The ITO, Ward-4(4), Ahmedabad V. Mahisagar Farms Pvt.Ltd., Ahmedabad

ITA 1831/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9596 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 19-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Capital asset

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , ( .) , ! BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDEN T (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.1831/AHD/2011 ( / ASSESSMENT YEAR : 2004-05) INCOME TAX OFFICER WARD-4(4) AHMEDABAD / VS. MAHISAGAR FARMS PVT.LTD. 17, BASANT BAHAR SHOBHAN CO.OP.HOU.SOC. NR.STERLING CLUB BOPAL, AHMEDABAD % & ./ ./ PAN/GIR NO. : AABCM 0514 G ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %(+ / APPELLANT BY : SHRI DINESH SINGH, SR.DR )*%(,+ / RESPONDENT BY : SHRI M.S. CHHAJED, AR - ., /& / DATE OF HEARING 04/06/2015 0123 , /& / DATE OF PRONOUNCEMENT 11/06/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VIII, AHMEDA BAD (CIT(A) IN SHORT) DATED 13/05/2011 PERTAINING TO ASSESSMEN T YEAR (AY) 2004-05. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ITA NO.1831/AHD /2011 ITO VS. MAHISAGAR FARMS PVT.LTD. ASST.YEAR 2004-05 - 2 - 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.15,37,836/- MADE BY THE AO ON ACCOUNT OF LON G TERM CAPITAL GAIN ON SALE OF AGRICULTURE LAND. 1.1 THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE SAID LAND WAS SITUATED WITHIN 8 KMS OF SAN AND MUNICIPALITY AREA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 18/12/2009, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.15,37,836/- BEING LONG TERM CAPITAL GAIN. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DELETED THE A DDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW T HE REVENUE IS IN APPEAL BEFORE US. 3. GROUND NOS.1 & 1.1 ARE INTER-CONNECTED AND, THER EFORE, THE SAME ARE DECIDED TOGETHER. THE LD.SR.DR SHRI DINESH SIN GH VEHEMENTLY ARGUED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELE TING THE ADDITION. HE ITA NO.1831/AHD /2011 ITO VS. MAHISAGAR FARMS PVT.LTD. ASST.YEAR 2004-05 - 3 - SUBMITTED THAT THE AO HAS OBSERVED THAT THE LAND IN QUESTION WAS WITHIN THE MUNICIPAL LIMIT OF THE SANAND NAGAR PALIKA. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE LD.CIT(A) HAS FOLLOWED THE EARLIER ORDER PASSED IN AY 2005-06. HE SUBMITTED A COPY O F THE SAID ORDER DATED 27/11/2009 IN APPEAL NO.CIT(A) VIII/ITO/4(4)/ 235/08-09 OF THE LD.CIT(A). IT IS SUBMITTED BY THE LD.COUNSEL FOR T HE ASSESSEE THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THIS ORDER . THE LD.COUNSEL FOR THE ASSESSEE ALSO PLACED ON RECORD A NOTIFICATION I SSUED U/S.2(1A)(C) BY THE CENTRAL GOVERNMENT, WHEREIN IT IS NOTIFIED THAT AREAS UPTO 2 KMS FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS, HENCE THE AGRICULTURE LAND IN QUESTION CANNOT BE SUBJECTED TO CAPITAL GAIN TAX. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE A S UNDER:- 3.3. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD REGARDING THIS ISSUE. ON THE IDENTICAL FACTS FOR THE A.Y. 200 5-06, THE LD. A.O MADE AN ADDITION AND WHICH WAS DELETED BY THE LD. C IT(A)VIDE ORDER NO.CIT(A)-VIII/ITO 4(4)/235/2008-09 DATED 27/ 11/2009. THE FINDINGS OF THE LD.CIT(A) ARE AS UNDER:- ' I HAVE CONSIDERED THE FACTS AND SUBMISSION OF THE LD. A.R CAREFULLY. IT IS SEEN THAT THE A.O HAS TREATED THE IMPUGNED PIECE OF LAND AS CAPITAL ASSET FOR THE PURPOSES OF LONG TERM ITA NO.1831/AHD /2011 ITO VS. MAHISAGAR FARMS PVT.LTD. ASST.YEAR 2004-05 - 4 - CAPITAL GAINS ON THE BASIS OF A REPORT PREPARED BY HIS INSPECTOR AND THE STATEMENT RECORDED BY THE INSPECT OR OF THE PURCHASER OF LAND. ON THE OTHER HAND THE APPELLANT HAS PLACED RELIANCE ON THE REPORT RECEIVED BY THE AO FR OM THE TALATI / MAMLATDAR OF TALUKA SANAND REGARDING THE D ISTANCE OF THE PIECE OF LAND UNDER REFERENCE FROM THE MUNIC IPAL LIMITS OF SANAND. IN THE GIVEN CIRCUMSTANCES, THE R EPORT SUBMITTED BY THE TALATI / MAMLATDAR IS AN EXPERT OP INION AND THE SAME CANNOT BE BRUSHED ASIDE WITH THE REPOR T OF AN INSPECTOR OF THE DEPARTMENT WHO IS NOT AN EXPERT WI TH REGARD TO ASCERTAINING THE DISTANCE OF A PIECE OF L AND FROM THE MUNICIPAL LIMITS. IF THE A.O. WAS NOT SATISFIED WITH THE REPORT OF TALATI / MAMLATDAR OF SANAND HE COULD HAV E ISSUED SUMMONS TO HIM AND WOULD HAVE CONFRONTED WITH THE R EPORT OF THE INSPECTOR AND COULD HAVE OBTAINED AN INDEPEN DENT REPORT FROM ANOTHER EXPERT IN THE MATTER. SINCE, IT HAS NOT BEEN DONE, THE REPORT SUBMITTED BY THE MAMLATDAR / TALATI IS REQUIRED TO BE RELIED UPON BEING A GOVERNMENT OFFIC IAL HAVING EXPERT KNOWLEDGE IN THE RELEVANT FIELD. THER EFORE, IN THE GIVEN CIRCUMSTANCES, THE A.O'S ACTION FOR TREAT ING THE PIECE OF LAND AS CAPITAL ASSET IN TOTAL DISREGARD O F THE REPORT OF TALATI / MAMLATDAR OF TALUKA SANAND CANNOT BE HE LD JUSTIFIED. THEREFORE, THE ADDITION OF LONG TERM CAP ITAL GAIN MADE BY HIM AMOUNTING TO RS. 2,17,016/- IS DELETED .' 3.4 SINCE, THE ADDITION DURING THE YEAR UNDER CON SIDERATION IS ALSO ON THE SAME SET OF FACTS AND THEREFORE FOLLOWI NG THE DECISION OF MY LD. PREDECESSOR, THE ADDITION DURING THE YEAR UNDER CONSIDERATIONS IS DELETED. 4.1. THE REVENUE HAS NOT PLACED ANY MATERIAL ON REC ORD SUGGESTING THAT THE DISTANCE OF THE LAND IN QUESTION WITH REGARD TO MUNICIPAL LIMITS OF ITA NO.1831/AHD /2011 ITO VS. MAHISAGAR FARMS PVT.LTD. ASST.YEAR 2004-05 - 5 - SANAND TOWN IS LESS THAN 2 KMS. UNDER THESE FACTS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) , SAME IS HEREBY UPHELD. THUS, GROUND NOS.1 & 1.1 OF REVENUES APPE AL ARE REJECTED. 5. GROUND NOS.2 & 3 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 11 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( .) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 11/ 06 /2015 6/..- , .-../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-VIII, AHMEDABAD 5. ; <)-89 , /893 , 7 / DR, ITAT, AHMEDABAD 6. < => . / GUARD FILE. / BY ORDER, * ;) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD