The ITO, Ward-1, Patan V. Shri Lalbhai Sukhabhai Desai, Patan

ITA 2430/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6231 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: ANIL KSHTRIYA
• Keywords: Capital asset; Opportunity of being heard; Rule of consistency
• Section: 143(3); 2(14); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ITO, WARD - 3 PATAN (APPELLANT) VS SHRI LALBHAI SUKHABHAI DESAI C/O. KIRANBHAI LALBHAI DESAI, AT & POST: GOVANA, TAL - HARIJ, DIST - PATAN - 384240 PAN: AHE PD7837R (RESPONDENT) REVENUE BY : S H RI SURENDRA KUMAR , CIT - D . R . ASSESSEE BY: S H RI ANIL KSHTRIYA , A.R. DATE OF HEARING : 16 - 11 - 2 017 DATE OF PRONOUNCEMENT : 12 - 01 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2009 - 10 , AR IS ES FROM ORDER OF THE CIT(A) , GANDHINAGAR, AHM EDABAD DATED 29 - 05 - 2015 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS O F APPEAL: - I) THE LD. CIT(A) HAS ERRED IN LAW &. ON FACTS IN DELETING THE ADDITION OF RS. 4,23,42,918/ - MADE BY THE A.O. ON ACCOUNT OF SHORT TERM CAPITAL GAIN. I T A NO . 2430 / A HD/20 15 A S SESSMENT YEAR 200 9 - 10 I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 2 II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME - TAX(APPEALS) OUG HT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. III) IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESORTED. 3. IN THIS CASE, RETURN OF INCOME DECLA RING INCOME OF RS. 9 ,45,750/ - WAS FILED ON 17 TH FEB, 2010. THE REAFTER THE CASE WAS REOPENED BY ISSUING OF NOTICE U/S. 148 OF THE ACT ON 14 TH DECEMBER, AFTER REFERRING THE ASSESSMENT MADE IN THE CASE OF SMT. ASHBEN LALBUBHAI DESAI STATING THAT SHE A LON G WITH THE ASSESSEE WAS HAVING J OINT OWNERSHIP OF LAND BEARING NO. 31 3, 326 IN S OYALA VILLAGE ON WHICH SHORT TERM CAPITAL GAIN WERE C OMPUTED AT RS. 68 , 92 , 760/ - ON SURVEY NO. 313 AND RS. 3 , 64 , 00 , 800/ - ON SURVEY NO. 326 RESPECTIVELY WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME . THE SOLD PROPERTY WAS CO - OWNED BY THEM IN THE RATIO OF 50 % EACH. THE ASSESSING OFFICER OF SMT. ASHBEN LALBUBHAI DESAI HAS MADE BOTH THE ADDITIONS SUBSTANTIVE AND PROTECTIVE BEING THE SHARE OF CAPITAL GAIN OF ASSESSEE ALSO IN HER ASSEEMENT TO PROTECT THE INTEREST OF REVENUE. THE AO HAS REFERRED THE CERTIFICATE OF THE CHIEF OFFICER OF SANAND NAGARPALIKA WHEREIN IT WAS STATED THAT SURVEY NO. 313,326,327/1,314 AND 315 ARE SITUATED WITHIN 2 KMS OF THE BOUNDARY OF SANAND NAGAR PALIKA. CONSEQUENTLY, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 4 , 23 , 42 , 908/ - ON THE GROUND OF SHORT TERM CAPITAL GAIN ON THE SALE OF AFORESAID LAND . 4. AGGRIEVED AGAINST THE DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: - I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 3 5.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND SUBMISSION FILED BY APPELLANT. THE UNDISPUTED FACTS OF THE PRESENT CASE ARE THAT THE APPELLANT AND SMT. ASHABEN LAL LUBHAI DESAI HAS JOINTLY SOLD LANDS BEARING SURVEY NO. 313 AND 326 IN SOYLA VILLAGE ON WHICH SHORT TERM CAPITAL GAIN (STCG) IS COMPUTED AT RS.68,92,760/ - AND RS.3,64,00,800/ - ON SURVEY NO 313 AND 326 RESPECTIVELY. BEING RATIO OF PARTNERSHIP BETWEEN THE APP ELLANT AND ASHABEN LALLUBHAI DESAI IS 1:1, OUT OF TOTAL CAPITAL GAIN SO COMPUTED, SUBSTANTIVE ADDITION OF RS.2,16,46,780/ - WAS MADE IN ASHABEN LALLUBHAI DESAI AND PROTECTIVE ADDITION OF RS.2,16,46,780/ - BEING SHARE OF APPELLANT WAS ALSO MADE IN THAT CASE. ON THIS BASIS, REASSESSMENT PROCEEDING WAS INITIATED BY AO U/S 147 OF THE ACT. 5.3.1 IT IS FURTHER OBSERVED THAT THE NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED TO THE APPELLANT AND IN RESPONSE TO THE SAME, THE APPELLANT STATED THAT PAN MENTIONED IN THE NO TICE WAS WRONG. BUT ON VERIFICATION OF THE RETURN OF INCOME IT HAS BEEN OBSERVED THAT BOTH THE PANS PERTAIN TO APPELLANT ONLY. THEREAFTER, THE AO HAS ISSUED NOTICE U/S 133(6) TO THE TALATI CUM MANTRI OF SOYALA VILLAGE AND IN RESPONSE TO THE SAME HE SUBMITT ED COPY OF 7/12 ABSTRACT AND MAP OF VILLAGE SOYALA AND GAVE DECLARATION THAT HE ALREADY GAVE A SUBMISSION DECLARING THE DISTANCE OF 'SURVEY NO. 326 AND 313 AS 3.5 KMS FROM SANAND MUNICIPAL LIMITS APPROXIMATELY AND ALSO PROVIDED PHOTOCOPY OF THE SAME. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, APPELLANT RELIED UPON DECISION OF CIT(A) AND I.T.A.T., IN THE CASE OF ASHABEN DESAI, PARTNER OF APPELLANT AND CONTENDED THAT AGRICULTURE LAND SOLD ARE BEYOND 2 KMS HENCE, SAME IS NOT SUBJECT TO CAPITAL GAIN. HOWEVER, THE AO HAS OBSERVED THAT IN THE CASE OF ASHABEN, THE REVENUE HAS FILED APPEAL BEFORE THE HON'BLE HIGH COURT AND THE CASE TIL! DATE IS PENDING. THE AO FURTHER AT PARA 10.1 HAS OBSERVED THAT THE BEST METHOD TO CALCULATE THE SHORTEST DISTANCE IS THE AERIAL O R STRAIGHT LINE ON A HORIZONTALPLANE METHOD AND BASED ON BHUVAN WEBSITE OF ISRO THE SHORTEST DISTANCE OF LANDS FROM THE MUNICIPAL LIMITS OF SANAND COMES OUT TO BE 1.904 KMS WHICH IS WELL WITHIN 02 KMS. FROM NAGARPALIKA. ON THIS BASIS AO ISSUED SHOW CAUSE N OTICE TO APPELLANT WHICH IS REPRODUCED AT PAGE 10 TO 14 OF ASSESSMENT ORDER. IN RESPONSE TO THIS SHOW CAUSE NOTICE, INSPECTION OF CASE RECORD WAS ALLOWED TO APPELLANT, WHERE IN DISTANCE WAS ONCE AGAIN CALCULATED BY STRAIGHT LINE ON A HORIZONTAL PLANE METHO D THROUGH ISRO WEBSITE AND FOUND THAT DISTANCE WAS 402.23 MTRS AND 812.509 MTRS AT TWO DIFFERENT POINTS LYING ON THE BORDER OF SANAND NAGARPALIKA AND ON THAT BASIS FRESH SHOW CAUSE NOTICE WAS ISSUED TO APPELLANT AND APPELLANT'S REP LY IS REPRODUCED TO PAGE 15 TO 1 7OFAO. 5.3.2 THEREAFTER, THE AO HAS CONTENDED THAT AS PER THE EXTRAORDINARY GAZETTE NOTIFICATION OF GOVT. OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, DATED 6 TH JANUARY 1994, IT IS SPECIFICALLY MENTIONED ON PAGE 01 AND PAGE 43 OF THE NOTIF ICATION THAT' AREAS UPTO A DISTANCE OF 02 KMS FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS OF SANAND WILL THEREOF BE SPECIFIED FOR THE PURPOSE OF THE PROVISIONS OF SECTION 2(14)(III)(B) AND 'PROVISO (II)(B) TO SECTION 2(LA)(C) OF THE ACT'. THUS, AO CAME TO CONCLUSION THAT ACCORDING TO THE SAID NOTIFICATION ANY LAND IN AN ARE A WITHIN SUCH DISTANCE AS SPECIFIED AS CAPITAL ASSET, CAPITAL GAIN TAX WILL BE LIABLE BE PAID ON SALE OF 'SUCH ASSETS AS PER SECTION 45 OF THE ACT. 5.3.3 THEREAFTER, THE AO AT PARA 16.3 OF HIS ORDER HAS OBSERVED THAT IT CAN BE SEEN FROM THE CERTIFIED MAP OF THE SANAND NAGARPALIKA AND MAP OF SOYALA VILLAGE I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 4 THAT SURVEY NOS. 1825,1827,1828,1833 &1834 ARE SITUATED WITHIN THE BOUNDARY OF SANAND NAGARPAKLIKA AND THEY SHARE BOUNDARY WITH SURVEY NOS 313, 326 & 327/1 HENCE, THEY ARE WITHIN 00.00 KM DISTANCE FROM SANAND NAGARPALIKA. THE AO ALSO REFERRED TO CERTIFICATE ISSUED BY TALATI CUM MANTRI WHEREIN IT IS STATED THAT THE SAID SURVEY NOS ARE AT APPROXIMATELY 400 METERS DISTANCE FROM MUNICIPAL LI MITS OF SANAND ACCORDING TO THE MAP. FURTHER, THE AO HAS REFERRED TO CERTIFICATE OF THE CHIEF OFFICER OF SANAND NAGARPALIKA WHEREIN IT IS STATED THAT SURVEY NO. 313,326,327/1,314 AND 315 ARE SITUATED WITHIN 2 KMS OF THE BOUNDARY OF SANAND NAGARPALIKA. THUS , AO CAME TO CONCLUSION THAT THE LAND ARE CAPITAL ASSETS 5.3.4 THE AO, THEREAFTER OBSERVED THAT IN CASE OF ASHABEN L. DESAI, A.Y. 2009 - 10 ALL THE CALCULATIONS OF DISTANCE MADE BY THE TALATI - CUM - MANTRI, THE AO AS WELL AS THE LD. CIT(A) EARLIER WAS FROM THE APPROACH ROAD BUT NOT FROM THE BOUNDARY OF SANAND NAGARPALIKA. AS PER THE EXTRAORDINARY GAZZATTE NOTIFICATION IT IS CLEAR THAT DISTANCE SHOULD BE CALCULATED IN ALL DIRECTIONS'FROM THE MUNICIPAL LIMITS OF SANAND AND NOT FROM THE APPROACH ROAD. AS THE LANDS WERE SOLD WITHIN SPAN OF 18 - 20 MONTHS FROM THE PURCHASE HENCE THE SAME WILL BE LIABLE FOR SHORT TERM CAPITAL GAINS FOR WHICH ADDITION OF RS. 4,23,42,9L48/ - IS MADE. 5.3.5 ON THE OTHER HAND APPELLANT HAS ARGUED THAT LAND BEARING SURVEY NO. 313 AND 326 INV OLVED IN PRESENT DISPUTE WERE JOINTLY HELD WITH SMT. ASHABEN DESAI, IN WHOSE CASE SIMILAR ISSUED WAS INVOLVED IN RELATION TO YEAR UNDER CONSIDERATION. THE CIT(A) AHMEDABAD HAS DELETED SAID ADDITION IN CASE OF ASHABEN DESAI. SAME HAS BEEN SUPPORTED BY THE H ON'BLE ITAT AS PER ORDER DATED 24.01.2013 IN ITA NO. 2122/ AHD/20 12. THUS, IT WAS ARGUED THAT SALE OF AGRICULTURE LANDS SITUATED IN A VILLAGE HAVING POPULATION OF LESS THAN 10,000 AND SITUATED AT A - DISTANCE OF 3. 2 KMS AND MORE FROM THE MUNICIPAL LIMIT OF SA NAND IS NOT COVERED U/S 2(14)(III)(B) OF THE ACT AS CAPITAL ASSET. ON SIMILAR BASIS LAND OWNED IN APPELLANT'S OWN NAME BEARING REVENUE SURVEY NO, 314, 315 AND 327/1 ARE ADJACENT TO AFORESAID LAND WHICH ARE JOINTLY HELD AND CONSIDERING THE FACTS DISCUSSED I N ABOVE REFERRED ORDERS, APPELLANT IS NOT LIABLE FOR CAPITAL GAIN TAX. IT WAS ALSO ARGUED THAT MEASUREMENT OF DISTANCE AT THE RELEVANT TIME WAS TO BE CONSIDERED BY WAY OF PUBLIC ROAD AND NOT TO BE MEASURED AERIALLY, AS THE AMENDMENT BROUGHT TO THIS EFFECT APPLIES FROM A.Y. 2015 - 16 AND NOT FROM A.Y. 2009 - 10. ON THE ENTIRE ISSUE THE APPELLANT HAS MAINLY RELIED UPON ORDER OF PREDECESSOR CIT (APPEALS) AND HON'BLE I.T.A.T., IN THE CASE OF APPELLANT'S PARTNER WHO IS JOINT OWNER OF THE PROPERTY AND ARGUED THAT IN THE CASE OF JOINT OWNER, DETAILED REMAND REPORT WAS OBTAINED FROM AO WHEREIN AO HAS ALSO MADE A SPOT VISIT WITH TALATI OF VILLAGE SOYLA AND EVEN CIT (APPEALS) - XI HAS ALSO VISITED THE IMPUGNED LANDS AND CAME TO CONCLUSION THAT LANDS INVOLVED IN PRESENT IS SUE ARE BEYOND TWO KILOMETERS, FROM SANAND MUNICIPAL LIMIT HENCE CAP ITAL GAIN CANNOT BE ATTRACTED. APPELLANT HAS ALSO STATED THAT INITIALLY AO HAS RELIED UPON BHUVAN MAP DOWNLOADED ON 18 TH FEBRUARY, 2014 BUT WHEN ONCE AGAIN IT WAS DOWNLOADED ON 10 TH MARC H, 2014, IT WAS BROUGHT TO THE NOTICE OF CONCERNED AO THAT THERE WAS NO ROAD AT ALL TO APPROACH THE LAND IN QUES TION AND THEREAFTER, AO, ALL OF A SUDDEN, TOOK A U - TURN AND RELIED UPON AND, RELIED UPON THE CONFIRMATION LETTERS FROM TALATI - CUM - MANTRI OF SOYL A VILLAGE BY ISSUING NOTICE ON 20 TH MARCH, 2014. THE APPELLANT HAS ALSO OBJEC TED NEW EVIDENCES RELIED UPON BY AO BEING CONFIRMATION LETTER OF TALATI OF SOYLA VILLAGE ON 19 TH MARCH , 2014 TO COME TO CONCLUSION THAT LANDS INVOLVED ARE WITHIN TWO KILOMETERS AN D IN THIS CONTEXT, IT WAS A RGUED THAT ALL I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 5 THE CONFIRMATIONS ARE OBTAINED BEHIND THE BACK OF ASSESSEE A - : EVEN THERE WAS ALLEGED MANIPULATION IN THE ABOVE CERTIFICATES. THE APPELLANT HAS CALLED FOR ISSUING OF SUMMONS TO RESPECTIVE TALATI SO THAT PROPER JUST ICE MAY BE GIVEN TO HIM. WITH REGARD TO CERTIFICATE ISSUED BY CHIEF OFFICER OF SANAND NAGARPALIKA, IT WAS STATED THAT THE SAID CERTIFICATE DOES NOT SHOW HOW DISTANCE WAS MEASURED. CONSIDERING ALL THESE FACTS, THE APPELLANT HAS MAINLY RELIED UPON SUBMISSION FILED DURING ASSESSMENT PROCEEDINGS WHICH ARE ALREADY REPRODUCED IN ASSESSMENT ORDER AS WELL AS SUBMISSIONS REPRODUCED HEREIN ABOVE AND ARGUED THAT HE IS NOT LIABLE FOR CAPITAL GAIN TAX. 5.3.6 ON CAREFUL CONSIDERATION OF ENTIRE FACTS AS DISCUSSED HEREIN ABOVE, THE ISSUE REVOLVED AROUND THE FACT THAT WHETHER LAND SOLD BY APPELLANT ARE WITHIN TWO KILOMETERS OF MUNICIPAL LIMITS OR NOT AND CONSEQUENTLY WHETHER APPELLANT IS LIABLE FOR INCOME FROM CAPITAL GAIN OR NOT DEPENDING UPON SITUATION OF SUCH LANDS. IT I S AN UNDISPUTED FACT, AS DISCUSSED HEREIN ABOVE, THAT AO HAS TAXED SHORT TERM CAPITAL GAIN F6R SURVEY NO. 313, 326 WHICH ARE JOINTLY OWNED WITH ASHABEN LALLUBHAI DESAI AND 327/1, 314 AND 315 INDEPENDENTLY HELD BY APPELLANT IN VERY SAME VILLAGE SOYLA. IT IS PERTINENT TO NOTE THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION IN THE CASE OF APPELLANT'S JOINT OWNER REFERRED SUPRA IN VERY SAME ASSESSMENT YEAR WHEREIN CIT (APPEALS) - XI VIDE HIS ORDER DATED 30 TH JULY, 2012 IN \ APPEAL NO. 352/WARD - 6(2)/LL - 12* HA S DECIDED THE ISSUE IN FAVOUR OF APPELLANT AS UNDER: '3.6 I HAVE CAREFULLY CONSIDERED: RIVAL CONTENTIONS. I HAVE ALSO PERUSED VARIOUS CASE LAWS RELIED UPON BY THE APPELLANT AND OTHER EVIDENCES FURNISHED BY THE APPELLANT DURING THE APPELLATE PROCEED INGS. TO ASCERTAIN THE FACTUAL POSITION AS FAR AS CONNECTIVITY OF LAND SITUATED AT SURVEY NO.313 PAIKI AND SURVEY NO.I3:26 SITUATED IN V ILLAGE SOYA, SANAND, I VISITED THIS LAND ON 27 TH JULY, 2012. TAKING INTO ENTIRETY OF FACTS ON RECORD, FOLLOWING RELEVANT FACTS EMERGE: (I) THE LAND SITUATED AT SURVEY NO. 313, PAIKI IN VILLAGE SOYLQA WAS SOLD BY THE APPELLANT ON 16 L JULY, 2008. THIS LAND WAS SOLD BY REGISTERED DOCUMENT NO. 4878/2008. THE LAND SITUATED AT SURVEY NO. 326 VILLAGE SOYLA, SANAND, WAS SOLD ON 25 JULY, 2008. THIS LAND WAS SOLD BY REGISTERED DOCUMENT NO. 4879/2008. (II) THESE LANDS WERE AGRICULTURAL LAND AT THE TIME WHEN LANDS WERE SOLD BY THE APPELLANT, AGRICULTURAL LANDS BEAR - ING SURVEY NO. 326 IS STILL AN AGRICULTURAL LAND IN REVENUE RECORDS AND ON MY VISITS I NOTICED AGRICULTURAL OPERATIONS WERE STILL CARRIED ON THIS LAND. THE EVIDENCES AVAILABLE ON RECORDS INDICATE THAT THE LAND SITUATED AT SURVEY NO. 313 PAIKI WERE CONVERTED FOR NON - AGRICULTURAL USE ON 16 TH JULY, 2009. THIS LAND WAS SOLD ON 16 TH JULY, 2008. THIS WAY, AT THE TIME OF SALE OF THIS LAND, IT WAS ALSO AN AGRICULTURAL LAND, THE APPELLANT HAS DECLARED AGRICULTURAL INCOME FROM THESE LANDS AND THE SAME WAS DULY ASSESSED. (III) THE LAND SITUATED AT SURVEY 1MB. 313 PAIKI AND SURVEY NO. 326 , SOYLA VILLAGE ARE NOT ADJACENT TO THE MUNICIPAL LIMITS OF SANAND. IN FACT THE ASSESSING OFFICER IN REMAND REPORT DATED 18 TH JULY, 2012 SUBMITTED THAT LANDS SITUATED AT SURVEY NO. 313 PAIKI IS AROUND 270 METERS FROM SDNAND MUNICIPAL LIMIT AND LAND SITUATE D AT SURVEY NO. 326, VILLAGE ; SOYAL, IS ABOUT 120 METERS AWAY FROM MUNICIPAL LIMITS OF SANAND. I I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 6 WOULD LIKE TO MAKE IT ABUNDANTLY CLEARLY AT THIS POINT THAT THESE DISTANCES ARE AERIAL DISTANCES OR AS THE CROW FLIES FROM THE MUNICIPAL LIMITS OF SANAND. THE D ISTANCE BETWEEN MUNICIPAL LIMITS OF SANAND AND LAND SITUATED AT SURVEY NO. 313 PAIKI THROUGH THE APPROACH ROAD WHICH PASSES THROUGH VILLAGE SOYLA IS 3.8 KMS. APPROX. THE LAND SITUATED AT SURVEY NO. 326 IS HAVING A DISTANCE OF 3.3 KMS. FROM THE MUNICIPAL LI MITS OF SANAND FOLLOWING THE APPROACH ROAD. I VISITED THESE LANDS ON 27* JULY, 012 AND FOUND THAT DISTANCES HAVE BEEN MEASURED ADEQUATE PRECISION, HOWEVER, THE ASSESSING OFFICER HAS RELIED UPON THE FACTUAL RECORD OF INSPECTOR DATED 12 TH . JUNE, 2012. AS PER THIS REPORT, DISTANCE OF LAND SITUATED AT SURVEY NO. 313 PAIKI FROM MUNICIPAL LIMIT OF SANAND IS 1.4 KMS. THIS DISTANCE HAS BEEN MEASURED FROM MUNICIPAL LIMIT OF SANAD AT FAGANI ROAD TILL THE LAND AT SURVEY NO,. 313 THROUGH THE PRIVATE PROPERTY BEING DEVE LOPED IN THE NAME AND STYLE OF 'SURAMYA LIFE SPACE'. IN MY7 CONSIDERED VIEW, ROAD DEVELOPED BY A PRIVATE PARTY WHICH IS FOR THE EXCLUSIVE OF THE RESIDENTS OF COLONY DEVELOPED 'BY DEVELOPER CANNOT BE SAID TO BE A PUBLIC ROAD AND THE SAME CANNOT BE TREATED A S AN APPROACH ROAD. FOR THE PURPOSE OF CAPITAL GAIN WE HAVE TO CONSIDER THE APPROACH ROAD AS IT WAS EIXSTINGH AT THETIME OF SALE OF AGRICULTURAL LAND, IN THIS CASE, RELEVANT PERIOD IS JUNE/JULY 2008. TALATI OF SOYLA VILLAGE IN HIS STATEMENT BEFORE THE ASSE SSING OFFICER HAD CLEARLY STATED THAT IN JUNE/JULY 2008 THERE WAS NO OTHER APPROACH EXCEPT APPROACH ROAD VIA VILLAGE SOYAL. THESE FACTS MAKES IT ABUNDANTLY CLEARLY THAT DURING THE RELEVANT TIME I.E. JUNE/JULY 2008 ONLY AVAILABLE APPROACH ROAD CONNECTING TH ESE LANDS TO SANAND WERE VIA VILLAGE SOYLA. THE ROAD IN 'SURAMYA LIFE SPACE' WAS CONSTRUCTED AFTER 2009 AS THE LAND USE OF THE LAND ON WHICH THIS ROAD IS CONSTRUCTED IN 'SURAMYA LIFE SPACE' HAS BEEN CHANGED FROM AGRICULTURAL TO NON - AGRICULTURAL IN THE YEAR 2009. THE CONSTRUCTION OF ROAD AND OTHER ALLIED CONSTRUCTION CAN BE UNDERTAKEN ONLY AFTER CHANGE OF LAND USE. IT IS ALSO OBSERVED BY THE ASSESS ING OFFICER THAT LAND SITUATED AT SURVEY NO. 313 , PAIKI AND SURVEY NO. 326, VIILAGE SOYLA WAS CONNECTED TO FAGA NI ROAD THROUGH CART ROADS WHICH IS NOT DRAWN IN THE MAPS. HOWEVER, THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SUCH CART ROADS. ON MY VISIT, I COULD NOT SPOT SUCH CART ROADS. IN FACT, I COULD NOT FIND ANY CART ROADS GOING DOWN TOWARDS THESE LAND FROM TH E FAGANI ROAD. IN VIEW OF THIS, THIS CONTENTION OF THE LEARNED ASSESSING OFFICER CANNOT BE ACCEPTABLE. : (IV) THE LEARNED ASSESSING OFFICER ALSO MADE A CASE FOR EASEMENT RIGHTS OF THE LAND OWNERS. HOWEVER, IN MY CONSIDERED VIEW THIS CONTENTION OF ASSESSING OFFICER IS MISPLACED AS THE MATERIAL FACTS IN THIS CASE IS DISTANCE OF IMPUGNED LANDS FROM MUNICIPAL LIMITS OF SANAND VIA APPROACH ROADS. 3.7 THE RELEVANT PROVISIONS OF LAW APPLICABLE TO THIS CASE ARE DISCUSSED IN FOLLOWING PARAS: (I) THE ASSESSING OFFICE R HAD TREATED THE LANDS AT SURVEY NO. 313 PAIKI AND SURVEY NO. 326 IN VILLAGE SOYLA AS THE CAPITAL ASSETS SINCE IN THE OPINION OF ASSESSING OFFICER THESE LANDS WERE SITUATED WITHIN TWO KILOMETERS FROM THE MUNICIPAL LIMITS OF SANAND. THE ASSESSING OFFICER H AD TAKEN THIS DISTANCE ON HORIZONTAL PLAIN OR AS THE CROW'S FLIGHT. ON THE OTHER HAND, THE APPELLANT'S CONTEND THAT THESE DISTANCES SHOULD'BE MEASURED THROUGH APPROACH ROAD. THIS ISSUE OF MEASURING DISTANCE FROM MUNICIPAL I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 7 LIMIT OF ANY TOWN HAS BEEN DISCUSS ED BY MUMBAI I.T.A.T., IN THE CASE OF LAUKIK DEVELOPERS V/S DCIT 108 TTJ 364 OR 105 ITD 657. THE RELEVANT PARA OF THIS ORDER IS REPRODUCED AS UNDER FOR THE SAKE OF READY REFERENCE. 'THE OTHER ISSUE OF MEASUREMENT OF DISTANCE OF 25 KMS. FROM MUMBAI CITY AND THE SIX RESIDENTIAL UNITS OF MORE THAN 1,000 SQ. FT. BUILT - UP AREA CONSTRUCTED BY THE ASSESSEE, WE FIND THAT THE ISSUE IS MERELY OF ACADEMIC INTEREST ONLY FOR THE REASON THAT WE HAVE ALREADY HELD IN THE PRECEDING PARAS OF THIS ORDER THAT THE ASSESSEE'S BU ILDING PROJECT IS NOT A 'HOUSING PROJECT' AND, THEREFORE, NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80 - 16(10) OF THE ACT. HOWEVER, SINCE MUCH ARGUMENTS WERE ADDRESSED FROM BOTH THE SIDES ON THIS ISSUE ALSO, WE PROCEED TO RECORD OUR FINDINGS ON THIS ISSUE. THE OTHER ISSUE IS WITH REGARD TO MEASUREMENT OF 25 KMS. DISTANCE FROM THE CITY OF MUMBAI. THE CASE OF THE ASSESSEE IS THAT THE SIX RESIDENTIAL UNITS OF WHOSE BUILT - UP AREA EXCEEDS 1,000 SQ. FT. CONSTRUCTED BY THE ASSESSEE, ARE NOT HIT BY PROV ISIONS OF SECTION 80 - IB(10)(C) OF THE ACT FOR THE REASON THAT THE ASSESSEE'S SITE IS OUTSIDE THE 25 KMS. DISTANCE FROM THE LIMITS OF CITY OF MUMBAI. IN THE PROVISIONS OF SECTION 80 - IB(10)(C) THE WORD 25 KMS. FROM THE MUNICIPAL LIMITS OF CITY OF MUMBAI IS M ENTIONED. THE CASE OF THE DEPARTMENT IS THAT THE DISTANCE OF 25 KM. HAS TO BE MEASURED FROM THE OUTER LIMITS OF MUNICIPALITY OF MUMBAI AND THERE BEING ONLY 'BMC' HAVING JURISDICTION OVER THE MUNICIPAL LIMITS OF MUMBAI, THE SITE OF THE BUILDING PROJECT OF T HE ASSESSEE HAS TO BE MEASURED FROM THE OUTER MUNICIPAL LIMITS OF 'BMC' ONLY. THE OTHER CONTROVERSY REGARDING THIS PROVISION IS THAT THE REVENUE INSIST THAT STRAIGHT LINE DISTANCE HAS TO BE MEASURED IN ACCORDANCE WITH PROVISIONS OF SECTION 11 OF THE GENERA L CLAUSES ACT WHEREAS THE CASE OF THE ASSESSEE IS THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND THE ASSESSEE'S SITE HAS TO BE MEASURED HAVING REGARD TO THE ROAD DISTANCE ONLY. WE FIND THAT THE ISSUE REGARDING DISTANCE TO BE MEASURED WITH REGARD TO ROA D DISTANCE OR A STRAIGHT LINE DISTANCE IS COVERED WITH THE DECISION OF THE PUNE TRIBUNAL IN THE CASE OF MANGALAM INORGANICS (P.) LTD. (SUPRA) WHEREIN HELD THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND ASSESSEE'S INDUSTRIAL UNDERTAKING IS TO BE MEASURE D HAVING REGARD TO THE ROAD DISTANCE AND NOT AS PER ,THE CROW'S FLIES, I.E., A STRAIGHT LINE DISTA NCE AS CANVASSED BY THE REVENUE. THERE BEING NO CONTRADICTORY DECISION BEFORE US ON THIS ISSUE, WE HOLD THAT THE DISTANCE OF 25 KMS. FOR THE PURPOSE OF SECTIO N 80 - IB(10) OF THE ACT HAS TO BE MEASURED AS PER THE ROAD DISTANCE AND NOT AS PER THE STRAIGHT LINE DISTANCE ON A HORIZONTAL PLAIN.' (II) SIMILAR ISSUE HAS ALSO BEEN CONSIDERED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF COMMISSIONER OF INCOME T AX - II, LUDHIANA V/S SATINDER PAL SINGH. THE RELEVANT PARA OF THIS ORDER IS REPRODUCED AS UNDER FOR THE SAKE OF READY REFERENCE. 'A PERUSAL OF THE AFORESAID PROVISION SHOWS THAT 'CAPITAL ASSET' WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NOT SITUATED IN ANY AREA WITHIN SUCH DISTANCE AS MAY BE SPECIFIED IN THIS BEHALF BY A NOTIFICATION IN THE OFFICIAL GAZETTE WHICH MAY BE ISSUED BY THE CENTRAL GOVERNMENT. THE MAXIMUM DISTANCE PRESCRIBED BY SECTION 2(14)( III)(B) OF THE ACT 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 I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 8 NOTIFICATION HAS TO TAKE INTO ACCOUNT THE EXTENT OF, AND SCOPE FOR URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS. THE REC KONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICANT WHICH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TERMS OF APPROACH ROAD RATHER THAN BY STRAIGHT LINE ON HORIZONTAL PLANE. IF PRINCIPLE OF MEASUREMENT OF DISTANCE I S CONSIDERED STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROW'S FLIGHT THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT OF URBANIZATION. SUCH A COURSE WOULD BE ILLUSORY. IT IS IN PURSUANCE OF THE AFOR ESAID PROVISION THAT NOTIFICATION NO. 9447, DATED 6 - 1 - 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 UP TO 2 KMS. FROM THE MUNICIPAL LIMITS IN ALL DIRECTIONS HAS TO BE REGARDED OTHER THAN AGRICULTURAL LAND. ONCE THE STATUTORY GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOPE OF URBANIZATION OF THE AREA HAS TO BE RECKONED WHILE ISSUING ANY SUCH NOTIFIC ATION THEN IT WOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF LAND SHOULD BE MEASURED BY THE METHOD OF STRAIGHT LINE ON HORIZONTAL PLANE OR AS PER CROW'S FLIGHT BECAUSE ANY MEASUREMENT BY CROW'S FLIGHT IS BOUND TO IGNORE THE URBANI ZATION WHICH HAS TAKEN PLACE. MOREOVER, THE JUDGMENT OF THE MUMBAI BENCH APPEARS TO HAVE ATTAINED FINALITY. KEEPING IN VIEW THE PRINCIPLE OF CONSISTENCY AS LAID DOWN IN RADHASOAMI SATSANG V. CIT [1992] 193 ITR 321 1 (SC) WE! ARE OF THE VIEW THAT THE OPINIO N EXPRESSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGAL INFIRMITY WARRANTING INTERFERENCE OF THIS COURT. ACCORDINGLY QUESTION NO. 1 IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY UPHOLDING THE ORDER OF THE TRIBUNAL.' 3.8 THE ABOVE DISC USSION MAKES IT VERY CLEAR THAT AGRICULTURAL LANDS SITUATED WITHIN TWO KILOMETERS FROM THE MUNICIPAL LIMITS OF SANAND CAN ONLY BE TREATED AS CAPITAL ASSET AS PER THE PROVISIONS OF SECTION 2(14)(III)(B) OF INCOME TAX ACT, 1961, IF SUCH AGRICULTURAL LANDS AR E SITUATED WITHIN TWO KILOMETERS FROM THE MUNICIPAL LIMITS OF SANANDJHAVING REGARD TO THE APPROACH ROAD DISTANCE. THE ASSESSING OFFICER OBSERVED IN HIS REMAND REPORT DATED 18 JULY, 2012 THAT THE DISTANCE OF LANDS SITUATED AT SURVEY NO. 313 PAIKI IS 3.8 KMS APPROX.., AWAY FROM THE MUNICIPAL LIMITS OF SANAND, IF THE SAME IS MEASURED THROUGH THE APPROACH ROAD WHICH PASSES THROUGH VILLAGE R SOYLA. IT IS FURTHER OBSERVED BY THE ASSESSING OFFICER IN THE REMAND REPORT DATED 18 TH JULY, 2012 THAT LAND SITUATED AT SUR VEY NO. 326 IS 3.3 KMS AWAY FROM THE MUNICIPAL LIMITS OF SANAND IF THIS DISTANCE IS MEASURED THROUGH APPROACH ROAD WHICH IS PASSING THROUGH THE VILL AGE SOYLA. SINCE AT THE TIME WHEN THIS AGRICULTURAL LANDS WERE SOLD, THERE WAS NO OTHER APPROACH ROAD, ACCOR DINGLY THE ABOVE MENTIONED DISTANCES HAS TO BE TAKEN FROM MUNICIPAL LIMITS OF SANAND FOR THE PURPOSE OF SECTION 2(14)(III)(B) OF INCOME TAX ACT. THE ABOVE FACTS CLEARLY INDICATE THAT THE IMPUGNED LANDS WERE MORE THAN TWO KILOMETERS AWAY FROM THE MUNICIPAL LIMITS OF SANAND HAVING REGARD TO THE APPROACH ROAD AND ACCORDINGLY, THIS CANNOT BE TREATED AS CAPITAL ASSET AS PER THE PROVISIONS OF SECTION 2(14) (III)(B) OF THAT INCOME TAX ACT. SINCE THESE LANDS ARE NOT CAPITAL ASSETS, ACCORDINGLY SALE PROCEEDS OF THESE I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 9 LAND CANNOT : BE TAXED UNDER THE HEAD 'CAPITAL GAIN'. ACCORDINGLY, I HOLD THAT ADDITION OF RS. 2,16,46,780 MADE BY ASSESSING OFFICER UNDER THE HEAD SHORT TERM CAPITAL GAINS IS UNTENABLE AND THE SAME IS ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWE D.' IT CAN BE SEEN FROM AFORESAID ORDER OF CIT (APPEALS) THAT TWO LANDS BEING LAND AT SURVEY NO. 313 AND 326 ARE ALSO INVOLVED IN APPELLANT'S APPEAL ALSO AND CIT (APPEALS) HAD VISITED THE SPOT PERSONALLY AND CAME TO CONCLUSION THAT THE ABOVE LANDS ARE BEYO ND THE TWO KILOMETERS DISTANCE FROM MUNICIPAL LIMITS OF SANAND. HE HAS ALSO STATED THAT DISTANCE BETWEEN MUNICIPAL LIMITS OF SANAND AND LAND SITUATED AT SURVEY NO. 313 THROUGH APPROACH ROAD IS 3.8 KMS, APPROXIMATELY AND 3.3 KMS. IN CASE OF SURVEY NO. 326. HE HAS ALSO DEALT WITH REMAND REPORT OBTAINED FROM AO AND OBSERVED THAT ROAD DEVELOPED BY PRIVATE PARTY WHICH IS EXCLUSIVELY USED FOR RESIDENTS CANNOT BE HELD AS PUBLIC ROAD OR APPROACH ROAD. THE CIT (APPEALS) HAS ALSO REFERRED TO STATEMENT OF TALATI OF SO YLA VILLAGE WHEREIN HE HAS STATED THAT IN JUNE/JULY 2008 THERE WAS NO OTHER APPROACH ROAD EXCEPT APPROACH ROAD VIA VILLAGE SOYLA. HE HAS ALSO REFERRED TO THE OBSERVATION OF AO IN REMAND REPORT DATED 18 TH JULY, 2012 WHEREIN IT WAS STATED THAT SURVEY NO. 326 IS 3.3 KMS AWAY FROM MUNICIPAL LIMITS OF SANAND IF THE DISTANCE IS MEASURED THROUGH VILLAGE SOYLA. THE ENTIRE OBSERVATION MADE BY CIT (APPEALS) IS FURTHER UPHELD BY HON'BLE AHMEDABAD I.T&.T., IN ITA 2122/AHD/2012, DATED 24 TH JANUARY, 2013 WHEREIN IT HAS B EEN HELD AS UNDER: '5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL BEFORE US. IT IS FOUND THAT THE ASSESSEE HAD DISCLOSED AGRICULTURAL INCOME FROM THAT LAND AND ALSO 7/12 RECORD SHOWS THE NATURE OF LAND IN LAND REVENUE REC ORD AS AGRICULTUR E. THE LEARNED CIT(A) HAD INSPECTED THE IMPUGNED SURVEY NUMBERS PERSONALLY AND FOUND THAT THE DISTANCE OF BOTH THE LANDS FROM THE SANAND MUNICIPAL LIMIT IS MORE THAN TWO KILOMETERS. IT MEANS IT IS OUTSIDE THE PURVIEW OF THE MUNICIPAL LIMIT. THE METHOD TO B E ADOPTED FOR MEASUREMENT IS - TO APPROACH ROAD NOT STRAIGHT LINE CROW'S FLIGHT METHOD AS HELD BY THE HON'BLE P&H HIGH COURT IN CASE OF CIT V/S SATINDER PAL SINGH (SUPRA) AND ITAT, MUMBAI, DECISION IN CASE OF LAUKIK DEVELOPERS V/S DCIT (SUPRA). THEREFORE, W E HAVE CONSIDERED VIEW THAT SALE PROCEEDS ON : ABOVE TWO LANDS IS NOT COVERED UNDER SECTION 2(14)(III)(B) OF THE L.T. ACT AS CAPITAL ASSETS. THEREFORE, WE DO NOT FIND ANY REASON TO INTERVENE IN THE ORDER OF THE CIT (APPEALS). THE APPEAL OF THE REVENUE IS, T HUS, DISMISSED.' IT CAN BE OBSERVED FROM AFORESAID ORDER OF I.T.A.T., THAT METHOD IS REQUIRED TO BE ADOPTED FOR MEASUREMENT IS THROUGH APPROACH ROAD AND NOT CROW'S FLIGHT METHOD AND HON'BLE IT.AT., HAS ALREADY APPROVED THE INSPECTION CARRIED OUT BY LEARNED CIT (APPEALS) IN THE CASE OF APPELLANT'S CO - OWNER AND HELD THAT DISTANCE OF BOTH THE LAND FROM SANAND MUNICIPAL LIMIT IS MORE THAN 2 KMS. AS ENTIRE ISSUE FOR BOTH THE SURVEY NUMBERS REFERRED SUPRA ARE ALREADY ADJUDICATED IN FAVOUR OF ONE OF THE CO - OWNERS, THE DECISION OF HON'BLE IT,AT., IS BINDING IN APPELLANT'S OWN CASE ALSO HENCE AO WAS NOT JUSTIFIED IN NOT FOLLOWING THE ABOVE DECISION OF HON'BLE AHMEDABAD IT.A.T., AND TREATING THE SALE PROCEEDS AS INCOME FROM CAPITAL GAIN. IT IS PERTINENT TO NOTE THAT O THER TWO SURVEY NUMBERS 314 AND 315 INVOLVED IN APPELLANT'S CASE ARE ADJACENT TO SURVEY NO. 313 REFERRED IN ABOVE CASE HENCE EVEN DISTANCE OF THESE TWO SURVEY NUMBERS CANNOT BE CONSIDERED TO BE WITHIN TWO KMS FROM SANAND MUNICIPAL LIMITS. FURTHER, I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 10 SURVEY N O. 327/1 INVOLVED IN PRESENT APPEAL IS SITUATED BETWEEN SURVEY NO. 313 AND 326 REFERRED IN ABOVE MENTIONED APPEAL ADJUDICATED BY HON'BLE AHMEDABAD ITAT, HENCE EVEN IN THAT CASE IT CANNOT BE HELD THAT SUCH LAND IS WITHIN TWO K MS FROM SANAND MUNICIPAL LIMITS . THE AO WHILE PASSING IMPUGNED ORDER HAS RELIED UPON EXTRA ORDINARY GAZETTE NOTIFICATION AND ARGUED THAT DISTANCE SHOULD BE CALCULATED FROM ALL THE DIRECTIONS FROM THE MUNICIPAL LIMITS OF SANAND AND NOT FROM T HE APPROACH ROAD. IT IS PERTINENT TO NOTE THAT ABOVE NOTIFICATION WAS ALSO CONSIDERED AT PAGE 2 OF ORDER OF HON'BLE AHMEDABAD I.T.A.T., AND IT IS PERTINENT TO NOTE THAT CIT (APPEALS) IN APPELLANT'S CO - OWNER'S CASE HAS HELD THAT DISTANCE IS MEASURED BETWEEN MUNICIPAL LIMITS OF SANAND AND LAND SITUATED THROUGH APPROACH ROAD AND THIS METHOD IS ALREADY APPROVED BY HON'BLE AHMEDABAD I.T.A.T., REFERRED SUPRA RELYING UPON SETTLED LEGAL LAW DISCUSSED THEREIN AND EVEN THE CIT (APPEALS) HAS NOT MEASURED THE DISTANCES FROM APPROACH ROAD BUT MEASURED IT FROM MUNIC IPAL LIMITS OF SANAND THROUGH APPROACH ROAD. WHILE PASSING THE IMPUGNED ASSESSMENT ORDER THE AO HAS ALSO RELIED UPON CERTIFICATE OBTAINED FROM SNAND NAGAR PALIKA AND THE CERTIFICATE STATES THAT SURVEY NUMBERS ARE WITHIN TWO KILOMETERS FROM THE BOUNDARY OF SANAND NAGAR PALIKA BUT HOW THE DISTANCE HAS BEEN COMPUTED IS NOWHERE MENTIONED IN THE SAID CERTIFICATE AND OPPORTUNITY TO REMAIN PRESENT BEFORE SAID AUTHORITY WAS ALSO NOT PROVIDED BY THE AO. THE AO HAS ALSO RELIED UPON CERTIFICATE ISSUED BY TALATI OF SOY LA GRAM PANCHAYAT WHICH IS OBTAINED ON 19 TH MARCH, 20,14 I.E. THE END OF ASSESSMENT YEAR AND EVEN IN THIS CASE PERSONAL ATTENDANCE OR OPPORTUNITY OF BEING HEARD BEFORE THE CONCERNED AUTHORITIES WAS NOT PROVIDED BY THE AO. IT IS PERTINENT TO NOTE THAT IN AP PELLANT'S CO - OWNER'S CASE, CIT (APPEALS) HAS DECIDED IN FAVOUR OF THE ASSESSEE AFTER MAKING PERSONAL VISIT, AFTER OBTAINING REMAND REPORT FROM CONCERNED AO WHEREIN HE HAS ALSO CONFIRMED THE DISTANCE THROUGH APPROACH ROAD AS BEYOND TWO KILOMETERS AS WELL AS CONSIDERING THE STATEMENT OF TALATI, WHICH IS MORE RELEVANT FOR ISSUE INVOLVED IN PRESENT* CASE. THUS, CONSIDERING HOLISTICALLY, THE LAND INVOLVED IN PRESENT CASE ARE BEY OND TWO KILOMETERS FROM SANAND MUNICIPAL LIMITS AS HELD BY HON'BLE I.T.A.T., IN THE C ASE OF APPELLANT'S CO - OWNER ALONG WITH THE FACT THAT OTHER THREE LAN DS ARE ALSO ADJACENT TO TWO LAN DS DISCUSSED IN ABOVE ORDER OF I.T.A.T., AND DISCUSSION MADE HEREIN ABOVE, IT IS HELD THAT AO IS NOT JUSTIFIED IN TREATING THE ABOVE LANDS AS SITUATED WITHI N TWO KILOMETERS FROM MUNICIPALS LIMITS OF SANAND. CONSEQUENTLY, ADDITION FOR LONG TERM CAPITAL IS DIRECTED TO BE DELETED. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING WRITTEN SUBM ISSION MADE BEFORE THE ASSESSING OFFICER AND LD. CIT(A) AND COPY OF ITAT ORDER OF ASHBEN LALBUBHAI DESAI ETC. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL HAS CONTENDED THAT ISSUE INVOLVED IS COVERED BY THE RECENTLY ISSUED CIRCULAR OF CBDT NO. 17/2015 (F. NO. I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 11 279/MISC/140/2015 ITJ DATED 6 TH OCTOBER, 2015 WHEREBY THE CBDT HAS ACCEPTED THAT T HE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE AGRICULTURAL LAND IS T O BE MEASURED HAVING REGARD TO T H E SHORTEST ROAD DISTANCE IN RESPECT OF PERIOD PRI OR TO PERIOD ASSESSMENT YEAR 2014 - 15. IT WAS ALSO MENTIONED IN THE CIRCULAR IN THE LIGHT OF JUDICIAL DECISION S ON THE SUBJECT CONSEQUENTLY IT IS DECI DED THAT BEING A SETTLED ISSUE NO APPEAL MAY HENCEFORTH BE FILED BY THE OFFICERS OF THE DEPARTMENT AND APP EAL ALREADY FILED IF ANY ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. IT WAS FURTHER CONTENDED THAT IN THE ASSESSEE S CASE ISSUE INVOLVED IS THE MEASUREMENT OF DISTANCE BETWEEN THE MUNICIPAL LIMIT AND AGRICULTURAL LAND IS IN RELATION TO ASSESSMENT YEAR 2009 - 10 BEING SETTLED ISSUE HAVING REGARD TO THE AFORESAID CIRCULAR ISSUED BY CBDT , THEREFORE, THIS APPEAL OF T HE REVENUE LIED BEFORE THE ITAT HAS ITSELF BECOME INFRUCTUOUS. HE HAS ALSO FILED COPY OF RELEVANT DOCUMENTS I. E. APPLICATION ON 30 TH DECEMBER, 2012 , RECORD OF PROCEEDINGS FOR MEASUREMENT OF DISTANCE BY ITO, IN THE PRESENCE OF TALATI COM MANTRA, ENGLISH TRANSLATION OF STATEMENT ON OATH BY THE ITO IN THE CASE OF THE ASH A BEN LALBUBHAI DESAI ETC . ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE RELIED ON THE ORDER OF ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSEE WAS HAVING JOINT OWNERSHIP OF PROPERTY WITH SMT. ASHABEN DESAI WITH SHAREHOLDING OF 50% E ACH IN RESPECT OF THE LAND BEARING SURVEY NO. 313 AND 326 IN SAYALA VILLAGE. THE ASSESS MENT U/S.143(3) OF THE ACT IN THE CASE OF SMT. ASHABEN I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 12 LALABHAI D E SAI WAS FINALIZED ON 29 - 12 - 2011 AND SHORTER TERM CAPITAL GAIN OF RS. 4,32,93,560/ - WAS DETERMINED FOR WHICH SUBSTANTIVE ADDITION OF RS . 21646780/ - WAS MADE IN T HE CASE OF THE SMT. ASHABEN LAL UBHAI DESAI AND AL S O PROTECTIVE ADDITION FOR S. 2164678/ - BEING THE SHARE OF LALUBHAI L . DESAI WAS A DDED PROTECTIVELY IN THE CASE OF THE SMT. ASHABEN DESAI. TH E LD. C IT(A) HAS D E LETED BOTH THE ADDITIONS SUBSTAN T I VE AND PROTECTIVE IN THE CAS E OF SMT . ASHABEN DESAI ON THE GROUND THAT DISTAN C E OF BOTH TH E LANDS FROM SANAND MUNIC I PAL LIMIT W A S MORE THAN TWO KILOMETERS BY APPROACH ROAD THEREFORE THE LANDS WERE NOT C OVERED U /S. 2(14)(III)(B) OF THE ACT AS CAPITAL ASSE T S. THE I T AT D B E N CH, AHD HAS DISMISSED THE APPEAL OF THE REVENUE BY SUSTAINING THE FINDINGS OF THE LD. CIT(A). IN THE CASE OF THE ASSESSEE, THE ASSESSING OFFICER HELD THAT AREAS UP TO A DISTANCE OF 02 KMS FRO M THE MUNICIPAL LIMIT IN ALL DIRECTIONS OF SANAND TO BE SPECIFIED FOR THE PURPOSE OF THE PROVISIONS OF SECTION 2(14)(III)(B) AD PROVISIONS OF B TO SECTION 2(1A) OF THE ACT. HE HAS FURTHER STATED THAT IN TH E CASE OF SMT. ASHABEN L. DESAI FOR ASSESSMENT YEA R 2009 - 10 ALL THE CALCULATIONS OF DISTANCE WAS MADE FROM THE APPROACH ROAD BUT NOT FROM THE BOUNDARY OF SANAND NAGARPALIKA. THEREFORE, THE ASSESSING OFFICER HAS DETERMINED THE SHORT TERM CAPITAL GA IN IN THE CASE OF THE ASSESSE ON THE GROUND THAT DISTANCE SHOULD BE CALCULATED IN ALL DIRECTIONS FROM THE MUNICIPAL LIMITS OF SAN AN D AND NOT FROM APPROACH ROAD. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL CONTEND THAT ON THE SIMILAR FACTS IN THE CASE OF SMT ASHABEN L. DESAI , IT WAS HELD THAT THE DISTANCE T O BE MEASURED BETWEEN MUNICIPAL LIMITS OF SANAND AND LAND SITUATED THROUGH I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 13 APPROACH ROAD AND THE SAME WAS SUSTAINED BY THE ITAT AHMEDABAD. HE HAS ALSO REFERRED THAT THE CBDT, NEW DELHI HAS ISSUED A CIRCULAR NO. 17/2015 F NO. 279/MISC/1 40/2015 - ITJ DATED 06/10/2015 WHEREBY T H E CBDT HAS ACCEPTED THAT T HE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE AGRICULTURAL L AN D IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD DISTANCE IN RESPECT OF PERIOD PRIOR TO ASSESSMENT YEAR 2014 - 15. WE HAV E PERUSED THE AFORESAID CIRCULAR OF THE CBDT WHEREIN IT IS STA T ED THAT IN LIGHT OF THE DECISION OF THE NAGPUR BENCH OF THE HONBLE BOMBAY HIGH COURT VI D E ORDER D A TED 30 - 03 - 2015 IN ITA 151 OF 2013 IN THE CASE O F SMT. MALTIBAI R. KADU HAS HELD THAT T HE AMEND MENT PRESCRIBING DISTANCE TO BE MEASURED AERIALLY, APP L I ES PROSPECTIVELY I.E. IN RELATION TO ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENTLY ASSESSMENT YEARS FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2014 - 15 , THE H IGH C OURT HELD THAT T H E DISTANCE BETWEEN THE MUNICI PAL LIMIT AND AGRICULTURAL LAND IS TO BE MEASURED HAVING REGARD TO THE S HORTEST ROAD DISTANCE . AFTER CONSIDERING THE ABOVE FACTS, LEGAL FINDINGS AND THE DECISION OF T HE CO - ORDINATE BENCH ITAT AHMEDABAD IN THE CASE OF SMT. ASHABEN L. DESAI, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LD. CIT(A). THEREFORE, THE APPEAL OF THE R EVENUE IS DISMISSED . 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 12 - 01 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AM ARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 12 /01/2018 I.T.A NO. 2430 /AHD/20 15 A.Y. 2009 - 10 PAGE NO ITO VS. SHRI LALBHAI SUKHABHAI DESAI 14 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,