Mani Bhusan Panchadhyai, Durgapur V. I.T.O.,Ward-2(3), Durgapur

ITA 118/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7325 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-07-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 24-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Capital asset; Set aside
• Section: 2(14); 133(6); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER] I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI............APPELLANT G-52, SAGARBHANGA COLONY DURGAPUR - 713211 [PAN : BHDPP 0773 J] INCOME TAX OFFICER, WARD 2(3), DURGAPUR........................................................RESPONDENT APPEARANCES BY: SHRI ARVIND AGARWAL, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SANKAR HALDER, JCIT SR. D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 8 TH , 2019 DATE OF PRONOUNCING THE ORDER : JULY 24 TH , 2019 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - DURGAPUR, (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 16/11/2018, FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN OF INCOME ON 18/02/2016 DISCLOSING TOTAL INCOME OF RS.1,65,890/-. THE ONLY ISSUE THAT ARISES FOR MY ADJUDICATION IS AS TO WHETHER THE LAND SOLD BY THE ASSESSEE AT NAURIHA VILLAGE UNDER RAMNAGAR P.S. OF PURBA MEDINIPUR DISTRICT, IS AN CAPITAL ASSET U/S 2(14) OF THE ACT. 2.1. THE ASSESSEE CLAIMED THAT THE LAND IN QUESTION IS AGRICULTURAL LAND WHICH IS SITUATED ABOUT 23 KMS AWAY FROM THE MUNICIPAL LIMITS AND HENCE NOT A CAPITAL ASSET AS DEFINED U/S 2(14) OF THE ACT. THE ASSESSING OFFICER CALLED FOR INFORMATION U/S 133(6) OF THE ACT AND OBTAINED A LETTER OF THE PANCHAYAT PRADHAN, TALGACHARI-I, RAMNAGAR 1, PURBA MEDINIPUR, WHEREIN HE STATED AS UNDER:- 2 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI 1) NATURE OF THE LAND KHATA NO. 169/1, DAG NOS. 229 & 218 AT NARIHA MOUZA ARE NON AGRICULTURAL LAND 2) NO AGRICULTURAL ACTIVITES HAS BEEN DONE WITHIN THE FINANCIAL YEARS 2009-14 3) THE LANDS ARE ABOUT 23 K.M. FROM THE CONTAI MUNICIPALITY. 3. BASED ON THIS LETTER, THE ASSESSING OFFICER BROUGHT TO TAX, THE CAPITAL GAIN ON THE SALE OF LAND BY HOLDING THAT THE LAND IN QUESTION IS A CAPITAL ASSET U/S 2(14) OF THE ACT. AGRIVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. 3.1. BEFORE THE LD. CIT(A), THE ASSESSEE PRODUCED A COPY OF THE LETTER ISSUED BY THE PANCHAYAT PRADHAN, TALGACHARI-I GRAM PANCHAYAT, RAMNAGAR I, PURBA MEDINIPUR, DT. 24/04/2017, WHEREIN HE STATED THAT DUE TO A MISTAKE CAUSED BY THE OVERSEER, HE HAD GIVEN WRONG INFORMATION IN THE 1 ST LETTER. IN THIS LETTER HE STATED THAT THE LAND IN QUESTION IS AGRICULTURAL LAND AND THAT AGRICULTURAL OPERATION HAS TAKEN PLACE THERE. THE LETTER READ AS FOLLOWS:- 3 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI 3.1. THE LD. CIT(A) DID NOT ACCEPT THIS LETTER DT. 24/04/2017 FROM THE PACHAYAT PRADHAN ON THE GROUND THAT IT IS AN AFTERTHOUGHT. HE ASKED FOR A NUMBER OF OTHER EVIDENCES, SUCH AS CERTIFIED COPY OF THE LAND RECORDS ETC. AND AS THE ASSESSEE COULD NOT PRODUCE THE SAME, HE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE ME. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE UNDISPUTED FACT IS THAT THE LAND IS SITUATED 23 KMS. AWAY FROM THE LIMITS OF MUNICIPALITY AND HENCE CANNOT BE CHARACTERIZED AS AN ASSET U/S 2(14) OF THE ACT. HE SUBMITS THAT THESE ARE AGRICULTURAL LANDS AND HENCE THE ASSESSING OFFICER SHOULD NOT HAVE BROUGHT THE SAME TO TAX AS THESE ARE NOT CAPITAL ASSETS UNDER THE ACT. HE RELIES ON THE LETTER ISSUED BY THE PANCHAYAT PRADHAN DT. 24/04/2017, AND SUBMITS THAT, LAND WHICH IS ADMITTEDLY BEYOND 23 KMS FROM THE MUNICIPALITY IS AGRICULTURAL LAND AND FOR THIS PROPOSITION HE RELIED ON CERTAIN CASE LAW WHICH WOULD BE DISCUSSED IN MY FINDING. 5.1. THE LD. D/R OPPOSES THESE CONTENTIONS AND SUBMITS THAT, THE ASSESSEE HAS NOT FURNISHED THE EVIDENCE SOUGHT FOR BY THE LD. CIT(A) AND HENCE THE ASSET IN QUESTION WAS RIGHTLY CLASSIFIED AS AN CAPITAL ASSET U/S 2(14) OF THE ACT, AND THE GAIN THEREON IS RIGHTLY TREATED AS CAPITAL GAINS. 6. HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, I HOLD AS FOLLOWS:- 7. THIS BENCH OF THE TRIBUNAL IN THE CASE OF KHAITAN LEFIN LIMITED VS. CIT IN ITA NO. 200/KOL/2016, ASSESSMENT YEAR 2009-10, ORDER DT. 25/01/2019, HELD AS FOLLOWS:- 3. WE HAVE HEARD RIVAL CONTENTIONS. RELEVANT CASE RECORDS COMPRISING OF THE ERSTWHILE ANDHRA PRADESH STATE GOVERNMENT NOTIFICATION DT. 16/04/2017 MERGING 8 GRAM PANCHAYATS IN THE GREATER HYDERABAD MUNICIPAL CORPORATION (GHMC), COPY OF THE CITY PLANNERS LETTER DT. 22/03/2012 CLARIFYING MAMIDIPALLY GRAM PANCHAYAT AS NOT MERGED IN THE SAID GRAM PANCHAYAT AS ON 01/04/2008, HYDERABAD METROPOLITAN DEVELOPMENT AUTHORITY DIRECTOR PLANNING-II LETTER DT. 19/03/2015 ADDRESSED TO THE DCIT, CIRCLE-8(1) U/S 133(6) OF THE ACT THAT THE SAID PANCHAYAT CONSISTED OF THREE DIFFERENT VILLAGES, GOVERNMENT OF ANDHRA PRADESH REVENUE DEPARTMENT MEMO DT. 21/01/2008 CLARIFYING THAT THE LANDS IN THE SAID PANCHAYAT IN THE VILLAGE SAROONAGAR MANDAL, RANGA REDDY DISTRICT ARE AGRICULTURAL NOT FALLING WITHIN 8 KMS. OF ANY MUNICIPALITY OR MUNICIPAL CORPORATION, COPY OF GOVERNMENT NOTIFICATION DT. 4 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI 06/01/1994 ISSUED U/S 2(1A)(C) PROVISOS UNDER CLAUSE (II)(B) AND SECTION 2(14)(III)(B) OF THE ACT, COPY OF GHMCS LETTER DT. 18/08/2014 STATING MAMIDAPALLY GRAM PANCHAYAT NOT TO HAVE BEEN MERGED WITH THE CORPORATION, COPY OF REMAND REPORT DT. 16/10/2015 ALONG WITH COVERING LETTER, TAX PAYERS REJOINDER THERETO, SALE DEED RELATED DOCUMENTS, PURCHASE DEED DT. 08/04/2004, AGREEMENT CUM POWER-OF- ATTORNEY AND VARIOUS RETURNS AS WELL AS SCRUTINY RELATED DOCUMENTS; STAND PERUSED. 4. THERE IS NO DISPUTE THAT THE ASSESSEE HAD INDEED SOLD ITS LAND IN QUESTION MEASURING 5.33 ACRES SITUATED IN VILLAGE MAMIDIPALLY MANDAL SAROONAGAR DISTRICT RANGA REDDY IN ERSTWHILE ANDHRA PRADESH DURING THE RELEVANT PREVIOUS YEAR; THE SOLE DISPUTE IN THE INSTANT LIS THAT ARISES FOR OUR APT ADJUDICATION IS AS TO WHETHER THE ASSESSEES LAND SOLD WAS A CAPITAL ASSET OR NOT FALLING WITHIN 8 KMS. OF THE GHMC U/S 2(14)(III)(B) OF THE ACT AS APPLICABLE IN THE IMPUGNED ASSESSMENT YEAR. THE TAXPAYER STAND THROUGHOUT IS THAT ITS LAND IS NOT A CAPITAL ASSET SINCE IT IS SITUATED BEYOND 8 KMS. DISTANCE OF ANY MUNICIPALITY WHEREAS THE REVENUES CASE IS THAT MAMIDIPALLY GRAM PANCHAYAT IS ADJACENT TO THE GHMC LIMITS. AND ALSO THAT IS HAPPENS TO BE A HUB OF MAJOR ECONOMIC ACTIVITY INCLUDING AVIATION SECTOR. WE FIND NO MERIT IN THE LATTERS STAND BASED ON THE LOWER AUTHORITYS RESPECTIVE FINDINGS. WE MAKE IT CLEAR FIRST OF ALL THAT THERE IS NO REBUTTAL COMING FROM THE DEPARTMENT THAT THE LAND IN QUESTION HAS EVER BEEN CONVERTED FROM AGRICULTURAL TO NON-AGRICULTURAL USE AT ANY POINT OF TIME BEFORE THE SALE IN QUESTION. THE STATE GOVERNMENTS REVENUE RECORDS STRONGLY SUPPORT THE ASSESSEES CASE RATHER THAT ITS LANDS ARE VERY MUCH AGRICULTURAL IN NATURE. THE ASSESSING OFFICER TRIED TO APPLY PERFORMANCE TEST THAT FOR DETERMINATION OF LAND IN ISSUE WHAT IS REQUIRED TO BE SHOWN IS CONNECTION WITH THE AGRICULTURAL PURPOSE IS THE USE AND NOT THE MERE POSSIBILITY OF THE LAND USER BY SOME POSSIBLE FUTURE OWNER FOR AGRICULTURAL OBJECTS. WE SEE NO MERIT IN THE IMPUGNED REASONING. THE LEGISLATURE MAKES IT CLEAR THAT AGRICULTURAL LANDS BEYOND 8 KMS. FROM THE LOCAL MUNICIPALITY ETC.; AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT/SCOPE FOR URBANISATION AND OTHER CONSIDERATION, SPECIFICALLY IN THE BEHALF. WE KEEP IN MIND THE STATUTORY PROVISION TO HOLD THAT THERE IS NO EVIDENCE ON RECORD PUT FORTH AT THE REVENUES BEHEST SPECIFICALLY QUOTING ANY ROAD OR SURFACE CONNECTIVITY OF THE ASSESSEES LANDS TO BE WITHIN 8KMS. DISTANCE FROM ANY MUNICIPALITY INCLUDING GMCH. THE LOWER AUTHORITIES HAVE STRONGLY RELIED UPON THE SOME AVIATION SECTOR SEZ WHICH CANNOT BE TAKEN AS THE RELEVANT FACTOR IS 8 KMS DISTANCE NOT FULFILLED U/S 2(14)(III)(B) OF THE ACT. THEY HAVE FURTHER RELIED UPON GOOGLE ASSISTANT IN COMING TO THE CONCLUSION THAT THE ASSESSEES LANDS ARE WITHIN 6 KMS. OF THE GHMC LIMITS. SUCH A METHOD HAS NOWHERE BEEN PRESCRIBED IN THE ACT. THE LEGISLATURE; IN FINANCE ACT, 2013 W.E.F. 01/04/2013, HAS MADE IT CLEAR WHILST SUBSTITUTING THE EARLIER PROVISION WITH THE DISTANCE OF THE LAND IN QUESTION HAS TO BE MEASURED AS PER AERIAL DISTANCE. THIS IS NOT THE REVENUES CASE THAT THE SAID AMENDMENT CARRIES ANY RETROSPECTIVE OPERATION. MEANING THEREBY THAT 8 KMS DISTANCE CONDITION HAS TO BE MEASURED IN TERMS OF THE ROAD ONLY AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIJAY SINGH KADAN [2015] 378 ITR 71 (DELHI). THE REVENUE FAILS TO DISPUTE THAT NEITHER OF THE LOWER AUTHORITIES HAS QUOTED ANY SURFACE LINK BETWEEN THE ASSESSEES LAND AND THE NEAREST MUNICIPALITY NAMELY GHMC SO AS TO TREAT ITS LANDS AS CAPITAL ASSET GIVING RISE TO LONG TERM CAPITAL GAINS ON TRANSFER. WE THEREFORE ACCEPT THE ASSESSEES SOLE SUBSTANTIVE GROUND AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED LONG TERM CAPITAL GAINS ADDITION OF RS.3,09,77,775/-. 7.1. THE KOLKATA A BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. METROPOLITAN COMMUNICATION (P) LTD., KOLKATA, IN ITA NO. 2351/KOL/2016, ASSESSMENT YEAR 2010-11, ORDER DT. 04/05/2018, HELD AS FOLLOWS:- 5 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI 7. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY THE PARTIES AND PERUSED THE RECORDS PLACED BEFORE US THE MAIN POINT IN THIS MATTER IS WHETHER THE LAND IN QUESTION IS A AGRICULTURAL LAND OR NOT. 8. SECTION 2(14)(III) OF THE ACT DEFINES THE AGRICULTURAL LAND AS FOLLOWS :- ' 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 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 THOUSAND 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 ITEM (A) AND WHICH HAS A POPULATION OF MORE THAN ONE LAKH BUT NOT EXCEEDING TEN LAKH; OR 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.' 9. IN THE INSTANT CASE THE LAND IN QUESTION IS SITUATED AT MOUZA-GURAP, J.L.NO.126 WITH TERRITORIAL LIMITS OF GURAP POLICE STATION, GRAM: GURAP UNDER THE OFFICE OF THE ADDITIONAL DISTRICT SUB REGISTRAR, DHANIYAKHALI ABOUT 36 KM FROM THE NEAREST MUNICIPALITY SITUATED AT CHINSURA, HOOGHLY I.E. FAR BEYOND 8 KM FROM THE LOCAL LIMITS OF ANY MUNICIPALITY, A FACT WHICH IS ADMITTED BY THE AO IN HIS REMAND REPORT. THE ASSESSEE HAS FILED A CERTIFICATE FROM GURAP PANCHAYAT DATED 07.11.2014 CERTIFYING THE DISTANCE AND THE PURPOSE FOR WHICH THE LANDS WERE PUT INTO USE AS AGRICULTURE. THE AR FURTHER POINTED OUT THAT ONE CARETAKER NAMELY MD. KUDDUS MOLLA CARRIED OUT AGRICULTURAL ACTIVITIES ON THAT PARTICULAR LAND AND THIS FACT WAS BROUGHT TO THE NOTICE OF THE AO BY A LETTER DATED 08.03.2013. THE PURCHASE AGREEMENT AS WELL AS THE SALE DEED, BEING A PART OF THE RECORD, SHOWS THE LAND AS 'SALI' WHICH IS NOTHING BUT AN AGRICULTURAL LAND AS EVIDENT FROM KHATIA. A WEBSITE HOSTED BY THE GOVERNMENT ITSELF SHOWS THE LAND IN QUESTION WAS AN AGRICULTURAL LAND AND THEREFORE NOT A CAPITAL ASSET AS PER THE DEFINITION OF THE CAPITAL ASSET U/S 2(14) OF THE ACT. THE RECEIPTS ON ACCOUNTS OF THEIR SALE ARE NOT TO BE TREATED AS CAPITAL GAINS. 10. THE LD. CIT(A) AT PAGE 13 AND 14 HAS HELD AS FOLLOWS :- 'IF THE TOTALITY OF FACTS AVAILABLE ON RECORD IS KEPT IN JUXTAPOSITION WITH THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE AND THE INTENTION OF THE LEGISLATURE ALONG WITH RELEVANT SECTIONS, I AM OF THE OPINION THAT A PARTICULAR LAND IS AGRICULTURAL LAND OR NOT DEPENDS UPON SO MANY FACTORS. ANY AGRICULTURAL INCOME DERIVED FROM AGRICULTURAL OPERATIONS WILL QUALIFY FOR AGRICULTURAL INCOME. SO FAR AS CAPITAL GAINS ON THE SALE OF SUCH LAND IS CONCERNED, IT ALSO DEPENDS UPON FACTORS LIKE LOCATION OF THE LAND, USE OF THE LAND, DISTANCE FROM MUNICIPAL LIMIT, WHETHER LAND USE WAS CHANGED, ETC. IF ALL THESE FACTORS ARE CUMULATIVELY KEPT IN MIND, ONE FACT EMERGES THAT THE IMPUGNED LAND IS SITUATED BEYOND THE PRESCRIBED LIMIT FROM THE MUNICIPALITY, RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORD, AGRICULTURAL OPERATION WAS DONE BY ONE CARETAKER, HENCE THERE IS NO QUESTION OF CAPITAL GAINS TAX ON SALE OF SUCH LAND. THE CORRECT TEST THAT HAS TO BE APPLIED IS WHETHER ON THE DATE OF SALE, THE LAND WAS AGRICULTURAL LAND OR NOT, WHETHER LAND USE WAS CHANGED OR NOT. JUST BECAUSE AFTER THE SALE, THE PURCHASER WAS GOING TO PUT THE LAND TO NON-AGRICULTURAL USE, IT DOES NOT MEAN THAT ON THE DATE OF SALE THE LAND HAS CEASED TO BE AGRICULTURAL LAND. IF IN THE REVENUE RECORD, THE PARTICULAR LAND IS RECORDED AS AGRICULTURAL LAND AND TILL THE DATE OF SALE, IT IS EXPLOITED AS AGRICULTURAL LAND 6 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI AND THE OWNER OF THE LAND HAS NOT TAKEN ANY STEP TO INDICATE HIS INTENTION TO EXPLOIT THE LAND FOR NON-AGRICULTURAL PURPOSES THEN SUCH LAND TO BE REGARDED AS AGRICULTURAL LAND. THE PURPOSE FOR WHICH SUCH LAND IS SOLD IS NOT OF MUCH IMPORTANCE AND WEIGHT. A CLOSE READING OF SECTION 2(L4)(III)(A) SEEMS TO SUGGEST THAT IT IS THE POPULATION OF THE MUNICIPALITY THAT HAS TO BE TAKEN INTO ACCOUNT AND NOT THE POPULATION OF ANY AREA WITHIN THE MUNICIPALITY. IT MAY BE THAT A MUNICIPALITY MAY COMPRISE OF MANY VILLAGES, WARDS AND STREET AND EACH ASSESSEE MAY CLAIM THAT THE LIMIT OF POPULATION IS PROVIDED WITH REFERENCE TO A PLACE, WARD OR STREET. IN SUCH AN EVENT, THE SECTION WILL HAVE NO UNIFORM APPLICATION AND WILL LEAD TO MANY ANOMALIES. PANCHAYAT IS DIFFERENT FROM MUNICIPALITY. MUNICIPALITY IS ALWAYS UNDERSTOOD DIFFERENTLY FROM PANCHAYAT, THEREFORE, THE LAND SITUATED BEYOND PRESCRIBED MUNICIPAL LIMIT AND IS RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORD IS TO BE CONSIDERED AS AGRICULTURAL LAND UNTIL PROVED OTHERWISE. ADMITTEDLY, THE TERM 'CAPITAL ASSET' HAS AN ALL EMBRACING CONNOTATION AND INCLUDES EVERY KIND OF PROPERTY AS GENERALLY UNDERSTOOD EXCEPT THOSE ARE EXPRESSLY EXCLUDED FROM THE DEFINITION. IT IS EXACTLY THE CASE HERE BECAUSE SECTION 2(L4)(III) EXPRESSLY DEFINES AGRICULTURAL LAND WITH REGARD TO ITS LOCATION AND DISTANCE FROM THE MUNICIPAL LIMIT. IT SEEMS THAT THE LEARNED ASSESSING OFFICER HAS NOT EXAMINED THE DOCUMENTS PRODUCED BY THE ASSESSEE ESTABLISHING THE DISTANCE OF LAND BEYOND PRESCRIBED MUNICIPAL LIMIT AND MORE SPECIFICALLY WHEN KHASRA NUMBER, ETC. HAS BEEN DULY MENTIONED IN THE REPORT OF TEHSILDAR. SO FAR AS THE ARGUMENT OF THE AO THAT THE LAND WAS SOLD AT A SUBSTANTIAL AMOUNT IS NOT THE RELEVANT FACTOR TO PROVE THAT IT WAS NON-AGRICULTURAL LAND BECAUSE IT DEPENDS UPON SO MANY FACTORS IN THE INSTANT CASE, THE LAND WHICH WAS SOLD IS SITUATED AT MOUZA - GURAP, J.L. NO. 126 WITH THE TERRITORIAL LIMITS OF GURAP POLICE STATION, GRAM: GURAP UNDER ADDITIONAL DISTRICT SUB REGISTRAR, DHANIYAKHALI, ABOUT 36K.M. FROM THE NEAREST MUNICIPALITY SITUATED AT CHINSURA, HOOGHLY I.E. FAR BEYOND 8 K.M FROM THE LOCAL LIMITS OF ANY MUNICIPALITY AND THE FACT WAS ALSO CONFIRMED BY THE LD. ASSESSING OFFICER FROM GRAM PANCHA AT GURAP.THE ASSESSEE HAS FILED A CERTIFICATE FROM GURAP PANCHAYAT DATED 07.11.2014 CERTIFYING THE DISTANCE AND THE AGRICULTURAL PURPOSE FOR WHICH THE LANDS WERE PUT INTO USE, COPY OF WHICH ALONG WITH A TRANSLATED VERSION ARE ANNEXED HERETO AND MARKED AS ANNEXURE: 'I' THUS AS PER THE ABOVE DEFINITION, THE LAND SOLD BEING SITUATED FAR BEYOND 8 K.M. FROM LOCAL LIMITS OF ANY MUNICIPALITY SITUATED AT CHINSURA, HOOGHLY IS AN AGRICULTURAL LAND AND OUTSIDE THE AMBIT OF THE DEFINITION OF CAPITAL ASSET AND INCOME ARISING FROM THE SALE OF SUCH LAND CANNOT BE TREATED AS SHORT TERM OR LONG TERM CAPITAL GAIN AS THE SAME IS EXEMPTED UNDER THE I.T. ACT , 1961.) THE TOTALITY OF FACTS CLEARLY LEADS TO THE CONCLUSION, UNDER THE FACTS NARRATED HEREINABOVE, THAT THE IMPUGNED LAND IS AGRICULTURAL LAND. HENCE THE ISSUE IS DECIDED IN FAVOUR OF THE APPELLANT. ' 11. TAKING INTO CONSIDERATION THE ENTIRE GAMUT OF THE MATTER THE ORDER PASSED BY THE AO AS WELL AS THE CIT(A), REMAND REPORT, THE SUBMISSIONS MADE BY THE AR AND DR AND CONSIDERING THE ENTIRE REPORTS PLACED BEFORE US, WE HOLD THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND AND THUS WE UPHOLD THE ORDER PASSED BY THE CIT(A) ON THE BASIS OF THE OBSERVATION MADE HEREIN ABOVE. 8. IN THE CASE ON HAND, THE PRADHAN OF THE PANCHAYAT HAS CLEARLY STATED THAT THE EARLIER INFORMATION WAS WRONGLY PROVIDED AND THE CHARACTER OF THE LAND WAS AGRICULTURAL AND CERTAIN AGRICULTURAL OPERATIONS HAD TAKEN PLACE ON THIS LAND. THERE IS NO DISPUTE THAT THE LAND IS SITUATED 23 KMS. AWAY FROM THE MUNICIPAL LIMITS. UNDER THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, IT IS NOT PROPER ON BEHALF OF 7 I.T.A. NO. 118/KOL/2019 ASSESSMENT YEAR: 2014-15 MANI BHUSAN PANCHADHYAI THE LD. CIT(A) TO REJECT THE CLAIM OF THE ASSESSEE THAT THE LAND IN QUESTION IS NOT A CAPITAL ASSET U/S 2(14) OF THE ACT. THE LATEST LETTER GIVEN BY THE PRADHAN CANNOT BE REJECTED WITHOUT EXAMINATION. THE SITUATION OF THE LAND AT A DISTANCE OF 23 KMS FROM THE MUNICIPAL LIMITS, IS A CLEAR INDICATOR THAT THE LAND IN QUESTION IS NOT URBAN PROPERTY. WHEN THE LAND IS UNDER WATER, IT HAS TO BE AGRICULTURAL LAND ONLY. THESE ASPECTS HAVE TO BE VERIFIED FROM THE FIELD. HENCE, WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE EVIDENCE FILED BY THE ASSESSEE AND THEN APPLY THE RATIOS OF THE DECISIONS IN THE CASES OF KHAITAN LEFIN LIMITED (SUPRA) AND M/S. METROPOLITAN COMMUNICATION (P) LTD., KOLKATA, (SUPRA) TO THE FACTS OF THE CASE ON HAND AND ADJUDICATE THE ISSUE AFRESH, IN ACCORDANCE WITH LAW. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 24 TH DAY OF JULY, 2019. SD/- [ J. SUDHAKAR REDDY] ACCOUNTANT MEMBER . DATED : 24.07.2019 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. MANI BHUSAN PANCHADHYAI G-52, SAGARBHANGA COLONY DURGAPUR - 713211 2. INCOME TAX OFFICER, WARD 2(3), DURGAPUR 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES