 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....
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....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 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 cir....
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....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 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 ....