The ITO, 5(1), Indore V. Shri Ashok Shukla, Indore

ITA 207/IND/2012

• Counselvise Citation: 20722714 RSA 2012
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: S S SHEETALADV
• Keywords: Capital asset; Competent authority; Onus to prove
• Section: 54B; 2(14); 80IB; 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.207/IND/2012 A.Y. 2008-09 ITO-5(1), INDORE :: APPELLANT VS ASHOK SHUKLA, INDORE PAN AERPS 1363 P :: RESPONDENT APPELLANT BY SHRI KESHAVE SAXENA RESPONDENT BY SHRI S.S. SHEETAL,ADV. DATE OF HEARING 2 8.0 8 .2012 DATE OF PRONOUNCEMENT 3 1 . 0 8 .2012 O R D E R PER JOGINDER SINGH , JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 31.1.2012 BROADLY ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED FIRST APPEL LATE 2 AUTHORITY ERRED IN TREATING THE LAND SOLD AS AGRICULTURAL LAND WHEN THE ASSESSEE FAILED TO SUBSTANTIATE THAT ANY AGRICULTURAL ACTIVITY WAS CARRIED OUT ON THE SAID LAND AND FURTHER ERRED IN HOLDING THAT THE LAND SOLD WAS BEYOND 8 KMS FROM THE MUNICIPAL LIMIT. 2. DURING HEARING, WE HAVE HEARD SHRI KESHAVE SAXENA, LD. CIT/DR AND SHRI S.S. SHEETAL, LEARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVEN UE IS IDENTICAL TO THE GROUND RAISED BY FURTHER SUBMITTI NG THAT FIRSTLY THE ASSESSEE HAS TO PROVE THAT ANY AGRICULTURAL OPERATION WAS DONE BY THE ASSESSEE AS THE ASSESSEE HIMS ELF IS NOT DOING ANY AGRICULTURAL OPERATION BEING ADVOCATE. IT WAS ALSO PLEADED THAT THE TEHSILDAR IS NOT A COMPETENT AUTHORITY TO ISSUE A CERTIFICATE REGARDING DISTANCE OF L AND FROM THE MUNICIPAL LIMIT. A PLEA WAS ALSO RAISED THAT THE LAND WAS SOLD TO DEVELOPER. OUR ATTENTION AS INVITED TO VARIOUS PAGES OF THE PAPER BOOK. RELIANCE WAS PLACED ON 3 THE DECISION IN 138 ITR 245 (GUJ), 136 ITR 621 (GUJ ), 185 ITR 318 (KER.), 220 ITR 43 (SC) AND 176 ITR 523 (BO M). ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSE E DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT THE IMPUGNED LAND WAS INHERITED BY ALL THE BROTHERS AND WAS ALSO SOLD AS A COMPOSITE SALE BEING COMPOSITE LAND. IT W AS EXPLAINED THAT ONE OF THE BROTHERS WAS CARRYING OUT AGRICULTURAL OPERATION AND IT IS NOT NECESSARY THAT EVERY BROTHER WILL TILT THE LAND HIMSELF. A PLEA WAS ALSO RAI SED THAT THE ASSESSING OFFICER AS WELL AS THE INSPECTOR OF THE INCOME TAX DEPARTMENT VISITED THE LAND, THE MAP WAS PREPARED BY THE INSPECTOR HIMSELF. THE LEARNED COUNS EL TOOK US TO VARIOUS PAGES OF THE PAPER BOOK THROUGH WHI CH HE TRIED TO EXPLAIN THAT THE LAND IN QUESTION IS SITUAT ED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT. RELIANCE WAS AL SO PLACED UPON THE DECISION OF THE TRIBUNAL IN ITA NO. 4 506/IND/2010 ALONG WITH THE DECISION IN CIT VS. SMT. DEBBIE ALEMAO; 331 ITR 59 (BOM). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN ADVOCATE PRACTISING IN HIGH COU RT OF MADHYA PRADESH AT INDORE. THE ASSESSEE EARNED INCOME FROM HOUSE PROPERTY, PENSION BEING EX-MLA IN STATE LEGISLATIVE ASSEMBLY, DECLARED INCOME OF RS. 4,04,690 /- ON 5.9.2008. THE ASSESSEE CLAIMED EXEMPTION FROM CAPITAL GAINS ON SALE OF LAND BY CLAIMING THE SAME TO BE AGRICULTURAL LAND SITUATED IN THE REVENUE RECORD OF VI LLAGE LASUDIA PARMAR (TEH. SANVER) BEARING KHASRA NO. 184, ETC. THE STAMP DUTY AND REGISTRATION FEES WERE BORNE BY THE PURCHASER AND THE SALE CONSIDERATION AMOUNTING TO RS.1,29,21,582/- WAS RECEIVED THROUGH CHEQUE. THE ASSESSING OFFICER CONCLUDED THAT THE IMPUGNED LAND IS SITUATED WITHIN 8 KMS FROM THE MUNICIPAL LIMIT AND THE N 5 MENTIONED THE PROVISIONS OF SECTION 10(37) OF THE I T ACT WHICH ARE APPLICABLE IN THE CASE OF COMPULSORY ACQUISITIO N, THEREFORE, IS NOT APPLICABLE TO THE FACTS OF THE CASE AS THE LAND WAS SOLD BY PRIVATE DEAL AND NO EXEMPTION U/S 54B OF THE ACT WAS CLAIMED. SO FAR AS THE ARGUMENT OF THE LEARNE D CIT DR AND OBSERVATION OF THE ASSESSING OFFICER THAT S INCE THE LAND WAS NOT CULTIVATED BY THE ASSESSEE HIMSELF AND WAS CARRIED ON BY THE BROTHER, THEREFORE, IT CANNOT BE TREATED AS AGRICULTURAL LAND. WE ARE NOT ABSOLUTELY CONVINCED BY THIS ARGUMENT/OBSERVATION BECAUSE THERE I S NO REQUIREMENT IN ANY ACT MORE ESPECIALLY THE INCOME T AX ACT THAT ONLY THE SELF CULTIVATED LAND WILL BE TREATED AS AGRICULTURAL LAND. THE TEHSILDAR IS THE CONCERNED REV ENUE OFFICER WHO ON THE BASIS INFORMATION/REPORT OF REVENU E PATWARI ISSUES A CERTIFICATE. SINCE THE BROTHER OF THE ASSESSEE WAS DOING AGRICULTURAL OPERATION, THEREFORE, ANY INCOME DERIVED OUT OF IT WILL BE TREATED AS AGRICULTU RAL 6 INCOME. EVEN IF LESS INCOME HAS BEEN SHOWN, THE ASSE SSEE CANNOT BE DENIED THE CHARACTER OF AGRICULTURAL INCOME. 4. SO FAR AS THE QUESTION OF DISTANCE FROM MUNICIPAL L IMIT IS CONCERNED, WE HAVE PERUSED THE RECORD AND FIND THAT EVEN AS PER THE REPORT OF THE INCOME TAX INSPECTOR ( PAGES 9 AND 10 OF THE PAPER BOOK) IT HAS BEEN MENTIONED THAT T HE LAND IS SITUATED 9.7 KMS BY ROAD FROM THE MUNICIPAL LI MIT BY A STRAIGHT DISTANCE METHOD. THE MAP OF THE LAND (PAGE 10) WAS PREPARED BY THE INCOME TAX INSPECTOR HIMSELF , THEREFORE, DISREGARD TO SUCH DOCUMENT IS NOT JUSTIF IED. A CERTIFICATE HAS BEEN ISSUED BY THE EXECUTIVE ENGINEER , PUBLIC WORKS DEPARTMENT (PAGE 11 OF THE PAPER BOOK) WHEREIN IT HAS BEEN SPECIFICALLY MENTIONED THAT THE IMPUGNED LAND IS 9.6 KMS FROM THE MUNICIPAL LIMIT. TH E LAND REVENUE OFFICER (TEHSILDAR) HAD ALSO MENTIONED THE SURVEY NO. 95 AREA 4.22 ACRE, SURVEY NO. 96/1 AREA 1.2 0 ACRE AND HAS MENTIONED THAT THE LAND IN QUESTION IS ABOUT 7 10 KMS FROM THE MUNICIPAL LIMIT AND THE POPULATION OF THE VILLAGE IS ABOUT 2000 PERSONS. THE ASSESSEE HAS ALSO PRODUCED A CERTIFICATE FROM THE LAND SURVEYOR (PAGE 14) WHEREIN IT HAS BEEN MENTIONED THAT THE IMPUGNED LAND I S SITUATED AT 9.09 KMS FROM THE MUNICIPAL LIMIT. THE ASSESSEE HAS ALSO PLACED ON RECORD THE GOOGLE MAP (PAGE 13). ALL THESE CERTIFICATES CLEARLY SAY THAT THE IMPUG NED LAND IS SITUATED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT , THEREFORE, AS PER SECTION 2(14)(III) OF THE ACT, THE IMPUGNED AGRICULTURAL LAND IS SITUATED IN THE REVENUE RECORD OF VILLAGE LASUDIA PARMAR WHOSE POPULATION IS ABOUT 2000 PEOPLE WHICH IS LESS THAN THE CONDITION MENTIONED IN SECTIO N 2(14)(III)(A) OF THE ACT. SO FAR AS THE CONDITION MEN TIONED IN SUB-CLAUSE (B) OF THE AFORESAID SECTION IS CONCERNED, FROM RECORD IT IS CLEAR THAT THE IMPUGNED LAND IS BEYOND T HE PRESCRIBED LIMIT OF 8 KMS FROM THE MUNICIPAL LIMIT. FROM THIS ANGLE ALSO, THERE IS NO MISTAKE IN THE CONCLUSION DRAWN 8 IN THE IMPUGNED ORDER. WE FURTHER FIND THAT SOME CAS ES LIKE LAUKIK DEVELOPERS; 303 ITR (AT) 356 HAVE BEEN R ELIED UPON IN THE IMPUGNED ORDER/ASSESSMENT ORDER WHEREIN THE ISSUE WAS EXAMINED WITH RESPECT TO SECTION 80IB OF TH E ACT WHEREAS THE ISSUE BEFORE US PERTAINS TO SECTION 2(14) WITH RESPECT TO AGRICULTURAL INCOME, THEREFORE, NOT APPLICA BLE TO THE FACTS OF THE PRESENT CASE. THE LEARNED CIT DR PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN BALKRISHNA HARIBALLABHADAS VS. CIT; 138 ITR 245. WE FIND THAT IN THAT CASE, THE LAND WAS SITUATED WITHIN MUNICIPAL LIMITS OF AHMEDABAD AND THE SURROUNDING LAND WAS DEVELOPED AND SINCE THE LAND WAS NOT AGRICULTURAL LAND, THE GAINS FROM SALE OF SUCH LAND WAS HELD TO BE EXIGIBLE TO CAPITAL GAI NS TAX. HOWEVER, THE LAND IN QUESTION IS CLEARLY AGRICULT URAL LAND SITUATED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT, THEREFORE, THIS CASE MAY NOT HELP THE REVENUE, MORES O ONE 9 FACT PERTINENT TO MENTION HERE THAT PART OF THE SAME LAN D, OWNED BY ONE OF THE BROTHERS, WAS TREATED AS AGRICULTUR AL LAND, THEREFORE, IT IS QUITE UNJUSTIFIED TO TREAT PART OF THE SAME LAND/CHUNK TO BE NON-AGRICULTURAL. ANOTHER CASE RELIED UPON IS FROM HONBLE BOMBAY HIGH COURT IN FAZALBHOY INV. COMPANY PVT. LTD.; 176 ITR 523 WHEREIN THERE WAS NO EVIDENCE SHOWING THAT NO AGRICULTURAL OPERATIONS WERE CARRIED OUT ON THE LAND. THE HONBLE COURT HELD THAT LAND WAS NOT AGRICULTURAL. HOWEVER, IN THE IMPUGNED LAND, AGRICULTURAL OPERATION WAS DONE BY ONE OF THE BROTHERS, THEREFORE, WITH UTMOST REGARD, THIS JU DICIAL PRONOUNCEMENT MAY NOT HELP THE REVENUE. ANOTHER DECISION RELIED ON IS CIT VS. GEMINI PICTURES CIRCU IT PRIVATE LIMITED; 220 ITR 43 (SC). THE LAND WAS SITUATED IN MOS T IMPORTANT BUSINESS CENTRE OF A CITY AND WAS ENTERED IN THE MUNICIPAL RECORD AS URBAN LAND AND TAX WAS PAID THEREON. PART OF THE LAND WAS USED FOR CONSTRUCTION OF NON- 10 RESIDENTIAL BUILDING. IN THAT SITUATION, PROFIT ON SAL E OF SUCH LAND WAS HELD TO BE EXIGIBLE TO CAPITAL GAINS. HOW EVER, IN THE IMPUGNED CASE, THE FACTS ARE ALTOGETHER DIFFEREN T, THEREFORE, MAY NOT HELP THE REVENUE. A DECISION FRO M HONBLE KERALA HIGH COURT IN KALPETTA ESTATES LTD. VS.CI T; 185 ITR 318 WAS RELIED UPON. IN THAT CASE, IT WAS HELD THAT BURDEN OF PROOF IS ON THE ASSESSEE TO PROVE THAT THE LAND WAS AGRICULTURAL LAND AT THE TIME OF TRANSFER AND FOREST LANDS WERE ACQUIRED WITH THE INTENTION OF EXTENDING PLANTATION. SINCE NO AGRICULTURAL OPERATION WAS CARRIED OU T, IT WAS HELD THAT IT GIVES RISE TO CAPITAL GAIN ON THE SALE OF SUCH LAND. IN THE CASE OF SARIFA BIBI MOHD. IBRAHIM; 13 6 ITR 621 (GUJ) THE LAND WAS SITUATED NEAR RAILWAY STATION AND WAS SOLD ON SQUARE YARD BASIS TO HOUSING SOCIETY. TH E PROFIT FROM THE SALE OF SUCH LAND WAS HELD TO BE ASSES SABLE TO CAPITAL GAINS TAX. KEEPING IN VIEW THE LOCATION AND OTHER 11 ATTENDANT CIRCUMSTANCES, IT WAS HELD TO BE ASSESSABLE TO CAPITAL GAINS TAX. 5. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT V S. SMT. DEBBIE ALENAO AND JOAQUIML ALENAO; (2011) 331 ITR 59 (BOM) WHEREIN THE LAND, IN QUESTION, WAS SHOWN IN THE REVENUE RECORD AS AGRICULTURAL LAND AND NO PERMISSION WA S TAKEN FOR CONVERSION OF LAND USE. IT WAS HELD THAT SIN CE NO AGRICULTURAL INCOME WAS SHOWN IN THE RETURN IS NOT THE MATERIAL FOR THE PURPOSES OF GAINS FROM SALE OF SUCH L AND. IT IS PERTINENT TO MENTION HERE THAT THIS CASE ALSO PERTAI NS TO SECTION 45, 54, 54B, ETC. OF THE ACT. 6. IF THE TOTALITY OF FACTS AVAILABLE ON RECORD IS KEPT IN JUXTAPOSITION WITH THE JUDICIAL PRONOUNCEMENTS DISCU SSED HEREINABOVE AND THE INTENTION OF THE LEGISLATURE ALONG WITH RELEVANT SECTIONS, WE ARE OF THE CONSIDERED OPINION T HAT A PARTICULAR LAND IS AGRICULTURAL LAND OR NOT DEPENDS UPON SO 12 MANY FACTORS. ANY AGRICULTURAL INCOME DERIVED FROM AGRICULTURAL OPERATIONS WILL QUALIFY FOR AGRICULTURAL INCO ME. SO FAR AS CAPITAL GAINS ON THE SALE OF SUCH LAND IS CONCERNED, IT ALSO DEPENDS UPON FACTORS LIKE LOCATION OF THE LAND, USE OF THE LAND, DISTANCE FROM MUNICIPAL LIMIT, WHETHER LAND USE WAS CHANGED, ETC. IF ALL THESE FACTORS ARE CUMULATIVELY KEPT IN MIND, ONE CLEAR FACT IS OOZING OU T THAT THE IMPUGNED LAND IS SITUATED BEYOND THE PRESCRIBED L IMIT FROM THE MUNICIPALITY, RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORD, AGRICULTURAL OPERATION WAS DONE BY ONE OF THE BROTHERS, WE ARE OF THE CONSIDERED OPINION THAT T HE NO CAPITAL GAINS TAX IS EXIGIBLE ON SALE OF SUCH LAND. SO FAR AS THE OBJECTION OF THE LEARNED CIT DR THAT THE TEHSILD AR IS NOT A COMPETENT AUTHORITY FOR MEASURING THE DISTANCE, W E ARE NOT SATISFIED WITH SUCH SUBMISSION ESPECIALLY WHEN THE INSPECTOR OF THE DEPARTMENT OF INCOME TAX AND TEHSILD AR BOTH HAVE CERTIFIED THAT THE LAND IS SITUATED BEYOND 8 KMS 13 FROM THE MUNICIPAL LIMIT. WE ARE OF THE CONSIDERED OP INION THAT TEHSILDAR IS THE MOST COMPETENT REVENUE OFFICER TO CERTIFY THE PROOF OF AGRICULTURAL OPERATION, DISTANCE OF LAND FROM A PARTICULAR PLACE, RATE OF LAND, ETC. OUR VIEW IS FURTHER FORTIFIED BY THE DECISION FROM HONBLE PUNJ AB & HARYANA HIGH COURT IN CIT VS. LALSINGH & OTHERS; 228 C TR 575. SO FAR AS THE ISSUE OF MEASURING THE LAND THROUG H STRAIGHT METHOD/AERIAL METHOD IS CONCERNED, WE ARE OF T HE VIEW THAT FOR MEASURING THE LAND WE ARE SUPPOSED TO GO BY THE ROAD, THEREFORE, ROAD DISTANCE IS THE MOST APPROPRI ATE METHOD AND NOT THE CROWS FLIES I.E. STRAIGHT LINE DI STANCE. THIS VIEW IS FURTHER SUPPORTED BY THE DECISION IN L AUKIK DEVELOPERS; 303 ITR 356 (MUM) AND THE DECISION FROM HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. SATINDER PAL SINGH (2010) 229 CTR 82. THE HONBLE COURT HELD AS UNDER :- 14 THE MAXIMUM DISTANCE PRESCRIBED BY SC. 2(14)(III) (B) WHICH MAY BE INCORPORATED IN THE NOTIFICATION COULD NOT BE MORE THAN 8 KMS FROM THE LOCAL LIMITS OF MUNICIPAL COMMITTEE OR CANTONMENT BOARD, ETC. THE NOTIFICATI ON HAS TO TAKE INTO ACCOUNT THE EXTENT OF AND SCOPE FOR URBANISATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS. THE RECKONING OF URBANISATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICANCE WHI CH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TER MS OF APPROACH ROAD RATHER THAN BY STRAIGHT LINE ON HORIZ ONTAL PLANE. IF PRINCIPLE OF MEASUREMENT OF DISTANCE IS CONSIDERED STRAIGHT LINE DISTANCE ON HORIZONTAL PLA NE OR AS PER CROWS FLIGHT THEN IT WOULD HAVE NO RELATIONSHI P WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EX TENT OF URBANISATION. SUCH A COURSE WOULD BE ILLUSORY. IT IS IN PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICAT ION NO. 9447 DT. 6 TH JAN., 1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESPECT OF THE STATE OF PUNJAB, AT I TEM NO. 18 THE SUB-DIVISION KHANNA HAS BEEN LISTED AT SERIA L NO. 19. IT HAS INTER ALIA BEEN SPECIFIED THAT AREA UPT O 2 KMS FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS HAS TO BE REGARDED OTHER THAN AGRICULTURAL LAND. ONCE THE STA TUTORY GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOP E OF URBANISATION OF THE AREA HAS TO BE RECKONED WHILE I SSUING ANY SUCH NOTIFICATION THEN IT WOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF LAND S HOULD BE MEASURED BY THE METHOD OF STRAIGHT LINE ON HORIZ ONTAL PLANES OR AS PER CROWS FLIGHT BECAUSE ANY MEASUREM ENT BY CROWS FLIGHT IS BOUND TO IGNORE THE URBANISATIO N WHICH HAS TAKEN PLACE. TRIBUNAL WAS THEREFORE JUSTIFIED I N HOLDING THAT DISTANCE OF 2 KMS FROM THE MUNICIPAL L IMITS OF CITY OF KHANNA HAS TO BE RECKONED FOR THE PURPOSES OF S. 2(14)(III) BY MEASURING THE SAME AS PER THE ROAD DI STANCE AND NOT AS PER STRAIGHT LINE DISTANCE ON A HORIZONT AL PLANE OR AS PER CROWS FLIGHT LAUKIK DEVELOPERS V. DY. CIT (2007) 108 TTJ (MUMBAI) 364 : (2007) 105 ITD 657 (MUMBAI) APPROVED. 15 THE ABOVE CONCLUSION BY THE HONBLE HIGH COURT CLEARL Y SUPPORTS THE CASE OF THE ASSESSEE. IN THE CASE OF LALS INGH & OTHERS (SUPRA) THE HONBLE HIGH COURT CONCLUDED TH AT THE REPORT OF THE TEHSILDAR HAVING CERTIFIED THAT THE ASSESSEES LAND WAS 8 KMS AWAY FROM THE MUNICIPAL LIMIT , THE LAND CONSTITUTED AGRICULTURAL LAND ENTITLING THE ASS ESSEE TO EXEMPTION U/S 54B OF THE ACT. 7. IF THE ASSESSMENT ORDER IS ANALYSED, WE ARE OF THE V IEW THAT THE LEARNED ASSESSING OFFICER IS MORE GUIDED BY SECTION 45 OF THE ACT WHICH SPEAKS ABOUT CAPITAL GAINS ARISING FROM THE TRANSFER OF CAPITAL ASSET. SECTION 54B OF THE ACT SPEAKS ABOUT NON-CHARGING OF GAINS OF THE CASES WHE RE THERE IS A TRANSFER OF LAND USED FOR AGRICULTURAL PURPOS ES. AN AMENDMENT WAS EFFECTED WITH EFFECT FROM 1.4.1970 SO AS TO INCLUDE LANDS SITUATED IN CERTAIN SPECIFIED AREAS WIT HIN THE AMBIT OF NON-AGRICULTURAL LAND. HOWEVER, BURDEN IS ON THE ASSESSEE TO PROVE THAT THE LAND IS AGRICULTURAL LAND AND 16 AT THE SAME TIME, ONUS IS ON THE DEPARTMENT TO PROVE T HAT THE LAND IS NON-AGRICULTURAL OR IT FORMS PART OF BUSIN ESS ASSET. FOR THE PURPOSES OF LAND BEING AGRICULTURAL LAND , ACTUAL AGRICULTURAL OPERATION OR CULTIVATION OR TILTING O F LAND IS ALWAYS NOT NECESSARY. WHAT IS TO BE SEEN IS WHETHE R SUCH LAND IS CAPABLE OF AGRICULTURAL OPERATION BEING CAR RIED ON. OUR VIEW IS FORTIFIED BY HONBLE CALCUTTA HIGH C OURT BORHAT TEA COM. LTD.; 138 ITR 783. THE CORRECT TEST T HAT HAS TO BE APPLIED IS WHETHER ON THE DATE OF SALE, THE L AND WAS AGRICULTURAL LAND OR NOT, WHETHER LAND USE WAS CHANGED OR NOT. JUST BECAUSE AFTER THE SALE, THE PURCHAS ER WAS GOING TO PUT THE LAND TO NON-AGRICULTURAL USE, IT D OES NOT MEAN THAT ON THE DATE OF SALE THE LAND HAS CEASED TO B E AGRICULTURAL LAND. IF IN THE REVENUE RECORD, THE PART ICULAR LAND IS RECORDED AS AGRICULTURAL LAND AND TILL THE DATE O F SALE, IT IS EXPLOITED AS AGRICULTURAL LAND AND THE OWNER OF THE LAND HAS NOT TAKEN ANY STEP TO INDICATE HIS INTENTIO N TO 17 EXPLOIT THE LAND FOR NON-AGRICULTURAL PURPOSES THEN S UCH LAND TO BE REGARDED AS AGRICULTURAL LAND. THE PURPOSE F OR WHICH SUCH LAND IS SOLD IS NOT OF MUCH IMPORTANCE AND WEIGHT. IF THE DEPARTMENT IS IN A POSITION TO PROVE THAT IT WAS USED AS AGRICULTURAL LAND AS A STOP GAP ARRANGEMENT AND ITS LAND USE WAS CHANGED BEFORE THE SALE THEN THE SITUATION MAY BE DIFFERENT. WHETHER THE LAND IS AN AGRICULTURAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FAC T. A CLOSE READING OF SECTION 2(14)(III)(A) SEEMS TO SUGGE ST THAT IT IS THE POPULATION OF THE MUNICIPALITY THAT HAS TO BE T AKEN INTO ACCOUNT AND NOT THE POPULATION OF ANY AREA WITHIN T HE MUNICIPALITY. IT MAY BE THAT A MUNICIPALITY MAY COMPRI SE OF MANY VILLAGES, WARDS AND STREET AND EACH ASSESSEE MAY CLAIM THAT THE LIMIT OF POPULATION IS PROVIDED WITH RE FERENCE TO A PLACE, WARD OR STREET. IN SUCH AN EVENT, THE SECTI ON WILL HAVE NO UNIFORM APPLICATION AND WILL LEAD TO MANY ANOMALIES. PANCHAYAT IS DIFFERENT FROM MUNICIPALITY. 18 MUNICIPALITY IS ALWAYS UNDERSTOOD DIFFERENTLY FROM PANCHAYAT, THEREFORE, THE LAND SITUATED BEYOND PRESCRIB ED MUNICIPAL LIMIT AND IS RECORDED AS AGRICULTURAL LAND IN T HE REVENUE RECORD IS TO BE CONSIDERED AS AGRICULTURAL LAND UNTIL PROVED OTHERWISE. ADMITTEDLY, THE TERM CAPI TAL ASSET HAS AN ALL EMBRACING CONNOTATION AND INCLUDES EVERY KIND OF PROPERTY AS GENERALLY UNDERSTOOD EXCEPT THOSE ARE EXPRESSLY EXCLUDED FROM THE DEFINITION. IT IS EXACT LY THE CASE HERE BECAUSE SECTION 2(14)(III) EXPRESSLY DEFINE S AGRICULTURAL LAND WITH REGARD TO ITS LOCATION AND DISTANC E FROM THE MUNICIPAL LIMIT. IT SEEMS THAT THE LEARNED ASSESSING OFFICER HAS NOT EXAMINED THE DOCUMENTS PRODUCED BY THE ASSESSEE ESTABLISHING THE DISTANCE OF LAND BEYOND PRESCRIBED MUNICIPAL LIMIT AND MORE SPECIFICALL Y WHEN KHASRA NUMBER, ETC. HAS BEEN DULY MENTIONED IN TH E REPORT OF TEHSILDAR. SO FAR AS THE ARGUMENT OF THE LEAR NED CIT DR THAT THE LAND WAS SOLD AT A SUBSTANTIAL AMOUNT IS 19 NOT THE RELEVANT FACTOR TO PROVE THAT IT WAS NON-AGRICU LTURAL LAND BECAUSE IT DEPENDS UPON SO MANY FACTORS. EVEN IN THE GROUNDS OF APPEAL, THE REVENUE HAS RAISED A GROUND THAT THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSEE BELONG TO THE LAND OF SHRI RAKESH SHUKLA, BROTHER OF T HE ASSESSEE. WE ARE NOT CONVINCED WITH THIS ARGUMENT ALSO BECAUSE THE TOTAL LAND IS ADJOINING TO EACH OTHER AND IS FROM ONE CHUNK. THIS CLAIM OF THE REVENUE RATHER SUPP ORTS THE CASE OF THE ASSESSEE. AS MENTIONED EARLIER, IN THE CASE OF ONE OF THE BROTHERS, IT HAS BEEN ALLOWED AS AGRICULT URAL LAND, THEREFORE, NO DIFFERENT YARD STICK CAN BE ADOPTED IN THE CASE OF ANOTHER BROTHER, BEING THE LAND IS PART OF THE SAME CHUNK. THE TOTALITY OF FACTS CLEARLY LEADS TO THE CONCLUSION, UNDER THE FACTS NARRATED HEREINABOVE, THAT T HE IMPUGNED LAND IS AGRICULTURAL LAND, THEREFORE, THE STAND OF THE LEARNED CIT(A) IS AFFIRMED. 20 FINALLY, THE APPEAL OF THE REVENUE IS HAVING NOT MERIT , THEREFORE, DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.8.201 2 . SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.8.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE