Late Dyandeo Bhaga Patil, Jalgaon V. Income-tax Officer, Jalgaon

ITA 1213/PUN/2011

• Counselvise Citation: 121324514 RSA 2011
• Duration Of Justice: 3 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 26-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Source of fund; Cost of acquisition; Fair market value
• Section: 50C; 2(14); 142(1); 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S.PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1213/PN/2011 (ASSESSMENT YEAR : 2005-06) LATE DYANDEO BHAGA PATIL, L/H SMT. MATHURABAI D. PATIL, NEAR APPA MAHARAJ SAMADHI MANDIR, OPP : CIVIL HOSPITAL, JALGAON-425001 PAN NO. : AALHP5228C .. APPELLANT VS. ITO, WARD-1(1), JALGAON .. RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 01-12-2014 DATE OF PRONOUNCEMENT : 31-12-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 23-08-2011 OF THE CIT(A)-II, NASHIK RELATING TO ASSESSMENT YEAR 2005-06. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT IN THIS CA SE INFORMATION WAS RECEIVED FROM THE DIT(CIB), PUNE ON 23-03-2009 THAT THE ASSESSEE HAS SOLD AN AGRICULTURAL LAND BEARING GAT NO.37 ADM EASURING 4.42H FOR THE SALE CONSIDERATION OF RS.5,75,000/- ON 23-0 3-2005. HOWEVER, THE VALUE OF THE PROPERTY AS PER SECTION 50C, I.E. STAMP DUTY VALUATION AUTHORITY WAS RS.37,80,000/-. THEREFORE, THE AO IS SUED NOTICE U/S.148 OF THE I.T. ACT TO THE ASSESSEE ON 24-03-2009. IT WAS SERVED ON HIS 2 LEGAL HEIR SMT. MATHURABAI DYANDEO PATIL ON 22-04-2 009. SUBSEQUENTLY, THE AO ISSUED A LETTER DATED 28-09-20 10 CALLING FOR CERTAIN INFORMATION AND DOCUMENTS, I.E. COPY OF RET URN OF INCOME FILED FOR A.Y. 2005-06, PURCHASE/SALE DEED, 7/12 OR PROPE RTY CARD EXTRACT, SOURCES OF INCOME ETC. ON THE BASIS OF STATUTORY N OTICE U/S.143(2) AND U/S.142(1) OF THE I.T. ACT ISSUED TO THE ASSESSEE, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO AND FURNISHED THE COPY OF PURCHASE DEED OF THE AGRICULTURAL LAND BEARING HALF PORTION OF GAT NO.37, AREA 4H AND 43R DATED 13-08-1998 WHIC H WAS PURCHASED BY SHRI DYANDEO BHAGA PATIL FOR RS. 1 LAK H FROM SHRI UKHARDU MATU SONAWANE. HE ALSO FURNISHED THE COPY OF SALE DEED OF THE AFORESAID LAND DATED 30-03-2005 WHICH WAS SOLD FOR SALE CONSIDERATION OF RS.5,75,000/- TO SHRI SANJAY UKHAR DU SONAWANE. THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 142(1) ON 27-12-2010 IN THE CAPACITY OF HUF ON THE DEATH OF HER HUSBAND SHRI DYANDEO BHAGA PATIL ON 03-01-2009. IT WAS CLAIMED THAT THE HUF HAS 3 CO-PARCENERS AND THEIR WIVES. R ETURN WAS FILED DECLARING AGRICULTURAL INCOME OF RS.20,000/-. DURI NG THE ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO EXPLAIN A S TO WHY THE STAMP DUTY VALUE OF RS.37,80,000/- SHOULD NOT BE ADOPTED FOR CALCULATING THE CAPITAL GAIN AS PER THE PROVISIONS OF SECTION 50C O F THE I.T. ACT. 2.1 IT WAS EXPLAINED THAT THE LAND SOLD IS AN AGRIC ULTURAL LAND WHICH IS SURROUNDED BY OTHER AGRICULTURAL LANDS. THE 7/1 2 EXTRACTS CLEARLY MENTION THAT COTTON, UDIT ETC., HAS BEEN GROWN. TH E FAMILY MEMBERS OF LATE SRI DYANDEO BHAGA PATIL ARE ORIGINALLY AGRI CULTURISTS. IT WAS EXPLAINED THAT THE PROFITS AND GAINS ARISING FROM T RANSFER OF THIS LAND 3 WHICH IS USED FOR AGRICULTURAL PURPOSES IS REALLY D ERIVED FROM SUCH LAND WITHIN THE MEANING OF SECTION 2(1A)(III) AND I S THEREFORE AGRICULTURAL INCOME WITHIN THE MEANING OF SECTION 2 (1) OF THE I.T. ACT. AND NOT ELIGIBLE FOR CAPITAL GAIN TAX. THE DECISIO N OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MANUBHAI A. SETH V S. N.D. NIRGUDKAR REPORTED IN 128 ITR 87 (BOM.) WAS RELIED UPON. IT WAS FURTHER SUBMITTED THAT THE AGRICULTURAL LAND UNDER TRANSACTION IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(I II) OF THE I.T. ACT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS RECEIVE D ONLY AN AMOUNT OF RS.5,75,700/- ALTHOUGH THE STAMP DUTY VALUE WAS FIX ED BY THE GOVERNMENT AT RS.37,80,000/-. THE ASSESSEE ALSO RE LIED ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CHANDANI BHUCHAR REPORTED IN 229 CTR 190 (P &H) WHERE IT HAS BEEN HELD THAT IN ABSENCE OF ANY ADMISSIBLE EVI DENCE, VALUATION DONE BY THE STAMP DUTY AUTHORITIES COULD NOT BE TAK EN AS ACTUAL SALE CONSIDERATION AND THE VALUE SHOWN IN THE SALE DEED HAS TO BE ACCEPTED FOR THE PURPOSE OF THE I.T. ACT. 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT THE AGRICULTURAL LAND OF THE ASSESSEE IS CAPITAL ASSET AS THE SAME IS SITUATED WITHIN THE DISTANCE OF 8 KMS FROM THE LOCAL LIMIT OF MUNICIPAL COUNCIL, JALGAON. THE ASSESSEE HAS NOT PROVED WITH ANY DOCUMENTARY PROOF THAT HER AGRI CULTURAL LAND IS NOT SITUATED WITHIN LOCAL LIMIT OF MUNICIPAL COUNCI L. HE, THEREFORE, HELD THAT THE PROVISIONS OF SECTION 50C WILL BE APP LICABLE TO THE CASE OF THE ASSESSEE SINCE THE LAND IS SITUATED WITHIN T HE LOCAL LIMIT OF MUNICIPAL COUNCIL. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE 4 AND DISTINGUISHING THE VARIOUS DECISIONS CITED BEFO RE HIM THE AO HELD THAT STAMP DUTY VALUATION U/S.50C AS PER STAMP DUTY VALUE AUTHORITIES AT RS.37,80,000/- IS LIABLE TO BE TAXED UNDER THE H EAD CAPITAL GAIN. HE ACCORDINGLY DETERMINED THE CAPITAL GAIN AT RS.36 ,15,553/- AFTER ALLOWING THE COST OF ACQUISITION AT RS.1,64,447/-. 4. BEFORE CIT(A) THE ASSESSEE FILED DETAILED WRITTE N SUBMISSIONS WHICH HAS BEEN SUMMARISED BY THE LD.CIT(A) AT PARA 4 OF HIS ORDER AND WHICH READS AS UNDER : I) THE TRANSACTION IN THE FORM OF SALE/PURCHASE OF TH IS AGRICULTURAL LAND IS NOTHING BUT RELEASE OF CHARGE FO RM MORTGAGE (MORTGAGED ON 14/08/1997 RELEASE ON 30/03/2005). II) WHAT IS TRANSACTION IS 'AGRICULTURAL LAND' AND THE SURPLUS REALIZED IS EXEMPT U/S. 2(1A)(III) & U/S. 10(1) OF THE IT ACT 1 961. THE GOVT. AUTHORITIES HAVE DECLARED THE SAID LAND IN 'GREEN ZON E'. III) THE VALUATION ADOPTED FOR THE PURPOSE OF STAMP D ULY CANNOT FORM THE FOUNDATION FOR THE MARKET VALUE OF THE PROPERTY . HENCE THE PROVISION OF SECTION 50C IS NOT APPLICABLE IN THIS CASE. ITS VALUE SHOULD BE ADOPTED AT RS.8,54,000/-, AS PER THE GOVT. APPROVE D VALUER. THE TRANSACTION AFFECTED IN THE FORM OF SALE/PURCHASE OF AGRICULTURAL LAND MAY BE DECLARED AS RELEASE OF CHARGE OF MORTGAG E. THOUGH THE AGRICULTURAL LAND UNDER TRANSACTION IS WIT HIN 8 KM. OF THE MUNICIPAL AREA, STILL IT IS AGRICULTURAL LAND AND TH E SURPLUS REALIZED MAY BE DECLARED AS EXEMPT UNDER SECTION 2(1A)(III) AN D U/S. 10(1) OF THE IT ACT. THE ACTUAL VALUATION ON THE BASIS OF GOVT. APPROVED V ALUER SHOULD BE TAKEN INTO CONSIDERATION AS AGAINST VALUATION ADOPTED FOR STAMP DUTY PURPOSES. 4.1 THE ASSESSEE ALSO FURNISHED THE VALUATION REPOR T FROM THE REGISTERED VALUER AND AN AFFIDAVIT IN SUPPORT OF HE R CONTENTION THAT THE TRANSACTION WAS OF MORTGAGE TRANSACTION. 5. BASED ON THE SUBMISSIONS MADE BY THE ASSESSEE TH E LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONF RONTING THE SAME TO 5 THE ASSESSEE AND CONSIDERING THE SUBMISSIONS MADE B EFORE HIM HE UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 5. I HAVE CAREFULLY GONE THROUGH THE SUBMISSION OF THE APPELLANT, ASSESSMENT ORDER, REMAND REPORT AND THE OTHER MATER IAL AVAILABLE ON RECORD. APPELLANT'S CONTENTION THAT THE TRANSACTION O F AGRICULTURAL LAND WHICH IS A SUBJECT MATTER OF THIS APPEAL, WAS NOT A PURCHASE/SALE TRANSACTION BUT ONLY A FRIENDLY (FAMILY) ARRANGEMEN T BY WAY OF MORTGAGE OF LAND IS NOT ACCEPTABLE IN VIEW OF THE REGISTERED PURCHASE AND SALE DEEDS OF THE SAID AGRICULTURAL LAND MENTIONING THEREIN CL EARLY THE DETAILS OF PURCHASERS, DATE OF PURCHASE, STAMP DUTY PAID, DETA ILS OF SELLER, DATE OF SALE, SALE CONSIDERATION ETC., THESE DOCUMENTS AND THE IR AUTHENTICITY IS NOT DISPUTED EVEN BY THE APPELLANT. IN VIEW OF THE ABOVE, PURCHASE AND SALE OF THE AGRICULTURAL LAND UNDER REFERENCE IS ESTA BLISHED BEYOND DOUBT. APPELLANT'S CONTENTION AND ITS AFFIDAVIT IN THIS RE GARD ARE THEREFORE, NOT ACCEPTABLE. APPELLANT'S GROUND NO.1 IN THIS REGARD IS DISMISSED. 6. THE ISSUE UNDER APPEAL IS NOT THE TAXABILITY OF THE AGRICULTURAL INCOME BUT THE TAXABILITY OF CAPITAL GAINS ARISING OU T OF SALE OF LAND ON 30/03/2005 FOR RS. 5,75,000/-. THE APPELLANT SAYS TH AT SINCE THAT LAND IN QUESTION WAS AN AGRICULTURAL LAND IT WAS NOT A C APITAL ASSET WITHIN THE MEANING OF SEC.2(14)(III) OF THE ACT. 7. SEC. 2(14)(III) OF THE ACT PROVIDES AS FOLLOWS: AGRICULTURAL LAND IN INDIA NOT BEING LAND SITUATE- (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNI CIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COM MITTEE TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BO ARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAND ACCO RDING 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 MOR E THAN EIGHT KILOMETERS FORM THE LOCAL LIMITS OF ANY MUNICIPALIT Y OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVT. MAY, HAVING REGARD TO EXTEND OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHA LF BY NOTIFICATION IN THE OFFICIAL GAZETTE. 8. AO IN HIS REMAND REPORT HAS REITERATED THAT THE INFORMATION CALLED FOR FROM THE LOCAL AUTHORITIES OF STATE GOVT. I.E. TALATHI, GRAMSEVALC, TOWN PLANNING DEPTT. AND MUNICIPAL COUNCIL HAS CLEARLY S UBSTANTIATED THAT THE LAND IN QUESTION WAS SITUATED WITHIN STIPULATED LIMIT OF 8 K MS OF MUNICIPAL COUNCIL. THIS ESTABLISHES BEYOND DOUBT THAT THE LAND IN QUESTION WAS SITUATED WITHIN IN THE DISTANCE OF 8 KM FROM THE LOCA L MUNICIPAL COUNCIL, JALGOAN. MOREOVER, THE APPELLANT HAS ALSO N OT DISPUTED THE FACT THAT THE LAND WAS SITUATED WITHIN 8 KMS OF THE MU NICIPAL LIMITS. IN THIS CASE SINCE THE LAND WAS LOCATED IN VILLAGE MOHADI WHICH COMES WITHIN JALGAON MUNICIPALITY, POPULATION OF THE MUNI CIPALITY IS TAKEN INTO CONSIDERATION WHICH EXCEEDS RS. 10.000/-. IN VIEW OF THE ABOVE, THE LAND IS A CAPITAL ASSET WITHIN ITS MEANING OF SEC. 2(14) (III) OF THE ACT. 6 9. ONCE THE ISSUE OF THE NATURE OF THE ASSET UNDER APPE AL IS ESTABLISHED THEN COMES THE QUESTION OF TAXABILITY OF I TS SALE PROCEEDS. IN THIS CASE IT IS ESTABLISHED THAT THE LAND IN QUESTION WAS A CAPITAL ASSET. HENCE GAINS ARE REQUIRED TO BE TAXED IN ACCORDA NCE WITH SEC. 50C OF THE ACT. THE PROVISION OF SEC. 50C INTERALIA SA YS: WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A R ESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED (O R ASSESSABLE) BY ANY AUTHORITY OF A STATE GOVT. (HEREAFTER IN THIS S ECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER 48, BE DEEME D TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER, IN THIS CASE THE SALE CONSIDERATION AS PER THE SALE DEED IS SHOWN AT RS.5,75,000/- WHERE AS THE STAMP DUTY VALUATION OFFIC ER HAS VALUED THE PROPERTY AT RS.37,80,000/-. TAKING INTO CONSIDER ATION THE PROVISIONS OF SEC. 50C, I AM OF THE CONSIDERED VIEW THA T AO WAS JUSTIFIED IN INVOKING SEC. 50C FOR COMPUTING CAPITAL GAINS IN THIS CASE. UNDER THE FACTS AND CIRCUMSTANCE OF THE CASE, VARIOUS J UDGMENTS CITED BY THE APPELLANT IN ITS SUBMISSION ARE NOT APPLICABLE AS THE FACTS OF THIS CASE ARE CLEARLY DISTINGUISHED FROM THAT OF THOSE C ASES. CASES CITED BY THE APPELLANT RELATE TO TAXABILITY OF AGRICULTUR AL INCOME WHICH IS NOT THE REAL ISSUE UNDER APPEAL. APPELLANT'S CASE THER EFORE, DOES NOT GET COVERED BY THESE JUDICIAL PRONOUNCEMENTS. SINCE T HE ACT PROVIDES VALUATION BY THE STAMP DUTY VALUATION OFFICER OR TH E DEPARTMENTAL VALUATION OFFICER, VALUATION GIVEN BY THE REGISTERED VALUER CANNOT BE ACCEPTED. THE ADDITION MADE BY THE AO IS THEREFORE C ONFIRMED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : WITHOUT PREJUDICE TO EACH OTHER : 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A)- NASHIK WAS NOT JUSTIFIED IN CONFIRMING THE ADDITI ON MADE BY THE A.O. OF ' RS.36,55,553/- ON ACCOUNT OF LONG TERM CA PITAL GAIN IGNORING THE FACT THAT IT WAS A SALE OF AGRICULTURAL LAND. THE CAPITAL GAIN ON ACCOUNT OF SALE OF AGRICULTURAL LAND IS NOT SUSTAINABL E. IT BE DELETED. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION TAKEN UNDER S. 147 OF THE ACT IS AB INITIO VOID AND W ITHOUT JURISDICTION. THERE WAS NO ESCAPEMENT OF ANY INCOME. THE ASSESSEE IN HIS LIFE-TIME HAD ADVANCED CERTAIN LOAN TO ANOTHER AGRICULTURIST OF THE AREA ON THE SECURITY OF HIS AGRICULTURAL LAND. SUBSEQUENTLY THE ORIGINAL AGRICULTURIST - THE BORROWER DISCHARGED HIS LIABILITY FOR THE SAME AM OUNT AND TOOK BACK HIS SECURITY IN THE FORM OF AGRICULTURAL LAND. THIS CANNOT CONSTITUTE ANY SALE. NO INCOME NOR CAPITAL GAIN WILL ARISE FOR TAXATION. IT BE HELD ACCORDINGLY. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE AGRICULTURAL LAND ONLY BECAUSE IT WAS WITHIN 8 KMS. OF THE DISTANCE FROM THE NOTIFIED AUTHORITY. THE OTHER CONDITION MUST BE SATISFIED THAT IS THE LAND WAS SO NOTIFIED UNDER THE NOTIFICATION ISSUED BY T HE C.B.D.T. IN THE 7 ABSENCE OF THIS SUBJECT MATTER BEING AGRICULTURAL LAND NO GAIN ARISES TO THE ASSESSEE. IT BE HELD ACCORDINGLY. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE N OTICE UNDER SECTION 148 WAS NOT PROPERLY SERVED. THE NOTICE WAS S ERVED ON THE WIFE OF THE DECEASED BEING LEGAL HEIR BEING SUP ER CITIZEN COULD NOT UNDERSTAND THE IMPLICATIONS OF THE SAME. THE ADULT MAL E MEMBER BEING KARTS WAS THEN AT HOME THE LD. A.O. WAS NOT JUSTI FIED IN SERVING THE NOTICE ON THE WINDOW. THE NOTICE MUST HAVE BEEN SERVED ON THE KARTA OF THE HUF. THE NOTICE IS BAD IN LAW AS IT WAS ALSO SERVED ON THE WIDOW WHEN FAMILY WAS IN MOURNING. THE ASSESSMENT, THEREFORE, BE QUASHED . 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE VALUATION DONE BY THE A.O. OF AGRICULTURAL LAND AND CONFIRMED BY LD. C.I.T. (A) INVOKING S. 50-C WAS NOT JUSTIFIED AS IT WAS CONTRAR Y TO LAW. THE ASSESSMENT MADE BY A.O. AND CONFIRMED BY LD. C.I.T. (A) WAS VITIATED IN LAW AND BE CANCELLED. 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND SINCE THE PROVISIONS OF S. 50-C ARE NOT APPLICABLE AS THE ONUS LI ES ON THE A.O. TO PROVE THAT THE ASSESSEE HAD ACTUALLY RECEIVED THE SALE CON SIDERATION AS PROVIDED IN THAT SECTION. IN THE ABSENCE OF THIS FMV CANNOT BE SUBSTITUTED FOR COMPUTATION OF CAPITAL GAIN. IT BE HELD ACCORDINGLY. 7) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS NOT JUSTIFIED IN CONFIRMING THE TAXATION OF CAPI TAL GAIN IN THE HANDS OF LEGAL HEIR SMT. MATHURABAI D. PATIL . THE ASSESSMENT SHOULD HAVE BEEN MADE IN THE HANDS OF KARTA OF HUF. THE ASSESSMENT ALSO IS BAD IN LAW AS STATUTORY NOTICES WERE NOT SERVED ON THE KARTA OF HUF. THE ILLEGAL ASSESSMENT BE QUASHED. 8) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ASSESSEE DENIES HER LIABILITY TO PAY INTEREST U/S. 234-A, 234-B A ND 234-C OF THE ACT AND IT BE DELETED. 9) THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 7. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE DID NOT PRESS GROUNDS OF APPEAL NO. 2, 4 AND 7 FOR WHICH TH E LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTIONS. ACCORDINGLY, THE SE GROUNDS ARE DISMISSED AS NOT PRESSED. 8. SO FAR AS THE OTHER GROUNDS ARE CONCERNED, THE L D. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE C IT(A). HE SUBMITTED THAT THE AO IN THE INSTANT CASE HAS APPLI ED PROVISIONS OF SECTION 50C FOR SALE OF AN AGRICULTURAL LAND. HE S UBMITTED THAT 8 BASICALLY IT IS NOT A SALE DEED IN REAL SENSE BECAU SE THE SALE DEED WAS EXECUTED ONLY TO SECURE THE ADVANCE. HE SUBMITTED THAT THE WITNESSES IN BOTH THE SALE DEEDS ARE SAME, AREA IS SAME AND T HE LAND IS SAME. FURTHER, THE LAND CANNOT BE USED FOR ANY OTHER PURP OSE OTHER THAN AGRICULTURAL PURPOSES. HE SUBMITTED THAT THE NOTIC E U/S.148 WAS ISSUED TO THE ASSESSEE ON 24-03-2009. THE ASSESSEE FILED RETURN OF INCOME ON 27-12-2010 AND THE ASSESSMENT HAS BEEN COMPLETED ON 28-12-2010, I.E. WITHIN A DAY FROM THE DATE OF FILING OF THE RE TURN. HE SUBMITTED THAT NO PROPER OPPORTUNITY WAS GRANTED BY THE AO TO THE ASSESSEE AND THE ASSESSMENT HAS BEEN COMPLETED IN UNDUE HASTE. FURTHER, NO NOTICE U/S.143(2) WAS ISSUED TO THE ASSESSEE. 8.1 THE LD. COUNSEL FOR THE ASSESSEE MADE AN ALTERN ATE ARGUMENT. HE SUBMITTED THAT ACCORDING TO THE SUB-CLAUSE (B) O F SECTION 2(14)(III) AN AGRICULTURAL LAND SITUATED IN AN AREA NOT BEING MORE THAN 8 KMS FROM THE LOCAL LIMITS OF ANY MUNICIPAL OR CANTONMEN T BOARD REFERRED TO IN SUB-CLAUSE (A), AS THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICIAL GAZETTE HAVING REGARD TO THE EXTENT OF, AN D SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSID ERATIONS CONSTITUTES A CAPITAL ASSET. THERE IS A NOTIFICATION NO.9447, DATED 06-01-1994 AMENDED BY NOTIFICATION NO.11186 DATED 28-12-1999 W HICH IS OPERATIVE FROM THE DATE OF NOTIFICATION ITSELF. IT PROVIDES, STATE-WISE AND, IN THE STATE, CITY-WISE, THE DISTANCE FROM THE LOCAL LIMITS OF THE MUNICIPALITY OR CANTONMENT BOARD, THE AGRICULTURAL LAND SITUATED WHEREIN WOULD BE REGARDED AS CAPITAL ASSET FOR THE PURPOSES OF SECTION 45 OF THE I.T. ACT. IN THIS NOTIFICATION, MUNICIP ALITY SHALL MEAN ANY AREAS WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY, 9 (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORA TION, NOTIFIED AREAS COMMITTEE, TOWN AREAS COMMITTEE, TOWN COMMITT EE OR BY ANY OTHER NAME) 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 PRE VIOUS YEAR. THE REFERENCE TO MUNICIPAL LIMITS OR THE LIMIT OF CANTO NMENT BOARD IN THE SCHEDULE TO THIS NOTIFICATION IS TO THE LIMITS AS E XISTING ON THE DATE ON WHICH THE LIMITS AS EXISTING ON THE DATE ON WHICH T HE NOTIFICATION IS PUBLISHED IN THE OFFICIAL GAZETTE. 8.2 HE SUBMITTED THAT IN VIEW OF THE FACT THAT THE DRAFT NOTIFICATION OF 1981 HAS GOT THE FINALITY ON 6-1-1994, ONLY THE NOTIFICATION OF 6-2- 1973 SHOULD REMAIN IN FORCE UPTO 5-1-1994 AND IN CA SE ANY CITY IS NOT COVERED BY THAT LIST, THE AGRICULTURAL LAND IN THE VICINITY OF THAT CITY SHOULD NOT BE CONSIDERED TO BE A CAPITAL ASSET AS T HE NEW PROVISIONS OF SECTION 2(14) PROVIDE THAT ALL THE AGRICULTURAL LAN D IN THE AREA OF A MUNICIPALITY, MUNICIPAL CORPORATION/CANTONMENT BOAR D ARE A CAPITAL ASSET AND THE LAND IN THE VICINITY 'OF SUCH MUNICIP ALITY OR BOARD NOT BEYOND 8 KMS., IF NOTIFIED IN THE OFFICIAL GAZETTE, SHALL BE THE CAPITAL ASSET. IF THERE IS NO SUCH NOTIFICATION THE LAND IN THE VICINITY OF SUCH UNNOTIFIED BIGGER CITIES EVEN WILL NOT BE A CAPITAL ASSET. 8.3 REFERRING TO THE ABOVE NOTIFICATION HE SUBMITTE D THAT IF THE NAME OF ANY VILLAGE OR CITY IS NOT INCLUDED IN THE LIST GIVEN IN NOTIFICATION NO.9447 DATED 06-01-1994 THEN THE ENTIRE LAND IN TH E CITY WILL BE TREATED AS RURAL AGRICULTURAL LAND PROVIDED THE POP ULATION OF MUNICIPALITY WITHIN WHOSE JURISDICTION THE LAND IS SITUATED IS LESS THAN 10 10000 BEFORE THE FIRST DATE OF THE PREVIOUS YEAR. HE ACCORDINGLY SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FI LE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRESH SINCE THE VILL AGE IN WHICH THE LAND IS SITUATED IS NOT NOTIFIED. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF LD.CIT(A) SUBMITTED THAT TH E ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE ARE FO R THE FIRST TIME BEFORE THE TRIBUNAL. THE LOWER AUTHORITIES HAVE NO OCCASION TO CONSIDER THE ABOVE ARGUMENTS. THEREFORE, THE MATTE R MAY BE RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THE ALTERNA TE CONTENTION OF THE ASSESSEE THAT IN VIEW OF THE NOTIFICATION NO.9447 D ATED 06-01-1994 ALTHOUGH THE AGRICULTURAL LAND IS SITUATED WITHIN 8 KMS FROM THE MUNICIPAL AREA OF JALGAON TOWN IS NOT AN AGRICULTUR AL LAND IN VIEW OF THE NOTIFICATION WAS NOT ARGUED BEFORE THE AO OR TH E CIT(A). THE ASSESSEE FOR THE FIRST TIME HAS RAISED THIS ALTERNA TE CONTENTION BEFORE THE TRIBUNAL. UNDER THESE CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO ADJUDICATE THE ISSUE IN THE LIGHT OF T HE NOTIFICATION ISSUED BY THE CBDT FROM TIME TO TIME WHICH IS BINDING ON T HE DEPARTMENT. THE AO SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER LAW. WE HOLD AND DIRECT AC CORDINGLY. 11 10.1 SINCE WE ARE RESTORING THE ISSUE TO THE FILE O F THE AO ON THE BASIS OF THE NEW LINE OF ARGUMENT ADVANCED BEFORE U S BY THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, WE REFRAIN OUR SELVES FROM ADJUDICATING THE OTHER ISSUES RAISED BEFORE US. GR OUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSES. 11. GROUNDS OF APPEAL NO.8 RELATE TO CHARGING OF IN TEREST U.S.234A, 234B AND 234C WHICH ARE MANDATORY AND CONSEQUENTIAL . ACCORDINGLY, THIS GROUND IS DISMISSED. 12. GROUND OF APPEAL NO. 9 BEING GENERAL IN NATURE IS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 31-12-2014. SD/- SD/- (R.S.PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE DATED: 31 ST DECEMBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, NASHIK 4. THE CIT-II, NASHIK 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE