TaxTMI 
TaxTMI 
2023 (5) TMI 413
X X X X Extracts X X X X
X X X X Extracts X X X X
....use where the framer assessee did not maintained records of bills but he produced the copy of valuation report from registered valuer which is on records. 3. That the learned Assessing Authority/CIT(A) further erred by framing assessment on basis of conjectures & surmises. 4. That the learned Assessing Authority/CIT(A) further erred by charging interest wrongly u/s 234A, 234B, 234C & 234D of the Income Tax Act, 1961. 5. That the learned Assessing Authority/CIT(A) further erred by initiating penalty proceedings u/s 271(1)(b) & 271(1)(c) of the Income Tax Act, 1961." 3. Notice u/s 148 was issued by ITO, Ward-3, Rewari on 26.3.2014 after recording reasons that the assessee has sold immovable property valued at Rs.5,96,62,500/- on 11.02.2013. In response to the query letter dated 07.07.2015, the assessee has furnished his reply alongwith copy of sale deed. The sale deed reveal that the assessee has sold land for Rs.7,18,03,125/- vide sale deed No.2137 dated 21.03.2013 situated at Garhi Alawalpur, Teh- Dharuhera, Rewari wherein the assessee has ½ share. The share of sale consideration of the assessee works out to Rs.3,59,01,592/-. 4. As the land is situated within 5 KMs f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not entitled for deduction claimed u/s 54B & 54F beyond the amount limit of Rs. 66,39,450/- (Rs.15,00,000 + Rs.51,39,450)." 8. The assessee further submitted before the ld. CIT(A) that the assessee sold agricultural land at Vill.- Alawalpur, Teh- Dharuhera, Rewari dated 10.02.2013 (FY 12-13) and the AO has wrongly treated it as urban land and further the assessee has re-invested the sale proceeds in his wife and son's name and hence no taxability arises. The ld. CIT(A) concluded that the land was situated within 5 KMs from Dharuhera notified area and the assessee's contention that Dharuhera became Municipality in the year 2007 holds no ground. The ld. CIT(A) also held that the assessee failed to furnish documents of ownership of houses claimed to have been constructed by him nor proved that the amount of capital gains was invested in construction of house, hence no deduction u/s 54F of the Income Tax Act, 1961 is allowable. The ld. CIT(A) also held that the new agricultural land purportedly purchased from the sale proceeds of the agricultural land in question was in the name of assessee's wife and sons who had no source of income. Thus, it appears to be a case of benami transacti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is Daruhera Municipal Committee was situated in district Mohindergarh and not in Rewadi. The Land situated of the assessee in Tehsil "Dharuhera" but not "Daruhera" which is situated in district Rewadi but not in District Mohindergarh as provided in the notification. 2.5 It is necessary to submit that as per present situation also Dharuhera is about 20Kms from District Rewari. While Dharuhera is on the other side of district Rewari as compared to Mohindergarh which is on the other side. While Dharuhera is about 75Kms from District Mohindergarh. Copy of Google Maps are enclosed as Annexure A, B and C which were earlier also enclosed with the application dated 19.10.2022 filed on 20.10.2022 and for the sake of convenience again enclosed. 2.6 It is therefore humbly submitted that the Land sold by the assessee in village Garhi Alawalpur, Tehsil Dharuhera, District Rewari was outside the scope of agricultural land included in the notification because the same was more than 22 Kms from the Municipality Rewadi as provided in the Notification dated 06.01.1994 applicable in the present case. 2.7 It is humbly submitted that the Ld. AO has not appreciated the notification properly and ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted that Agricultural Land was always outside the purview of central legislation which includes Income Tax Act and so agricultural income was never included as taxable under Income Tax Act. Central Government on account of urbanization found that nature of agricultural land has been changed due to urbanization or industrial development or any other similar reason by the notification includes such land under the scope of Income Tax Act from time to time. Thus the scope of Income Tax is extended only within the limits provided in the notification but not beyond the notification. In the present case notification dated 06.01.1994 applicable because the land was sold before the subsequent notification brought by the legislature. In this notification only area in all directions of distance of 5 Kms from the municipality of Rewadi could be under the scope of Income Tax Act but not beyond 5 Kms. 4. It may be appreciated that the land in question is more than 22Kms from the municipality of Rewadi as provided in the notification and so is outside the purview of the Income Tax Act. It is necessary to state that assessing officer while recording reasons noticed that notification issued by C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tside the scope of Income Tax Act as the same was not capital asset as per notification dated 06.01.1994 which was understood incorrectly by both the lower authorities due to which ground No. 7 challenging the reassessment proceeding is raised and so reassessment proceeding may kindly be held to be bad in law by admitting this ground. 7. That the ground no. 8 is again highlighting the legal ground that addition made is bad in law as the land in question is not a capital asset as explained above the factual aspect which is clearly evident from the google location as well as certificate from Tehsildar that the land in question is more than 22Kms from the Municipality Rewadi as mentioned at S no. 49. 8. It is necessary to bring into your kind notice decision of Jurisdictional High Court i.e., Hon'ble High Court of P&H in the case of CIT Vs. Lai Singh reported in 195 taxmann 420 (2010) in which it was held that certificate from Tehsildar correctly relied upon by the Ld. CIT(A) and it cannot be discarded. This decision was subsequently followed by Delhi High Court in CIT vs Vijay Singh Kadan reported in 63 taxmann.com 22 (2015). Subsequently Hon'ble ITAT Chandigarh Bench in the case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sewn into any wearing apparel;] [(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 according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or (b) in any area within such distance, not being more than eight kilometers, 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 Gazette47;]" 15. In accordance with the provisions of Section 2(14), the notification dated 06.01.1994 has been issued wherein the Municipalities and Cantonment Boards have been notified. The said notification is reproduced as under: INCOME-TAX ACT, 1961: NOTIFICATION UNDER SECTION 2(1A)(C), PROVISO, CLAUSE (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al limns in all directions. 3. Assandh (Distt. Karnal) Areas up to a distance of 2 kms from the municipal limits in till directions. 4. Bahadurgarh (Distt. Rohtak) Areas up to a distance of 8 kms. from the municipal limits in all directions. 5. Ballabhgarli (Distt. Faridabad) Areas up to a distance of 8 kms. from the municipal limits in all directions. 6. Banvala (Distt. Hissar) Areas up to a distance of 2 kms. from the municipal limits in all directions. 7. Bawani Khera (Distt. Bhiwani) Areas up to a distance of 5 kms. from the municipal limits in all directions. 8. Bhiwani Areas up to a distance of 5 kms. from the municipal limits in all directions. 9. Charkhi Dadri (Distt. Bhiwani) Areas up to a distance of 2 kms. from the municipal limits in all directions 10. Chika (Gulla) (Distt. Kurukshetra) Areas up to a distance of 2 Kms. from the municipal limits in all directions. 11. Debawali (Distt. Mohindergarh) Areas up to a distance of 5 kms. from the municipal limits in all directions  ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in all directions. 31. Kallanwali (Distt. Sirsa) Areas up to a distance of 2 kms. from the municipal limits in all directions. 32. Karnal Areas up to a distance of 8 kms. from the municipal limits in all directions. 33. Kharkhauoda (Distt. Sonepat) Areas up to a distance of 2 kms. from the municipal limits in all directions. 34. Thanesar (Distt. Kurukshetra) Areas up to a distance of 5 kms. from the municipal limits in all directions. 35. Ladwa (Distt. Kurukshetra) Areas up to a distance of 2 kms. from the municipal limits in all directions. 36. Meham (Distt. Rohtak) Areas up to a distance of 2 kms. from the municipal limits in all directions. 37 Mohindergarh Areas up to a distance of 2 kms. from the municipal limits in all directions. 38. Naraingarh (Distt. Ambala) Areas up to a distance of 2 kms. from the municipal limits in all directions. 39. Narnaul (Distt. Mohindergarh) Areas upto a distance of 2 kms. from the municipal limits in all directions. &nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 57. Sonepat Areas up to a distance of 8 kms. from the municipal limits in all directions. 58. Taraori (Distt. Karnal) Areas up to a distance of 2 kms. from the municipal limits in directions. 59. Tauru (Distt. Gurgaon) Areas up to a distance of 2 kms. from the municipal limits in all directions. 60. Tohana (Distt. Hissar) Areas up to a distance of 2 kms. from the municipal limits in all directions. 61. Yamunanagar Areas up to a distance of 8 kms. from the municipal limits in all directions. 62. Jagadhari (Distt. Yamunanagar) Areas tip to a distance of 8 kms. from the municipal limits in all directions. ............................................... 2. This notification shall have effect on and from the date of its publication in the Official Gazette. Explanation 1. (1) In this notification, "Municipality" shall mean any areas which is comprised within the jurisdiction of a municipality, (whether known as a municipality, municipal corporation, notified areas committee, town areas committee, town committee or by any other name) which has a population o....