Goa International School P. Ltd., Vasco V. Asst. Commissioner of Wealth tax Cir. 1, Margao

CO 49/PAN/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9767 (ITAT-PANAJI)
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B BARTHAKUR LD
• Keywords: Capital asset; Opportunity of being heard; Rule of consistency; Question of law; Difference of opinion; Valuation report
• Section: 2(14); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER W TA NO. 01 /PNJ/2013 (ASSESSMENT YEAR - 2005 - 06) THE ASSISTANT COMMISSIONER OF WEALTH TAX, CIRCLE - 1 , MARGAO, GOA (APPELLANT) VS. M/S. GOA INTERNATIONAL SCHOOL PVT. LTD. PLOT NO. 178/1, 179/1, PEDDA, VERCA, SALCETE, GOA - 403 601. PAN: AACCG1266D (RESPONDENT) CROSS OBJECTION NO. 49 /PNJ/2013 ARISING OUT OF W TA NO.01/PNJ/2013 (ASSESSMENT YEAR - 2005 - 06) M/S. GOA INTERNATIONAL SCHOOL PVT. LTD. (NOW ZURI HOTELS & RESORT PVT. LTD.) PLOT NO. 178/1, 179/1, PEDDA, VERCA, SALCETE, GOA - 403 601. PAN:AACCG1266D (OBJECTOR ) VS. THE ASSISTANT COMMISSIONER OF WEALTH TAX, CIRCLE - 1, MARGAO, GOA (RESPONDENT) APPELLANT BY : SHRI B. BARTHAKUR, LD. DR. RESPONDENT BY : SHRI SANDIP BHANDARE , CA. DATE OF HEARING : 10 /06/2014 DATE O F PRONOUNCEMENT : 04 /07 /2014 O R D E R PER: D.T. GARASIA THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT AND CROSS OBJECTION HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), PANAJI, DATED 17.04. 2013 FOR THE ASSESSMENT YEAR 2005 - 06. 2 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) 2. THE GROUNDS ARE RAISED BY THE DEPARTMENT WHICH READ AS UNDER: 1. THE ORDER OF LD. CWT(A) IS OPPOSED TO LAW AND FACT OF THE CASE. 2. THE LD.CWT(A), PANAJI HAS ERRED IN DELETING THE ADDITION OF RS. 40,00,000/ - MADE BY THE AO ON ACCOUNT OF WEALTH ASSESSED BY TREATING LAND IN QUESTION AS URBAN LAND, WHICH IS LIABLE FOR WEALTH TAX. 3. THE LD. CWT(A), PANAJI HAS ERRED IN TREATING THE COMPANY PLOT OF URBAN LAND, WHICH IS LIABLE FOR WEALTH TAX IS OUTSIDE THE PURVIEW OF DEFINITION OF ASSETS U/S. 2(EA)(V) OF THE WEALTH TAX ACT. THE SAID ASSET IS AN ASSET WITHIN THE MEANING OF SECTION 2(EA) OF THE W.T. ACT, 1957. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAS PLANNED TO SET UP A STATE OF THE ART INTERNATIONAL EDUCATION INSTITUTION WITH WORLD CLASS AFFILIATION AND PURCHASED A PLOT OF LAND CALLED CONO SITUATED AT SIRIDAO - PALEM, TISWADI TALUK ON 08 .03.2004. THE ASSESSEE HAS CONVERTED THIS LAND INTO STOCK IN TRADE DURING THE FINANCIAL YEAR ENDING 31.03.2006. HOWEVER, AS ON 31.03.2005 THE ASSESSEE WAS IN POSSESSION OF THIS VACANT URBAN LAND, WHICH IS WITHIN 8 KMS FROM THE LIMITS FROM THE MUNICIPAL LIM ITS OF PANAJI. THE S AID ASSET IS AN ASSET WITHIN THE MEANING OF SECTION 2(E)(A) OF THE WEALTH TAX ACT. THEREFORE, CONSIDERING THE COSTS OF LAND THE ASSESSING OFFICER HAS COMPUTED THE NET WEALTH TAX AND HE HAS ESTIMATED THE MARKET VALUE AT 40,00,00,000/ - AND TAXABLE WEALTH WAS ASSESSED. 4. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DELETED THE WEALTH TAX BY OBSERVING AS UNDER : 7. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND ARGUMENTS OF THE LEARNED COUNSEL OF THE APPELLANT. THERE IS NO DIFFER ENCE OF OPINION AS FAR AS FACTS OF THIS CASE IS CONCERNED BETWEEN THE A.O. AND THE APPELLANT. THE FACTS, AS NARRATED BY THE A.O, IN THE ASSESSMENT ORDER ITSELF, CAN BE SUMMARIZED AS UNDER: I) THE APPELLANT COMPANY, AS IS EVIDENT FROM THE NAME ITSELF WAS I NCORPORATED ON 25.02.2004 WITH THE INTENTION OF RUNNING A SCHOOL OF INTER NATIONAL STANDARDS. II) THE APP ELLANT COMPANY, AS IS PURPOSE PURCHASED A PLOT OF LAND CALLED CONO SITUATED AT SIRIDAO - PALEM, TISWADI TALUKA ON 08.03.2004. III) THIS LAND IS WITHIN 8 KMS. FROM THE MUNICIPAL LIMITS OF PANAJI MUNICIPA1ITY. IV) THIS LAND WAS CONVERTED INTO STOCK - IN - TRADE DURING FINANCIAL YEAR ENDING ON 31.03.2006 I. E. F. YR. 2005 - 06. 3 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) V) SINCE THE APPELLANT COMPANY ENCOUNTERED VARIOUS BOTTLENECKS AND NO ENCOURAGEMENT WAS RECEIVED FROM THE STATE GOVERNMENT, THE SCHOOL PROJECT HAD TO BE ABANDONED AND THEREFORE IT WAS DECIDED TO START REAL ESTATE PROJECT ON THE SAME PLOT OF LAND. VI) T HE A.O. NOTED FROM THE BALANCE SHEET OF THE APPELLANT COMPANY THAT DURING F.YR. 2004 - 05 ADDITION OF RS.3,76,31,096/ - HAS BEEN MADE AND W.I. P HAS BEEN DECLARED AT RS.21,88,319/ - . 8. NOW, SINCE THERE IS NO DIFFERENCE OF OPINION ON THE FACTS OF THE CASE, THE ONLY ISSUE REMAINED FOR DECISION IS THE DIFFERENCE OF OPINION, WHETHER THIS LAND WAS AN URBAN LAND, CHARGEABLE TO WEALTH TAX, THE A.O. HAS REMARKED, WHILE DECIDING THE CHARACTER OF LAND DURING F. YR. 2004 - 05 AS UNDER: FROM THE ABOVE EXPENSES, IT CAN BE MADE OUT THAT THE ASSESSEE HAS INCURRED CERTAIN EXPENSES WHICH ARE RELEVANT, WHEN A NEW L AND IS PURCHASED. IN OTHER WORDS, THE NEW OWNER HAS TO INCUR CERTAIN EXPENDITURE IN THE FORM OF CONSTRUCTION OF ROAD, FENCING, LIGHTING ETC. SO AS TO SAFEGUARD THE LAND FROM ENCROACHMENT AND OTHER ACTIVITIES. THOSE EXPENSES CANNOT BE CALLED AS DEVELOPMENT ACTIVITY WITH AN INTENTION O1 DURING OF THE BUSINESS. THAT CAN BE CALLED AS MINIMUM REQUIREMENT TO SAFEGUARD THE LAND, APPEARANCE OF THE LAND AND ALSO TO BOOST THE VALUE OF THE LAND. ON THE BASIS OF ABOVE FINDING, THE A.O. WENT ON TO CONCLUDE T HAT THE AS SESSEE WAS HOLDING THIS LAND AS URBAN LAND, WHICH IS LIABLE FOR WEALTH TAX. 9. ON THE BASIS OF ABOVE FACTS, I AM NOT IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE A.O. THE INTENTION OF INCORPORATION OF THE APPELLANT COMPANY WAS COMMERCIAL, THE INTENTION OF PURCHASE OF LAND WAS COMMERCIAL AND EXPENSES WERE ALSO INCURRED FOR COMMERCIAL PURPOSE. SUBSEQUENTLY, TH E LAND WAS CONVERTED INTO SOCK - IN - TRADE FOR COMMERCIAL PURPOSE. IN VIEW OF THE FACTS OF THIS CASE, IN MY OPINION, THE LAND IS NOT LIABLE FOR WEALTH T AX AND THE A.O. IS DIRECTED TO DELETE THE ADDITION MADE. THIS GROUND OF A PPEAL OF APPELLANT IS ACCORDINGLY ALLOWED. 10. IN VIEW OF THE DECISION ARRIVED AT BY THE UNDERSIGNED, OTHER GROUNDS OF APPEAL BECOME INFRUCTUOUS AND THEREFORE THE SAME ARE NOT BEING ADJUDICATED UPON. 5. THE DEPARTMENT IS IN APPEAL AGAINST THE SAID ORDER. THE ASSESSEE HAS FILED CROSS OBJECTION AND ADDITIONAL CROSS OBJECTION WHICH READ AS UNDER: GROUNDS IN CROSS OBJECTION: A) IN PARA 3.7 OF THE ASSESSMENT ORDER THE AO HAS ERRED IN VALUING THE LAND ON HIS OWN AT RS. 40 CRORES WITHOUT REFERRING THE SAME TO THE DEPARTMENTAL VALUATION OFFICER FOR DETERMINING ITS MARKET VALUE AS PER SCHEDULE III PART H REFERRED BY SEC 7 OF THE WEALTH TAX ACT. THE AO HAS ERRED IN NOT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND VALUING THE LAND AT MUCH HIGHER AMOUNT THAN THE AMOUNT AS PER VALUATION REPORT OBTAINED BY THE COMPANY FROM A REGISTERED VALUER. B) THE AO HAS NOT GIVEN DEDUCTION OF THE UNSECURED LOANS OF RS. 5.33 CRS T AKEN FOR THE PURPOSE OF BUYING THE LAND. THE SAME LOANS ARE REFLECTED IN THE AUDITED BALANCE SHEET AS AT 31 ST MARCH 2005. ADDITIONAL GROUND IN CROSS OBJECTION: 4 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) THE LEARNED A.O. HAS ERRED IN CONSIDERING THE LAND SITUATED AT SURVEY NO. 16,17,18,20,21/ - AND 22 IN VILLAGE SIRIDAO - GOA AS URBAN LAND AND LEVYING WEALTH TAX THEREON. THE SAID LAND IS NOT AN URBAN LAND AS THE SAME IS NOT SITUATED IN A NOTIFIED AREA HAVING POPULATION OF MORE THAN 1000 AS ALSO NOT HAVING BEEN SITUAT ED WITHIN A DIS TANCE OF 8 KMS. F ROM A NOTIFIED MUNICIPAL AREA. 6. DURING T HE COURSE OF HEARING THE LEARNED A R HAS RAISED THE ADDITIONAL CROSS OBJECTION BEFORE US AND HE HAS SUBMITTED THAT THE ADDIT IONAL GROUND GOES TO THE ROOT OF THE CASE AND IF THE ADDITIONAL GROUND IS DECIDED FIRST THEN THE MATTER WILL BE DISPOSED ON ADDITIONAL GROUND ONLY. IN ADDITIONAL GROUND THE ASSESSEE HAS TAKEN THE GROUND THAT THE WEALTH TAX ACT 1956 GIVES POWER TO CENTRAL GOVT. TO LEVY TAX ON THE URBAN LANDS. THE ASSESSEES LAND IS SITUATED I N VILLAGE WHICH HA S LE SS THAN TEN THOUSAND POPULATION; T HEIR ACTUAL POPULATION BEING 2 872 AS PER CENSUS OF 2001, THE LAST CENSUS BEFORE VALUATION DATE 31 ST MARCH, 2005 . THE CENTRAL GOVT. HAS NO JURISDICTION TO LEVY WEALTH TAX ON SUCH LAND. THIS GROUND IS VERY ROOT OF LEVY WEALTH TAX ON THE LAND. THE ASSESSEE HAS TAKEN THIS GROUND EARLIER . T HIS GROUND MAY BE CONSIDERED AS ADDITIONAL GROUND AS PER RULE - 29 OF INCOME TAX APPEAL RULES AND IT MAY BE TAKEN AS ADDITIONAL GROUND. 7. WE HAVE HEARD BOTH THE PARTIES WHETHER THIS ADDITIONAL CROSS OBJECTION SHOULD BE ADMITTED OR NOT. WE FIND THAT AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF N ATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX (1998)229 I TR 383(SC) WHEREIN IT HAS HELD AS UNDER: THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME - TAX (APPEALS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUNAL (VIDE, E.G., CIT V. ANAND PRASAD [1981] 128 ITR 388 (DELHI), CIT V. KARAMCHAND PREMCHAND P. LTD. [1969] 74 ITR 254 (GUJ) AND CIT V. CELLULOSE PRODUCTS OF INDIA LTD. [1985] 151 ITR 499 (GUJ) [FB}). UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER TH AT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 5 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) THE REFRAMED QUESTION, THEREFORE, IS ANSWERED IN THE AFFIRMATIVE, I.E., THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHOR ITIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. WE REMAND THE PROCEEDINGS TO THE TRIBUNAL FOR CONSIDERATION OF THE NEW GROUNDS RAISE D BY THE ASSESSEE ON THE MERITS . T HEREFORE, WE PERMIT TO RAISE THE ADDITIONAL GROUND. WE RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT , WE PERMIT THE RAISE THE ADDITIONAL GROUND. 8 . THE LEARNED AR HAS FILED THE WRITTEN SUBMISSION BEFORE US. IN THE WRITTEN SUBMISSION THE ASSESSEE HAS SUBMITTED AS PER THE SECTION - 3 OF WEALTH TAX ACT, THE NET WEALTH OF A PERSON IS CHARGEABLE IN WEALTH TAX. SECTION - 2 (M) DEFINES NET W EALTH AS PER AMOUNT BY WHICH THE AGGREGATE VALUE OF ASSET S, BELONGING TO AN ASSESSEE, IS IN EXCESS OF ALL THE DEBTS OWNED BY THE ASSESSEE. SECTION 2 (EA) OF THE WEALTH TAX 1957 CATEGORISES THE ASSETS INTO 6 CLAUSE S . SUB - SECTION (V) OF SECTION 2 (EA) CONSIDERED THE URBAN LAND AS AN ASSETS. EXPLANATION - 1 (B) OF SECTION 2 (EA) CONSIDERS URBAN LAND AS AN ASSET. I) ANY AREA WHICH IS COMPRISED WITHIN THE JU RISDICTION OF A MUNICIPALITY (WHERE 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 VALUATION DATE AND II) LAND SITUATED WITHIN 8 KMS FROM THE LOCAL LIMITS OF SUCH MUNICIPAL I TIES OR CANTONMENT AS THE CENTRAL GOVERNMENT MAY SPECIFY. THE VALUATION DA TE IS 31 ST MARCH, 2005 AND THE LAST CENSUS PROCEEDINGS THIS DATE IS THAT IN 2001, FURTHER LAND CONTAINING SURVEY NO. 15,16,17,18,20,21, AND 22 IS SITUATED IN VILLAGE PANCHAYAT SIRIDAO, GOA. AS PER THE CERTIFICATE OBTAINED FRO M THE VILLAGE PANCHAYAT SIRIDA GOA (THE COPY OF WHICH IS ENCLOSED HEREWITH - PAGE 156) THE POP ULATION OF THE VILLAGE SIRIDAO - GOA ACCORDING TO THE CENSUS OF 2 001 IS 2872, (WHICH IS LESS THAN 10000). THE FIGURE OF POPULATION IS SO CONFIRMED BY THE CERTIFICATE OBTAINED FROM THE CENSUS DEP ARTMENT. (COPY OF WHICH IS ENCLOSED HEREWITH - PAGE 157). THUS THE LAND 6 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) SITUATED AT SURVEY NO. 15,16,17,18,20,21 AND 22 LOCATED WITH THE JURISDICTION OF VILLAGE PANCHAYAT SIRIDAO - GOA IS NOT URBAN LAND AS PER THE DEFINITION CONTAINED IN EXPLANATION 1(B) (I) OF SECTION 2(EA). PU RSUANT TO THE POWERS VESTED IN IT, THE CENTRAL GOVERNMENT VIDE NOTIFICATION NO. 1302 DATED 28TH DECEMBER 1999 HAS SPECIFIED THE MUNICIPAL CORPORATIONS IN THE STATE OF GOA IN RESPECT OF WHICH THE LAND SITUATED WITHIN 8 KMS THEREOF WOULD BE CONSIDERED AS URBAN LAND. FROM THE VILLAGE PANCHAYAT OF SIRIDAO, THE NEAREST MUNICIPAL CORPORATION IS THE PANAJI MUNICIPAL CORPORATION. AS PER THE CERTIFICATE OBTAINED FROM VILLAGE PANCHAYAT OF SIRIDAO AS WELL AS REGISTERED VALUER MR. DEVENDRA PRABHU T HE NEAREST DISTANCE BETWEEN THE LAND SITUATED AT SURVEY NO. 15,16,17,18,20,21, AND 22 LOCATED WITHIN THE JURISDICTION OF VILLAGE PANCHAYAT SIRIDAO GOA AND THE OUTER LIMITS OF PANAJI MUNICIPAL CORPORATION IS MORE THAN 8 KMS. COPIES OF CERTIFICATES ARE ENCLOS ED HEREWI TH. (PAGES 158 - 159) THUS THE LAND SITUATED AT SURVEY NO. 15,16,17,18,20,21 AND 22 LOCATED WITHIN THE JURISDICTION OF VILLAGE PANCHAYAT SIRIDAO - GOA IS NOT URBAN LAND AS PER THE DEFINITION CONTAINED IN EXPLANATION 1(B) (I) OF SECTION 2(EA). THEREFO RE, IT IS NOT AN ASSET, HENCE IT IS NOT CHARGEABLE TO WEALTH TAX. 9 . LEARNED DR SUBMITTED THAT PROPERTY SITUATED WITHIN 8 KMS FROM THE LOCAL LIMITS OF SUCH MUNICIPALITIES, THEREFORE, THIS EVIDENCE WILL NOT BE HELPFUL TO THE ASSESSEE. 10 . WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT SECTION 2(EA) OF THE WEALTH TAX ACT CATEGORISED THE URBAN LAND AS UNDER: I) 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 P RECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE VALUATION DATE AND II) LAND SITUATED WITHIN 8 KM S FROM THE LOCAL LIMITS OF SUCH MUNICIPALITIES OR CANTONMENT AS THE CENTRAL GOVERNMENT MAY SPECIFY. 7 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) IN THE INSTANT CASE THE VALUATION DATE IS 31 ST MARCH, 2005 AND THE LAST CENSUS PRECEDING THIS DATE 2001, FURTHER LAND CONTAINING SURVEY NO. 15,16,17,18,20,21 AND 22 IS SITUATED IN VILLAGE PANCHAYAT SIRIDAON, GOA, GOA. THE POPULATION OF THE SRIDAO VILLAGE IS ACCORDING TO CENSUS O F 2001 IS 2872, WHICH IS LESS THAN 1 THOUSAND. THE FIGURE OF POPULATION IS CONFIRMED BY THE CERTIFICATE WHICH READ AS UNDER: POPULATION CERTIFICATE: SIR, I AM TO REFER YOUR LETTER DATED 03/05/2014 AND TO FURNISH HEREWITH THE REQUIRED INFORMATION AS UNDER: NAME OF VILLAGE POPULATION (AS PER CENSUS - 2001) PERSON MALE FEMALE SIRIDAO 2872 1410 1462 YOURS FAIT H FULLY (MALLIKARJUNA) JOINT DIRECTOR THE CENTRAL GOVERNMENT BY HIS NOTIFICATION NO. 1302 WHICH READ AS UNDER: NOTIFI CATION: 1302 SECTION(S) REFERRED: S, 2 STATUTE: 1N COME TAX DATE OF ISSUE: 28/12/1999 IN EXERCISE OF THE POWERS CONFERRED IN ITEM (B) OF CLAUSE (II) OF THE PROVISO TO SUB - CLAUSE (C) OF CLAUSE (IA), AND ITEM (1,) OF SUB - CLAUSE (III) OF CLAUSE (14), OF SECTION 2 OF THE INCOME - TAX ACT, 1961 (43 OF 1961), IN THE SCHEDULE TO THE NOTIFICATION S. 0. NO. 10(E), DATED 6TH JAN UARY, 1994, FOR SERIAL NUMBER 7 REL ATING TO GOA AND ENTRIES THERETO, THE FOLLOWING SHALL BE SUBSTITUTED, NAMELY 7. GOA I. MAPUSA AREAS UP TO DISTANCE OF 8 KM. FROM MUNICIPAL LIMITS IN ALL DIRECTIONS. 2. MARGOA AREAS UP TO DISTANCE OF 8 KM. FROM MUNICIPAL LIMITS IN ALL DIRECTIONS. 3. PANAJI AREAS UP TO DISTANCE OF 8 KM. FROM MUNICIPAL LIMITS IN ALL DIRECTIONS. 4. VASCO AREAS UP TO DISTANCE OF 8 KM. FROM MUNICIPAL LIMITS IN ALL DIRECTIONS. 5. POND A AREAS UP TO DISTANCE OF 8 KM. FROM MUNICIPAL LIMITS IN ALL DIRECTIONS. 6.CANCONA AREAS UP TO DI STANCE OF 8 KM. FROM MUNIC IPAL LIMITS IN ALL DIRECTIONS. [NOTIFICATION NO. 11186/F. NO. 164/1 / 196 - IT(A - I)J 8 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) FROM THIS ABOVE NOTIFICATION THE VILLAGE PANCHAYAT SIRIDAO, NEAREST MUNICIPAL CORPORATION IS PANCHAYAT MUNICIPAL CORPORATION. AS PER CERTIFICATE O BTAINED FROM THE VILLAGE PANCHAYAT SIRIDAO AS WELL AS REGISTER VALUER MR DEVENDRA PRABHU NEAREST DISTANCE BETWEEN LAND SITUATED AT SURVEY NO.15, 16,17,18,20,21 AND 22 IS LOCATED WITHIN JURISDICTION OF VILLAGE PANCHAYAT SIRIDAO GOA AND OUTER LIMITS OF PANAJI MUNICIPAL CORPORATION IS MORE THAN 8 KMS. THE CERTIFICATE GIVEN BY T HE PANCHAYAT AND DEVENDRA PRABHU WHICH READ AS UNDER: CERTIFICATE THIS IS TO CERTIFY THAT AS PER THE CENSUS 2001 THE POPULATION OF THIS VILLAGE PACHAYAT SIRIDAO - PALEM IS 2972 (MALE 1410 FEMALE 1462). THIS CERTIFICATE IS ISSUED AT THE REQUEST OF ZURI HOSPITALITY PRIVATE LIMITED SIRIDAO - PALEM. TISWADI - GOA. THEREFORE , A S PER THE ABOVE DOC UMENTARY EVIDENCE THE LAND AT S U RVEY NO. 15,16,17,18,20, 21 AND 22 IS LOCATED WITHIN JURISDICTION OF VILLAGE PANCHAYAT SIRIDAO GOA IS NOT URBAN LAND AS PER DEFINITION CONTAINED IN EXPLANATION 1 (B)(I) OF SECTION 2(EA). THE NEX T QUESTION COMES REGARDING THE MEASUREMENT OF DISTANCE FROM ONE POINT TO ANOTHER. I N THE FOLLOWING CASES IT HAS BEEN HELD THAT DISTANCE HAS TO BE MEASURED BY THE ROAD AND THE DISTANCE CANNOT BE THE AERIAL DISTANCE. CIT VS. SANTINDER PAL SINGH 188 TAXMAN 5 4 (PUNJ & HA R.) LAUKIK DEVELOPERS VS. DY. CIT 105 ITD 657 (MUMBAI) SHRI PRAKASH LAXMINARAYAN VS. ACIT, CIR - 5(NAGPUR) ITO VS. ASHOK SHUKLA, DECIDED IN ITA NO. 207/INDORE/2012 WE FIND THAT THE AGRICULTURAL LAND HAS BEEN DEFINED IN SECTION 2 (14 ) ( B) OF WHICH READ AS UNDER: [( 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 4 OF NOT LESS THAN TEN THOUSAND [ ACCORDING TO THE LAST PRECEDING 9 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISH ED BEFORE THE FIRST DAY OF TH E P REVIOUS YEAR ] ; OR ( B ) IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIALLY, ( I ) NOT BEING MORE THAN TWO KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN TEN THO USAND BUT NOT EXCEEDING ONE LAKH; OR ( II ) NOT BEING MORE THAN SIX KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN ONE LAKH BUT NOT EXCEEDING TEN LAKH; OR ( III ) NOT BEING MORE THAN EIGHT KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM ( A ) AND WHICH HAS A POPULATION OF MORE THAN TEN LAKH. EXPLANATION FOR THE PURPOSES OF THIS SUB - CLAUSE, 'POPULATION' MEANS THE POPU LATION ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR; FROM THIS ABOVE DEFINITION THERE IS AN AMENDMENT IN SECTION - 2 ( 14 ) W.E.F 1.4.2014 THAT THE DISTANCE HAS TO BE MEASURED A ERIALLY . THE AMENDMENT CLEARLY STATES THAT AMENDED PROVISIONS WILL BE APPLICABLE FOR ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENT ASSESSMENT YEARS. SINCE THE PRESENT CASE PERTAINS TO A.Y. 2005 - 06, THE PRE AME NDED POSITION WOULD NOT PREVAIL AND AS STATED EARLIER THE JUDGMENTS HAVE CLEARLY RULED THAT DISTANCE HAS TO BE MEASURED BY THE ROAD AND THE DISTANCE CANNOT BE TAKEN BY AERIAL DISTANCE. IN THE CASE OF CIT V. SATINDER PAL SINGH 188 TA XMAN 54 , WHEREIN IT HAS HELD AS UNDER: A PERUSAL OF THE AFORESAID PROVISION SHOWS THAT `CAPITAL ASSET' WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NOT SITUATED IN ANY AREA WITHIN SUCH DISTANCE AS MAY BE SPECIFIED IN THIS BEHALF BY A NOTIFICATION IN THE OFFICIAL GAZETTE WH ICH MAY BE ISSUED BY THE CENTRAL GOVERNMENT. THE MAXIMUM DISTANC E PRESCRIBED BY SECTION 2(14) (B) OF THE ACT WHICH MAY BE INCORPORATED IN THE NOTIFICATION COULD NOT BE MORE THAN 8 KMS. FROM THE LOCAL LIMITS OF MUNICIPAL COMMITTEE OR CANTONMENT BOARD ETC. THE NOTIFICATION HAS TO TAKE INTO ACCOUNT THE EXTENT OF, AND SCOPE FOR URBANIZATION OF THAT ARE A AND OTHER RELEVANT CONSIDERATIONS. THE RECKONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICANT WHICH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TERMS OF APPROACH ROAD RATHER THAN BY STRAIGHT LINE ON HORIZONTAL PLAN E. IF PRINCIPLE OF MEASUREMENT OF DISTANCE IS CONSIDERED STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROW'S FLIGHT THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT OF URBANIZATION. SUCH A 10 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) COURSE WOULD BE ILLUSORY. IT IS IN PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICATION NO. 9447, DATED 6 - 1 - 1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESPECT OF THE STATE OF PUNJAB, AT ITEM NO. 18, THE SUB - DIVISION, KHANNA HAS BEEN LISTED AT SERIAL NO. 19. I T HAS, INTER ALIA, BEEN SPECIFIED THAT AREA UP TO 2 KMS. FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS HAS TO BE REGARDED OTHER THAN AGRICULTURAL LAND. ONCE THE STATUTORY GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOPE OF URBANIZATION OF THE AREA HAS TO BE RECKONED WHILE ISSUING ANY SUCH NOTIFICATION THEN IT WOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF LAND SHOULD BE MEASURED BY THE METHOD OF STRAIGHT LINE ON HORIZONTAL PLANE OR AS PER CROW'S FLIGHT BECAUSE ANY MEASUREMENT BY CROW'S FLIGHT IS BOUND TO IGNORE THE URBANIZATION WHICH HAS TAKEN PLACE. MOREOVER, THE JUDGMENT OF THE MUMBAI BENCH APPEARS TO HAVE ATTAINED FINALITY. KEEPING IN VIEW THE PRINCIPLE OF CONSISTENCY AS LAID DOWN IN RADHASOAMI SATSANG V. CIT [1992] 193 ITR 321 (SC) WE ARE OF THE VIEW THAT THE OPINION EXPRESSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGAL INFIRMITY WARRANTING INTERFERENCE OF THIS COURT. ACCORDINGLY QUESTION NO. 1 IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY UPHOLDING THE OR DER OF THE TRIBUNAL. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE NET WEALTH MEANS THE AMOUNT BY WHICH THE AGGREGATE VALUE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT OF ALL THE ASSETS, WHEREVER LOCATED BELON GING TO THE ASSESSEE ON THE VALUATION DATE, INCLUDING ASSETS REQUIRED TO BE INCLUDED IN HIS NET WEALTH AS ON THE DATE UNDER THIS ACT, IS IN EXCESS OF THE AGGREGATE VALUE OF ALL THE DEBTS OWNED BY THE ASSESSEE ON THE DATE OF VALUE WHICH HAVE BEEN INCURRED I N RELATION TO THE SAID ASSETS. THE NET WEALTH IS CHARGEABLE TO TAX. IN THE ASSESSEES CASE THE NET WEALTH TAX THAT A LAND SITUATED IN ANY AREA WHICH IS COMPR ISED WITHIN JURISDICTION OF A MUNICIPALITY OR A C ANTONMENT 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 VALUATION DATE AND LAND SITUATED WITHIN 8 KMS FROM THE LOCAL LIMITS OF SUCH MUNICIPALITIES OR CANTONMENT AS THE CENTRAL GOVERNMENT MA Y SPECIFY. IN THE CASE OF ASSESSEE THE VALUATION DATE IS 31 ST MARCH, 2005 AND THE LAST CENSUS PRECEDING THIS DATE IS THAT IN 2001. THE LAND CONTAINING SURVEY NOS.15,16,17,18,20,21 AND 22 IS SITUATED IN VILLAGE PANCHAYAT SIRIDAO, GOA. AS PER CERTIFICATE THE POPULATION OF THE VILLAGE IS 2872 WHICH IS LESS THAN 1 0 000. THE POPULATION IS CONFIRMED BY THE CERTIFICATE OBTAINED FROM CENSUS 11 . ITA NO. 01 & C.O. NO. 49 /PNJ/2013, (AS SE SSMENT YEAR . 2005 - 06) DEPARTMENT. THUS , THE LAND SITUATED AT SURVEY NOS.15,16,17,18,20,21 AND 22 LOCATED WITHIN JURISDICTION OF SURVEY NOS.15,16,17,18,20,21 AND 22 V ILLAGE P ANCHAYAT SIRIDAO - GOA IS NOT URBAN LAN D. THE VILLAGE PANCHAYAT OF SIRIDAO - GOA NEAREST MUNICIPALITIES CORPORATION IS THE PANAJI MUNICIPAL CORPORATION. AS PER THE CERTIFICATE THE VILLAGE PANCHAYAT OF SIRIDAO - GOA IS MORE THAN 8 KMS. THEREFORE, WE ARE OF THE VIEW THAT THE LAND OF SIRIDAO - GOA OF TH E ASSESSEE SURVEY NOS.15,16,17,18,20,21 AND 22 IS NOT URBAN LAND AS PER SECTION 2(EA), THEREFORE, IT IS NOT AN ASSET. THUS, WE ALLOW THE ADDITIONAL GROUND. WE HAVE ALLOWED APPEAL ON CROSS OBJECTION. WE DID NOT ALLOW THE REVENUES APPEAL ON MERIT. 6. IN T HE RESULT , APPEAL OF THE D EPARTMENT IS NOT DECIDED ON MERIT AND CROSS OBJECTION IS ALLOWED AS INDICATED ABOVE. ORDER PRO NOUNCED IN THE OPEN COURT ON 4 . 7 .2014. S D / - S D / - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 4 .7 .2014 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT(A) CONCERNED ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER