ITO-WARD-6(1), Nagpur V. SHRI VASANT K. ASHTANKAR, Nagpur

ITA 277/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1631 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: HARISH BHONEJA
• Keywords: Capital asset; Business income
• Section: 11

Judgement Text

1 ITA NOS. 277 & 264/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO.277/NAG/2014 ASSESSMENT YEAR : 2009 10. THE INCOME TAX OFFICER, SHRI VASANT K. ASHTANKAR WARD 6(1), NAGPUR. V/S. SIRASPETH, TELIPURA, NAGPUR. PAN ALWPA 6426F. APPELLANT RESPONDENT. I.T. A. NO.264/N AG/2014 ASSESSMENT YEAR : 2009 10. THE INCOME TAX OFFICER, SHRI SURENDRA K. ASHTANKAR, WARD 7(1), NAGPUR. V/S. PLOT NO. 86, NEAR SUTGIRNI, BHAGIRATHA PARK, WANADONGARI, HINGNA, DIST. NAGPUR. PAN ASEPA 9522B APPELLANT RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI HARISH BHONEJA. DATE OF H EARING : 03 09 - 2015. DATE OF PRONOUNCEMENT : 3 0 T H OCT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED CIT(APPEALS) DATED 26 02 2014 AND 28 02 2 014 AND PERTAIN TO 2 ITA NOS. 277 & 264/NAG/2014. ASSESSMENT YEAR 2009 10. SINCE THE ISSUES ARE COMMON, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE FACTS IN BOTH THE CASES ARE IDENTICAL AND IN ITA NO. 264/NAG/2014 LEARNED CIT(APPEALS) HAS FOL LOWED HIS ORDER IN CONNECTION WITH THE CASE OF VASANT K. ASHTANKAR AS IN ITA NO. 277/NAG/2014 ABOVE. HENCE WE ARE DEALING WITH THIS ISSUE BY REFERRING THE FACTS AND FIGURES OF ITA NO. 277/NAG/2014. THE GROUND OF APPEAL READS AS UNDER : WHETHER ON THE FAC TS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) IS CORRECT IN LAW IN HOLDING THAT FOR CONSIDERING THE DISTANCE FROM MUNICIPAL LIMITS FOR THE CATEGORIZATION OF AN AGRICULTURAL LAND AS CAPITAL ASSET IN THE NATURE WITH RESPECT TO THE DEFINITION UNDER S EC. 2(14)(III)(B) OF THE INCOME TAX ACT, THE DISTANCE OF 8 KMS SHOULD BE MEASURED BY APPROACH ROAD AND NOT BY STRAIGHT LINE / CROW FLIGHT DISTANCE METHOD? 3. AT THE OUTSET IN THIS CASE THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE IN THIS CASE HAS BEEN SQUARELY ANSWERED AGAINST THE REVENUE BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. NITISH RAMCHANDRA CHORDIA 374 ITR531. LEARNED COUNSEL SUBMITTED THAT HONBLE HIGH COURT HAS CLEARLY HELD THAT BEFOR E AMENDMENT WITH EFFECT FROM 1 ST APRIL 2014 MEASUREMENT WAS TO BE DONE BY THE ROAD DISTANCE AND NOT BY CROW FLIGHT OR STRAIGHT LINE METHOD . HENCE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. 4. PER CONTRA LEARNED D.R. REFERRED TO NOTIFICATION NO. [SO 9447] (FILE NO. 164/3/87 ITA.I), DATED 6 1 1994. BY REFERRING TO THE AFORESAID NOTIFICATION LEARN ED D.R. TRIED TO SUBMIT THAT AE RAIL DISTANCE SHOULD BE CONSIDERED AND NOT 3 ITA NOS. 277 & 264/NAG/2014. THROUGH ROAD DISTANCE. HENC E LEARNED D.R. PLEADED THAT IN VIEW OF THE ABOVE SAID NOTIFICATION THERE IS CLEARLY AN ERROR IN THE ORDER OF LEARNED CIT(APPEALS) AS HE HAS NOT CONSIDERED THE SAME. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. NITISH RAMCHANDRA CHORDIA 374 ITR531 HAS HELD AS UNDER : H ELD , DISMISSING THE APPEALS, (I) THAT THE AMENDMENT IN THE TAXING STATUTE, UNLESS A DIFFERENT LEGISLATIVE INTENTION IS C LEARLY EXPRESSED, SHALL OPERATE PROSPECTIVELY. IF THE ASSESSEE HAS EARNED BUSINESS INCOME AND NOT THE AGRICULTURAL INCOME, SECTION 11 OF THE GENERAL CLAUSES ACT, 1897, WILL PREVAIL UNLESS A DIFFERENT INTENTION APPEARS TO THE CONTRARY. THE RELEVANT AMENDMEN T PRESCRI B ING THAT THE DISTANCE TO BE COUNTED MUST BE AERIAL CAME INTO FORCE WITH EFFECT FROM A PRIL 1, 2014. THE NEED FOR THE AMENDMENT ITSELF SHOWED THAT IN ORDER TO AVOID ANY CONFUSION, THE EXERCISE BECAME NECESSARY. THIS EXERCISE TO CLEAR THE CONFUSION, THEREFORE, SHOWED THAT THE BENEFIT THEREOF MUST BE GIVEN TO THE ASSESSEE. IN SUCH MATTERS, WHEN THERE IS ANY DOUBT OR CONFUSION, THE VIEW IN FAVOUR OF THE ASSESSEE NEEDS TO BE ADOPTED. CIRCULAR NO. 3 OF 2014, DATED JANUARY 24, 2014, DEALING WITH APPLICAB ILITY EXPRESSLY STIPULATES THAT IT TAKES EFFECT FROM APRIL 1, 20114 AND, THEREFORE, PROSPECTIVELY APPLIES IN RELATION TO THE ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENT ASSESSMENT YEARS. HENCE, THE QUESTION WHETHER PRIOR TO THE ASSESSMENT YEAR 2014 - 15 THE AUTHO RITIES ERRED IN COMPUTING THE DISTANCE BY ROAD DID NOTA RISE AT ALL. FROM THE ABOVE EXPOSITION IT IS CLEAR THAT IN THE ASSESSMENT YEAR UNDER CONSIDERATION THE DISTANCE WAS TO BE MEASURED BY THE APPROACH ROAD DISTANCE AND NOT THE AERIAL DISTANCE. THE APP ROACH DISTANCE IS BEYOND 8 KMS. AS HAS BEEN FOUND BY THE LEARNED CIT(APPEALS) WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. 4 ITA NOS. 277 & 264/NAG/2014. IN SUCH SITUATION, IN OUR CONSIDERED OPINION, LEARNED COUNSEL OF THE ASSESSEE HAS RIGHTLY CONTENDED THAT THE ISSUE IS COVERED IN FAVO UR OF THE ASSESSEE. LEARNED D.RS RELIANCE ON THE NOTIFICATION MENTIONED ABOVE CANNOT HELP THE CASE OF THE REVENUE AS A PERUSAL OF THE SAID NOTIFICATION DOES NOT SHOW ANY CLEAR LIGHT THAT THE SAID NOTIFICATION MANDATED THAT THE AERIAL DISTANCE SHOULD BE P REFERRED OVER THE DISTANCE BY APPROACH ROAD. MORE OVER THE LIQUIDATOR IN ITS WISDOM HAS ITSELF THOUGHT IT PRUDENT TO AMEND THE PROVISIONS OF THE ACT WITH EFFECT FROM 1 ST APRIL, 2014 TO PROVIDE THAT AERIAL DISTANCE SHOULD BE TAKEN INTO ACCOUNT IN SUCH SITU ATION. HENCE ADMITTEDLY PRIOR TO THIS AMENDMENT, THE DISTANCE BY APPROACH ROAD WAS TO BE MEASURED AND AERIAL DISTANCE WAS NOT TO BE TAKEN INTO ACCOUNT. MOREOVER THIS NOTIFICATION CAN BY NO STRETCH OF IMAGINATION TAKE PR ECEDENCE OVER THE HONBLE JURISDICTIONAL HIGH COURT DECISION CITED ABOVE. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). HENCE THE GROUND RAISED BY THE REVENUE IS ANSWERED IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, THESE APPEALS F ILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCT ., 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 30 TH OCT ., 2015. 5 ITA NOS. 277 & 264/NAG/2014. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR