ITO, NCW - 1 (5), CHENNAI V. Ms. S. BALASARASWATHI, CHENNAI

ITA 1214/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7992 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains
• Section: 148; 133(6)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1214/CHNY/2019 िनधाᭅरण वषᭅ /Assessment Year: 2014-15 The Income Tax Officer, Non-Corporate Ward-1(5), Coimbatore. v. Late T. Bhavani Devi (Rep by Legal Heir Ms. S. Balasaraswathi) New No.31, Old No.16, Neelkantha Mehta Street, T.Nagar, Chennai – 600 017. PAN: AJDPB 5831E (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri M. Rajan, CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri G. Baskar, Advocate स ु नवाई कȧ तारȣख/Date of Hearing : 22.02.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 25.02.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)-2, Chennai in ITA Appeal No.73/2017-18 dated 24.01.2019. The Assessment was framed by the ITO, Non-Corporate Ward-1(5), Chennai U/s 2 I.T.A. No.1214/Chny/2019 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’) for the A.Y. 2014-15 vide order dated 30.12.2017. 2. The short point under dispute is whether the assessee’s land in question is located within 6 kms of aerial distance or outside 6 kms of aerial distance from the municipal limits of Tambaram Municipality and that of the land in question which is in village Varadarajapuram. For this Revenue has raised following ground Nos.2, 3 & 4:- 1. The order of the Ld. CIT(A) is contrary to law, facts arid circumstances of the case. 2. The Ld.CIT(A) erred in giving relief to the assessee by holding that AO failed to prove the fact that the land in question was located within 6 kms of aerial distance from the municipal limits of Tambaram Municipality when JCIT, Range- 1, Chennai in directions under section 144A of the Act to the AO, relied on Google maps website and deduced that as per the maps, and found that the outer limit of Tambaram Municipality being the nearest municipality to Varadarajapuram, the place where the impugned property is situated, viz. varadarajapuram is only 4.17 kms from the outer limit of Tambaram municipality, when measured aerially. 3. The Ld.CIT(A) erred in giving relief to the assessee by rejecting the direction of the JCIT under section 144A 8s the order of the AO that provisions of sub clause (a) of 2( 14)(iii) is not applicable in this case as the impugned land at Varadarajapuram is not located within the municipality of Tambaram & that provisions of section 2(14)(iii)(b) are only applicable as the land at Varadarajapuram is 3 I.T.A. No.1214/Chny/2019 located with the specified limits from the outer limit of Tambaram Municipality, which has a population of 1,74,787. 4. The Ld. CIT(A) erred in giving relief to the assessee when in accordance with section 2(14)(iii)(b) of the Act, the land impugned, is within 6 km s from the outer limit of Tambaram Municipality and squarely falls under the definition of capital asset and the sale of this land results in taxable capital gain and cannot be claimed as exempt as agricultural in nature. 3. Brief facts are that the assessee filed her return of income for the relevant assessment year 2014-15 on 24.07.2014 and this return was processed u/s.143(1) of the Act. Subsequently, the AO received information from DIT(I & CI) regarding sale of land from which assessee has not disclosed any capital gain and accordingly assessee’s case was reopened u/s.147 r.w.s. 148 of the Act. Notice u/s.148 of the Act was issued on 19.12.2016 and served on one Ms. Balasaraswathi, legal representative of late T. Bhavani Devi, who passed away on 19.01.2015. The assessee requested vide letter dated 15.05.2017 that the return filed on 24.07.2014, as originally filed, be treated as one in response to notice issued u/s.148 of the Act. The AO during the course of assessment proceedings revealed the information that the assessee along with other co-owners has sold five immovable properties i.e., land admeasuring 9.38 acres situated at 111, 4 I.T.A. No.1214/Chny/2019 Varadarajapuram Village, Sriperumbudur Taluk, Kancheepuram District during the financial year 2013-14 for a total considerationof Rs.27,21,51,200/-. The assessee’s share was Rs.13,66,64,200/-. There is no dispute about these facts. The details of land sold including the date of transaction, survey number, document number, area of land sold, amount of sale proceed and assessee’s share, these are tabulated by the AO in his assessment order and for the sake of clarity, we are reproducing the same. S.No. Survey No. Document No. Land sold in acres Date of Transaction Amount in Rs. Market/guideline value Assessee’s Share 1. 235 9774/2013 2.11 20.11.2013 5,05,97,800 6,43,97,200 6,43,97,200 2. 238/2A 1265/2014 1.48 13.02.2014 3,54,90,400 4,51,69,600 4,51,69,600 3. 238/1 1264/2014 1.74 13.02.2014 4,17,25,200 5,31,04,800 88,50,800 4. 237 9773/2013 1.89 20.11.2013 4,53,22,200 5,76,82,800 96,13,800 5. a. 237 b. 240/2A c. 240/1A Agreement of sale 0.80 0.77 0.50 13.02.2014 5,17,96,800 - 86,32,800 Total 13,66,64,200 3.1 According to the AO, this land is situated at a distance of 4 kms from the local limit of Tambaram Municipality and the population of Tambaram Municipality as per the preceding census is 1,74,784. According to AO, the property in question does not fit into the definition of agricultural land but it partake the character of capital asset falling u/s.2(14)(iii) of the Act. This 5 I.T.A. No.1214/Chny/2019 matter was referred to the JCIT, Range-1, Chennai by the assessee u/s.144A of the Act for directions and the JCIT, vide his letter dated 30.12.2017 issued directions and in directions, he noted that the village Varadarajapuram is only 4.17 kms from the outer limit of Tambaram Municipality. The AO treating the same as capital asset liable to capital gains, in view of directions of JCIT, Range-1, Chennai assessed the income under Long Term Capital Gains. Aggrieved, assessee preferred appeal before CIT(A). 4. The CIT(A) after going through the certificate issued by the Village Administrative Officer (VAO) who certified that the land in question is covered under Kundrathur Panchayat Unit and situated at a distance of 7 kms away from Tambaram Municipality. He also noted from the copy of map i.e., Google map submitted by the assessee which shows the distance from the land in question showing the aerial distance to be 8 kms from the nearest municipal limit of Tambaram Municipality. Accordingly, the CIT(A) opines the land in question is located outside 6 kms of aerial distance from the municipal limit of Tambaram Municipality and accordingly, he held this is agricultural land not liable to capital gains tax in term of section 2(14)(iii) of the Act. The 6 I.T.A. No.1214/Chny/2019 CIT(A) also holds that the conclusion of the AO in arriving at that the property in question is not agricultural land is wrong and according to him, the property in question is actually agricultural land. Therefore, he directed the AO to delete the assessment of sale consideration of this agricultural land from Long Term Capital Gain. Aggrieved, Revenue is in appeal before the Tribunal. 5. Before us, the ld.CIT-DR Shri M. Rajan, took us through the directions issued by JCIT vide letter dated 30.12.2017 and he particularly referred to para 8 (iii) & (iv), wherein the aerial distance of Varadarajapuram village from outer limit of Tambaram Municipality is described and the distance is 4.17 kms i.e., within the limit of 6 kms as prescribed by the notification issued by CBDT u/s.2(14)(iii) of the Act. The ld.CIT-DR further drew our attention to para 4 of the directions issued by JCIT vide letter dated 30.12.2017 and stated that even the Tahsildar who is Nodal Officer for the Revenue Department vide letter dated 22.12.2017 stated that the land in question is situated within 4 kms approx. from the outer limit of Tambaram Municipality. The ld.CIT-DR stated that once this fact is established that the land in question is situated within the limit of 6 kms, the land in question is capital asset liable to capital gains and the AO has rightly charged Long 7 I.T.A. No.1214/Chny/2019 Term Capital Gain tax on the same. Accordingly, he asked the Bench to reverse the order of CIT(A) and sustain the order of AO. 6. On the other hand, the ld.counsel for the assessee Shri G. Baskar first of all took us to the same directions issued by the JCIT vide letter dated 30.12.2017 and relevant point 8(iv), which was referred by CIT-DR was read out by him. He stated that from this it is clear that the distance measured is of village Varadarajapuram from the outer limit of Tambaram Municipality aerially but not of the land in question. The ld.counsel for the assessee stated that even the Tahsildar, as pointed out by ld.CIT(A), has categorically stated in his letter dated 22.12.2017 that the land in question is situated within 4 kms approx. from the outer limit of Tambaram Municipality but he was not sure, only he has estimated the distance. Further, the ld.counsel for the assessee pointed out from the paper-book wherein the certificate of Village Administrative Officer clearly certified that the land in question is situated beyond 7 kms from the Tambaram Municipality. Apart from this, the ld.counsel for the assessee filed complete aerial distance measured from Google map and GPS system installed between the land in question and the outer limit of Tambaram Municipality. The ld.counsel for the assessee 8 I.T.A. No.1214/Chny/2019 referred to page 3 of its paper-book and shown us that the aerial distance measured is 8.14 kms (5.06 miles). He stated that this is the exact distance measured through Google map by positioning the GPS systems on both sides i.e., the land in question and the outer limit of Tambaram Municipality. The ld.counsel for the assessee for this referred to page 3 of assessee’s paper-book wherein the concerned document is enclosed. In view of the above, the ld.counsel for the assessee stated that the distance of land in question situated at No.111, Varadarajapuram village and the outer municipal limit of Tambaram Municipality is actually 8.14 kms and this is the shortest aerial distance. According to him the land in question cannot be assessed as capital asset falling under Long Term Capital Gain tax. 7. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the JCIT vide his directions dated 30.12.2017 has noted the fact in 8 (iii) & (iv) as under:- 8 (iii) The maps above depict the outer limit of Tambaram Municipality being the nearest municipality to Varadarajapuram and also the limits of Karasangal which is an area located beyond Varadarajapuram. From the map it may be seen that a point beyond Varadarajapuram that too on the other end of Karasangal itself is only 5.65 kms from the outer limits of Tambaram Municipality, when measured aerially. 9 I.T.A. No.1214/Chny/2019 (iv) Further it can be very clearly conferred from the above map that Varadarajapuram is only 4.17 kms from the outer limit of Tambaram Municipality, when measured aerially. From the above, it is clear that the JCIT has calculated the aerial distance of Varadarajapuram village from the outer limit of Tambaram Municipality measured aerially as seen from the google map positioning of GPS. Further, we noted that in the same directions, the JCIT has referred to one letter of Tahsildar dated 22.12.2017, wherein the Revenue Tahsildar has only made approximation of the land in question from the outer limit of Tambaram Municipality. The relevant para 4 reads as under:- “4. The return filed in response to the notice u/s.148 was taken up for scrutiny by issue of a notice u/s.143(2). Subsequently notices were issued u/s.142(1) calling for specific details and documents in response to which the assessee Shri S. Balasubramaniyan appeared and submitted details & documents before the assessing officer. The assessee had submitted a copy of a letter from Village Administrative Officer (VAO) of Varadarajapuram village, dated 22/11/2017 in which the VAO has stated that the land in question is situated within 7 kms from outer limits of Tambaram municipality. On the other hand, the assessing officer vide notice u/s 133(6) dated 22/11/2017 sought certain details of the land from the Tahsildar, Sriperumbudhur Taluk. In response to the above notice, the Tahsildar vide letter dated 22/11/17 made submissions. In the said submission, the Tahsildar has stated that the land in question is situated within 4 Km approximately from the outer limits of Tambaram Municipality.” 7.1 We have also gone through the web documents filed by assessee in her paper-book at pages 1 to 3 and particularly page 10 I.T.A. No.1214/Chny/2019 3, the land in question, when measured aerially the distance from outer limit of Tambaram Municipality is 8.14 kms (5.06 miles). Even the VAO vide his certificate dated 22.11.2017 has certified that the aforementioned land is situated beyond 7 kms from Tambaram Municipality. In entirety of facts and going through these evidences we are of the view that the land situated in village Varadarajapuram is beyond 6 kms of outer limit of Tambaram Municipality. Hence, we are of the view that the aforesaid land was not taxable because land did not fall within the distance of 6 kms from the outer limit of Tambaram Municipality measured aerially. Hence, we find no infirmity in the order of CIT(A) and the same is confirmed. 8. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the court on 25 th February, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 25 th February, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.