Hitesh Diwakar Lund, Pune V. Income-tax Officer,

ITA 1710/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1039 (ITAT-PUNE)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Additional evidence; Cost of acquisition
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.1710/PN/2016 / ASSESSMENT YEAR : 2009-10 SHRI HITESH DIWAKAR LUND, PRAKASH WOLLENS, DR. AMBEDKAR CHOWK, DAUND, DIST. PUNE 413 801 PAN :ACGPL2528N . / APPELLANT V/S ITO, WARD - 7(3), PUNE . / RESPONDENT / APPELLANT BY : SHRI SUHAS BORA / RESPONDENT BY : SHRI SUHAS KULKARNI / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 25-05-2016 OF THE CIT(A)-7, PUNE RELATING TO ASSES SMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 17-08-2011 DECLAR ING TOTAL INCOME AT RS.2,75,290/-. DURING THE COURSE OF ASSES SMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS SOLD A N IMMOVABLE PROPERTY AT S.NO.99/1/1 TO 99/1/8 AND S.NO.107/1/1 TO 1 07/1/4 AT VILLAGE PANDHAREWADI, TALUKA DAUND, DIST. PUNE ALONG WITH 8 OTHERS VIDE SALE DEED DATED 17-01-2009. HE OBSERVED TH AT THE ASSESSEE HAS CLAIMED HIS SHARE OF RS.46,03,750/- AS EXEM PT BEING SALE PROCEEDS OF AGRICULTURAL LAND SITUATED BEYOND 15 KMS FROM THE / DATE OF HEARING :08.09.2016 / DATE OF PRONOUNCEMENT: 09.09.2016 2 ITA NO.1710/PN/2016 LIMITS OF DAUND MUNICIPALITY. TO SUBSTANTIATE HIS CLAIM THE ASSESSEE HAS ANNEXED A COPY OF THE CERTIFICATE FROM THE TALATI OF PANDHAREWADI. 3. IN ORDER TO CROSS VERIFY THE CORRECTNESS OF THE DIS TANCE OF THE SUBJECTED PROPERTY FROM THE LIMITS OF DAUND MUNICIPALITY THE AO ISSUED A LETTER TO THE TOWN PLANNING DEPARTMENT, BARAMAT I CALLING FOR INFORMATION IN RESPECT OF THE ABOVE PROPERTY. THE TOW N PLANNER, BARAMATI IN RESPONSE TO THE SAID, VIDE LETTER DATED 26- 08-2011 CLARIFIED THAT THE SAID PROPERTY IS AT A DISTANCE OF 6380 MTRS TO 7380 MTRS FROM THE DAUND MUNICIPALITY. ACCORDING TO THE REPORT OF THE TOWN PLANNER CLEARLY REVEALED THAT EVEN IF THE FARTHEST PORTION IS TAKEN INTO CONSIDERATION THE SAID PROPERTY IS AT A DISTAN CE OF LESS THAN 8 KMS FROM DAUND MUNICIPALITY LIMITS. HE, THEREFORE, CONFRONTED THE SAME TO THE ASSESSEE. THE ASSESSEE IN RESPONSE TO THE SAID LETTER SUBMITTED THAT THE DISTANCE OF AGRICULTURA L LAND WITHIN THE MEANING OF SECTION 2(14)(III)(B) HAS TO BE MEASURED IN TERMS OF THE APPROACH-BY-ROAD AND NOT BY STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE AND AS PER CROWS FLIGHT. VARIOUS DECISIONS WERE ALSO BROUGHT TO THE NOTICE OF THE AO. 4. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND DETERMINED THE LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AT RS.45,32,558/-. AFTER ALLO WING THE CLAIM OF EXEMPTION U/S.54B AT RS.20,38,585/-, THE AO COMPUTE D THE NET LONG TERM CAPITAL GAIN AT RS.24,93,973/- IN THE HAN DS OF THE ASSESSEE. 3 ITA NO.1710/PN/2016 5. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS : ON FACTS AND IN LAW, 1. THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.24,93,913/- MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN ARISING ON SALE OF AGRICULTURAL LAND WHICH IS SITUATED BEYOND 8 KM FROM DAUND MUNICIPAL LIMITS HENCE IT IS NOT A CAPITAL ASSET WITHOUT APPRECIA TING THE FACTS AND SUBMISSIONS GIVEN BY THE ASSESSEE. 2. THE LD.CIT(A) ERRED IN LAW IN CONFIRMING THE ADD ITIONS WITHOUT APPRECIATING THE FACTS THAT THE DISTANCE OF 8 KM FOR THE PURPOSE OF SEC.2(14)(III) OF THE INCOME TAX ACT, 1961 HAS TO BE TAKEN IN TERMS OF APPROACH ROAD AND NOT AS PER STRAIGHT LINE DISTANCE ON A HORIZONTAL PLAN. 3. THE LD.CIT(A) ERRED IN LAW, THAT THE AMENDMENT I N SEC.2(14) IS APPLICABLE TO THE APPELLANT. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND O R DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMIT TED THAT IDENTICAL ISSUE HAD COME UP BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF OTHER CO-OWNERS NAMELY, SMT. PREETI VASUD EV, LUND, SHRI NIKHIL VASUDEV LUND AND SHRI VIVEK LALCHAND LUND VIDE ITA NOS. 197, 198 AND 199/PN/2014 ORDER DATED 28-01-2015 FOR A.Y. 2009-10. IN THE SAID ORDER THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, THIS BEING A COVERED MA TTER IN FAVOUR OF THE ASSESSEE, THE GROUNDS RAISED BY THE ASSES SEE SHOULD BE ALLOWED. HE ALSO RELIED ON THE DECISION OF THE AHMEDABAD B ENCH OF THE TRIBUNAL ITO VS. AKASH DEEP FARMS PVT. LTD. AND VICE VERSA VIDE ITA NO.2138/AHD/2012 & ITA NO.2564/AHD/2012 ORDER DAT ED 11- 08-2015. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND FAIRLY CONCEDED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE CO-OWNERS . 4 ITA NO.1710/PN/2016 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOU S DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTANT CASE ALONG WITH 8 OTHERS HAS SOLD AN IMMOVABLE PROPERTY AT VILLAGE PANDHARE WADI, TALUKA DAUND, DIST. PUNE VIDE SALE DEED DATED 17-01-2009. THE ASSESSEE HAS CLAIMED HIS SHARE OF RS.46,03,750/- AS EXEMPT BEING SALE PROCEEDS OF AN AGRICULTURAL LAND SITUATED BEYOND 8 K MS FROM THE LIMITS OF DAUND MUNICIPALITY. I FIND THE AO ON THE BASIS OF THE CERTIFICATE OF THE TOWN PLANNING DEPARTMENT OF BARAMATI HELD THAT THE LAND IN QUESTION IS WITHIN 8KMS FROM THE MUNICIPALITY LIMITS OF DAUND FOR WHICH HE CONSIDERED THE SALE CONSIDERATION OF RS.46,03,750/- AS TRANSFER OF LONG TERM CAPITAL ASSET. AFTER ALLOWING THE INDEXED COST OF ACQUISITION AT RS.71,112/- HE DETERMIN ED THE LONG TERM CAPITAL GAIN AT RS.45,32,558/-. AFTER ALLOWING THE DEDUCTION U/S.54B AT RS.20,38,585/- THE AO DETERMINED THE TAXABLE LONG TERM CAPITAL GAIN AT RS.24,93,973/- WHICH HAS B EEN UPHELD BY THE CIT(A). IT IS THE CONTENTION OF THE LD. COU NSEL FOR THE ASSESSEE THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE TR IBUNAL IN THE CASE OF OTHER CO-OWNERS WHEREIN THE TRIBUNAL HELD SU CH LAND AS AGRICULTURAL LAND BEYOND 8 KMS FROM THE MUNICIPAL LIMIT AND THEREFORE GAIN FROM SUCH TRANSFER IS EXEMPT. 9. I FIND THE TRIBUNAL IN THE CASE OF CO-OWNERS NAMELY S MT. PREETI VASUDEV, LUND, SHRI NIKHIL VASUDEV LUND AND SHRI VIVE K LALCHAND LUND (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE AND AGAINST THE REVENUE BY DISMISSING THE APPE AL FILED BY THE REVENUE. THE RELEVANT OBSERVATION OF THE TRIBUNAL FR OM PARA 12 ONWARDS READ AS UNDER : 5 ITA NO.1710/PN/2016 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. IN THIS CASE, ASSESSEE HAD SOLD HER AGRICULTURAL LAND AND THE GAIN THE REOF WAS CLAIMED AS EXEMPT. ACCORDING TO THE ASSESSEE, THE AGRICU LTURAL LAND DID NOT FALL WITHIN THE MEANING OF EXPRESSION CAPITAL ASSE T BECAUSE OF SECTION 2(14)(III)(B) OF THE ACT. THE ASSESSING OFFICER DENIED THE EXEMPTION AND SOUGHT TO TAX THE GAIN UNDER THE HEAD CAPITAL GAINS ON THE GROUND THAT THE DISTANCE OF THE SUBJECTPROPERTY F ROM THE MUNICIPAL LIMITS OF DAUND MUNICIPALITY WAS IN EXCESS OF 8 KMS AND THEREFORE IT DID NOT MEET WITH THE REQUIREMENTS OF SUB-CLAUSE (B) OF CL AUSE (III) OF SUB- SECTION (14) OF SECTION 2 OF THE ACT. THE RELEVANT PO RTION OF SECTION 2(14)(III) OF THE ACT IS REPRODUCED AS UNDER :- 2(14) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HEL D BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE (I) . (II) . [(III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SI TUATE (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNIC IPAL CORPORATION, NOTIFIED AREA COMMITTED, TOWN AREA COM MITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONME NT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSA ND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RE LEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF TH E PREVIOUS YEAR ; OR (B) IN ANY AREA WITHIN SUCH DISTANCE, NOT B EING MORE THAN EIGHT KILOMETRES, FROM THE LOCAL LIMITS OF ANY M UNICIPALITY 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 CONSIDER ATIONS, SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIA L GAZETTE;] 13. THE CIT(A) HAS COME TO CONCLUDE THAT THE SUBJECT- PROPERTY IS AT A DISTANCE OF 8.8 KMS FROM THE MUNICIPAL LIMITS OF DAUND MUNICIPALITY, BASED ON THE LETTER OF THE PWD EXECUTIVE ENGINEER, D AUND DATED 22.11.2011. TO THE CONTRARY, THE ASSESSING OFFICE RELIE D UPON A COMMUNICATION OF THE TOWN PLANNING DEPARTMENT DATED 26.08.2011 WHEREIN IT WAS STATED THAT THE PROPERTY IS AT A DISTANC E OF BETWEEN 6380 MTRS. TO 7360 MTRS. FROM THE DAUND MUNICIPALITY LIMITS. BEFORE THE CIT(A), IT WAS SUBMITTED, ON THE BASIS OF THE CLAR IFICATION ISSUED BY THE TOWN PLANNING DEPARTMENT DATED 03.12.2011, THAT THE DISTANCE OF 6.38 TO 7.36 KMS MENTIONED EARLIER WAS IN TERMS OF AER IAL DISTANCE. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE JUDGEME NT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH (SUPRA), THE DISTANCE OF THE AGRICULTURAL LAND IN QUESTION HAS TO BE MEASURED IN TERMS OF APPROACH ROAD AND NOT AERIAL DISTANCE. THE R ELEVANT DISCUSSION IN THE ORDER OF THE HONBLE HIGH COURT IS AS UNDER :- A PERUSAL OF THE AFORESAID PROVISION SHOWS THAT 'CAPIT AL ASSET' WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NOT SITUATED IN ANY AREA WITHIN SUCH DISTANCE AN MAY BE SPECIFIED IN THIS BEHALF BY A NOTIFICATION IN THE OFFICIAL GAZETTE, WHICH MA Y BE ISSUED BY 6 ITA NO.1710/PN/2016 THE CENTRAL GOVERNMENT. THE MAXIMUM DISTANCE PRESCRIB ED BY S. 2(14)(III)(B) OF THE. ACT WHICH MAY BE INCORPORAT ED IN THE NOTIFICATION COULD NOT BE MORE THAN 8 KMS. FROM THE LOCAL LIMITS OF MUNICIPAL COMMITTEE OR CANTONMENT BOARD ETC. THE NOTIFICATION HAS TO TAKE INTO ACCOUNT THE EXTENT OF , AND SCOPE FOR URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDE RATIONS. THE RECKONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICANT WHICH WOULD YIELD TO THE PR INCIPLE OF MEASURING DISTANCE IN TERMS OF APPROACH ROAD RATHER TH AN BY STRAIGHT LINE ON HORIZONTAL PLANE. IF PRINCIPLE OF M EASUREMENT OF DISTANCE IS CONSIDERED STRAIGHT LINE DISTANCE ON HORIZON TAL PLANE OR AS PER CROW'S FLIGHT THEN IT WOULD HAVE NO RELATIO NSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXT ENT OF URBANIZATION. SUCH A COURSE WOULD BE ILLUSORY. IT IS I N PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICATION NO.9447 DT. 6TH JAN. 1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESP ECT OF THE STATE OF PUNJAB, AT ITEM NO.18 THE SUB-DIVISION K HANNA HAS BEEN LISTED AT SERIAL NO.19. IT HAS INTERALIA, BEEN SPE CIFIED THAT AREA UPTO 2 KMS. FROM THE MUNICIPAL LIMITS IN ALL DIR ECTIONS HAS TO BE REGARDED OTHER THAN AGRICULTURAL LAND. ONCE T HE STATUTORY GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOPE OF URBANIZATION OF THE AREA HAS TO BE RECKONED WHILE ISSU ING ANY SUCH NOTIFICATION THEN IT WOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF LAND SHOULD BE ME ASURED BY THE METHOD OF STRAIGHT LINE ON HORIZONTAL PLANE OR A S PER CROW'S FLIGHT BECAUSE ANY MEASUREMENT BY CROW'S FLIGHT IS BOUN D TO IGNORE THE URBANIZATION WHICH HAS TAKEN PLACE. MOREO VER, THE JUDGMENT OF THE MUMBAI BENCH APPEARS TO HAVE ATTAINE D FINALITY. KEEPING IN VIEW THE PRINCIPLE OF CONSISTENC Y AS LAID DOWN IN RADHASOAMI SATSANG V. CIT [1991] 100 CTR (SC) 267 : (1992) 193 ITR 321 (SC), WE ARE OF THE VIEW THAT TH E OPINION EXPRESSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGA L INFIRMITY WARRANTING INTERFERENCE OF THIS COURT. AC CORDINGLY QUESTION NO. (1) IS ANSWERED AGAINST THE REVENUE AND I N FAVOUR OF THE ASSESSEE BY UPHOLDING THE ORDER OF THE TRIBUNAL. 14. THERE IS NO DECISION TO THE CONTRARY BROUGHT TO O UR NOTICE AND THEREFORE IT HAS TO BE HELD THAT THE DISTANCE PRESCRIB ED BY SECTION 2(14(III)(B) OF THE ACT HAS TO BE MEASURED IN TERMS OF APPROACH ROAD AND NOT BY AERIAL DISTANCE. THEREFORE, ON THIS ASPECT, WE UPHOLD THE ACTION OF THE CIT(A). 15. FACTUALLY SPEAKING, IF THE DISTANCE OF THE SUBJECT -PROPERTY FROM THE MUNICIPAL LIMITS OF DAUND MUNICIPALITY IS SEEN, THE RO AD DISTANCE IS 8.8 KMS AS STATED BY THE PWD EXECUTIVE ENGINEER, DAUND. TH EREFORE, THE AFORESAID MATERIAL RELIED UPON BY THE CIT(A) TO HOLD THAT THE CLAIM OF THE ASSESSEE IS IN COMPLIANCE WITH SECTION 2(14)(III)(B) OF THE ACT CANNOT BE FAULTED. WE MAY ALSO MENTION HERE THAT THE ADDITIONAL EVIDENCE AND MATERIAL ADMITTED BY THE CIT(A) AT THE STAGE OF APPELLATE PROCEEDINGS WAS FORWARDED TO THE ASSESSING OFFICER FOR HI S REMAND REPORT. THE CIT(A) IN PARA 3.3 OF HER ORDER HAS DISCU SSED THE CONTENTS OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER WHEREIN IT IS NOTED AS UNDER :- 7 ITA NO.1710/PN/2016 THE ASSESSING OFFICER HAS ALSO STATED THAT THE LETTER DAT ED 22.11 2011 OF THE PWD EXECUTIVE ENGINEER, DAUND CLARIFYIN G THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS OF DAUND TO THE IMPUGNED PROPERTY WAS 8.8. KMS. SHOULD BE TAKEN AS ONLY AN INDIC ATOR IN VIEW OF THE CLEAR VARIATION IN THE DISTANCE STATED BY THE TOWN PLANNER. 16. THE AFORESAID OBSERVATION OF THE CIT(A) REFERS TO THE STAND OF THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS TO THE EFFEC T THAT THE LETTER OF PWD EXECUTIVE ENGINEER, DAUND CLARIFYING THE DIST ANCE BETWEEN SUBJECT PROPERTY AND THE MUNICIPAL LIMITS, DAUND WAS IN EXCESS OF 8 KMS IS NOT DISPUTED. 17. CONSIDERING THE MATERIAL AND EVIDENCE ON RECORD AND THE LEGAL POSITION DISCUSSED ABOVE, WE FIND THAT THE CIT(A) MADE NO MISTAKE IN CONCLUDING THAT ASSESSEE WAS JUSTIFIED IN AVAILING THE BE NEFIT OF EXEMPTION AVAILABLE IN TERMS OF SECTION 2(14)(III)(B) OF THE ACT IN THE CONTEXT OF THE SAID SALE OF AGRICULTURAL LAND.THUS, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) AND THE REVENUE FAILS ON THIS ASPE CT. 18. IN THE RESULT, THE APPEAL OF THE REVENUE VIDE IT A NO.197/PN/2014 IN THE CASE OF SMT. PREETI VASUDEV LUND IS DISMISSED. 19. IN SO FAR AS, THE OTHER TWO APPEALS OF THE REVENUE IN ITA NO.198/PN/2014 (SHRI NIKHIL VASUDEO LUND) AND ITA NO.199/PN/2014 (SHRI VIVEK LALCHAND LUND) FOR THE A SSESSMENT YEAR 2009-10 RESPECTIVELY ARE CONCERNED, THE ISSUE INVOLVED IS IDENTICAL AND OUR DECISION IN ITA NO.197/PN/2014 (SMT. PREETI VASUD EV LUND) SHALL APPLY MUTATIS-MUTANDIS IN THESE APPEALS ALSO. ACCORDING LY, ITA NO.198/PN/2014 (SHRI NIKHIL VASUDEO LUND) AND ITA NO.199/PN/2014 (SHRI VIVEK LALCHAND LUND) ARE ALSO H EREBY DISMISSED. 10. FURTHER, THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF AKASH DEEP FARMS PVT. LTD. (SUPRA) HAS OBSERVED AS UNDER : 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. THE DEFINITION OF CAPITAL ASSET HAS BEEN PROVIDED IN SECTION 2(14) OF THE ACT. SUB-CLAUSE (A) AND (B) OF S ECTION 2(14)(III) CONTEMPLATES THAT IF AN AGRICULTURE LAND IS IN INDIA, AND IT IS SITUATED AT A DISTANCE OF MORE THAN 8 KMS. FROM THE LOCAL LIMIT OF ANY MUNICIPALITY CANTONMENT BOARD, THEN, THAT LAND WOULD NOT FALL WI THIN THE AMBIT OF DEFINITION CAPITAL ASSET. IN OTHER WORDS, IF THE LA ND WHICH IS NOT FORMING PART OF CAPITAL ASSET SOLD BY AN ASSESSEE, THEN, NO GAIN AS SUCH WOULD BE CONSIDERED, AS ACCRUED TO THE ASSESSEE. IN THE PRESENT CASE, THE LD.AO HAS OBSERVED THAT IF THE DISTANCE OF GEOGRAP HICAL SITUATION OF THE ASSESSEES LAND IS BEING MEASURED FROM MUNICIPALITY LI MIT, BY WAY OF CROWS FLIGHT, THEN, IT IS WITHIN THE MUNICIPAL LI MIT. IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS, AS DISCUSSED BY THE LD.CIT (A), IT HAS BEEN HELD THAT THE DISTANCE IS TO BE MEASURED BY ROAD AND NOT BY AERIAL ROUTE. AT THIS STAGE, IT IS IMPORTANT TO TAKE NOTE OF THE BOARD CIRCULAR BEARING NO.17/2015. IT READS AS UNDER: 8 ITA NO.1710/PN/2016 CBDT CIRCULAR NO -17/2015, DATED: OCTOBER 06, 2015 SUBJECT:- MEASUREMENT OF THE DISTANCE FOR THE PURPOSE OF SECTION 2(14)(III)(B) OF THE INCOME-TAX ACT FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2014-15 'AGRICULTURAL LAND IS EXCLUDED FROM THE DEFINITION OF CAPITAL ASSET AS PER SECTION 2(14)(III) OF THE INCOME-TAX ACT B ASED, INTER- ALIA, ON ITS PROXIMITY TO A MUNICIPALITY OR CANTONME NT BOARD. THE METHOD OF MEASURING THE DISTANCE OF THE SAID LAND FROM THE MUNICIPALITY, HAS GIVEN RISE TO CONSIDERABLE LITIGATIO N. ALTHOUGH, THE AMENDMENT BY THE FINANCE ACT, 2013 W.E.F. 1.04. 2014 PRESCRIBES THE MEASUREMENT OF THE DISTANCE TO BE TAKEN AERIALLY, AMBIGUITY PERSISTS IN RESPECT OF EARLIER PERIODS. 2. THE MATTER HAS BEEN EXAMINED IN LIGHT OF JUDICIAL DECISIONS ON THE SUBJECT. THE NAGPUR BENCH OF THE HON. BOMBAY HIG H COURT VIDE ORDER DATED 30.03.2015 IN ITA 151 OF 2013 IN T HE CASE OF SMT. MALTIBAI R KADU HAS HELD THAT THE AMENDMENT PRE SCRIBING DISTANCE TO BE MEASURED AERIALLY, APPLIES PROSPECTIVEL Y I.E. IN RELATION TO ASSESSMENT YEAR 2014-15 AND SUBSEQUENT ASSESSMENT YEAR. FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2 014- 15, THE HIGH COURT HELD THAT THE DISTANCE BETWEEN TH E MUNICIPAL LIMIT AND THE AGRICULTURAL LAND IS TO BE MEASURED HAV ING REGARD TO THE SHORTEST ROAD DISTANCE. THE SAID DECISION OF THE HIGH COURT HAS BEEN ACCEPTED AND THE AFORESAID DISPUTED ISSUE HAS NOT BEEN FURTHER CONTESTED. 3. BEING A SETTLED ISSUE, NO APPEALS MAY HENCEFORTH BE FILED ON THIS GROUND BY THE OFFICERS OF THE DEPARTMENT AND APP EALS ALREADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY BE WITHDRAWN/ NOT PRESSED UPON. TH IS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. [F. NO. 279/MISC./140/2015-ITJ] (D S CHAUDHRY) CIT (A&J), CB DT 9. THUS, IF THE FINDING OF THE LD.CIT(A) IS BEING EXA MINED IN THE LIGHT OF THE CIRCULAR, THEN ONE THING IS CLEAR THAT THE DISTAN CE IS TO BE MEASURED BY ROADS IN THIS ACCOUNTING YEAR. THE LAND SOLD BY THE ASSESSEE IS SITUATED BEYOND 8 KMS. OF THE MUNICIPAL LIMIT. 10. NEXT OBJECTION OF THE AO WAS THAT THE STATE GOVE RNMENT HAS ENHANCED THE MUNICIPAL LIMIT IN 2006 AND THE DISTANC E IS TO BE MEASURED FROM NEW BOUNDARY OF THE AHMEDABAD MUNICIPA L CORPORATION LIMIT. AMC LIMIT WAS EXTENDED UPTO SARKH EJ SINCE 2006. THE LD.CIT(A) HAS EXAMINED THIS ASPECT, AND HAS OBSERVED THAT PERUSAL OF SUB-CLAUSE (B) OF SECTION 2(14)(III) WOULD INDICATE THAT THE MUNICIPAL LIMIT IS TO BE TAKEN FROM THE AREA WHICH HAS BEEN NOT IFIED BY THE CENTRAL GOVERNMENT IN ITS GAZETTE NOTIFICATION. CENTRAL GOVE RNMENT HAS NOTIFIED THE AREA ON 6.1.1994, AND FROM THAT NOTIFICATION, T HE AGRICULTURE LAND OF THE ASSESSEE WAS SITUATED BEYOND A DISTANCE OF 8KMS. THIS ASP ECT HAS BEEN LUCIDLY CONSIDERED BY THE LD.CIT(A) IN THE FIND ING EXTRACTED SUPRA. WE DO NOT SEE ANY REASON TO INTERFERE IN THIS FINDING . IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE APPE AL OF THE REVENUE. IT IS DISMISSED. 9 ITA NO.1710/PN/2016 11. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO T HE FACTS OF THE CASE IN CASE OF THE CO-OWNERS, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN TH E CASE OF CO-OWNERS AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUG HT TO MY NOTICE AGAINST THE ORDER OF THE TRIBUNAL, I HOLD THAT THE AGRICULTURAL LAND IN QUESTION IS BEYOND A DISTANCE OF 8 KMS FROM THE DA UND MUNICIPALITY AND THEREFORE THE ASSESSEE IS NOT LIABLE TO ANY LONG TERM CAPITAL GAIN ARISING ON SALE OF SUCH AGRICULTURAL LAND. G ROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-09-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 09 TH SEPTEMBER, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // // $ % // // TRUE COPY // &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 7, PUNE 4. THE CIT- 7, PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.