ACIT, Gurgaon V. Sh. Rajender Singh, Gurgaon

ITA 1318/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6876 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 09-06-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 06-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V P MISHRA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Capital asset; Cost of acquisition
• Section: 143(3); 2(14); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SMT. DIVA SINGH , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 1318 /DEL/ 2013 ASSESSMENT YEAR: 1996 - 97 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), GURGAON VS. SH. RAJENDER SINGH, L/H - SH. HUKMI, HUF, R/O - VILL. WAZIRABAD, GURGAON GIR/PAN : (APPELLANT) (RESPONDENT) APPELLANT BY SH. V.P. MISHRA, SR. DR RESPONDENT BY DR. RAKESH GUPTA, ADV. DATE OF HEARING 09 .06.2016 DATE OF PRONOUNCEMENT 20.07.2016 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE R EVENUE IS PREFERRED AGAINST THE ORDER DATED 24/12/2012 OF THE LEARNE D COMMISSIONER OF INCOME - TAX ( APPEALS), FARIDABAD IN RELA TION TO ASSESSMENT YEAR 1996 - 9 7 , RAISING FOLLOWING GROUNDS: I. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS RIGHT IN DELETING THE ADDITION OF RS. 1,71,25,750/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CAPITAL GAIN ON ACCOUNT OF SALE OF AGRICULTURAL LAND SITUATED WITHIN EIGHT KILOMETERS FROM THE MUNICIPAL LIMITS. II. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS RIGHT IN ACCEPTING TWO CONFLICTING DISTANCE CERTIFICATES ISSUED BY THE SAME AUTHORITY I.E . TEHSILDAR. III. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS RIGHT IN ACCEPTING THE ROAD DISTANCE OF 8.5 KM AND IGNORING THE AERIAL DISTANCE OF 4.67 KM AS DISCUSSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 2 ITA NO. 1318/DEL/2013 AY: 1996 - 97 2. THE BRIEFLY STATED FACTS OF THE CASE AS CULLED OUT FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 18/03/1998 DECLARING INCOME OF RS. 4,42, 486/ - AND AGRICULTURAL INCOME OF RS. 50,000/ - IN THE STATUS OF SH. HUKMI (HUF). IN T HE SCRUTINY PROCEEDINGS, THE ASSESSING OFFICE R OBSERVED SALE OF LAND TO DLF G ROUP C OMPANIES THROUGH 10 REGISTERED SALE DEEDS FOR A CONSIDERATION OF RS. 1,79, 68,750/ - . IN THE RETURN O F INCOME, NO CAPITAL GAIN WAS DECLARED AS ACCORDING TO THE ASSESSEE SAID LAND WAS AGRICULTURAL LAND, SITUATED BEYOND 8 KM FROM THE MUNICIPAL LIMIT OF GURGAON. THE ASSESSEE FILED KHASRA GIRDAWARI REPORT FOR THE YEAR S 1994 - 95 AND 1995 - 96 AND THE CERTIFICAT E ISSUED BY THE T EHSILDAR THAT THE LAND WA S SITUATED APPROXIMATELY 10 KMS FROM THE MUNICIPAL LIMIT OF GURGAON. THE ASSESSING OFFICER THOUGH DID NOT DISPUTE DISTANCE OF THE LAND FROM THE MUNICIPALITY , HOWEVER , DISPUTED WHETHER THE LAND WAS AGRICULTURAL LAND BECAUSE ACCORDING TO HIM THE LAND WAS UNCULTIVATED AS PER THE KHASRA GIRDAWARI REPORT AND CROPS OF WHEAT AND SARSON MENTIONED IN THE KHASRA GIRDAWARI WAS NOT SUPPORTED BY ANY EVIDENCE OF SALE OF AGRICULT URAL PRODUCE. IN VIEW OF THE OBSERVATION, THE LEARNED ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF L ONG - TERM CAPITAL GAIN OF RS. 1,71,25, 750/ - , AFTER ALLOWING INDEXE D COST OF ACQUISITION OF RS. 8,43, 000/ - AGAINST T HE SALE CONSIDERATION OF RS. 1,79,68, 750/ - . 3. SUBSEQUENTLY, THE LEARNED COMMISSIONER OF INCOME T AX, ROHTAK EXERCISING HIS POWE RS UNDER SECTION 263 OF THE ACT , SET - ASIDE THE ASSESSMENT ORDER DATED 18/09/1998 PASSED UNDER SECTION 143(3) OF THE ACT, HOLDING IT TO BE ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF THE REVENUE INAS MUCH AS THE ASSESSING OFFICER DID NOT CARRY OUT PROPER INVESTIGATION IN RESPECT OF DISTANCE OF THE LAND FROM THE MUNICIPAL LIMIT OF GURGAON. THE LEARNED COMMISSIONER OF INCOME T AX, ROHATAK GOT THE ENQUIRIES CONDUCTED THROUG H THE INCOME TAX OFFICER, GURGAON , ACCORDING TO WHICH , THE LAND WAS CERTIFIED TO BE 7.5 KM FROM 3 ITA NO. 1318/DEL/2013 AY: 1996 - 97 THE MUNICIPAL LIMIT OF GURGAON MEASURED THROUGH STRAIGHT - LINE DISTANCE METHOD. THE LEARNED CIT PASS ED THE ORDER UNDER SECTION 263 ON 14/10/1999. 4. MEANWHILE, A GGRIEVED BY THE ASS ESSMENT ORDER UNDER SECTION 143 (3) DATED 18/09/1998, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) , FARIDABAD, WHO SET ASIDE THE ASSESS MENT WITH THE DIRECTION TO THE ASSESSING OFFICER TO FRAME THE ASS ESSMENT OF FRESH AFTER TAKING INTO ACCOUNT THE OBSERVATION OF THE LEARNED CIT, ROHTAK. 5. IN CONSEQUENCE, THE ASSESSING OFFICER PASSED THE ASS ESSMENT ORDER UNDER SECTION 143 (3) READ WITH SECTION 263 AND 250 ON 28/02/2000 MAKING ADDITION OF RS. 1,77,21,80 0/ - FOR LONG - TERM CAPITAL GAIN ON SALE OF LAND. 6. THE ORDER PASSED BY THE LEARNE D COMMISSIONER OF INCOME - TAX, ROHTAK UNDER SECTION 263 DATED 14/10/1999 WAS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL, WHO WIDE ORDER DATED 03/10/2002 IN APPEAL NO. 4652/DELHI/99 , SET - ASIDE THE ORD ER OF LEARNED COMMISSIONER OF INCOME T AX HOLDING THAT EVEN THOUGH THE ORDER PASSED BY THE ASSESSING OFFICER COULD BE HELD TO BE ERRONEOUS, THE SAME WAS NOT PREJ UDICIAL TO THE INTEREST OF THE R EVENUE AS THE LONG - TERM CAPITAL GAIN FROM THE SALE OF THE LAND WAS BROUGHT TO TAX. 7. APPEAL FILED BY THE ASSESSEE AGAINST THE AFORESAID ORDER UNDER SEC TION 143(3) READ WITH SECTION 263 AND 250 DATED 28/02/2000 WAS ALLOWED BY THE LEARNE D COMMISSIONER OF INCOME - TAX ( APPEALS) ON 29/01/2003 HOLDING TO BE INFRUCTUOUS AS THE ORDER PASSED BY THE LEARNED CIT, ROHTAK WAS ALREADY SET ASIDE BY THE TRIBUNAL. 8. THE ASSESSEE ALSO FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LEARNE D COMMISSIONER OF INCOME - TAX ( APPEALS), SETTING ASIDE THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 18/09/1998 WITH THE DIRECTION TO THE ASSESSING OFFICER TO FRAME THE ASSESSMENT ORDER AFTER TAKING IN TO ACCOUNT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX, ROHTAK , UNDER SECTION 263 OF THE 4 ITA NO. 1318/DEL/2013 AY: 1996 - 97 ACT , DATED 14/10/1999. THE TRIBUNAL IN APPEAL NO. 4991/DELHI/99 RESTORED THE MATTER TO THE FILE OF THE LEARNED COMMISSIONER OF INCO ME - TAX(APPEALS). 9. IN COMPLIANCE, THE LEARNE D COMMISSIONER OF INCOME - TAX ( APPEALS) PASSED ORDER UNDER SECTION 250(6) OF THE ACT DATED 02/04/2004 DECIDING THE APPEAL AGAINST THE ORIGINAL ASSESSMENT ORDER DATED 18/09/1998 HOLDING THAT THE SAID LAND WAS AGR ICULTURAL LAND, HOWEVER, IT WAS SITUATED WITHIN 8 KM S OF THE MUNICIPAL LIMIT OF GURGAON AND THUS LIABLE FOR CAPITAL GAIN TAX IN THE HANDS OF THE ASSESSEE. AGAINST THE SAID ORDER OF THE LEARNE D COMMISSIONER OF INCOME - TAX( APPEALS), THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. IN ORDER DATED 29/02/2008 PASSED IN ITA NO. 2582/DEL/2004, THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AFTER ASCERTAINING THE EXACT DISTANCE OF LAND FROM THE MUNICIPAL LIMIT OF GURGAON BY ADOPTING SHORTEST ROAD DISTANCE METHOD AND NOT AS PER CROW S FLIGHT OR STRAIGHT LINE DISTANCE METHOD, FOLLOWING THE DECISION OF THE TRIBUNAL, MUMB AI B ENCH IN THE CASE OF LAUKIK D EVELOPERS VS. DEPUTY COMMISSIONER OF INCOME TAX, 105 ITD 657 AND TRIBUNAL, PUNE BENCH IN THE CASE OF MANGALAM INORGANICS PVT . LTD. SANGAMNER V. ACIT , ITA NO. 622, 622A/PN/01 FOR THE ASSESSMENT YEAR S 1992 - 93 AND 1993 - 94 . P URSUANT TO THE DIRECTION OF THE TRIBUNAL, THE ASSESSING OFFICER CALLED FOR A REPORT FROM THE TEHSILDAR , GURGAON, WHO REPORTED THAT LAND IN QUESTION SOLD BY THE ASSESSEE WAS SITUATED AT A DISTANCE OF 6.75 KM FROM THE MUNICIPAL LIMITS BY THE SHORTEST ROAD DISTANCE METHOD AND 4.67 IN KILOMETRES BY STRAIGHT - LINE METHOD . IN VIEW OF THE REPORT OF THE T EHSILDAR, TH E ASSESSING OFFICER HELD THE SAID LAND AS CAPITAL ASSET AND TAXED THE SAME IS LONG - TERM CAP ITAL GAIN OF RS. 1,71,25, 750/ - . 10. THE ASSESSEE PREFERRED APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER, CHALLENGING THAT THE REPORT OF T EHSILDAR DETERMINING THE SHORTEST DISTANCE BY ROAD AS 6.75 WAS NOT MADE AVAILABLE TO THE ASSESSEE. THE LEARNED COMMISSIONER OF INCOME TAX , IN VIEW OF CONTRADICTION REGARDING OF EXACT DISTANCE OF LAND FROM THE MUNICIPAL LIMITS BETWE EN THE REPORT CERTIFIED BY THE T EHSILDAR WHICH WAS 5 ITA NO. 1318/DEL/2013 AY: 1996 - 97 RELIED UPON BY THE AO AND THE REPORT SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX, ROHTAK DURING U/S 263 PROCEEDINGS, DIRECTED THE ASSESSING OFFICER WIDE LETTER DATED 06/03/2012 TO CONDUCT FURTHER ENQUIRIES FROM THE CONCERNED AUTHORITIES. THE ASSES SING OFFICER DEPUTED AN I NSPECTOR OF HIS OFFICE TO PHYSICALLY MEASURE THE SHORTEST ROAD DISTANCE. THE ASSESSING OFFICER ALSO R EQUESTED THE T EHSILDAR TO MEASU RE THE SAID DISTANCE. BOTH THE I NSPECTOR OF THE OFFICE OF THE ASSESSING OFFICER AS WELL AS T HE SUBO RDINATE OFFICERS OF THE T EHSILDAR REPORTED THE SHORTEST ROAD DISTANCE OF THE LAND AS AT 8 .5 KILOMETRES FROM THE MUNICIPALITY OFFICE . THE ASSESSING OFFICER FORW ARDED THIS REPORT TO THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS). IN VIEW OF THE REPORT OF T HE ASSESSING OFFICER , LEARNED COMMISSIONER OF INCOME T AX (A PPEALS ) DELETED THE ADDITION ON ACCOUNT OF LONG - TERM CAPITAL GAINS. AGGRIEVED, THE R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING GROUNDS AS REPRODUCED ABOVE. 11. IN T HE FIRST GROUND OF APPEAL, THE R EVENUE HAS RAISED THAT THE LAND WAS SITUATED WITHIN 8 KM FROM THE MUNICIPAL LIMIT BUT THE LEARNE D COMMISSIONER OF INCOME - TAX( APPEALS) HAS DELETED THE ADDITION OF RS. 1,71,25, 750 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CAPITAL GAINS. 1 1.1 THE L D. SR. DEPARTMENTAL R EPRESENTATIVE RELIED ON THE FINDING S OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. O N THE CONTRARY, THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN THE REMAND REPORT SENT BY THE ASSESSING OFFICER TO THE LEAR NED COMMISSIONER OF INCOME - TAX (APPEALS), HE HIMSELF HAD ADMITTED THE FACT OF DISTANCE OF SAID LAND FROM THE MUNICIPALITY OF GURGAON BEING MORE THAN 8 KM, AND THEN AGAIN FILING THE APPEAL DISPUTING THE FACT, WAS NOT CORRECT AND , THEREFORE , GROUND OF THE R EVENUE DESERVE TO BE DISMISSED. 11.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) IN PARA 6.2 OF THE IMPUGNED ORDER HAS DECIDED THE ISSUE AS UNDER: 6 ITA NO. 1318/DEL/2013 AY: 1996 - 97 6.2. THE HON BLE ITAT, IN VERY CATEGORICAL TERMS, HAD ISSUED DIRECTIONS TO THE AO TO GET THE DISTANCE OF LAND MEASURED BY SHORTEST ROAD DISTANCE METHOD FOLLOWING THE DECISIONS OF HON BLE MUMBAI AND PUNE ITATS CITED SUPRA. THEREFORE, THE MEASUREMENT OF DISTANCE BY STRAIGHT LINE METHOD O R CROW S FLIGHT WAS UNWARRANTED AND CONTRARY TO THE DIRECTION OF THE HON BLE ITAT, WHICH AMOUNTS TO INSUBORDINATION. DURING THE REMAND PROCEEDINGS, THE AO HAS CARRIED OUT NECESSARY INQUIRY. THERE IS ONE REPORT BY THE INSPECTOR SHRI SUMIT KUMAR SHARMA DATED 06.06.2012 AND HE HAS PHYSICALLY MEASURED THE DISTANCE OF THE LAND OF THE ASSESSEE BEARING KHASRA NO. 1997, 2001 AND 2378/2 FROM THE MUNICIPAL LIMITS WITH THE ASSISTANCE OF HALKA PATWARI AND KANOONGO, ON BEING DIRECTED BY THE TEHSILDAR, BY SHORTEST ROAD D ISTANCE METHOD. THE DISTANCE HAS BEEN MEASURED AT 8.5 KMS FROM THE MUNICIPAL LIMITS. THERE IS ANOTHER REPORT OF HALKA PATWARI AND KANOONGO OF THE REGION DATED 05.06.2012, WHEREIN THE DISTANCE OF LAND HAS BEEN REPORTED AT 8.5 KMS, WHICH IN TURN HAS ALSO BEE N CERTIFIED BY THE TEHSILDAR. THE AO HAS ALSO CONFRONTED THE DISCREPANCY AS REGARDS DISTANCE REPORTED IN THE EARLIER REPORT DATED 29.12.2009 AND THE TEHSILDAR HAS CONFIRMED AUTHENTICITY OF HIS LATER REPORT AND REAFFIRMED THE DISTANCE OF 8.5 KMS. THE RESULT S OF INQUIRY DURING THE REMAND PROCEEDINGS LEAVE NO SCOPE FOR ANY DISPUTE THAT THE DISTANCE OF LAND SOLD BY THE ASSESSEE WAS 8.5 KMS FROM THE MUNICIPAL LIMITS OF GURGAON. IT IS QUITE OBVIOUS THAT WHEN THE DISTANCE EARLIER MEASURED BY STRAIGHT LINE METHOD W AS 7.5 KMS, THE DISTANCE BY SHORTEST ROAD METHOD IS BOUND TO BE MORE UNLESS THE ROAD ITSELF IS IN STRAIGHT LINE, WHICH CANNOT BE THE CASE. THE AO HAS NOT DISPUTED THE DISTANCE AS CERTIFIED BY THE TEHSILDAR AND REPORTED BY HIS INSPECTOR. THEREFORE, THE LAND IN QUESTION SOLD BY THE ASSESSEE WAS NOT AN ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT (BEING AGRICULTURAL LAND OUTSIDE 8 KMS OF THE MUNICIPAL LIMITS OF GURGAON) SO AS TO ATTRACT THE PROVISIONS OF SECTION 45 OF THE ACT. CONSEQUENTLY, THE ADDITIO N OF RS. 1,71,25,750/ - MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN IS DELETED. THE GROUND NO. 3 OF APPEAL STANDS ALLOWED. 11.3 THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) HAS ALSO REPRODUCED THE REMAND REPORT SENT BY THE ASSESSING OFFICER O N PAGE 9 OF THE IMPUGNED ORDER. THE LEARNED AR ALSO REFERRED TO THE COPY OF THE SAID REMAND REPORT AVAILABLE O N PAGE 6 TO 7 OF THE PAPER BOOK . THE RELEVANT PARA OF THE SAID REMAND REPORT IS ALSO REPRODUCED AS UNDER: AS FAR AS THE ISSUE OF ABOVE ADDITION I S CONCERNED, IT IS SUBMITTED THAT INSPECTOR OF THIS OFFICE WAS DEPUTED TO PHYSICALLY MEASURE THE SHORTEST ROAD 7 ITA NO. 1318/DEL/2013 AY: 1996 - 97 DISTANCE OF THE LAND OF THE ASSESSEE BEARING KHASRA NO 1997, 2001 AND 2378/2 FROM THE MUNICIPAL LIMITS . THE TEHSILDAR OF GURGAON REGION WAS ALSO REQUESTED VIDE THIS OFFICE LETTER F.NO. ACIT/CIRCLE - L/GGN/12 - 13 DATED 31.05.2012 TO DEPUTE STAFF FROM HIS OFFICE TO HELP IN MEASURING ACTUAL DISTANCE OF THE ABOVE MENTIONED PIECE OF LAND FROM LOCAL MUNICIPAL LIMITS. AS PER THE INSPECTOR S REPORT (COPY ENCL OSED FOR YOUR REFERENCE), DISTANCE OF THE SAID PIECE OF LAND FROM THE MUNICIPALITY IS 8.5 KM. FURTHER, AS PER THE REPORT OF HALKA PATWARI AND KANOONGO OF THE REGION THE DISTANCE OF THE ABOVEMENTIONED PIECE OF LAND HAS BEEN MENTIONED AS 8.5 KM. THIS REPORT HAS BEEN DULY ACKNOWLEDGED BY THE TEHSILDAR, GURGAON REGION (COPY OF THE REPORT ENCLOSED). FUTHER, VIDE THIS OFFICE LETTER NO ACIT/C - L/GGN/2012 - 13/3303 - 04 DATED 22.08.2012, TEHSILDAR, GURGOAN WAS ASKED TO EXPLAIN THE DISCREPANCY BETWEEN HIS EARLIER REPORT DATED 29.12.2009 AND LATER REPORT DATED 31.05.2012. REPLY WAS RECEIVED ON 14.09.2012 VIDE THIS OFFICE RECEIPT NO 4444, WHEREIN THE TEHSILDAR CONFIRMED AUTHENTICITY OF HIS LATER REPORT AND REAFFIRMED THAT THE SAID DISTANCE IS 8.5KM. THEREFORE, THE ISSUE OF TREATMENT OF PIECE OF LAND OF SH. HUKMI, BEARING KHASRA NO 1997, 2001 AND 2378/2 AS CAPITAL ASSET MAY BE DECIDED ON MERIT. 11.4 T HE LEARNED COUNSEL OF THE ASSESSEE ALSO REFERRED TO THE REPORT OF THE INSPECTOR OF THE INCOME TAX O FFICE WHICH IS AVAILABLE AT PAGE NO. 3 OF THE ASSESSEE S PAPER BOOK. THE RELEVANT PART OF THE REPORT IS REPRODUCED AS UNDER: IT WAS DIRECTED TO PHYSICALLY MEASURE THE ROAD DISTANCE OF LAND HAVING KHASRA NO 1997, 2001 AND 2378/2 OWNED BY THE ABOVE NAMED AS SESSEE FROM THE MUNICIPALITY. IT IS SUBMITTED THAT I ALONG WITH HALKA PATWARI OF WAZIRABAD, SH. SATENDER BHANDARI, MOBILE NO 8750598080 AND KANOONGO OF WAZIRABAD SH. SUSHIL BOTH OF THEM WERE DIRECTED BY THE TEHSILDAR GURGAON, MEASURED THE SHORTEST ROAD DIS TANCE OF THE ABOVEMENTIONED PIECE OF LAND. THE DISTANCE OF THE SAID LAND FROM MUNICIPALITY IS 8.5 KM. THE HALKA PATWARI HAS ALSO SUBMITTED HIS REPORT WHEREIN THE DISTANCE HAS BEEN MENTIONED AS 8.5 KM FROM THE MUNICIPALITY OFFICE. THE REPORT IS DULY ACKNOWL EDGED BY THE TEHSILDAR, GURGAON AND THE SAME IS PLACED ON RECORD. 1 1.5 LEARNER COUNSEL OF THE ASSESSEE ALSO REFERRED TO T HE REPORT OF THE T EHSILDAR DATED 05/06/2012, WHICH IS AVAILABLE AT PAGE 2 OF THE ASSESSEE S PAPER BOOK. IN THIS REPORT ALSO THE DIST ANCE OF THE LAND IN REFERENCE HAS BEEN MEASURED AS 8.5 KM FROM THE MUNICIPAL OFFICE . 8 ITA NO. 1318/DEL/2013 AY: 1996 - 97 11.6 THE ASSESSING OFFICER ALSO WROTE A LET TER ON 22/08/ 2012 TO THE T EHSILDAR FOR RECONCILING WITH THE EARLIER REPORT DATED 29/12/2009 WHEREIN THE SHORTEST DISTANCE THR OUGH ROA D WAS MEASURE AS 6.75 KM S . THE T EHSILDAR IN HIS REPORT DATED 31/08/2012 , WHICH WAS RECEIVED IN THE OFFICE OF THE ASSESSIN G OFFICER ON 14/09/2012 , CLARIFIED THE DISTANCE AS 8.5 KILOMETRES. 11.7 WE FIND THAT AS REGARD TO THE SHORTEST ROAD DISTANCE OF THE IMPUGNED LAND FROM THE MUNICIPAL LIMITS IS CONCERNED , LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS), HAS RELIED ON TO EVIDENCES FORWARDED BY THE ASSESSING OFFICER IN REMAND REPORT . FIRST EVIDENCE IS THE RE PORT OF THE INSPECTOR OF INCOME - T AX, WHICH HAS BEEN REPRODUCED IN PARA 11. 4 OF THIS ORDER. A COPY OF THE I NSPECTOR S REPORT IS ALSO AVAILABLE AT PAGE NO. 3 OF THE ASSESSEE S PAPER BOOK. THE SECOND EVIDENCE IS THE REPORT DATED 05/06/2012 OF THE OFFICIALS OF T EHSILDAR , WHICH WAS FORWARDED B Y THE TEHSILDAR OF GURGAON. BOTH THESE EVIDENCES WERE GATHERED BY THE ASSESSING OFFICER IN REMAND PROCEEDINGS AND SENT TO THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS). A COPY OF THE SECOND EVIDENCE HAS BEEN FILED BY THE ASSESSEE AT PAGE NO. 2 OF THE PA PER BOOK. ON PERUSAL OF BOTH THE EVIDENCES, WE FIND THAT DISTANCE OF THE IMPUGNED LAND HAS BEEN MEASURED BOTH BY THE INSPECTOR AS WELL AS OFFICIALS O F THE T EHSILDAR FROM THE OFFICE OF THE MUNICIPALITY, WHICH IS NOT THE CORRECT MEASUREMENT OF THE SHORTEST R OAD DISTANCE AS REQUIRED AS PER THE PROVISIONS OF THE INCOME TAX ACT. THE AGRICULTURAL LAND WHICH IS EXCLUDED FROM THE DEFINITION OF CAPITAL ASSET HAS BEEN DEFINED IN SECTION 2(14) (III) OF THE ACT. THE DEFINITION DURING THE RELEVANT ASSESSMENT YEAR WAS AS UNDER: 2(14) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE ---- . (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATE ---- 9 ITA NO. 1318/DEL/2013 AY: 1996 - 97 (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 ACCORDING 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 BE ING MORE THAN EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS , SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE;] 11.8 F ROM THE ABOVE DEFINITION , IT IS CLEAR THAT IF THE AGRICULTURAL LAND IS SITUATED IN AN AREA AT THE DISTANCE OF MORE THAN 8 KMS FROM THE LOCAL LIMITS OF THE N O T I F I E D MUNICIPALITY OR CANTONME NTS BOARD, IT SHALL NOT BE TREATED AS CAPITAL ASSET. WHAT IS IMPORTANT HERE IS THAT THE DISTANCE OF THE AGRICULTURAL LAND HAS BE TO MEASURED FROM THE SPECIFIC POINT ON SHORTEST ROAD CONNECTING THE AGRICULTURAL LAND TO THE CITY, WHERE THE LOCAL LIMITS OF TH E MUNICIPALITY ENDS. THE OFFICIALS OF THE T EHSILDAR HAS MEASURED THE DISTANCE OF THE IMPUGNED LAND FROM MUNICIPAL OFFICE AS 8.5 KMS RATHER THAN FROM END OF THE MUNICIPAL LIMIT OF THE CITY . SIMILARLY, THE INSPECTOR OF THE INCOME T AX DEPARTMENT HAS ALSO REPORTED SHORTEST ROAD DISTANCE OF THE AGRICULTU RAL LAND FROM THE MUNICIPALITY AS 8.5 KMS., INSTEAD OF MEASURING FROM THE END OF THE MUNICIPAL LIMITS OF THE CITY. B OTH THE AUTHORITIES HAVE COMMITTED ERROR IN MEASUREMENT OF THE SHORTEST ROAD DISTANCE OF THE LAND, IN ACCORDANCE TO THE DIRECTION OF THE TRIBUNAL, WHICH IS EVIDENT FROM HIGHLIGHTED PART OF THE REPORT OF THE I NSPECTOR REPRODUCED ABOVE IN PARA 11.4 OF THIS ORDER . THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) HAS RELIED ON THE ABOVE EVIDENCES SU BMITTED BEFORE HIM WHICH ARE NOT ACCORDING TO THE DIRECTIONS OF THE TRIBUNAL IN ITA NO. 2582/DEL/2004 . IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE FEEL IT APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF THE LEARNED 10 ITA NO. 1318/DEL/2013 AY: 1996 - 97 COMMISSIONER OF INCOME - TAX ( APP EALS) WITH THE DIRECTION TO GET ASCERTAINED THE MUNICIPAL LIMIT OF THE CITY OF GURGAON AT RELEVANT PERIOD OF TIME AND THEN GET THE SHORTEST ROAD DISTANCE OF THE IMPUGNED LAND MEASURED FROM THE SAID MUNICIPAL LIMIT OF THE CITY AND THEN ADJUDICATE THE MATTER IN DISPUTE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION HERE THAT THE ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING. THIS BEING AN OLD MATTER, WE DIRECT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TO ADJUDICATE ON PRIORITY BASIS. THIS GR OUND OF THE APPEAL IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 12. IN GROUND NO. 2, THE R EVENUE HAS RAISED THE ISSUE OF TWO CONFLICTING DIST ANCE CERTIFICATE ISSUED BY THE T EHSILDAR. 12.1 SINCE WHILE ADJUDICATING THE FIRST GROUND OF THE APPEAL, WE H AVE ALREADY REMITTED THE MATTER OF MEASUREMENT OF THE SHORTEST ROAD DISTANCE OF THE LAND FROM THE MUNICIPAL LIMITS OF THE CITY TO THE COMMISSIONER OF INCOME TAX(APPEALS). THIS GROUND IS RENDERED INFRUCTUOUS , H ENCE, DISMISSED . 13. IN GROUND NO. 3 , THE R E VENUE HAS CHALLENGED THE SHORTEST ROAD DISTANCE TAKEN FOR MEASURING DISTANCE OF LAND FROM THE PERMISSIBLE LIMIT RATHER THAN AERIAL DISTANCE OF THE LAND FROM THE MUNICIPAL LIMITS. 13.1 HAVING HEARD THE RIVAL SUBMISSION ON THE ISSUE IN DISPUTE , WE FIND THAT LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) HAS FOLLOWED THE DIRECTION OF THE TRI BUNAL IN THE ORDER DATED 29/02/ 2008 IN APPEAL NO. 2582/DEL/2004, WHEREIN THE MATTER WAS RESTORED TO THE ASSESSING OFFICER FOR FRESH DECISION AFTER ASCERTAINING THE EXACT DIS TANCE OF LAND FROM THE MUNICIPAL LIMITS OF THE CITY BY ADOPTING SHORTEST ROAD DISTANCE METHOD AND NOT AS PER CROW S FLIGHT OR STRAIGHT - LINE DISTANCE METHOD IN VIEW OF THE DECISION OF THE TRIBUNAL MUMB AI BENCH IN THE CASE OF LAUKIK D EVELOPERS VS. DCIT (SUPRA) AND DECISION OF THE TRIBUNAL PUNE BENCH IN THE CASE OF MANGALAM INORGANICS PRIVATE LIMITED (SUPRA). IN VIEW OF THE ABOVE, THERE IS NO INFIRMITY IN THE FINDING S OF THE LEARNED COMMISSIONER OF 11 ITA NO. 1318/DEL/2013 AY: 1996 - 97 INCOME - TAX ( APPEALS) ON THE ISSUE IN DISPUTE AND , AC CORDINGLY , THE GROUND OF APPEAL IS DISMISSED. 14. IN THE RESULT , THE APPEAL OF THE R EVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 0 T H JULY , 2016 . S D / - S D / - ( DIVA SINGH ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 0 T H JULY , 2016 . LAPTOP / - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI