DCIT, Circle - 8, Kolkata, Kolkata V. Mr. Arijit Mitra, Kolkata

ITA 1679/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54498 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2010
• Court: TRIBUNAL
• Department Lawyers: NIRAZ KUMAR
• Assessee Lawyers: D S DAMLE
• Keywords: Capital asset; Capital Gains
• Section: 143(3); 2(14); 142(1); 133(6); 143(2); 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . , ! '# '# '# '# /AND ' # , ! ) [BEFORE HONBLE SHRI S. V. MEHROTRA, AM & HONBLE S RI MAHAVIR SINGH, JM] #$ #$ #$ #$ / I.T.A NO. 1679/KOL/2010 %& ''( %& ''( %& ''( %& ''(/ // / ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. MR. ARIJIT MITRA CIRCLE-8, KOLKATA (PAN-ADMPM 4395 D) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) & C.O. NO.184/KOL/2010 IN #$ #$ #$ #$ / I.T.A NO. 1679/KOL/2010 %& ''( %& ''( %& ''( %& ''(/ // / ASSESSMENT YEAR: 2007-08 MR. ARIJIT MITRA VS. DEPUTY COMMISSIONER OF IN COME-TAX, CIRCLE-8, KOLKATA (CROSS OBJECTOR) (RESPONDENT) FOR THE REVENUE: SHRI NIRAZ KUMAR FOR THE ASSESSEE: SHRI D. S. DAMLE . / ORDER PER MAHAVIR SINGH, JM ( ' # ' # ' # ' #, , , , ! ! ! ! ) THE APPEAL BY REVENUE AND CROSS OBJECTION BY ASSESS EE ARE ARISING OUT OF ORDER OF CIT (A)-VIII, KOLKATA IN APPEAL NO. 283/CIT(A)-VIII/KOL /09-10 DATED 29.06.2010. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-8, KOLKATA FOR ASSESSMEN T YEAR 2007-08 U/S. 143(3) INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) VID E HIS ORDER DATED 29.12.2009. FOR THE SAKE OF BREVITY AND CLARITY, WE DISPOSE OF BOTH THESE APPEA L AND CROSS OBJECTION BY THIS CONSOLIDATED ORDER. 2. FIRST WE WILL TAKE UP CROSS OBJECTIONS OF ASSESS EE AS THE ISSUE RAISED IN THIS CROSS OBJECTION OF ASSESSEE IS ON JURISDICTION, WHICH WIL L GO TO THE ROOT OF THE CASE. THE ONLY ISSUE IN THIS CROSS OBJECTION OF ASSESSEE IS, WHETHER THE AS SET TRANSFERRED IS AGRICULTURAL LAND AND, THEREFORE, FALLS WITHIN THE DEFINITION OF CAPITAL A SSET AS DEFINED UNDER SECTION 2(14)(III) OF THE ACT OR NOT. FOR THIS, ASSESSEE HAS RAISED FOLLOWIN G THREE EFFECTIVE GROUNDS IN HIS CROSS OBJECTION: 2 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) ERRED IN LAW AND IN FACT IN NOT UPHOLDING THE ASSESSEES CONTENT ION THAT NO CAPITAL GAINS WAS CHARGEABLE TO TAX AROSE ON SALE OF LAND AS THE ASSE T TRANSFERRED WAS AGRICULTURAL LAND AND THEREFORE DID NOT FALL WITHIN THE DEFINIT ION OF CAPITAL ASSET DEFINED IN SEC. 2(14) OF THE I. T. ACT. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, SINCE THE LAND IN QUESTION WAS REGULARLY ASSESSED TO LAND REVENUE AND THE SAME WAS RECORDED IN THE LAND RECORDS AS AGRICULTURAL LAND AND THERE BEING STANDING MANGO TREES WHICH WERE PLANTED BY THE PREDECESSOR IN TITLE AND THE AGRICULTURAL ACTIVITIE S HAVING BEEN CARRIED; ON THE SAID LAND, THE AUTHORITIES BELOW ERRED NOT ACCEPTING THE ASSES SEES CLAIM THAT THE LAND IN QUESTION WAS AGRICULTURAL LAND & THEREFORE PROFIT ON ITS S ALE WAS NOT CHARGEABLE TO TAX. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LAND IN QUESTION BEING USED FOR AGRICULTURAL PURPOSES AND THE SAME BEING M ORE THAN 8 KMS AWAY FROM ANY OF THE NOTIFIED. MUNICIPALITIES, THE AUTHORITIES BELOW OUGHT TO HAVE HELD THAT THE LAND WAS AGRICULTURAL LAND AND THEREFORE FALL WITHIN THE MEA NING OF AGRICULTURAL LAND DEFINED IN SEC. 2(14) OF THE I. T. ACT AND THEREFORE NO CAPITA L GAINS WAS CHARGEABLE TO TAX ON THE TRANSFER OF THE SAID LAND. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR 2007-08 ON 20.11.2007 AND WAS SELECTED FOR SCRUTINY BY ISSUING NOTICE U/S. 143(2) AND 142(1) OF THE ACT. THE ASSES SEE IS OWNER OF LAND AT VILLAGE KALABERIA, DIST. 24 PARGANAS (NORTH). A PART OF LAND SITUATED AT JL NO.30, TOUZI NO. 10, LR KHAITAN NO.476 WAS INHERITED BY ASSESSEE FROM HIS FATHER TH ROUGH WILL AND YOUNGEST GRANDFATHER. DURING FINANCIAL YEAR 2006-07 ASSESSEE SOLD THIS LA ND FOR A SUM OF RS.2,08,20,133/-. THE ASSESSEE CLAIMED THAT THIS IS AGRICULTURAL LAND AND DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET AS DEFINED IN SECTION 2(14)(III) OF THE ACT B ECAUSE THIS LAND IS 8/9 KMS FROM MUNICIPALITY OFFICE OF RAJARHAT MUNICIPALITY. THE ASSESSEE IN S UPPORT OF SAME FILED CERTIFICATE FROM PRADHAN, RAJARHAT, BISHNUPUR-1 NO GRAM PANCHAYAT DURING ASSE SSMENT PROCEEDINGS. ASSESSING OFFICER TREATED THIS LAND AS CAPITAL ASSET FALLING WITHIN T HE PROVISIONS OF SECTION 2(14)(III) OF THE ACT VIDE PARA 3 OF HIS ASSESSMENT ORDER AS UNDER: 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ENQUIR IES WERE CARRIED OUT FROM DIFFERENT STATE GOVERNMENT AUTHORITIES, LOCAL AUTHORITIES AND FEW OTHER PERSONS. THE FINDINGS ARE DISCUSSED IN SUBSEQUENT THE ARGUMENT GIVEN BY THE A SSESSEE WAS CONSIDERED AND THESE ARE DISCUSSED IN SUBSEQUENT PARAGRAPHS:- (I) AS DISCUSSED ABOVE, THE ASSESSEE SUBMITTED A CE RTIFICATE DATED 08.12.2006 FROM PRADHAN, RAJARHAT BISHNUPUR, 1 NO. GRAM PANCHAYAT W HICH STATES THAT DISTANCE OF ASSESSEES LAND FROM OFFICE OF RAJARHAT MUNICIPA1IT Y IS 8 TO 9 KILOMETERS. HOWEVER, AS PER PROVISIONS OF SECTION 2(14)(III) OF THE ACT, TH E AGRICULTURAL LAND WILL NOT BE CONSIDERED AS A CAPITAL ASSETS IF IT IS SITUATED IN ANY AREA WITHIN SUCH DISTANCE, NOT BEING MORE THAN 8 KILOMETERS FROM THE LOCAL LIMITS OF MUNICIPALITY OR CANTONMENT BOARD. IT MEANS THAT THE DISTANCE OF 8 KILOMETERS IS TO BE COMPUTED FROM THE LOCAL LIMIT OF THE MUNICIPALITY. IN PRESENT CASE THE DISTANCE OF ASSES SEES 1AND FROM THE OUTER LIMIT OF RAJARHAT MUNICIPALITY IS APPROXIMATELY 2.5 KILOMETE RS. THIS FACT IS EVIDENT FROM TWO CERTIFICATES DATED 13.10.2009 ISSUED BY PRADHAN, RA JARHAT BISHNUPUR, I NO. GRAM PANCHAYAT. THESE CERTIFICATES ARE ENCLOSED AT ANNEX URE-II OF THIS ORDER. FURTHER 3 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 COMMUNICATION WAS MADE WITH BL & LRO, RAJARHAT, NOR TH 24-ARGANAS TO KNOW THE DISTANCE OF ASSESSEES PLOT FROM BOUNDARY OF RAJARH AT MUNICIPALITY, A COPY OF REPLY RECEIVED FROM BL & LRO VIDE LETTER NO.2031 /BL & LR O/RHT/09 DATED 06.11.2009 IS ENCLOSED AT ANNEXURE-III FROM WHICH IT IS EVIDENT T HAT THE DISTANCE OF ASSESSEES PLOT FROM RAJARHAT MUNICIPALITY BOUNDARY IS APPROXIMATEL Y 2.5 KILOMETERS. THE CERTIFICATES AT ANNEXURE-II AND III ESTABLISHES BEYOND DOUBT THA T ASSESSEES LAND IS A CAPITAL ASSETS AS DEFINED IN SECTION 2(14)(III) OF THE I.T. ACT. (II) IN THE COURSE OF HIS STATEMENT ON OATH UNDER S ECTION 131 OF THE 1.T. ACT, 1961 ON 05.11.2009, SHRI ARIJIT MITRA AGAIN SUBMITTED A LETTER DATED 26.10.2009 FROM PRADHAN, RAJARHAT BISHNUPUR, 1 NO. GRAM PANCHYAT WHICH STATE S THAT THE DISTANCE OF ASSESSEES LAND FROM THE MUNICIPALITY BOARD OR OFFICE IS 8 TO 9 KILOMETERS. THE ASSESSEE IS AGAIN CALCULATING DISTANCE OF LAND FROM THE MUNICIPALITY OFFICE WHICH IS NOT CORRECT. IF ASSESSEES LOGIC IS TO BE BELIEVED THAN A LAND IN K ASBA, GARIAHAAT OR LAKE GARDEN WOULD NOT BE A CAPITAL ASSET BECAUSE DISTANCES OF T HESE PLACES ARE MORE THAN 8 K.M. FROM THE OFFICE OF THE KOLKATA MUNICIPAL CORPORATIO N AT S.N. BANERJEE ROAD (BEHIND NEW MARKET). THE PROVISIONS OF SECTION 2(14)(III) O F THE ACT USES THE WORD LIMITS WHICH MEANS THAT THE DISTANCE HAS TO BE CA1EUTED FROM THE BOUNDARY OF THE MUNICIPALITY. (III) THE STATEMENT OF SHRI ARIJIT MITRA WAS RECORD ED UNDER OATH UNDER SECTION 131 OF THE ACT ON 05.11.2009. IN HIS STATEMENT, HE STATED THAT HE IS NOT AWARE OF ANY PROCEDURES INVOLVED IN AGRICULTURAL ACTIVITY. IT WAS ALSO STAT ED THAT HE DID NOT MAKE ANY INVESTMENT IN THE AGRICULTURE. HE HAS NOT SHOWN ANY AGRICULTUR E INCOME IN HIS RETURN OF INCOME IN ANY PAST ASSESSMENT YEARS. IT WAS ALSO STATED BY HI M THAT THE LAND IN QUESTION CONSISTS OF POND, MANGO ORCHARD, PADDY FIELD ETC. ON FIELD ENQU IRY IT WAS FOUND THAT THE LAND CONSISTS OF POND AND MANGO ORCHARD. VIDE A LETTER D ATED 24.12.2009 THE ASSESSEE STATED THAT MOST OF THE LAND IS COVERED BY MANGO AND OTHER TREES. THUS, IT IS VERY MUCH CLEAR THAT ALMOST NO AGRICULTURE ACTIVITY WAS CARRIED OUT ON THE LAND OF THE ASSESSEE. SO THE LAND IN QUESTION CANNOT BE TERMED AS AN AGRICULTUR E LAND. AGGRIEVED AGAINST THE ACTION OF ASSESSING OFFICER H OLDING THE LAND AS CAPITAL ASSET FALLING IN SECTION 2(14)(III) OF THE ACT, ASSESSEE PREFERRED A PPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER BY HOLDING AS UNDER: IN THIS GROUND, THE APPELLANT IS DISPUTING THE ASS ESSING OFFICER (AO)S DECISION THAT THE LAND SOLD BY IT WAS NOT AGRICULTURAL LAND. THE REAS ONS BEHIND THE SAID DECISION HAVE BEEN SPELT OUT IN THE ASSESSMENT ORDER. THE APPELLA NTS SUBMISSION AT THE APPELLATE STAGE IS A REITERATION OF HIS SUBMISSIONS BEFORE THE AO. THE CRUX OF THE ISSUE APPEARS TO BE THAT THE APPELLANTS LANDS ARE SITUATED AT A DISTAN CE OF AROUND 2.5 KM FROM THE BOUNDARIES OF RAJARHAT MUNICIPALITY. THIS APPEARS T O GO AGAINST THE DEFINITION OF AGRICULTURAL LAND AS GIVEN IN SEC. 2(14)(III)(B) OF THE INCOME TAX ACT. ONCE IT IS ESTABLISHED THAT THE LAND IS AT A DISTANCE OF 2.5 K M. FROM THE OUTER BOUNDARIES OF THE MUNICIPALITY THE ISSUE OF LIMITS, AS SPOKEN ABOUT I N THE SAID SECTION, BECOMES PARAMOUNT. IN FACT, THE APPELLANT IN HIS SUBMISSION HAS ALSO A DMITTED THAT HERE, A QUESTION ARISE WHETHER DISTANCE HAS TO BE MEASURED FROM THE JURISD ICTION OF THE MUNICIPALITY (I.E. OUTER BOUNDARY) OR 1OCAL LIMITS OF THE MUNICIPALITY (I.E. MUNICIPALITY OFFICE). ALSO, THE APPELLANTS RELIANCE ON NOTIFICATION NO.9447 DATED 06.01.1994 AND THE SUBSEQUENT AMENDED NOTIFICATION NO.1186 DATED 28.12.1999, IN M Y OPINION, DOES NOT HELP HIS CASE BECAUSE NO MENTION OF RAJARHAT MUNICIPALITY IS SEEN THERE. I MAY ADD THAT, AS PER THE DEFINITION, THE CHARACTER OF THE LAND IS IMMATERIAL . SO THE QUESTION OF WHETHER AN ORCHARD CAN BE CLASSIFIED AS AGRICULTURAL LAND IS I MMATERIAL TO THE CASE. SIMILARLY, WHETHER OR NOT ANY AGRICULTURAL OPERATIONS HAVE BEE N CARRIED OUT THEREIN IS ALSO NOT MATERIAL. NONE OF THE ARGUMENTS ADVANCED BY THE APP ELLANT, IN MY OPINION, BOLSTER HIS 4 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 CASE THAT THE LAND IN QUESTION IS AGRICULTURAL. ALS O NONE OF THE CASE LAWS CITED BY THE APPELLANT DEAL WITH THE ISSUE OF THE PROVISIONS OF SEC. 2(14)(III)(B) OF THE ACT. RESPECTFULLY, DIFFERING FROM THESE, I HOLD THAT THE LAND IN QUESTION CANNOT BE SAID TO BE AGRICULTURAL. THE AOS DECISION ON THIS ISSUE IS CO NFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED, NOW ASSESSEE IS IN CROSS OBJECTION BEFOR E US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE SHRI D. S. DAMLE, AT THE OUTSET, REFERRED TO THE DEFINITION OF CAPITAL ASSET AS GIVEN IN SECTION 2(14)(III) OF THE ACT OF AGRICULTURE LAND, AND ARGUED THAT WHAT IS TO BE CONSIDERED AS CAPITAL ASSET. THE RELEVANT DEFINITION REFERRED, READS AS UNDER:- DEFINITIONS SECTION 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWIS E REQUIRES,- ( 14 ) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD B Y AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, B UT DOES NOT INCLUDE [( III ) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUAT E ( A ) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDI CTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORA TION, 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 BEING MORE THAN EIGHT KILOMETRES, 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, URBANISATION OF THAT AREA AND OTHER RELEVANT C ONSIDERATIONS, SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE 46 ;] LD. COUNSEL ALSO REFERRED TO ASSESSEES PAPER BOOK PAGES 2 TO 4, WHEREIN LETTER DATED 06.11.2009 OF BL & LRO, RAJARHAT NORTH 24 PARGANA S IS ENCLOSED AT PAGE 2 OF THE SAME, WHICH READS AS UNDER: MEMO NO. 2031/B.L & L.R.O./RHT/09 DATE 06.11.09 SUB : CALLING FOR INFORMATION U/S. 133(6) OF INCOME TAX ACT, 1961 WITH RESPECT TO LAND SOLD BY SHRI ARIJIT MITRA REF: HIS OFFICE MEMO NO. CIRCLE-8/KOL/ARIJIT/2009-1 0/1048 REFERENCE ABOVE THIS IS TO INFORM THAT 1. DISTANCE OF BOUNDARY OF RAJARHAT MUNICIPALITY FR OM PLOTS NO. 231, 233, 234, 235 AND 236 OF MOUZA KALABERIA JL NO. 30 IS APPROXIMATE LY 2.5 KM. 2. IMPORTANT LAND MARK OF MUNICIPALITY AREA IS MOUZ A GOPALPUR 5 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 RAJARHAT FROM ABOVE MENTIONING PLOTS. FURTHER, AT PAGE 3 OF ASSESSEES PAPER BOOK, COPY O F CERTIFICATE OF PRADHAN RAJARHAT BISHNUPUR 1 NO GRAM PANCHAYAT WAS ALSO REFERRED, WHICH READS AS UNDER: TO WHOM IT MAY CONCERN THIS IS TO CERTIFY THAT SUDHANSHU KR. MITRA OWNED L AND AT MOUZA KALABERIA (JL NO. 30, RS DAG NO. 338, 366, 344, 360, 314, 316, KHATIAN NO . 476) UNDER THIS GRAM PANCHAYAT JURISDICTION. THE DISTANCE OF ABOVE LAND FROM NEAR EST IMPORTANT LAND MARK SITUATED IN RAJARHAT MUNICIPALITY AREA IS RAIGACHI. THE DISTAN CE OF ABOVE LAND FROM THE NEAREST BOUNDRY OF RAJARHAT GOPALPUR MUNICIPALITY (RAIGACHI ) IS 2.5 KM (APPROX.) LD. COUNSEL AS WELL AS LD. CIT-DR SHRI NIRAJ KUMAR WERE ON AGREEMENT IN RESPECT TO THE FACTS OF THE CASE THAT THE ASSESSEES LAND IS SITUATED AT VILLAGE KALABERIA WHICH IS 2.5 KM FROM RAJARHAT MUNICIPALITY. BOTH ADMITTED THAT RAJARHAT MUNICIPALITY CAME INTO EXISTENCE IN 1994 AND IT IS ALSO A FACT THAT DISTANCE OF ASSESSEES L AND FROM OUTER LIMIT OF RAJARHAT MUNICIPALITY IS APPROX. 2.5 KM AS CERTIFIED BY PRADHAN, RAJARHAT BI SHNUPUR 1 NO GRAM PANCHAYAT AND BL &LRO. THE LD. COUNSEL ALSO REFERRED TO REVENUE REC ORDS MAINTAINED BY B.L. & LRO, RAJARHAT, WHICH ISSUED LAND RECORDS AS ON 8.12.2010 , QUALIFYING THIS LAND AS SHALI, GARDEN AND POND. IN VIEW OF THESE FACTS, LD. COUNSEL SH RI D. S. DAMLE STATED THAT THIS LAND IS AGRICULTURAL LAND AND NOT FALLING UNDER THE DEFINIT ION OF CAPITAL ASSET AS PROVIDED IN SECTION 2(14)(III) OF THE ACT IN VIEW OF THE FACT THAT IT D OES NOT COME UNDER THE AMBIT OF SUB-CLAUSE (A) AS THIS LAND DOES NOT FALL WITHIN THE JURISDICTION OF ANY MUNICIPALITY OR IN ANY AREA WITHIN SUCH DISTANCE NOT BEING MORE THAN 8 KM FROM THE LOCAL LI MITS OF ANY MUNICIPALITY AS NOTIFIED BY CENTRAL GOVT. IN THE OFFICIAL GAZETTE. HE REFERRED TO NOTIFICATION UNDER SECTION 2(1A)(C), PROVISO (II) (B) AND 2(14)(III)(B) VIDE NO. 9447 (F. NO.164 /3/87-ITA-I), DATED 6.1.1994 AS AMENDED BY NOTIFICATION NO. 11186 DATED 28.12.1999. THE LD. C OUNSEL REFERRED TO PAGES 52 TO 54 OF THE ASSESSEES PAPER BOOK, WHEREIN MUNICIPALITIES OF ST ATE OF WEST BENGAL ARE COVERED AND REFERRED TO THE FACT THAT RAJARHAT MUNICIPALITY IS NOT COVER ED UNDER THIS DEFINITION. 5. LD. CIT-DR HEAVILY RELIED ON THE FACT THAT THIS LAND IS WITHIN 8 KM FROM THE LOCAL LIMITS OF RAJARHAT MUNICIPALITY AS ADMITTED IN THE CERTIFI CATE ISSUED BY BL&LRO AND PRADHAN, RAJARHAT BISHNUPUR 1 NO GRAM PANCHAYAT. ACCORDING TO HIM, THIS LAND FALLS SQUARELY UNDER THE DEFINITION OF CAPITAL ASSET U/S. 2(14)(III) OF THE ACT AS IT FALLS UNDER SUB-CLAUSE (B) OF THIS SECTIO N, REASON BEING THIS LAND NOT BEING MORE THAN 8 KMS FR OM RAJARHAT MUNICIPALITY AND IT IS WITHIN 2.5 KM FROM THE LOCAL LIMITS OF RAJARHAT MUNICIPALI TY. 6 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 6. IT IS A FACT THAT THIS LAND DOES NOT FALL IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF MUNICIPALITY 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 1 ST DAY OF PREVIOUS YEAR. THAT MEANS THE LAND DOES NO T FALL IN SUB-CLAUSE (A) OF SECTION 2(14)(III) OF THE ACT AS THIS LAND I S OUT OF MUNICIPAL LIMIT OF RAJARHAT MUNICIPALITY AND MOREOVER IT IS 2.5 KM FROM THE OUTER LIMITS OF RAJARHAT MUNICIPALITY AS CERTIFIED BY B.L & L.R.O, RAJARHAT NORTH 24 PARGANAS. NOW, WE HAVE TO SEE WHETHER THIS LAND FALLS IN CLAUSE (B) OF SECTION 2(14)(III) OF THE ACT AS THIS SECTION PR ESCRIBES THAT ANY AREA WITHIN SUCH DISTANCE, NOT BEING MORE THAN 8 KM, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD AS REFERRED TO IN SUB-CLAUSE (A) OF SECTION 2(14)(III) OF THE ACT, AS THE CENTRAL GOVERNMENT MAY HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBA NIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHALF BY NOTIFICAT ION IN THE OFFICIAL GAZETTE. AS REFERRED BY LD. COUNSEL THE LATEST NOTIFICATION THAT IS NOTIFICATIO N UNDER SECTION 2(1A)(C), PROVISO (II)(B) AND 2(14)(III)(B), I.E. NOTIFICATION NO.9947[F. NO.164/ 3/87-ITA-I] DATED 6.1.1994 WHEREAS A DRAFT NOTIFICATION WAS PUBLISHED BY CENTRAL GOVERNMENT IN EXERCISE OF POWERS CONFERRED BY ITEM B OF CLAUSE (II) OF THE PROVISO TO SUB-CLAUSE (C) OF CLA USE (1A), AND ITEM (B) OF SUB-CLAUSE (III) OF CLAUSE 14 OF SECTION 2 OF THE ACT, IN THE GAZETTE O F INDIA, EXTRAORDINARY, PART II, SECTION3, SUB- SECTION (II), DATED 13.2.1991 UNDER THE NOTIFICATIO N OF GOVT. OF INDIA IN THE MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NO. SO 91(E) DATED 8.2.1991, FOR SPECIFYING CERTAIN AREAS FOR THE PURPOSE OF SAID CLAUSES AND OBJECTIONS AND SUGGESTI ONS WERE INVITED FROM THE PUBLIC WITHIN A PERIOD OF 45 DAYS FROM THE DATE OF THE COPIES OF TH E GAZETTE OF INDIA CONTAINING NOTIFICATION BECAME AVAILABLE TO THE PUBLIC. FURTHER, THIS WAS A MENDED BY NOTIFICATION NO. 11186 DATED 28/12/1999 IN EXERCISE OF POWERS CONFERRED BY ITEM (B) OF CLAUSE (II) OF THE PROVISO TO SUB- CLAUSE (C) OF CLAUSE (1A), AND ITEM (B) OF SUB-CLAU SE (III) OF CLAUSE 14 OF SECTION 2 OF THE ACT, AND IN SUPERSESSION OF THE NOTIFICATION OF GOVT. OF INDIA IN THE ERSTWHILE MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NO. SO 77(E) DATED 6.2.1973, THE CENTRAL GOVERNMENT HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR URBANIZATION OF TH E AREAS CONCERNED AND OTHER RELEVANT CONSIDERATION, HEREBY SPECIFIES THE AREAS SHOWN IN COLUMN (4) OF THE SCHEDULE HERETO ANNEXED AND FALLING OUTSIDE THE LOCAL LIMITS OF MUNICIPALIT Y OR CANTONMENT BOARD, AS THE CASE MAY BE, SHOWN IN THE CORRESPONDING ENTRY IN COLUMN (3) THER EOF AND AGAINST THE STATE OR UNION TERRITORY SHOWN IN COLUMN (2) THEREOF FOR THE PURPOSE OF THE ABOVE MENTIONED PROVISION OF THE INCOME- TAX ACT, 1961 (43 OF 1961). 7 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 7. FROM THE ABOVE, IT IS CLEAR THAT AGRICULTURAL LA ND SITUATED IN AREAS LYING WITHIN A DISTANCE NOT EXCEEDING 8 KM FROM THE LOCAL LIMITS OF SUCH MU NICIPALITIES OR CANTONMENT BOARDS ARE COVERED BY THE AMENDED DEFINITIONS OF CAPITAL ASSE T, IF SUCH AREAS ARE, HAVING REGARD TO THE EXTENT OF AND SCOPE FOR THEIR URBANIZATION AND OTHE R RELEVANT CONSIDERATIONS, IS NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS BEHALF. CENTRAL GOVERNM ENT IN EXERCISE OF SUCH POWERS HAS ISSUED THE ABOVE NOTIFICATION, AS AMENDED LATEST BY NOTIFI CATION NO. 11186 DATED 28.12.1999 CLEARLY CLARIFIES THAT AGRICULTURAL LAND SITUATION IN RURAL AREAS, AREAS OUTSIDE THE MUNICIPALITY OR CANTONMENT BOARD ETC., HAVING A POPULATION OF NOT L ESS THAN 10,000 AND ALSO BEYOND THE DISTANCE NOTIFIED BY CENTRAL GOVERNMENT FROM LOCAL LIMITS I. E. THE OUTER LIMITS OF ANY SUCH MUNICIPALITY OR CANTONMENT BOARD ETC., STILL CONTINUES TO BE EXC LUDED FROM THE DEFINITION OF CAPITAL ASSET. ACCORDINGLY, IN VIEW OF SUB-CLAUSE (B) OF SECTION 2 (14)(III) OF THE ACT EVEN UNDER THE AMENDED DEFINITION OF EXPRESSION CAPITAL ASSET, THE AGRI CULTURAL LAND SITUATED IN RURAL AREAS CONTINUES TO BE EXCLUDED FROM THAT DEFINITION. AND AS IN THE PR ESENT CASE, ADMITTEDLY, THE AGRICULTURAL LAND OF THE ASSESSEE IS OUTSIDE THE MUNICIPAL LIMITS OF RAJARHAT MUNICIPALITY AND THAT ALSO 2.5 KM AWAY FROM THE OUTER LIMITS OF THE SAID MUNICIPALITY , ASSESSEES LAND DOES NOT COME WITHIN THE PURVIEW OF SECTION 2(14)(III) EITHER UNDER SUB CLAU SE (A) OR (B) OF THE ACT, HENCE THE SAME CANNOT BE CONSIDERED AS CAPITAL ASSET WITHIN THE ME ANING OF THIS SECTION. HENCE, NO CAPITAL GAIN TAX CAN BE CHARGED ON THE SALE TRANSACTION OF THIS LAND ENTERED BY THE ASSESSEE. ACCORDINGLY, WE QUASH THE ASSESSMENT ORDER QUA CHARGING OF CAPITAL GAINS ON VERY JURISDICTION OF THE ISSUE. THE C.O. OF THE ASSESSEE IS ALLOWED. 8. COMING TO REVENUES APPEAL IN ITA NO. 1679/K/201 0, SINCE WE HAVE ALREADY ALLOWED THE CO OF THE ASSESSEE ON JURISDICTION, THAT THE AO HAS NO JURISDICTION TO ASSESSEE THE ASSESSEES LAND BEING OUT OF THE PURVIEW OF CAPITAL ASSET U/S. 2(14)(III) OF THE ACT, ON MERITS THE ISSUE HAS BECOME ACADEMIC AND REQUIRES NO CONSIDERATION. APP EAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AN D THE CO OF ASSESSEE IS ALLOWED. 10. ORDER PRONOUNCED IN OPEN COURT ON 12.8.2011 SD/- SD/- . . , ! ' '' ' # # # # , ! (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( / / / /) )) ) DATED 12TH AUGUST, 2011 8 ITA 1679/K/2010 & CO .184/K/2010 MR. ARIJIT MITRA, A.Y. 2007-08 '01 %23 4' JD.(SR.P.S.) . 5 ,6 76'8- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT DCIT, CIRCLE-8, KOLKATA 2 ,-*+ / RESPONDENT, MR. ARIJIT MITRA, 33A, J. L. NEHRU RO AD, 4 TH FLOOR, ROOM NO. A-5, KOLKATA-700 071. 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA 5 . '> ,% / DR, KOLKATA BENCHES, KOLKATA -6 ,/ TRUE COPY, .%?/ BY ORDER, #3 /ASSTT. REGISTRAR .