The ACIT- 1(2), Bhopal V. M/s. Fortune Builders, Bhopal

ITA 254/IND/2013

• Counselvise Citation: 25422714 RSA 2013
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRUDULA BAJPAI
• Assessee Lawyers: S S SHEETAL
• Keywords: Capital asset; Competent authority; Onus to prove
• Section: 54B; 2(14); 80IB; 11

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 245/IND/2013 A.Y.2008-09 ACIT CIRCLE 2(1) INDORE :: APPELLANT VS SATISH SHUKLA INDORE PAN AGTPS 5418D :: RESPONDENT ITA NO. 246/IND/2013 A.Y.2008-09 ACIT CIRCLE 2(1) INDORE :: APPELLANT VS RAKESH SHUKLA INDORE PAN AUIPS-4837R :: RESPONDENT CO NO. 69/IND/2013 (ARISING OUT OF ITA NO. 246/IND/2013) A.Y.2008-09 RAKESH SHUKLA INDORE PAN AGTPS 5418D :: APPELLANT VS ITO WARD 2(3) INDORE :: RESPONDENT 2 DEPTT BY SMT. MRUDULA BAJPAI ASSESSEE BY SHRI S.S. SHEETAL DATE OF HEARING 23.9.2013 DATE OF PRONOUNCEMENT 23.09.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER BOTH THESE APPEALS ARE BY THE REVENUE FOR THE A.Y . 2008-09 CHALLENGING THE IMPUGNED ORDER DATED 10 TH JANUARY, 2013 OF THE LEARNED FIRST APPELLATE AUTHORITY. THE ASSESSEE (S HRI RAKESH SHUKLA) HAS ALSO PREFERRED CROSS OBJECTION (CO NO. 69/IND/2013). WE WOULD LIKE TO DEAL WITH THE DEPARTMENTS APPEALS FIRST WHEREIN THE IDENTICAL GROUND RAISED IS WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN LAW IN PLACING RELIANCE UPON THE DECIS ION IN THE CASE OF ASHOK SHUKLA WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT HOLDING THAT THE DISTANCE HAS TO BE MEASURED AS PER THE ROAD DISTANCE AND NOT AS PER STRAIGHT LINE METHOD FOR TH E PURPOSES OF SECTION 2(14)(III) OF THE ACT IGNORING THE REPORT O F TEHSILDAR AND INSPECTOR AND THE METHOD PRESCRIBED UNDER THE PROVI SIONS OF SECTION 11 OF THE GENERAL CLAUSES ACT, 1897. 2. DURING HEARING, WE HAVE HEARD SMT. MRUDULA BAJPA I, LEARNED CIT DR, WHO REPRESENTED THE DEPARTMENT SUPP ORTING THE ASSESSMENT ORDER. ON THE OTHER HAND, IN THE CASE O F SHRI SATISH 3 SHUKLA, SHRI S.S. SHEETAL, LEARNED ADVOCATE, APPEAR ED WHEREAS NOBODY REPRESENTED SHRI RAKESH SHUKLA IN SPITE OF S ERVICE OF NOTICE. MR. SHEETAL POINTED OUT THAT THE IMPUGNED I SSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE TRIBUNAL ON IDENTICAL ISSUE WHICH IS ARISING OUT OF THE SALE OF THE SAME PROPERTY BEING THE CO-OWNERS. THE LEARNED COUNSEL PLACED ON RECORD THE COPY OF THE ORDER OF THE TRIBUNAL DATED 31.8.2012 IN THE CASE OF ITO VS. ASHOK SHUKLA (ITA NO. 207/IND/2 012). THE ASSERTION MADE BY THE LEARNED COUNSEL WAS NOT CONTR OVERTED BY THE REVENUE BEING A MATTER OF RECORD. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. SO FAR AS THE NON-AP PEARANCE IN THE CASE OF SHRI RAKSH SHUKLA, IN SPITE OF SERVICE OF NOTICE, IS CONCERNED, THEREFORE, WE HAVE NO OPTION BUT TO PROC EED EX PARTE QUA THIS ASSESSEE AND TEND TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND MORE SPECIFICAL LY WHEN THE FACTS ARE IDENTICAL AND ARE OOZING OUT FROM THE SAM E TRANSACTION, BEING CO-OWNER. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE AFORESAID ORDER DATED 31. 8.2012 FOR READY REFERENCE :- 4 THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 31.1.2012 BROADLY ON THE GROUND THAT ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED FIRST APPELL ATE AUTHORITY ERRED IN TREATING THE LAND SOLD AS AGRICULTURAL LAN D WHEN THE ASSESSEE FAILED TO SUBSTANTIATE THAT ANY AGRICULTUR AL ACTIVITY WAS CARRIED OUT ON THE SAID LAND AND FURTHER ERRED IN HOLDING THAT THE LAND SOLD WAS BEYOND 8 KMS FROM THE MUNICI PAL LIMIT. 2. DURING HEARING, WE HAVE HEARD SHRI KESHAVE SAXEN A, LD. CIT/DR AND SHRI S.S. SHEETAL, LEARNED COUNSEL FOR T HE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE RE VENUE IS IDENTICAL TO THE GROUND RAISED BY FURTHER SUBMITTIN G THAT FIRSTLY THE ASSESSEE HAS TO PROVE THAT ANY AGRICULTURAL OPE RATION WAS DONE BY THE ASSESSEE AS THE ASSESSEE HIMSELF 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 LAND FROM THE MUNICIPAL LIMIT . A PLEA WAS ALSO RAISED THAT THE LAND WAS SOLD TO DEVELOPER. OU R ATTENTION AS INVITED TO VARIOUS PAGES OF THE PAPER BOOK. RELI ANCE WAS PLACED ON THE DECISION IN 138 ITR 245 (GUJ), 136 IT R 621 (GUJ), 185 ITR 318 (KER.), 220 ITR 43 (SC) AND 176 ITR 523 (BOM). 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 WAS EXPLAINED THAT ON E OF THE BROTHERS WAS CARRYING OUT AGRICULTURAL OPERATION AN D IT IS NOT NECESSARY THAT EVERY BROTHER WILL TILT THE LAND HIM SELF. A PLEA WAS ALSO RAISED 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 LEA RNED COUNSEL TOOK US TO VARIOUS PAGES OF THE PAPER BOOK THROUGH WHICH HE TRIED TO EXPLAIN THAT THE LAND IN QUESTION IS SITUATED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT. RELIANCE WA S ALSO PLACED UPON THE DECISION OF THE TRIBUNAL IN ITA NO. 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 PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN ADVOCATE PRACTISING IN HIGH COURT 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 LAN D BY CLAIMING THE SAME TO BE AGRICULTURAL LAND SITUATED IN THE REVENUE RECORD OF VILLAGE LASUDIA PARMAR (TEH. SANV ER) BEARING KHASRA NO. 184, ETC. THE STAMP DUTY AND REGISTRATIO N FEES WERE BORNE BY THE PURCHASER AND THE SALE CONSIDERATION A MOUNTING TO RS.1,29,21,582/- WAS RECEIVED THROUGH CHEQUE. THE ASSESSING OFFICER CONCLUDED THAT THE IMPUGNED LAND IS SITUATE D WITHIN 8 5 KMS FROM THE MUNICIPAL LIMIT AND THEN MENTIONED THE PROVISIONS OF SECTION 10(37) OF THE IT ACT WHICH ARE APPLICABL E IN THE CASE OF COMPULSORY ACQUISITION, THEREFORE, IS NOT APPLIC ABLE TO THE FACTS OF THE CASE AS THE LAND WAS SOLD BY PRIVATE D EAL AND NO EXEMPTION U/S 54B OF THE ACT WAS CLAIMED. SO FAR AS THE ARGUMENT OF THE LEARNED CIT DR AND OBSERVATION OF T HE ASSESSING OFFICER THAT SINCE THE LAND WAS NOT CULTI VATED BY THE ASSESSEE HIMSELF AND WAS CARRIED ON BY THE BROTHER, THEREFORE, IT CANNOT BE TREATED AS AGRICULTURAL LAND. WE ARE N OT ABSOLUTELY CONVINCED BY THIS ARGUMENT/OBSERVATION BECAUSE THER E IS NO REQUIREMENT IN ANY ACT MORE ESPECIALLY THE INCOME T AX ACT THAT ONLY THE SELF CULTIVATED LAND WILL BE TREATED AS AG RICULTURAL LAND. THE TEHSILDAR IS THE CONCERNED REVENUE OFFICER WHO ON THE BASIS INFORMATION/REPORT OF REVENUE PATWARI ISSUES A CERT IFICATE. SINCE THE BROTHER OF THE ASSESSEE WAS DOING AGRICUL TURAL OPERATION, THEREFORE, ANY INCOME DERIVED OUT OF IT WILL BE TREATED AS AGRICULTURAL INCOME. EVEN IF LESS INCOME HAS BE EN SHOWN, THE ASSESSEE CANNOT BE DENIED THE CHARACTER OF AGRI CULTURAL INCOME. 4. SO FAR AS THE QUESTION OF DISTANCE FROM MUNICIPA L LIMIT 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 THE LAND IS SITUATED 9.7 KMS BY ROAD FROM THE MUNICIPAL LIMIT BY A STRAI GHT DISTANCE METHOD. THE MAP OF THE LAND (PAGE 10) WAS PREPARED BY THE INCOME TAX INSPECTOR HIMSELF, THEREFORE, DISREGARD TO SUCH DOCUMENT IS NOT JUSTIFIED. A CERTIFICATE HAS BEEN ISSUED BY THE EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT (PAGE 1 1 OF THE PAPER BOOK) WHEREIN IT HAS BEEN SPECIFICALLY MENTIO NED THAT THE IMPUGNED LAND IS 9.6 KMS FROM THE MUNICIPAL LIMIT. THE LAND REVENUE OFFICER (TEHSILDAR) HAD ALSO MENTIONED THE SURVEY NO. 95 AREA 4.22 ACRE, SURVEY NO. 96/1 AREA 1.20 ACRE A ND HAS MENTIONED THAT THE LAND IN QUESTION IS ABOUT 10 KMS FROM THE MUNICIPAL LIMIT AND THE POPULATION OF THE VILLAGE I S ABOUT 2000 PERSONS. THE ASSESSEE HAS ALSO PRODUCED A CERTIFI CATE FROM THE LAND SURVEYOR (PAGE 14) WHEREIN IT HAS BEEN MENTION ED THAT THE IMPUGNED LAND IS SITUATED AT 9.09 KMS FROM THE MUNI CIPAL LIMIT. THE ASSESSEE HAS ALSO PLACED ON RECORD THE GOOGLE M AP (PAGE 13). ALL THESE CERTIFICATES CLEARLY SAY THAT THE IM PUGNED LAND IS SITUATED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT, THE REFORE, AS PER SECTION 2(14)(III) OF THE ACT, THE IMPUGNED AGR ICULTURAL LAND IS SITUATED IN THE REVENUE RECORD OF VILLAGE LASUDIA P ARMAR WHOSE POPULATION IS ABOUT 2000 PEOPLE WHICH IS LESS THAN THE CONDITION MENTIONED IN SECTION 2(14)(III)(A) OF THE ACT. SO FAR AS THE CONDITION MENTIONED IN SUB-CLAUSE (B) OF THE AF ORESAID SECTION IS CONCERNED, FROM RECORD IT IS CLEAR THAT THE IMPUGNED LAND IS BEYOND THE PRESCRIBED LIMIT OF 8 KMS FROM T HE MUNICIPAL LIMIT. FROM THIS ANGLE ALSO, THERE IS NO MISTAKE IN THE CONCLUSION 6 DRAWN IN THE IMPUGNED ORDER. WE FURTHER FIND THAT SOME CASES LIKE LAUKIK DEVELOPERS; 303 ITR (AT) 356 HAVE BEEN RELIED UPON IN THE IMPUGNED ORDER/ASSESSMENT ORDER WHEREIN THE ISSUE WAS EXAMINED WITH RESPECT TO SECTION 80IB OF THE AC T WHEREAS THE ISSUE BEFORE US PERTAINS TO SECTION 2(14) WITH RESPECT TO AGRICULTURAL INCOME, THEREFORE, NOT APPLICABLE TO T HE FACTS OF THE PRESENT CASE. THE LEARNED CIT DR PLACED RELIANCE ON THE DECISIO N OF THE HONBLE GUJARAT HIGH COURT IN BALKRISHNA HARIBALLAB HADAS VS. CIT; 138 ITR 245. WE FIND THAT IN THAT CASE, THE L AND WAS SITUATED WITHIN MUNICIPAL LIMITS OF AHMEDABAD AND T HE SURROUNDING LAND WAS DEVELOPED AND SINCE THE LAND W AS NOT AGRICULTURAL LAND, THE GAINS FROM SALE OF SUCH LAND WAS HELD TO BE EXIGIBLE TO CAPITAL GAINS TAX. HOWEVER, THE LAN D IN QUESTION IS CLEARLY AGRICULTURAL LAND SITUATED BEYOND 9 KMS FROM THE MUNICIPAL LIMIT, THEREFORE, THIS CASE MAY NOT HELP THE REVENUE, MORESO ONE FACT PERTINENT TO MENTION HERE THAT PART OF THE SAME LAND, OWNED BY ONE OF THE BROTHERS, WAS TREATED AS AGRICULTURAL LAND, THEREFORE, IT IS QUITE UNJUSTIFIED TO TREAT P ART OF THE SAME LAND/CHUNK TO BE NON-AGRICULTURAL. ANOTHER CASE RE LIED UPON IS FROM HONBLE BOMBAY HIGH COURT IN FAZALBHOY INV. CO MPANY PVT. LTD.; 176 ITR 523 WHEREIN THERE WAS NO EVIDENC E SHOWING THAT NO AGRICULTURAL OPERATIONS WERE CARRIED OUT ON THE LAND. THE HONBLE COURT HELD THAT LAND WAS NOT AGRICULTUR AL. HOWEVER, IN THE IMPUGNED LAND, AGRICULTURAL OPERATI ON WAS DONE BY ONE OF THE BROTHERS, THEREFORE, WITH UTMOST REGARD, THIS JUDICIAL PRONOUNCEMENT MAY NOT HELP THE REVENUE. AN OTHER DECISION RELIED ON IS CIT VS. GEMINI PICTURES CIRCU IT PRIVATE LIMITED; 220 ITR 43 (SC). THE LAND WAS SITUATED IN MOST IMPORTANT BUSINESS CENTRE OF A CITY AND WAS ENTERED IN THE MUNICIPAL RECORD AS URBAN LAND AND TAX WAS PAID THE REON. PART OF THE LAND WAS USED FOR CONSTRUCTION OF NON-RESIDE NTIAL BUILDING. IN THAT SITUATION, PROFIT ON SALE OF SUC H LAND WAS HELD TO BE EXIGIBLE TO CAPITAL GAINS. HOWEVER, IN THE IM PUGNED CASE, THE FACTS ARE ALTOGETHER DIFFERENT, THEREFORE, MAY NOT HELP THE REVENUE. A DECISION FROM HONBLE KERALA HIGH COURT IN KALPETTA ESTATES LTD. VS.CIT; 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 TRANS FER AND FOREST LANDS WERE ACQUIRED WITH THE INTENTION OF EXTENDING PLANTATION. SINCE NO AGRICULTURAL OPERATION WAS CARRIED OUT, IT WAS HELD THAT IT GIVES RISE TO CAPITAL GAIN ON THE SALE OF SUCH L AND. IN THE CASE OF SARIFA BIBI MOHD. IBRAHIM; 136 ITR 621 (GUJ) THE LAND WAS SITUATED NEAR RAILWAY STATION AND WAS SOLD ON SQUAR E YARD BASIS TO HOUSING SOCIETY. THE PROFIT FROM THE SALE OF SUCH LAND WAS HELD TO BE ASSESSABLE TO CAPITAL GAINS TAX. KEE PING IN VIEW THE LOCATION AND OTHER ATTENDANT CIRCUMSTANCES, IT WAS HELD TO BE ASSESSABLE TO CAPITAL GAINS TAX. 7 5. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON T HE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. SMT. D EBBIE ALENAO AND JOAQUIML ALENAO; (2011) 331 ITR 59 (BOM) WHEREIN THE LAND, IN QUESTION, WAS SHOWN IN THE REVENUE REC ORD AS AGRICULTURAL LAND AND NO PERMISSION WAS TAKEN FOR C ONVERSION OF LAND USE. IT WAS HELD THAT SINCE NO AGRICULTURAL I NCOME WAS SHOWN IN THE RETURN IS NOT THE MATERIAL FOR THE PUR POSES OF GAINS FROM SALE OF SUCH LAND. IT IS PERTINENT TO MENTION HERE THAT THIS CASE ALSO PERTAINS 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 DISC USSED HEREINABOVE AND THE INTENTION OF THE LEGISLATURE AL ONG WITH RELEVANT SECTIONS, WE ARE OF THE CONSIDERED OPINION THAT A PARTICULAR LAND IS AGRICULTURAL LAND OR NOT DEPENDS UPON SO MANY FACTORS. ANY AGRICULTURAL INCOME DERIVED FROM AGRICULTURAL OPERATIONS WILL QUALIFY FOR AGRICULTURAL INCOME. S O FAR AS CAPITAL GAINS ON THE SALE OF SUCH LAND IS CONCERNED, IT ALS O 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 CL EAR FACT IS OOZING OUT THAT THE IMPUGNED LAND IS SITUATED BEYON D THE PRESCRIBED LIMIT 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 OPINI ON THAT THE NO CAPITAL GAINS TAX IS EXIGIBLE ON SALE OF SUCH LAND. SO FAR AS THE OBJECTION OF THE LEARNED CIT DR THAT THE TEHSILDAR IS NOT A COMPETENT AUTHORITY FOR MEASURING THE DISTANCE, WE ARE NOT SATISFIED WITH SUCH SUBMISSION ESPECIALLY WHEN THE INSPECTOR OF THE DEPARTMENT OF INCOME TAX AND TEHSILDAR BOTH HAV E CERTIFIED THAT THE LAND IS SITUATED BEYOND 8 KMS FROM THE MUN ICIPAL LIMIT. WE ARE OF THE CONSIDERED OPINION THAT TEHSILDAR IS THE MOST COMPETENT REVENUE OFFICER TO CERTIFY THE PROOF OF A GRICULTURAL OPERATION, DISTANCE OF LAND FROM A PARTICULAR PLACE , RATE OF LAND, ETC. OUR VIEW IS FURTHER FORTIFIED BY THE DECISION FROM HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. LALSINGH & O THERS; 228 CTR 575. SO FAR AS THE ISSUE OF MEASURING THE LAND THROUGH STRAIGHT METHOD/AERIAL METHOD IS CONCERNED, WE ARE OF THE VIEW THAT FOR MEASURING THE LAND WE ARE SUPPOSE D TO GO BY THE ROAD, THEREFORE, ROAD DISTANCE IS THE MOST APPR OPRIATE METHOD AND NOT THE CROWS FLIES I.E. STRAIGHT LINE DISTANCE. THIS VIEW IS FURTHER SUPPORTED BY THE DECISION IN LAUKIK DEVELOPERS; 303 ITR 356 (MUM) AND THE DECISION FROM HONBLE PUN JAB & HARYANA HIGH COURT IN CIT VS. SATINDER PAL SINGH ( 2010) 229 CTR 82. THE HONBLE COURT HELD AS UNDER :- 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 MUNICIP AL COMMITTEE OR CANTONMENT BOARD, ETC. THE NOTIFICATI ON 8 HAS TO TAKE INTO ACCOUNT THE EXTENT OF AND SCOPE FO R URBANISATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS. THE RECKONING OF URBANISATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICA NCE 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 IS CONSIDERED STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGH T THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT 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 PUNJ AB, AT ITEM NO. 18 THE SUB-DIVISION KHANNA HAS BEEN LIS TED 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 OTHER THAN AGRICULTUR AL LAND. ONCE THE STATUTORY GUIDANCE OF TAKING INTO AC COUNT THE EXTENT AND SCOPE OF URBANISATION OF THE AREA HA S TO BE RECKONED WHILE ISSUING ANY SUCH NOTIFICATION THE N 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 PLANES OR AS PER CROWS FLIGHT BECAUSE ANY MEASUREMENT BY CROWS FLI GHT IS BOUND TO IGNORE THE URBANISATION WHICH HAS TAKEN PLACE. TRIBUNAL WAS THEREFORE JUSTIFIED IN HOLDING THAT DISTANCE OF 2 KMS FROM THE MUNICIPAL LIMITS OF CITY OF KHANNA HAS TO BE RECKONED FOR THE PURPOSES OF S. 2(14)(III) BY MEASURING THE SAME AS PER THE ROAD DISTANCE AND NOT AS PER STRAIGHT LINE DISTANCE ON A HORIZONTAL PLANE OR AS PER CROWS FLIGHT LAUKIK DEVELOPERS V. DY. CIT (2007) 108 TTJ (MUMBAI) 364 : (2007) 105 ITD 657 (MUMBAI) APPROVED. THE ABOVE CONCLUSION BY THE HONBLE HIGH COURT CLEA RLY SUPPORTS THE CASE OF THE ASSESSEE. IN THE CASE OF LALSINGH & OTHERS (SUPRA) THE HONBLE HIGH COURT CONCLUDED THA T THE REPORT OF THE TEHSILDAR HAVING CERTIFIED THAT THE A SSESSEES LAND WAS 8 KMS AWAY FROM THE MUNICIPAL LIMIT, THE LAND C ONSTITUTED AGRICULTURAL LAND ENTITLING THE ASSESSEE TO EXEMPTI ON U/S 54B OF THE ACT. 7. IF THE ASSESSMENT ORDER IS ANALYSED, WE ARE OF T HE VIEW THAT THE LEARNED ASSESSING OFFICER IS MORE GUIDED B Y SECTION 45 OF THE ACT WHICH SPEAKS ABOUT CAPITAL GAINS ARISING FROM THE TRANSFER OF CAPITAL ASSET. SECTION 54B OF THE ACT S PEAKS ABOUT NON-CHARGING OF GAINS OF THE CASES WHERE THERE IS A TRANSFER OF LAND USED FOR AGRICULTURAL PURPOSES. AN AMENDMENT WAS 9 EFFECTED WITH EFFECT FROM 1.4.1970 SO AS TO INCLUDE LANDS SITUATED IN CERTAIN SPECIFIED AREAS WITHIN THE AMBI T OF NON- AGRICULTURAL LAND. HOWEVER, BURDEN IS ON THE ASSES SEE TO PROVE THAT THE LAND IS AGRICULTURAL LAND AND AT THE SAME TIME, ONUS IS ON THE DEPARTMENT TO PROVE THAT THE LAND IS NON-AGR ICULTURAL OR IT FORMS PART OF BUSINESS ASSET. FOR THE PURPOSES OF LAND BEING AGRICULTURAL LAND, ACTUAL AGRICULTURAL OPERATION OR CULTIVATION OR TILTING OF LAND IS ALWAYS NOT NECESSARY. WHAT IS T O BE SEEN IS WHETHER SUCH LAND IS CAPABLE OF AGRICULTURAL OPERAT ION BEING CARRIED ON. OUR VIEW IS FORTIFIED BY HONBLE CALCU TTA HIGH COURT BORHAT TEA COM. LTD.; 138 ITR 783. THE CORRECT TEST THAT HAS TO BE APPLIED IS WHETHER ON THE DATE OF SALE, THE LAND WAS AGRICULTURAL LAND OR NOT, WHETHER LAND USE WAS CHAN GED OR NOT. JUST BECAUSE AFTER THE SALE, THE PURCHASER WAS GOIN G TO PUT THE LAND TO NON-AGRICULTURAL USE, IT DOES NOT MEAN THAT ON THE DATE OF SALE THE LAND HAS CEASED TO BE AGRICULTURAL LAND . IF IN THE REVENUE RECORD, THE PARTICULAR LAND IS RECORDED AS AGRICULTURAL LAND AND TILL THE DATE OF SALE, IT IS EXPLOITED AS AGRICULTURAL LAND AND THE OWNER OF THE LAND HAS NOT TAKEN ANY STEP TO INDICATE HIS INTENTION TO EXPLOIT THE LAND FOR NON-AGRICULTU RAL PURPOSES THEN SUCH LAND TO BE REGARDED AS AGRICULTURAL LAND. THE PURPOSE FOR 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 ARRANGE MENT AND ITS LAND USE WAS CHANGED BEFORE THE SALE THEN THE S ITUATION MAY BE DIFFERENT. WHETHER THE LAND IS AN AGRICULTU RAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FACT. A CLOSE REA DING OF SECTION 2(14)(III)(A) SEEMS TO SUGGEST THAT IT IS THE POPUL ATION OF THE MUNICIPALITY THAT HAS TO BE TAKEN INTO ACCOUNT AND NOT THE POPULATION OF ANY AREA WITHIN THE MUNICIPALITY. IT MAY BE THAT A MUNICIPALITY MAY COMPRISE OF MANY VILLAGES, WARDS A ND STREET AND EACH ASSESSEE MAY CLAIM THAT THE LIMIT OF POPUL ATION IS PROVIDED WITH REFERENCE TO A PLACE, WARD OR STREET. IN SUCH AN EVENT, THE SECTION WILL HAVE NO UNIFORM APPLICATION AND WILL LEAD TO MANY ANOMALIES. PANCHAYAT IS DIFFERENT FROM MUNI CIPALITY. MUNICIPALITY IS ALWAYS UNDERSTOOD DIFFERENTLY FROM PANCHAYAT, THEREFORE, THE LAND SITUATED BEYOND PRESCRIBED MUNI CIPAL LIMIT AND IS RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORD IS TO BE CONSIDERED AS AGRICULTURAL LAND UNTIL PROVED OTH ERWISE. ADMITTEDLY, THE TERM CAPITAL ASSET HAS AN ALL EMB RACING CONNOTATION AND INCLUDES EVERY KIND OF PROPERTY AS GENERALLY UNDERSTOOD EXCEPT THOSE ARE EXPRESSLY EXCLUDED FROM THE DEFINITION. IT IS EXACTLY THE CASE HERE BECAUSE SE CTION 2(14)(III) EXPRESSLY DEFINES AGRICULTURAL LAND WITH REGARD TO ITS LOCATION AND DISTANCE FROM THE MUNICIPAL LIMIT. IT SEEMS THA T THE LEARNED ASSESSING OFFICER HAS NOT EXAMINED THE DOCUMENTS PR ODUCED BY THE ASSESSEE ESTABLISHING THE DISTANCE OF LAND BEYO ND PRESCRIBED MUNICIPAL LIMIT AND MORE SPECIFICALLY WH EN KHASRA NUMBER, ETC. HAS BEEN DULY MENTIONED IN THE REPORT OF 10 TEHSILDAR. SO FAR AS THE ARGUMENT OF THE LEARNED CI T DR THAT THE LAND WAS SOLD AT A SUBSTANTIAL AMOUNT IS NOT THE RE LEVANT FACTOR TO PROVE THAT IT WAS NON-AGRICULTURAL LAND BECAUSE IT DEPENDS UPON SO MANY FACTORS. EVEN IN THE GROUNDS OF APPEAL , THE REVENUE HAS RAISED A GROUND THAT THE DOCUMENTARY EV IDENCES PRODUCED BY THE ASSESSEE BELONG TO THE LAND OF SHRI RAKESH SHUKLA, BROTHER OF THE ASSESSEE. WE ARE NOT CONVINC ED WITH THIS ARGUMENT ALSO BECAUSE THE TOTAL LAND IS ADJOINING T O EACH OTHER AND IS FROM ONE CHUNK. THIS CLAIM OF THE REVENUE RA THER SUPPORTS THE CASE OF THE ASSESSEE. AS MENTIONED EAR LIER, IN THE CASE OF ONE OF THE BROTHERS, IT HAS BEEN ALLOWED AS AGRICULTURAL LAND, THEREFORE, NO DIFFERENT YARD STICK CAN BE ADO PTED IN THE CASE OF ANOTHER BROTHER, BEING THE LAND IS PART OF THE SAME CHUNK. THE TOTALITY OF FACTS CLEARLY LEADS TO THE C ONCLUSION, UNDER THE FACTS NARRATED HEREINABOVE, THAT THE IMPU GNED LAND IS AGRICULTURAL LAND, THEREFORE, THE STAND OF THE L EARNED CIT(A) IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NOT M ERIT, THEREFORE, DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.8.2012 . 4. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, CONCLUSION DRAWN IN THE IMPUGNED ORDER, ASSERTION M ADE BY THE LEARNED RESPECTIVE COUNSEL AND THE ORDER OF THE TRIBUNAL ARE KEPT IN JUXTAPOSITION AND ANALYSED, WE FIND THAT IN THE AFORESAID ORDER DATED 31.8.2012, AN ELA BORATE DISCUSSION HAS BEEN MADE BY THE TRIBUNAL WHILE COMI NG TO A PARTICULAR CONCLUSION ON IDENTICAL FACTS. WE FURTHER NOTE THAT THE IMPUGNED ISSUE IS THE OFF-SHOOT OF TH E SALE DEED EXECUTED ON 15 TH DAY OF NOVEMBER, 2007 AT INDORE IN WHICH SHRI RAKESH SHUKLA, SHRI ASHISH SHUKLA, SH RI 11 SUMIT SHUKLA, SHRI SATISH SHUKLA AND SHRI ASHOK SHUKLA ARE THE VENDORS. THE SAID SALE DEED (PAGES 4 TO 16 OF THE PAPER BOOK) WAS EXECUTED IN FAVOUR OF M/S FETISH REALTORS PVT. LTD. THE TRIBUNAL DECIDED THE ISSUE IN THE CASE OF SHRI ASHOK SHUKLA, WHO IS ONE OF THE VENDORS. SINCE THE FACTS ARE IDENTICAL AND OOZING OUT OF THE SAME SALE DEED/TRANSACTION, THEREFORE, THE AFOR ESAID DECISION OF THE TRIBUNAL WILL BE APPLICABLE TO THE OTHER VENDORS I.E. THE PRESENT ASSESSEES ALSO MORE SPECIF ICALLY WHEN NO CONTRARY FACTS/DECISIONS WERE BROUGHT TO OU R NOTICE. IN THE ABSENCE OF ANY CONTRARY FACTS OR JUD ICIAL PRONOUNCEMENTS, WE FIND NO MERIT IN THE APPEALS OF THE REVENUE AND DISMISS THE SAME. 5. SO FAR AS THE CROSS OBJECTION (CO NO. 69/IND/201 3) IN THE CASE OF SHRI RAKESH SHUKLA IS CONCERNED, IT IS MERELY IN SUPPORT OF THE ORDER OF THE LEARNED CIT( A). SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE, IT 12 HAS REMAINED FOR ACADEMIC INTEREST ONLY AND DISMISS ED AS SUCH. FINALLY, THE APPEALS OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 23.9.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 23.9.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-2323 13