Gyanendra Tyagi, Faridabad V. DCIT, Central Circle, Noida

ITA 2583/DEL/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6920 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 24-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Capital asset; Business income; Principle of natural justice; Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Sh. Amit Shukla, Judicial Member Dr. B. R. R. Kumar, Accountant Member (Through Video Conferencing) ITA No. 2583/Del/2019 : Asstt. Year : 2014-15 Gyanendra Tyagi, C/o M/s RRA Taxindia, D-28, South Extension, Part-I, New Delhi-110049 Vs DCIT, Cental Circle, Noida (APPELLANT) (RESPONDENT) PAN No. ADUPT6282C Assessee by : Dr. Rakesh Gupta, Adv. Revenue by : Sh. Rajesh Kumar, Sr. DR Date of Hearing: 08.03.2022 Date of Pronouncement: 15.03.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of the ld. CIT(A)-IV, Kanpur dated 25.02.2019. 2. Following grounds have been raised by the assessee: “1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in holding the gain resulting from transfer of rural agricultural land as chargeable to tax and has further erred in bringing to tax a sum of Rs.14,20,800/- and that too as business income. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in not treating the subjected land as rural agricultural land ITA No. 2583/Del/2019 Gyanendra Tyagi 2 and has further erred to treat the gain as chargeable to tax and that too as business income and that too in violation of principles of natural justice. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B, 234C and 234D of Income Tax Act, 1961.” 3. During the Assessment Year 2014-15, the assessee sold a piece of land in joint name with Sh. Deepak Tyagi for Rs. 31,50,000/- in which the assessee's share was Rs. 28,00,000/-. In the return filed, the assessee has not shown and capital gain on the sale of the said property. Since, the assessee did not provide the cost of acquisition of the said land, in absence of the details of cost of acquisition, the entire amount of sale consideration is taken as short term capital gains by the Assessing Officer. Aggrieved the assessee filed appeal before the ld. CIT(A) and argued that the impugned land was indeed agricultural land and situated beyond 8 kilometers from the Municipal limits of Faridabad at the time of sale and hence it was not capital asset and therefore such sale did not given rise to any chargeable capital gain. In support of his contention, he submitted the distance certificate and copy of sale and purchase deed in respect of the impugned land. In the remand report, the AO submitted that the land was located in Terai Belt of Yamuna River on the side of Noida & Greater Noida. The entire landscape has been developed into Farm land interspersed with beautifully designed cottage with all modern amenities. M/s Dikkrish Builders Pvt. Ltd. has developed the farm Landscape in the name of “GREEN BEAUTY”. Its directors are Pradeep Tyagi and Dinesh Tyagi. Others are either family ITA No. 2583/Del/2019 Gyanendra Tyagi 3 members or closely related with the affairs of business of the company. The company is mainly engaged in the purchase of agricultural land and development into Farm land, Farm house and sale it to the customers. Roads, fencings and Electric polls are installed by the Company itself. 4. The ld. CIT(A) confirmed the addition made by the AO on the grounds that it is a settled proposition of law that mere fact of recording agricultural land in the revenue record would not be a conclusive proof to treat the alleged land as agricultural land and also owing to the nature of utilization, amenities like road, electric polls, cottage with fencings, the said land cannot be treated as agricultural land. 5. During the hearing before us, the ld. AR mainly submitted as under: i. The land in question was classified in the revenue record of Faridabad as agricultural land. ii. The land was actually used for agricultural purposes at the time of purchase and sale and the assessee had never changed its character from agricultural land to non-agricultural land. iii. The land in question is at a distance of more than 8 kms from Tehsil (Faridabad), which is evidenced from certificate issued by competent authority. iv. The notification SO No. 9447 dated 06.01.1994 of CBDT. v. Due to the change of course of River Yamuna, the land parcels have shifted between the States of U.P and Haryana. ITA No. 2583/Del/2019 Gyanendra Tyagi 4 We have gone through the facts of the case and find that the land is situated at Kidawali Tehsil, Faridabad. The Tehsil is situated partly in U.P and mostly in Faridabad. The Inspector report reveals that the land is located approximately 2 Kms from Noida Sector-135. The assessee submits that the land is 8 Kms from Faridabad and relied on the notification SO No. 9447 dated 06.01.1994 of CBDT. We find that the said notification has been amended vide proviso to Clause (II)(b) to Section 2(14)(II)(b): Urbanization of areas, wherein 8 Kms from Noida has been treated as Municipal limits for determination of urban areas. We also find that the NOIDA has been established under Uttar Pradesh Industrial Development Act, 1976 and the same has been covered by the notification of CBDT vide the notification mentioned above. 6. The Section 2(14)(iii) reads as under: “2(14)....... (iii) agricultural land in India, not being land situate— (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population58 of not less than ten thousand [***] ; or [(b) in any area within the distance, measured aerially,— (I) not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in ITA No. 2583/Del/2019 Gyanendra Tyagi 5 item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.—For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;]]” 7. Hence, in view of the peculiar facts of the case, the only proper course is to determine the distance as per the provisions of Section 2(14)(iii)(b) and hence we remit the matter back to the file of the AO to determine the exact distance taking into consideration the exact physical location of the land sold. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 15/03/2022. Sd/- Sd/- (Amit Shukla) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 15/03/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR