TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 655
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.... 2. Because learned Commissioner of Income Tax (Appeals) erred in sustaining the addition of long term capital gain Rs. 13230858/- by wrongly observing that land situated at village masuri pargana dasna is within the municipal limits of Ghaziabad though the agricultural land is undisputedly beyond the municipal limits of Ghaziabad and dispute was applicability of notification So10(E)/9447 published on 06/01/1994. 3. Because learned Commissioner of Income Tax (Appeals) erred in holding the agricultural land, capital assets though the same is beyond 8 km. of municipal limits in terms s. 2(14)(iii)(a)/(b) of act as also held by hon'ble ITAT in several cases, hence order is against the law." 3. Briefly stated the facts of the case are that ....
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.... Ghaziabad in 1994. Since the assessee has purchased this property in FY 2005-06 and sold the property in FY 2012-13, the plea of the assessee for calculating the distance of the said property from the municipal limits of Ghaziabad in 1994 was rejected by the Assessing Officer. Assessing Officer noted that in the meanwhile information was carried out from the Tehsildar who also confirmed that the said land is about 5 kms from the municipal limits of Nagar Nigam. AO concluded as under :- "Amply opportunities have already been provided to the assessee to present his case and to substantiate as to how the said land is situated beyond 8 Kms from the Municipal limits of Ghaziabad, which is the only point of dispute in this case. The Inspectors....
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....isions of capital gain contending that the land sold by him was agricultural rural land and is exempt from tax as per provisions of IT Act, 1961. During the course of appellate proceedings it has been argued that for the purpose of determination of rural or urban land the municipal limits as on 06.01.1994, when the notification of distance from respective municipal limits, was passed, should be considered with reference to section 2(14)(iii). 5.1.1 Examination of facts reveal that the appellant sold a joint property leading to assessment of long term capital gain of Rs. 1,32,30,8581- by the AO for appellant. During the course of assessment proceedings the AO found that the said property is a capital asset, as the same lies within the muni....
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.... effect that municipal limits were extended upto Govindpuram and Dasna Drain on 31.08.1994 on its upgrading from Municipal Council (Nagar Palika) to Municipal Corporation (Nagar Nigam) on same date. Assessee also referred to confirmation dated 15.03.2016 from GNN to the effect that distance of Vill Masuri during the year 1993-94 was 10 km from the local limits of the Municipal Council (Nagar Palika). Therefore, considering the report of the inspector dated 04.03.2016 as well as confirmation by Ghaziabad Nagar Nigam dated 15.03.2016, the land in question is undoubtedly beyond 8 km from the limits of Municipal corporation during 1993-94, though the confirmation from GNN of distance of 10 km is more reliable than the report of the inspector.....
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.... to be the limits as existing on the date on which the notification is published in the official gazette. We quote the explanation 2 of the notification (supra) as under:- "(2) The reference to the 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 on which the notification is published in the official gazette." If the stand of the Revenue is accepted that the distance of 8 kms should be considered from the Municipal Limit exists as on the date of the sale of land then it would render the notification issued by the Central Govt. as ineffective and unworkable. As it is made clear by explanation 2 of the said notification that Municipal Limits is to be c....
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....e of 8 kms. from the Municipality has to be seen from the date of notification dated 06.11.1994 in the light of judicial pronouncements quoted above. 13. Hence, on objective analysis of the facts and law enunciated by the judicial pronouncements, we find that impugned land falls outside the ambit of definition of capital asset provided in Section 2(14) of the Act. Consequently, the capital gains arising on sale of agricultural land which is not a capital asset cannot be brought to charge under s. 45 of the Act. We thus find merit in the plea of the assessee for exemption of capital receipt from ambit of taxation." 7. Per contra, ld. DR for the Revenue relied upon the orders of the authorities below. 8. Upon careful consideration, we fin....