Sh. Ajay Maheswari, Meerut V. ITO, Meerut

ITA 2373/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3308 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 22-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

ITA NO. 2373/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-2373/DEL/2013 ( ASSESSMENT YEAR: 2009-10) AJAY MAHESWARI 346, SARAI LAL DASS MEERUT ACKPM8324H VS ITO WARD 1(1) MEERUT ASSESSEE BY SH. SANDEEP SAPRA, ADV. REVENUE BY SH. S.K. JAIN, SR. DR ORDER PER K. NARSIMHA CHARY, J.M. THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER DATED 11.02.2013 IN APPEAL NO. 367/2011-12 PASSED B Y THE LD. CIT (A)-MEERUT CONFIRMING THE ORDER OF THE AO. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT YEAR 2009-10 ON 20 TH AUGUST, 2008 THE ASSESSEE SOLD AGRICULTURAL LAND MEASURING 0.40025 HECT. SITUATED IN KHASRA NO. 713, VILLAGE- ABUPUR, PARGANA-JALALABAD, TEHSIL MODINAGAR (GHAZIA BAD) FOR A SUM OF RS. 57,43,800/- TO M/S SRM UNIVERSITY AND CL AIMED EXEMPTION FROM CAPITAL GAIN SINCE SUCH LAND HAPPENS TO BE AN AGRICULTURAL LAND DEFINED U/S 2(14)(III) OF THE ACT . AO RECKONED DATE OF HEARING 03.05.2017 DATE OF PRONOUNCEMENT 05.05.2017 ITA NO. 2373/DEL/2013 2 THE DISTANCE BY FOLLOWING THE STRAIGHT-LINE OR AERI AL DISTANCE, INSTEAD OF ACCEPTING THE PLEA OF THE ASSESSEE THAT THE DISTANCE HAS TO BE RECKONED WITH REFERENCE TO APPROACH ROADS. I N THE APPEAL PREFERRED BY THE ASSESSEE, LD. CIT (A) ALSO AGREED WITH THE AO ON THE GROUND THAT IF THE CONCEPT OF AN APPROACH ROAD IS ACCEPTED IT WILL GIVE RISE TO A HOST OF DOUBTS AS TO THE DEFINI TION OF APPROACH ROAD, WHETHER A PEDESTRIAN TRACK WOULD QUALIFY AS A N APPROACH ROAD, WHETHER SUCH APPROACH ROAD HAS TO BE A PUBLIC OR COULD ALSO BE A PRIVATE ROAD, WHETHER THE ROAD WAS EXISTE NT IN THE PAST AND IF SO WHETHER BEFORE AT THE TIME OF OR AFTER TH E DATE OF THE TRANSFER OF THE ASSET AND FINALLY, WHETHER A PLOT O F LAND CONTIGUOUS TO ANOTHER PLOT WHICH HAS APPROACH ROAD AND IS OWNE D BY THE VENDEE WILL QUALIFY AS CAPITAL ASSET, AND SO ON AND SO FORTH. 3. AGGRIEVED BY THIS APPROACH OF THE AUTHORITIES BE LOW, CHALLENGING THE IMPUGNED ORDER, THE ASSESSEE IS BEF ORE US STATING THAT THEY COMMITTED ERROR IN THEIR APPROACH TO RECK ON THE DISTANCE IN TERMS OF SECTION 2(14) OF THE ACT AND T HE ADDITION MADE UNDER THAT ASSUMPTION IS BAD UNDER LAW. 4. IT IS THE ARGUMENT OF THE LD. AR THAT THE AUTHOR ITIES BELOW COMMITTED AN ERROR IN REJECTING THE CONTENTION OF T HE ASSESSEE THAT THE DISTANCE HAS TO BE RECKONED WITH REFERENCE TO THE ITA NO. 2373/DEL/2013 3 APPROACH ROAD BUT NOT ON APPLYING THE STRAIGHT-LINE OR AERIAL METHOD. HE FURTHER SUBMITTED THAT PURSUANT TO THE ORDER DATED 30.03.2015 IN ITA NO. 151 OF 2013 IN THE CASE OF SM T. MALTIBAI R KADU, THE BOARD THE CBDT ISSUED A CIRCULE NO. 17 OF 2015 ON 6 TH OCTOBER, 2015 GIVING CLARIFICATION THAT FOR THE PER IOD PRIOR TO THE AY 2014-15 THE DISTANCE BETWEEN THE MUNICIPAL LIMIT ED AND THE AGRICULTURAL LAND HAS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD DISTANCE, AND IT IS ONLY IN RELATION TO THE AY 2014- 15 AND THEREAFTER THE DISTANCE COULD BE MEASURED AE RIALLY. PER CONTRA, THE LD. DR VEHEMENTLY RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 5. ADMITTEDLY THIS MATTER RELATES TO THE AY 2009-10 . THE CIRCULAR NO. 17 OF 2015 ON 6 TH OCTOBER, 2015 READS AS FOLLOWS: CIRCULAR NO. 17/2015 F.NO.279/MISC./L 40/2015-1TJ GOVERNMENT OF LNDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI, 6 TH OCTOBER, 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 A CT BASED, INTER- AIIA. ON ITS PROXIMITY TO A MUNICIPALITY OR CANTONMEN T BOARD. THE METHOD OF MEASURING THE DISTANCE OF THE SAID LAND FR OM THE MUNICIPALITY, HAS GIVEN RISE TO CONSIDERABLE LITIGA TION. ALTHOUGH, ITA NO. 2373/DEL/2013 4 THE AMENDMENT BY THE FINANCE ACT, 2013 W.E.F. 1.04.2 014 PRESCRIBES THE MEASUREMENT OF THE DISTANCE TO BE TAKE N 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 HO N. BOMBAY HIGH COURT VIDE ORDER DATED 30.03.2015 IN ITA 151 OF 2013 IN THE CASE OF SML. MALTIBAI R KADU HAS HELD THAT THE A MENDMENT PRESCRIBING DISTANCE TO BE MEASURED AERIALLY, APPLIE S PROSPECTIVELY I.E. IN RELATION TO ASSESSMENT YEAR 20 14-15 AND SUBSEQUENT ASSESSMENT YEARS. FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2014-15, THE HIGH COURT HELD THAT TH E DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE AGRICUL TURAL LAND IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROA D DISTANCE. THE SAID DECISION OF THE HIGH COURT HAS BEEN ACCEPTE D AND THE AFORESAID DISPUTED ISSUE HAS NOT BEEN FURTHER CONTE STED. 3. BEING A SETTLED ISSUE, NO APPEALS MAY HENCEFORTH BE FILED ON THIS GROUND BY DIE OFFICERS OF THE DEPARTMENT AND APPEALS ALREADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/ TRIBUNALS MAY BE WITHDRAWN/ NOT PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. SD/- (D.S. CHAUDHRY) CIT (A&J). CBDT, NEW DELHI 6. ADMITTEDLY THE CIRCULAR WAS NOT AVAILABLE BEFORE THE AUTHORITIES BELOW WHEN THEY PASSED THE ORDERS. THE RE WAS NO OCCASION FOR THEM TO DECIDE THE ISSUE IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN THIS CIRCULAR. WE ARE, T HEREFORE, OF THE CONSIDERED OPINION THAT IN VIEW OF THE SPECIFIC INS TRUCTIONS CONTAINED IN THIS CIRCULAR THAT FOR THE PERIOD PRIO R TO THE AY 2014- 15 THE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND AGR ICULTURAL LAND HAS TO BE MEASURED HAVING REGARD TO BE SHORTEST ROA D DISTANCE, IT IS JUST AND PROPER TO SET ASIDE THE ORDERS OF THE A UTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE AO FOR CO NSIDERING THE PLEA OF THE ASSESSEE IN THE LIGHT OF THIS CIRCULAR. WHILE DISPOSING ITA NO. 2373/DEL/2013 5 OF THE MATTER AFRESH, THE AO WILL TAKE INTO CONSIDE RATION THE CONTENTIONS AND THE EVIDENCE, IF ANY, PUT FORTH BY THE ASSESSEE BEFORE HIM. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH MAY, 2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA CHARY) PRESIDENT JUDICIAL MEMBER DATED: 05.05.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 03.05.2017 DRAFT PLACED BEFORE AUTHOR 04.05.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 05.05.17 KEPT FOR PRONOUNCEMENT ON 05.05.17 FILE SENT TO THE BENCH CLERK 08.05.17 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. ITA NO. 2373/DEL/2013 6