ITO-WARD-1(4), Nagpur V. SHRI WASUDEO GANPATRAO THUL, Nagpur

ITA 252/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1572 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Capital asset; Revised return
• Section: 143(3); 2(14)

Judgement Text

1 I TA NO. 252 /NA G/2014 IN TH E INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 2 52 /NAG/2014 ASSESSMENT YEAR: 2009 - 10 THE INCOME TAX OFFICER, WARD 1 (4), ROOM NO.504, 5 TH FLOOR, MECL BUILDING, SEMINARY HILLS, NAGPUR 440 006 VS SHRI WASUDEO GANPATRAO THUL, PLOT NO.4, GOPAL NAGAR, GORLE LAYOUT, NAGPUR, P AN: AAQPT6391K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI NARENDRA KANE, DR RESPONDENT BY SHRI MANOJ G. MORYANI, AR DATE OF HEARING: 19 - 10 - 2015 DATE OF PRONOUNCEMENT: 4/12 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE LEARNED CIT (A) - I, NAGPUR DATED 18 - 01 - 2014 . THE GROUNDS RAISED BY THE REVEN UE ARE REPRODUCED BELOW: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN HOLDING THAT FOR THE PURPOSE OF DISTANCE TO BE COMPUTED U/S. 2 (14) (III) (B) OF THE I. T. ACT, 1961, THE DISTANCE FROM THE LOCAL LIMIT OF ANY MUNICIPALIT Y LIMIT IS TO BE MEASURED BY ROAD AND NOT AERIALLY; 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN NOT CONSIDERING THE CERTIFICATE ISSUED BY THE ASSTT. DIRECTOR, TOWN PLANNING, NAGPUR WHICH INDICATED THAT DISTANCE OF THE AGRICUL TURAL LAND SOLD BY THE ASSESSEE FROM MUNICIPAL LIMITS OF NAGPUR WAS 3.5 KMS . MEASURED AERIALLY AND ALSO FURTHER ERRED IN RELYING ON THE CERTIFICATE OF THE SARPANCH OF THE GRAM PANCHAYAT INDICATING THAT THE DISTANCE OF THE LAND FROM THE MUNICIPAL LIMITS WAS 17 KMS; 2 I TA NO. 252 /NA G/2014 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN NOT CONSIDERING THE CONTENTS OF THE NEW SECTION 2 (14) (III) (B) INTRODUCED BY THE FINANCE ACT, 2013 W. E. F. 01.04.2014 WHICH STIPULATED THAT THE DISTANCE WAS TO BE MEASUR ED AERIALLY AND THIS AMENDMENT BEING PROCEDURAL AND CLARIFICATORY IN NATURE CLARIFYING THE LEGISLATIVE INTENTION, WAS APPLICABLE RETROSPECTIVELY SINCE INCEPTION; 2 . FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) OF THE IT ACT DATED 14 - 12 - 2011 WERE THAT DURING THE RELEVANT FINANCIAL YEAR THE ASSESSEE HAD SOLD AN AGRICULTURAL LAND JOINTLY WITH FOUR OTHERS FOR A TOTAL CONSIDERATION OF RS.2,37,00,000/ - . THE ASSESSEE HAS RECEIVED HIS SHARE OF RS.59,25,000/ - . THE ASSESSEE HAS NOT OFFERED ANY CAPITAL GAINS IN RESPECT OF THE TRANSACTION OF SALE IN IMMOVABLE PROPERTY EITHER IN THE ORIGINAL RETURN OR IN THE REVISED RETURN. ON PERUSAL OF THE SALE DEED, THE AO FOUND THAT THE ASSESSEE HAS SOLD THE SAID PROPERTY FOR RS.2,37,00,000/ - A S AGAINST THE MARKET VALUE OF THE PROPERTY OF RS.1,05,21,000/ - . ON FURTHER ENQUIRIES, THE AO GATHERED THAT THE LAND IN QUESTION SOLD BY THE ASSESSEE WAS LOCATED WITHIN THE RADIUS OF 8 KMS., FROM THE MUNICIPAL LIMITS OF NAGPUR CITY. THE AO THEREFORE, HAS WR ITTEN A LETTER TO THE ASST. DIRECTOR, TOWN PLANNING, NAGPUR TO ASCERTAIN THE AERIAL DISTANCE OF THE SAID PROPERTY FROM THE NEAREST OCTROI NAKA OF NAGPUR MUNICIPAL CORPORATION. THE ASST. DIRECTOR, TOWN PLANNING, NAGPUR INFORMED THE AO THAT THE SA ID LAND WAS LOCATED AT 3.5 KMS. FROM THE MUNICIPAL LIMITS OF NAGPUR CITY. THE AO THUS, FOUND THAT T H E LAND SOLD BY THE ASSESSEE WAS SITUATED WITHIN 8 KMS. OF MUNICIPAL LIMITS OF NAGPUR CITY. THEREFORE, THE LAND IN QUESTION IS A CAPITAL ASSET WITHIN THE MEANING OF SEC . 2(14) OF THE IT ACT, 1961 AND ACCORDINGLY THE AO CHARGED THE CAPITAL GAIN ON THE SAME. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE LEARNED CIT (A) HAS EXAMINED THE FACTUAL AS WELL AS LEGAL ASPECT IN DETAIL AND THEREAFTER HEL D THAT THE LAND IN QUESTION WAS AN AGRICULTURAL LAND WHICH WAS SITUATED BEYOND 8 KMS . OF MUNICIPAL LIMITS, HENCE, COULD NOT BE RECORDED AS CAPITAL ASSET WITHIN THE MEANING OF SECTION 2 (14) OF THE IT ACT. THE LEARNED 3 I TA NO. 252 /NA G/2014 CIT (A) HAS APPRECIATED THE FACT THAT THE AO HAD ADOPTED THE AERIAL DISTANCE OF 3.5 KMS. HOWEVER, THE DISTANCE BY ROAD WAS 13 KMS. HE HAS ALSO APPRECIATED A CERTIFICATE FROM GRAM PANCHAYAT, PANJARI STATING THAT THE LAND IN QUESTION WAS AN AGRICULTURAL LAND WHICH WAS SITUATED AROUND 17 KMS . AW AY FROM THE MUNICIPAL LIM ITS OF NAGPUR CITY. AFTER CONSIDERING THIS ASPECT AND FOLLOWING FEW ORDERS OF THE HONBLE HIGH COURTS, THE VIEW TAKEN BY THE AO WAS REVERSED AND THE GROUNDS WERE ALLOWED. 4. WIT H THIS FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES. THE PAPER BOOK CONTAINED THE EXTRACT OF 7/12 DOCUMENT, COPY OF SALE DEED, A CERTIFICATE OF GRAM PANCHAYAT AND A COPY OF GOOGLE MAP TO ESTABLISH THE NATURE OF THE LAND AS WELL AS THE DISTANCE OF THE LAND. BEFORE US, A DECISION OF CIT VS SMT. DEBBIE ALEMAO, (2011) 331 ITR 59 HAS ALSO BEEN CITED. NOW, WE HAVE COME ACROSS WITH A CBDT INSTRUCTION DATED 06 TH OCTOBER, 2015 WHICH READS AS UNDER: - SUBJECT: - MEASUREMENT OF THE DISTANCE FOR THE PURPOSE OF SECTION 2(14)(III)(B) OF THE INCOME - TAX ACT FOR THE PE RIOD 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 ACT BASED, INTER - ALIA, ON ITS PROXIMITY TO A MUNICIPALITY OR CANTONMENT BOARD. THE METHOD OF MEASURING THE DISTANCE OF THE SAID LAND FROM THE MUNICIPALITY, HAS GIVEN RISE TO CONSIDERABLE LITIGATION. ALTHOUGH, THE AMENDMENT BY THE FINANCE ACT, 2013 W. E. F. 1.04.2014 PRESCRIBES THE MEASUREMENT OF THE DISTANCE TO BE TAKEN AERIALLY, AMBIGUITY PERSISTS IN RESPE CT OF EARLIER PERIODS. 2. THE MATTER HAS BEEN EXAMINED IN LIGHT OF JUDICIAL DECISIONS ON THE SUBJECT. THE NAGPUR BENCH OF THE HON. BOMBAY HIGH COURT VIDE ORDER DATED 30.03.2015 IN ITA 151 OF 2013 IN THE CASE OF SMT. MALTIBAI R. KADU HAS BEEN HELD THAT TH E AMENDMENT PRESCRIBING DISTANCE TO BE MEASURED AERIALLY, APPLIES PROSPECTIVELY I.E. IN RELATION TO ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENT ASSESSMENT YEARS. FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2014 - 15, THE HIGH COURT HELD THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE AGRICULTURAL LAND IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD DISTANCE. THE SAID DECISION OF THE HIGH COURT HAS 4 I TA NO. 252 /NA G/2014 BEEN ACCEPTED AND THE AFORESAID DISPUTED ISSUE HAS NOT BEEN FURTHER CONTESTED. 3. BEING A SETTLED ISSUE, NO AP PEALS MAY HENCEFORTH BE FILED ON THIS GROUND BY THE OFFICERS OF THE DEPARTMENT AND APPEALS ALREADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY BE WITHDRAWN/NOR PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 5 . IN TH E LIGHT OF THE ABOVE CBDT INSTRUCTION AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT (A) HAS RIGHTLY APPRECIATED THE FACTS OF THE CASE AS WELL AS THE APPLICABLE LAW AND THEREUPON CORRECTLY ALLO WED THE CLAIM OF THE ASSESSEE. AS A RESULT, WE FIND NO FORCE IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE AND THE SAME ARE HEREBY DISMISSED. 6 . IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF DE CEMBER , 2015. SD/ - SD/ - (SHAMIM YAHYA) (MU KUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 4 TH DECEMBER , 2015. LAKSHMIKANT DEKA/SR. PS 5 I TA NO. 252 /NA G/2014 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOM E TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 02.12.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 02.12.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 3 .12.2015 SR.PS 6. DATE OF PRONOUNCEMENT 04.12.2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 04.12.2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK