Shri Faruk Jikar Kachhi (Bawla), Nagpur V. Assistant Commissioner of Income Tax Circle-3, Nagpur

ITA 193/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3880 (ITAT-NAGPUR)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR MILLIND BHUSARI
• Keywords: Capital asset; Business income
• Section: 2(14); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI BEFORE SHRI R.K.GUPTA , J M & SHRI D.KARUNAKAR A RAO , A M ITA NO. 192 / N AG / 20 1 2 ( ASSESSMENT YEAR 200 8 - 09 ) SMT. HAMIDABAI FARUK KACHHI (BALWA), 62/A, MAHESH NAGAR, MASKASATH, ITWARI R OAD, SHANTI NAGAR, NAGPUR - 440002 VS. ACIT,CIR - 3 , NAGPUR - 440 001 . PAN NO. : A CXPK 3148 A ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 193 /NAG/2012 (ASSESSMENT YEAR 200 8 - 09 ) SHRI FARUK JIKAR KACHHI (BALWA), 62/A, MAHESH NAGAR, MASKASATH, ITWARI ROAD, SHANTI NAGAR, NAGPUR - 440002 VS. ACIT,CIR - 3, NAGPUR - 440 001 . PAN NO. : A DCPK 2916 J ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : MR. K.P.DEWANI REVENUE BY : DR. MILLIND BHUSARI DATE OF HEARING : 15 TH MARCH., 2013 DATE OF PRONOUNCEMENT : 0 3 /04 /2 013 O R D E R P ER BENCH : TH ESE TWO APPEALS HA VE BEEN PREFERRED BY TWO DIFFERENT ASSESSEE S BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAIN ST THE ORDER OF LEANED CIT(A) - I I , NAGPUR (MAHARASHTRA) RELATING TO ASSESSMENT YEAR 200 8 - 09 , WHICH HA S BEEN HEARD THR OUGH E - COURT, MUMBAI. \ 2 . SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE, THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . IN BOTH THE APPEALS, THE AFORESAID ASSESSEES HAVE RAISED THE FIRST GROUND AGAINST THE ACTION OF THE LEARNED CIT(A) IN REGARD TO CONFIRMING THE ACTION OF THE AO IN RESPECT OF DENIAL OF EXEMPTION CLAIMED ON ITA NO S . 192 & 193 / NAG/2012 2 INCOME FROM SALE OF AGRICULTURAL LAND WHICH DOES NOT FALL UNDER THE DEFINITION OF CAPITAL ASSET UNDER SECTIO N 2(14) OF THE ACT AMOUNTING TO RS. 57,43,300/ - IN CASE OF SMT. HAMIDABAI FARUK KACHHI AND RS. 94,46,000/ - IN CASE OF SHRI FARUK JIKAR KACHHI . 4 . DURING THE COURSE OF ASSESSMENT PROCEEDING, THE AO NOTED THAT THE ASSESSEE HAS SOLD LAND IN DIFFERENT MOUZA OF THE VILLAGE AT 1.62 HECTARE ON 1 - 11 - 2007, 2.0 HECTARE ON 31 - 12 - 2007 AND 1.16 HECTARE ON 10 - 8 - 2007 FOR CONSIDERATION OF RS. 84,00,000/ - , RS.96,00,000/ - AND RS.7,50,000/ - , RESPECTIVELY. THESE LANDS ARE OWNED JOINTLY BY THE ASESSEEE S SHRI FARUK JIKAR KACHHI A ND SMT. HAMIDABAI FARUK KACHHI . BOTH THESE ASSESSEES DID NOT PAY ANY CAPITAL GAIN ON THE AMOUNT OF SALE OF AGRICULTURAL LAND TREATING THE SAME AS BEYOND 8KM FROM THE MUNICIPAL LIMIT. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AS IN HIS V IEW THESE LANDS WERE WITHIN 8KM RADIUS FROM THE MUNICIPAL LIMIT. WHILE HOLDING SO, THE AO MEASURED THE DISTANCE BY STRAIGHT LINE METHOD ON HORIZONTAL OR CROWS FLIGHT. 5 . IN APPEAL BEFORE THE CIT(A) , THE ACTION OF THE AO HAS BEEN CONFIRMED BY PASSING A DE TAILED ORDER . 6 . WE HAVE HEARD RIVAL SUBMISSION AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FOUND THAT ON SIMILAR FACTS IN CASE OF SANJAY NAGORAO PAIDLEWAR & NITISH RAMESHCHANDRA CHORDIA VS. ACI T, LISTED UNDER ITA NOS.112 & 113/NAG/2012 AND THESE APPEALS HAVE BEEN DISPOSED OF BY US VIDE ORDER ITA NO S . 192 & 193 / NAG/2012 3 DATED 22 - 03 - 201 3 . THE ISSUE HAS BEEN DISCUSSED AT GREAT LENGTH AND FOUND THAT THIS IS SQUARELY COVERED BY VARIOUS HONBLE HIGH COURTS AND VARIOUS BENCHES OF THE TRIBUNAL. THE FINDINGS OF THE TRIBUNAL HAVE BEEN RECORDED IN PARA 9 TO 21 , WHICH ARE AS UNDER : - 9 . WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. WE HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED ON BEHALF OF BOTH THE PARTIES I.E . ASSESSEES AND DEPARTMENT AND HAVE ALSO PERUSED THE RELEVANT MATERIAL ON RECORD, ON WHICH OUR ATTENTIONS WERE DRAWN. WE HAVE ALSO TAKEN INTO CONSIDERATION THE VARIOUS CASE LAWS RELIED UPON BY THE LEARNED AR AS WELL AS LEARNED CIT DR . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FOUND THAT THE ISSUE IN RESPECT TO WHETHER THE AGRICULTURAL LAND IN QUESTION IS AN ASSET WITHIN THE MEANING OF SECTION 2(14) OR NOT, HAVE ALREADY BEEN DECIDED BY THE HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH(SUPRA) . THIS DECISION OF THE HON BLE PUNJAB AND HARYANA HIGH COURT HAS BEEN CONSISTENTLY FOLLOWED BY VARIOUS BENCHES OF THE TRIBUNAL IN VARIOUS PARTS OF THE COUNTRY. ONE OF US HAS ALSO TAKEN INTO CONSIDERING THIS ISSUE WHI LE SITTING IN JAIPUR BENCHES OF THE TRIBUNAL AND FOUND THAT THE DECISION OF THE HON BLE PUNJAB AND HARYANA HIGH COURT HAS TO BE FOLLOWED AND THE DISTANCE HAS TO MEASURED THROUGH APPROACH ROAD AND NOT THROUGH THE CROWS FLIGHT DISTANCE. THE HON BLE PUNJAB AN D HARYANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH (SUPRA) HAS HELD THAT THE DISTANCE OF AGRICULTURAL LAND BELONGING TO THE ASSESSEE WITHIN THE MEANING OF SECTION 2(14)(III) (B) HAS TO BE MEASURED IN TERMS OF APPROACH ROAD AND NOT BY A STRAIGHT LINE DIS TANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. COPY OF THE ORDER IS ALSO PLACED IN THE COMPILATION AT PAGES 1 & 2 . 10 . THE CONTENTION RAISED BY LEARNED CIT(A) THAT THE RECKONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICAN CE WHICH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TERMS OF APPROACH ROAD RATHER THAN BY STRAIGHT LINE ON HORIZONTAL PLANE, THIS CONTENTION OF LEARNED CIT(A) HAS ALSO BEEN CONSIDERED BY THE HON BLE PUNJAB AND HARYANA HIGH COURT AND HAS OBSERVED THAT THE PRINCIPLE OF MEASUREMENT OF DISTANCE IS CONSIDERED AS STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT OF URBANIZATION. SUCH A COURS E WOULD BE ILLUSORY, WHICH IS IN PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICATION NO. 9447 DATED. 6 TH JANUARY, 1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESPECT OF THE STATE OF PUNJAB, AT ITEM NO. 18, THE SUB - DIVISION KHANNA HAS BEEN LISTED AT SERIAL NO. 19. IT HAS INTER ALIA BEEN SPECIFIED THAT AREA UPTO 2 KMS. FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS HAS TO BE REGARDED AS OTHER THAN AGRICULTURAL LAND. ONCE THE STATOR GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOPE OF URBANIZATION OF TH E AREA HAS TO BE RECKONED WHILE ISSUING ANY SUCH NOTIFICATION THEN IT WOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF ITA NO S . 192 & 193 / NAG/2012 4 LAND SHOULD BE MEASURED BY THE METHOD OF STRAIGHT LINE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT BECAUSE ANY ME ASUREMENT BY CROWS FLIGHT IS BOUND TO IGNORE THE URBANIZATION WHICH HAS TAKEN PLACE. THE DECISION OF THE MUMBAI BENCH IN THE CASE OF LAUKIK DEVELOPERS VS DCIT, REPORTED IN (2007) 108 TTJ (MUMBAI) 364 , WAS ALSO TA KEN INTO CONSIDERATION BY THE HO NBLE PUNJA B AND HARYANA HIGH COURT AND FOUND THAT THE DECISION OF THE TRIBUNAL HAS ATTAINED FINALITY. 1 1 . IN CASE OF LAUKIK DEVELOPERS (SUPRA) , THE MUMBAI BENCH OF THE TRIBUNAL HAS OBSERVED THAT ONCE THE PRINCIPLE OF MEASURING DISTANCE HAS BEEN SETTLED NAMELY THAT THE DISTANCE OF THE AGRICULTURAL LAND BELONGING TO THE ASSESSEE - RESPONDENT HAS TO BE MEASURED IN TERMS OF BY APPROACH ROAD AND NOT BY A STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. ACCORDINGLY, THE HON BLE PUNJAB AND HARYANA HIGH COU RT HELD THAT THE DISTANCE HAS TO BE MEASURED BY APPROACH ROAD AN D NOT BY STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. IN CASE OF LAUKIK DEVELOPERS (SUPRA) , THE ASSESSEE DISPUTED THAT THE DISTANCE FOR THE PURPOSE OF SECTION 80IB(10) H AS TO BE MEASURED THROUGH STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE AND NOT BY APPROACH ROAD. THE MUMBAI BENCH OF THE TRIBUNAL HAS HELD THAT THE ISSUE REGARDING DISTANCE TO BE MEASURED WITH REGARD TO ROAD DIS TANCE OR A STRAIGHT LINE DISTANCE IS COVERED WI TH THE DECISION OF THE PUNE TRIBUNAL IN THE CASE OF MANGALAM INORGANICS (P) LTD (SUPRA) , WHEREIN IT WAS HELD THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND ASSESSEES INDUSTRIAL UNDERTAKING HAS TO BE MEASURED HAVING REGARD TO THE RO A D DISTANCE AND NOT AS PER THE CROWS FLIGHT I.E., A STRAIGHT - LINE DISTANCE AS CANVASSED BY THE REVENUE. 1 2 . IN CASE OF ITO VS. ASHOK SHUKLA, DECIDED IN ITA NO. 207/ INDORE/2012 , FOR ASSESSMENT YEAR 2008 - 09 , VIDE ORDER DATED 31 - 8 - 2012, THE ISSUE WAS IN RESPECT TO WHETHER THE ASSESSEE WAS ENTITLED TO EXEMPTION FROM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND. THIS ISSUE WAS EXAMINED IN DETAIL AND IT WAS FOUND THAT THE TEHSILDAR AND PATWARI HAVE GIVEN A REPORT THAT THE LAND IN QUESTION WAS AGRICULTURAL LAND AND THE DISTANCE IS 9.7 KMS FROM THE MUNICIPAL LIMIT. THIS DISTANCE WAS THROUGH THE APPROACH ROAD AND NOT BY STRAIGHT LINE DISTANCE METHOD. THEREAFTER DISCUSSING THE ISSUE ON MERIT AND HAVING TAKING INTO CONSIDERATION THE DECISION OF THE TRIBUNAL IN THE CASE OF LAUKIK DEVELOPERS (SUPRA) AND CONSIDERING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF BALKRISHNA HARIBALLABHADAS VS. CIT, REPORTED IN 138 ITR 245 , WHICH WAS RELIED UPON BY THE LEARNED DR AND FOUND THAT THE MEASUREMENT HAS TO BE ADOPTED BY THE APPROACH ROA D AND NOT BY STRAIGHT LINE METHOD. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH (SUPRA) . 1 3 . IN CASE OF ACIT VS. M/S SHAGUN INFRASTRUCTURE PVT. LTD., DECIDED IN ITA NO. 209/NAG/2009 , FOR ASSESSMENT YEAR 2006 - 07, VIDE ORDER DATED 27 - 6 - 2011, THE NAGPUR BENCH OF THE TRIBUNAL HAS HELD THAT THE LAND IN QUESTION WHICH WAS SITUATED MORE THAN 8 KMS. FROM THE LOCAL MUNICIPAL LIMIT AND IS CLEARLY AGRICULTURAL LAND IN TERMS OF SECTION 2(14)(III ) OF THE ACT,, THEREFORE, ANY INCOME FROM SUCH LAND INCLUDING PROFIT ARISING FROM SALE OF SUCH AGRICULTURAL LAND IS NOT ASSESSABLE AS INCOME. ITA NO S . 192 & 193 / NAG/2012 5 1 4 . IN CASE OF ACIT VS. GAURAV KHANDELWAL , DECIDED IN ITA NO. 195/AGRA/2010 , FOR ASSESSMENT YEAR 2006 - 07, THE AGRA BENCH OF THE TRIBUNAL FOLLOWING THE DECISION OF MUMBAI BENCH IN CASE OF LAUKIK DEVELOPERS (SUPRA) AND THE DECISION OF HON BLE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH (SUPRA) , HE LD THAT THE DISTANCE OF 8KMS HAS TO BE MEASURED BY APPR OACH ROAD DISTANCE AND NOT BY STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE. SIMILAR VIEW HAS BEEN EXPRESSED IN CASE OF SHRI MA I NRAJ VS. ACIT , DECIDED IN ITA NO. 1371/M D S /2011 , FOR ASSESSMENT YEAR 2007 - 08 VIDE ORDER DATED 18 - 8 - 2011. IN THIS CASE ALSO IT HAS BE EN HELD THAT THE DISTANCE HAS TO BE MEASURED BY APPROACH ROAD AND NOT THROUGH CROWS FLIGHT OR STRAIGHT LINE METHOD. IN CASE OF SMT. SAVITHRI AMMAL VS. ITO , DECIDED IN ITA NO.487/M D S /201 2 , VIDE ORDER DATED 12 - 7 - 2012 AGAIN IT HAS BEEN HELD THAT THE DISTANC E HAS TO BE MEASURED AS PER THE APPROACH ROAD AND NOT BY STRAIGHT LINE METHOD. SIMILAR VIEW HAS BEEN EXPRESSED IN CASE OF ITO VS. SHRI CHAGANLAL LAL JI ASWIN BUSINESS , DECIDED IN ITA NO. 857/M D S /2011, FOR THE ASSESSMENT YEAR 2007 - 08 , VIDE ORDER DATED 18 - 2 - 20 11 . IN CASE OF ITO VS. M/S RANJIT RATTAN MEHRA (HUF), DECIDED IN ITA NO. 442/ASR/2011 FOR ASSESSMENT YEAR 200 8 - 09 , THE AMRITSAR BENCH OF THE TRIBUNAL HAS TAKEN A VIEW THAT THE DISTANCE OF 8 KMS HAS TO BE MEASURED THROUGH THE APPROACH ROAD AND NOT THROUGH TH E STRAIGHT LINE METHOD. WHILE HOLDING SO, THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF SATINDER PAL SINGH (SUPRA) , WAS TAKEN INTO CONSIDERATION AND ANOTHER DECISION O F THE SAME HIGH COURT IN CASE OF CIT VS. LAL SINGH & OTHERS, REPO RTED IN (2010) 228 CTR 575 WAS ALSO TAKEN INTO CONSIDERATION AND HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE DISTANCE OF 8KM HAS TO BE MEASURED THROUGH APPROACH ROAD AND NOT BY STRAIGHT LINE METHOD ON HORIZONTAL PLANE. 1 5 . WE HAVE ALSO TAKEN INTO CONSIDERATION VARIOUS ARGUMENTS OF LEARNED CIT DR AND FOUND THAT SINCE THE ISSUE IS COVERED BY THE DECISION OF THE VARIOUS BENCHES OF THE TRIBUNAL AS WELL BY HON BLE PUNJAB AND HARYANA HIGH COURT, THEREFORE, IN VIEW OF THE CONSISTENCY THE VIEW TAKEN BY VARIOUS BENCHES HAS TO BE FOLLOWED. THERE IS NO CONTRARY DECISION IS AVAILABLE ON THE SAME FACTS AND, THEREFORE, IT CANNOT BE SAID THAT THE DECISION OF THE HON BLE PUNJAB AND HARYANA HIGH COURT HAS ONLY PERSUASIVE VALUE. IF THERE IS ANY CONT RARY DECISION IS AVAILABLE EITHER BY THE HON BLE HIGH COURT OR BY ANY OTHER BENCHES OF THE TRIBUNAL, THEN OF COURSE IT CAN BE SAID THAT THE DECISION OF OTHER BENCHES HA VE PERSUASIVE VALUE. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HE LD THAT DISTANCE OF 8 KMS. HAS TO BE MEASURED THROUGH APPROACH ROAD AND NOT BY STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR CROWS FLIGHT. HENCE, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEES. 1 6 . REGARDING THE ISSUE IN REGARD TO WHETHER THE SALE CONS IDERATION OUT OF AGRICULTURAL INCOME IS ASSESSABLE AS BUSINESS INCOME OR NOT, ONCE WE HAVE HELD THAT THIS WAS AN AGRICULTURAL LAND AND, THEREFORE, ANY CONSIDERATION OUT OF SALE OF AGRICULTURAL LAND, WHICH IS NOT ASSESSABLE AS THE LAND WAS SITUATED BEYOND 8 KMS., THEREFORE, THE DIRECTION OF THE LEARNED CIT(A) THAT THE SURPLUS MAY BE TREATED AS BUSINESS INCOME , HAS BECOME NOW MEANINGLESS. ITA NO S . 192 & 193 / NAG/2012 6 E VEN AND OTHERWISE, THIS ISSUE IS ALSO DECIDED BY VARIOUS HIGH COURTS INCLUDING THE HON BLE BOMBAY HIGH COURT. THOUGH LEAR NED CIT(A) HAS PLACED RELIANCE ON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN CASE OF GOPAL RAMNARAYAN KASAT, REPORTED IN 9 TAXMAN.COM 236 (BOM) , HOWEVER, IN A LATEST DECISION THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. DEBBIE ALEMAO, RE PORTED IN (2011) 331 ITR 59 , HAS HELD THAT THE LAND WHICH WAS SHOWN AS AGRICULTURAL LAND IN THE REVENUE RECORDS AND NEVER SOUGHT TO BE USED FOR NON - AGRICULTURAL PURPOSE S BY THE ASSESSEE TILL IT WAS SOLD HAS TO BE TREATED AS AGRICULTURAL LAND, EVEN THOUGH N O AGRICULTURAL INCOME WAS SHOWN BY THE ASSESSEE FROM THIS LAND AND, THEREFORE, NO CAPITAL GAIN WAS TAXABLE ON THE SALE OF THE SAID LAND. 1 7 . FACTS IN THE CASE IN HAND ARE SIMILAR. THE LAND IN QUESTION WAS SHOWN AS AGRICULTURAL LAND IN THE REVENUE RECORD. W HETHER THERE WAS ANY AGRICULTURAL INCOME OR NOT , IS NOT THE MOOT QUESTION TO DECIDE THE ISSUE, HOWEVER, THE IMPORTANT FACTOR IS TO BE DECIDED AS TO WHETHER THE CHARACTER OF THE LAND IS AGRICULTURE OR NOT. UNDISPUTEDLY , IN THE REVENUE RECORD AND AS PER THE PATWARI CERTIFICATE, THE LAND IN QUESTION IS AGRICULTURAL LAND. THEREFORE, THE SALE CONSIDERATION WAS NOT TAXABLE ON THE SALE OF SAID LAND I.E. EITHER ON ACCOUNT OF CAPITAL GAIN OR ON ACCOUNT OF BUSINESS INCOME. 1 8 . EVEN WE FOUND THAT THIS ISSUE HAS BEEN D ECIDED BY THE HON BLE APEX COURT WHILE CONFIRMING THE ORDER OF THE HON BLE DELHI HIGH COURT IN THE CASE OF DLF UNITED LIMITED , 217 ITR 337 . THE FACTS IN THE CASE OF DLF UNITED LIMITED (SUPRA) WERE THAT THE DLF LIMITED PURCHASED AGRICULTURAL LAND FROM VARIO US FARMERS IN THE EAR AND SHOWN EXEMPTION, HOWEVER, THE AO TREATED THE SALE CONSIDERATION AS REVENUE RECEIPT. UPTO THE STAGE OF TRIBUNAL, THE ORDER OF AO WAS CONFIRMED, HOWEVER, THE HON BLE DELHI HIGH COURT HELD THAT THE LAND IN QUESTION WAS OF AGRICULTURA L LAND AND THEREFORE, ANY RECEIPT ON ACCOUNT OF SALE OF AGRICULTURAL LAND IS NOT TAXABLE. THIS DECISION OF THE HON BLE DELHI HIGH COURT HAS BEEN CONFIRMED BY THE HON BLE APEX COURT, WHEREBY IT HAS BEEN HELD THAT EVEN AND OTHERWISE WE SEE NO MERIT IN THE SP ECIAL LEAVE PETITION AND THE SAME ARE ACCORDINGLY DISMISSED ON THE GROUND OF DELAY AS WELL AS ON MERITS. COP IES OF THESE ORDERS ARE PLACED IN THE COMPILATION. 1 9 . THIS ISSUE HAS ALSO BEEN CONSIDERED IN VARIOUS OTHER DECISION I.E. IN CASE OF HINDUSTAN INDUS TRIAL RESOURCES LIMITED VS. ACIT, REPORTED IN 335 ITR 77 , WHEREIN IT WAS HELD THAT IN VIEW OF THE FINDING OF THE TRIBUNAL THAT THE LAND IN QUESTION WAS AGRICULTURAL LAND AT THE TIME OF PURCHASE BY THE ASSESSEE AS ALSO AT THE TIME OF ACQUISITION, THE LAND W AS CLEARLY AGRICULTURAL LAND IRRESPECTIVE OF THE FACT THAT THE ASSESSEE INTENDED TO USE THE LAND FOR INDUSTRIAL PURPOSES AND DI D NOT CARRY OUT ANY AGRICULTURAL OPERATIONS AND, THEREFORE, NO CAPITAL GAINS COULD BE CHARGED ON ACQUISITION THEREOF UNDER THE LA ND ACQUISITION ACT, 1894. WHILE HOLDING SO, THE DECISION IN THE CASE OF DLF UNITED LIMITED (SUPRA) , WAS TAKEN INTO CONSIDERATION BY THE H O N BLE DELHI HIGH COURT. 20 . IN CASE OF SHRI SATYANARAYAN O. AGRAWAL VS. ADCIT, DECIDED IN ITA NO. 169/NAG/2012 FOR ASS ESSMENT YEAR 2007 - 08, SIMILAR VIEW ALSO WAS TAKEN FOLLOWING THE VARIOUS CASE LAWS AND ULTIMATELY IT WAS HELD THAT THE CONSIDERATION RECEIVED OUT OF SALE OF AGRICULTURAL LAND WAS NOT TAXABLE. ITA NO S . 192 & 193 / NAG/2012 7 2 1 . SINCE THIS ISSUE HAS ALREADY BEEN DECIDED BY VARIOUS B ENCHES OF THE TRIBUNAL AND THE H ON BLE BOMBAY HIGH COURT AS WELL AS THE HON BLE DELHI HIGH COURT AND THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF DLF UNITED LIMITED (SUPRA) , WHICH HAS BEEN CONFIRMED BY THE HON BLE SUPREME COURT, THEREFORE, WE H O LD THAT ANY CONSIDERATION RECEIVED OUT OF SALE OF AGRICULTURAL LAND, CANNOT BE TREATED AS BUSINESS INCOME FOR THE PURPOSE OF CAPITAL GAIN OR FOR THE PURPOSE OF BUSINESS INCOME, WHATEVER THE CASE MAY BE. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE ALLOW THIS GROUND IN FAVOUR OF ALL THE ASSESSEES. 7 . SINCE FACTS ARE SIMILAR, THEREFORE, FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL, WE ALLOW THIS GROUND OF THE ASSESSEE S IN BOTH THE APPEALS BY HOLDING THAT THE DISTANCE OF 8KM HAS TO BE MEA SURED THROUGH APPROACH ROAD AND NOT BY STRAIGHT LINE METHOD ON HORIZONTAL PLANE AND IF THROUGH APPROACH ROAD THE DISTANCE IS TAKEN, THEN IT IS SEEN THAT THE DISTANCE IS BEYOND 8 KM FROM THE MUNICIPAL LIMIT . A CCORDINGLY, WE H O LD THAT NO CAPITAL GAIN IS PAYA BLE AS THE AGRICULTURAL LAND SOLD IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) (III)(B) OF THE ACT. 8 . THE NEXT GROUND IN CASE OF SMT. HAMIDABAI FARUK KACHHI (I.E. ITA NO. 192/NAG/2012) , IS IN REGARD TO DENIAL OF EXEMPTION UNDER SECTION 10(1) IN RESPECT OF AGRICULTURAL INCOME OF ASSESSEE AMOUNTING TO RS. 3,04,785/ - 8 .1 THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 4,47,700/ - , HOWEVER, THE AO DID NOT ACCEPT IN TREATING THE AMOUNT OF RS. 3,04,785/ - AS INCOME FROM AGRICULTURE AND THE SAME WAS A DDED UNDER SECTION 68 OF THE ACT. THE CIT(A) ALSO CONFIRMED THE ACTION OF THE AO . ITA NO S . 192 & 193 / NAG/2012 8 8 .2 AFTER CONSIDERING THE SUBMISSION AND TAKING INTO CONSIDERATION THE DECISION OF THE TRIBUNAL IN CASE OF SMT. RUKSANA BEGUM VS. ITO, DECIDED IN ITA NO. 1/NAG/2008, VIDE ORD ER DATED 26 - 6 - 2009 , WE FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN PART. IT IS SEEN THAT IN THE EARLIER YEAR, THE AGRICULTURAL INCOME OF RS. 2,90,400/ - WAS ACCEPTED BY THE DEPARTMENT. SAME LAND IS AVAILABLE WITH THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION . T HEREFORE, WE HOLD THAT TREATING THE ENTIRE RECEIPTS AS NOT INCOME FROM AGRICULTURE INCOME AND ADDED BACK UNDER SECTION 68 , IS NOT JUSTIFIED. THEREFORE, WE ARE OF THE VIEW THAT IF AGRICULTURAL INCOME OF RS. 2 LAKHS OUT OF THE TOTAL INCOME OF RS. 3,04,7 85/ - IS TAKEN, THAT WILL MEET THE END OF JUSTICE. ACCORDINGLY , WE DELETE THE ADDITION OF RS. 2 LAKHS AND SUSTAIN THE REMAINING AMOUNT. 9 . IN CASE OF SHRI FARUK JIKAR KACHHI (ITA NO. 193/NAG/2012) , THE SECOND GROUND IS AGAINST DENIAL OF EXEMPTION UNDER SECTI ON 10(10 IN RESPECT OF AGRICULTURAL INCOME OF RS. 4,47,700/ - . 9 .1 THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 4,47,700/ - DURING THE YEAR UNDER CONSIDER ATION, HOWEVER, THE AO DID NOT ACCEPT THE CLAIM OF AGRICULTURAL INCOME, THEREFORE, HE ADDED THE SAME UNDER SECTION 68. CIT(A) ALSO CONFIRMED THE ACTION OF THE AO. 9 .2 AFTER CONSIDERING THE SUBMISSION AND TAKING INTO CONSIDERATION THE DECISION OF THE TRIBUNAL IN CASE OF SMT. RUKSANA BEGUM (SUPRA) , WE FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN PART. IT IS SEEN IN EARLIER IMMEDIATELY PRECEDING YEAR, THE AGRICULTURAL INCOME OF RS. 3,28,315/ - WAS ACCEPTED ON THE SAME LAND. AGRICULTURAL LAND HELD ITA NO S . 192 & 193 / NAG/2012 9 BY THE ASSESSEE WAS OF 2.0 ACRE. THE TRIBUNAL IN THE CASE OF SMT. RUKSANA BEGUM (SUPRA) , ON SIMILAR FACTS, HELD THAT INCOME OF RS. 30 ,500/ - PER ACRE WILL BE REASONABLE. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE HIMSELF HAS SHOWN LESSER INCOME. KEEPING IN MIND ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IF THE AGRICULTURAL INCOME OF RS. 2,50, 000/ - IS TAKEN AS INCOME AS AGRICULTURAL INCOME, THEN IT WILL MEET THE END OF JUSTICE. WE ORDER ACCORDINGLY. THIS GROUND OF ASSESSEE IS ALLOWED IN PART. 1 0 . REMAINING ISSUE IS AGAINST DISALLOWANCE OF EXPENSES OF RS. 2,79,485/ - . 1 0 .1 THE AO DISALLOWED THE ENTIRE EXPENDITURE CLAIMED IN THE PROFIT AND LOSS ACCOUNT . THESE EXPENSES WERE SHOWN ON CONVEYANCE EXPENSES, ELECTRICAL EXPENSES, COMMUNICATION EXPENSES, COMMISSION EXPENSES, SALARY EXPENSES, ETC. ETC. THE AO BY OBSERVING THAT THE ASSESSEE DID NOT SUBSTANT IATE THE CLAIM OF THE EXPENSES, DISALLOWED THE ENTIRE EXPENSES. LEARNED CIT(A) ALSO CONFIRMED THE ACTION OF THE AO. 1 0.2 AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD , WE FOUND THAT THE ASSESSEE DESERVE TO SUCCEED IN PART. THE DENI AL OF ENTIRE EXPENSES, IN OUR VIEW, IS NOT JUSTIFIED. IN PART, SIMILAR EXPENSES WERE ALLOWED. THEREFORE, KEEPING IN MIND THE PAST HISTORY AND TAKING INTO CONSIDERATION THE QUANTUM OF EXPENSES, WE ARE OF THE VIEW THAT, IF RS. 50,000/ - IS SUSTAINED, THAT WILL MEET THE END OF JUSTICE. ITA NO S . 192 & 193 / NAG/2012 10 ACCORDINGLY, WE CONFIRM THE ADDITION OF RS. 50,000/ - AND REMAINING DISALLOWANCE OF ARE HEREBY DELETED. 1 1 . RESULTANTLY, APPEAL S OF BOTH THE ASSESSEE S ARE ALLOWED IN PART . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF APR. 2013. SD/ - SD/ - (D.KARUNAKAR A RAO) (R.K.GUPTA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 0 3 / 04 / 2013 . PKM , PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A ) ,NAGPUR . 4. CIT 5. DR, ITAT, MUMBAI /NAGPUR 6. GUARD FILE. //TRUE COPY// BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI