Dy. Comm. of Income-tax, Pune V. Shri Satish Vasudeo Jadhav, Pune

ITA 1638/PUN/2011

• Counselvise Citation: 163824514 RSA 2011
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Capital asset
• Section: 2(14); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1638/PN/2011 (ASSTT. YEAR : 2008-09) DCIT, CIRCLE-3, PUNE. .. APPELLANT VS. SATISH VASUDEO JADHAV, 90, VISHWANATH SHIVAJI HOUSING SOCIETY, SHIVAJI NAGAR, PUNE. .. RESPONDENT ASSESSEE BY : SHRI C.H.NANIWADEKAR DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 18.04.2013 DATE OF PRONOUNCEMENT : 25.04.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AND DE LETING THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS SHOR T TERM CAPITAL GAINS INSTEAD OF CONFIRMING THE ORDER OF TH E ASSESSING OFFICER. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT AS PER THE PUNE METROPOLITAN REGIONAL PLAN, THE IMPUGNED LAND WAS SITUATED WITHI N 8 KMS. OF THE MUNICIPAL LIMITS AND, THEREFORE, NOT COVERED BY THE PROVISIONS OF SEC. 2(14)(III) OF THE INCOME TAX ACT , 1961. 2. THE ISSUE INVOLVED IN THE APPEAL RELATES TO THE DISALLOWANCE OF ASSESSEES CLAIM THAT THE PROFIT ON SALE OF AGRICUL TURAL LAND AT GODAMBEWADI IS EXEMPT FROM CAPITAL GAINS TAX WITHIN THE MEANING 2 OF SECTION 2(14)(III) OF THE ACT. BASIC FACTS ARE THAT THE LAND IN QUESTION IS AGRICULTURAL LAND, WHICH IS NOT IN DISP UTE. THE ONLY DISPUTE RELATES TO DISTANCE OF AGRICULTURAL LAND FR OM LOCAL LIMITS OF NEAREST MUNICIPALITY OR MUNICIPAL CORPORATION WITHI N THE MEANING OF SECTION 2(14)(III)(B) OF THE ACT. THE ASSESSING OFFICER HELD THAT SAID LAND IS WITHIN 8 KM. FROM PIMPRI CHINCHWAD MUN ICIPAL CORPORATION LIMITS ON THE BASIS OF THE MAP OF POONA METROPOLITAN REGIONAL PLAN DEVELOPED BY THE ASSISTANT DIRECTOR O F TOWN PLANNING. THE STAND OF THE ASSESSEE HAS BEEN THAT PLAN PREPAR ED BY TOWN PLANNING DIRECTORATE MERELY GIVES A RADIUS OF 8 KMS . AROUND THE PCMC LOCAL LIMITS. IT MEANS THE MAP GIVES DISTANCE AS CROW FLIES. THE ISSUE OF MEASUREMENT OF DISTANCE BECOMES CONTRO VERSIAL WHEN SUCH DISTANCE HAS NECESSARILY TO BE ARRIVED ON THE BASIS OF DISTANCE BY ROAD AND NOT ON THE BASIS OF AS THE CROW FLIES. ACCORDING TO THE ASSESSEE, THE ACTUAL ROAD DISTANCE FROM GODAMBEWADI FROM PMC BY ROAD AS PER CERTIFICATE OBTAINED FROM TEHSILDAR, MU LSHI, REVEALS THAT ACTUAL DISTANCE IS 8.5 KMS. IT HAS BEEN CONTENDED THAT THE TEHSILDAR HAS ISSUED CERTIFICATE AFTER DUE ENQUIRIE S WITH THE EXECUTIVE ENGINEER, PWD, MULSHI. THE LD. AUTHORISE D REPRESENTATIVE RELIED ON THE DECISION OF HON'BLE PU NJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. LAL SINGH AND OTHERS, 325 ITR 588 (P&H), WHEREIN RELIANCE WAS PLACED ON C ERTIFICATE GIVEN BY CONCERNED TEHSILDAR. THE ASSESSING OFFICER IN T HE ASSESSMENT PROCEEDINGS HAS NOT ACCEPTED THE STAND OF THE ASSES SEE AND HELD THAT RS.1,65,73,775/- WAS SHORT TERM CAPITAL GAIN O N ACCOUNT OF SALE OF LAND BY THE ASSESSEE AT GODAMBEWADI. THE A SSESSING OFFICER HAS GONE BY THE DEFINITION OF THE CAPITAL ASSET FOR THE PURPOSE OF AGRICULTURAL LAND AS PER THE PROVISIONS OF SECTION 2(14)(III) OF THE ACT WHICH STATES THAT THE LAND SHOULD NOT BE WITHIN THE MUNICIPAL LIMITS AND SHOULD NOT BE IN ANY AREA UPTO A DISTANCE OF 8 KM. FROM THE MUNICIPAL LIMITS. AS PER TOWN PLANNING REPORT, LAN D SOLD BY THE ASSESSEE IS LOCATED WITHIN 8 KMS. OF MUNICIPAL LIMI TS. ISSUE BEFORE US IS NOT WHETHER LAND IN QUESTION IS AGRICULTURAL OR NOT. ISSUE IS WHETHER IT FALLS WITHIN 8 KMS. OF MUNICIPAL LIMITS. WHETHER IT IS AGRICULTURAL OR NON-AGRICULTURAL, IF IT IS WITHIN 8 KMS. FROM THE 3 OUTSKIRTS OF THE MUNICIPAL LIMITS, IT WILL BE CAPIT AL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT. ACCORDINGLY, CAPITAL ASSETS WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NO T SITUATED IN ANY AREA WITHIN SUCH DISTANCE WHICH MAY BE SPECIFIED IN THIS BEHALF BY NOTIFICATION IN OFFICIAL GAZETTE ISSUED BY THE CENT RAL GOVERNMENT. THE MAXIMUM DISTANCE PRESCRIBED BY SECTION 2(14)(II I)(B) WHICH MAY BE INCORPORATED IN THE NOTIFICATION COULD NOT BE MO RE THAN 8 KMS. FROM THE LOCAL LIMITS OF MUNICIPAL COMMITTEE OR CAN TONMENT BOARD AS THE CASE MAY BE. THE NOTIFICATION HAS TO TAKE I NTO ACCOUNT THE EXTENT OF AND SCOPE FOR URBANIZATION OF THAT AREA A ND OTHER RELEVANT CONSIDERATIONS. AS QUESTION BEFORE US IS WHETHER D ISTANCE BEYOND 8 KMS. BY ROAD REMAINS TO BE SEEN WITH RESPECT TO T HE LOCATION OF THE LAND AT GODAMBEWADI FROM PMC. AS STATED ABOVE, THE CERTIFICATE FROM CONCERNED TEHSILDAR, MULSHI, REVEA LS THAT THAT ACTUAL DISTANCE IS 8.5 KMS. THE SAID CERTIFICATE H AS BEEN ISSUED WITH DUE ENQUIRIES WITH THE EXECUTIVE ENGINEER, PWD , MULSHI, ACCORDING TO WHICH DISTANCE OF THE PROPERTY IN QUES TION IS MORE THAN 8 KMS. LAND BEING MORE THAN 8 KMS. AWAY, CONS TITUTING AGRICULTURAL LAND AS HELD IN THE CASE OF LAL SINGH AND OTHERS (SUPRA). IN VIEW OF ABOVE, THE CIT(A) WAS JUSTIFIE D IN HOLDING THAT THE LAND IN QUESTION IS MORE THAN 8 KMS. FROM THE M UNICIPAL LIMITS ACCORDINGLY NOT COVERED BY THE PROVISIONS OF SECTIO N 2(14)(III) OF THE ACT. ACCORDINGLY, HE WAS JUSTIFIED IN DELETING TH E ADDITION MADE BY THE ASSESSING OFFICER TOWARDS SHORT TERM CAPITAL GA INS. WE UPHOLD THE SAME. 3. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF APRIL, 2013. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 25 TH APRIL, 2013 4 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DCIT, CIRCLE-3, PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II, PUNE. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.