Appeal Details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 5147 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-09-2021
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2013-2014
Appeal Filed On
28-09-2018
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ ITA NO.2807/CHNY/2018 /ASSESSMENT YEAR: 2013-14 DR. M. SENTHILVELAN, NO.14, BIG DEVANGAR STREET, BHUVANAGIRI, CUDDALORE 608 601. [PAN: AEFPS 9669N] VS. THE ASST. COMMISSIONER OF INCOME TAX, CUDDALORE CIRCLE, CUDDALORE. ( /APPELLANT) ( &'( /RESPONDENT) ( / APPELLANT BY : MR. R. VIJAYARAGHAVAN, ADVOCATE &'( /RESPONDENT BY : MRS. R. ANITA, ADDL. CIT /DATE OF HEARING : 26.08.2021 / DATE OF PRONOUNCEMENT : 24.09.2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), P UDUCHERRY IN I.T.A NO.74/CIT(A)-PDY/2016-17 DATED 29.06.2018 REL EVANT TO THE ASSESSMENT YEAR 2013-14. I.T.A NO.2807/CHNY/2018 :- 2 -: 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE, A DOCTOR BY PROFESSION AND WORKING AS PROFESSOR IN ANNAMALAI UN IVERSITY, ADMITTED INCOME FROM SALARY AND PROFESSION. HE ALSO ADMITTE D INCOME FROM REAL ESTATE BUSINESS AND INTEREST INCOME RECEIVED FROM H IS BANK ACCOUNTS. DURING THE FINANCIAL YEAR 2012-13, THE ASSESSEE CON VERTED 7.49 ACRES OF LAND AT R.S NO.62/2, 64/1,2, 65/3,4, 66/3, 66/4, 110/34, 110/33, 110/4, 110/5 SITUATED AT MELBHUVANGIRI AND KEEZHBUV ANAGIRI INTO SALEABLE PLOTS (STOCK-IN-TRADE). THE ASSESSEE SOLD SOME PLOTS MEASURING 57345 SQ. FT. FOR RS. 57,34,500/- AND DEC LARED INCOME AT RS. 4,77,965/- ON PRESUMPTIVE BASIS U/S. 44AD. IN THE ASSESSMENT ORDER, THE A.O HAS NOTED THAT THE ASSESSEE HAS CONVERTED T HE CAPITAL ASSET INTO STOCK-IN-TRADE AS PER THE PROVISIONS OF S. 45( 2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER AS THE ACT), PROFITS OR GA INS ARISING FROM THE TRANSFER OF CAPITAL ASSET OR ITS TREATMENT BY THE A SSESSEE AS A STOCK-IN- TRADE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERS ION OR TREATMENT IS DEEMED AS A TRANSFER OF CAPITAL ASSET AND ATTRACTS CAPITAL GAIN PROVISIONS. THE SAME WAS POINTED OUT TO THE ASSESS EE, IN REPLY THE ASSESSEE HAS SUBMITTED BY A LETTER DATED 26.12.2015 THAT THE LANDS AT KEEZHBUVANGIRI AND MELBHUVANAGIRI ARE AGRICULTURAL LANDS TILL THE DATE OF CONVERSION INTO SALEABLE PLOTS. THE ASSESSEE ALSO STATED THAT THE LANDS ARE LOCATED MORE THAN 8 KM FROM THE NEAREST CHIDAMB ARAM MUNICIPALITY AND THUS, HE SATISFIED THE REQUIREMENT FOR BEING AGRICULTURAL I.T.A NO.2807/CHNY/2018 :- 3 -: LAND AS IT IS LOCATED BEYOND THE SPECIFIED LIMIT HE NCE, HE DID NOT ADMIT CAPITAL GAIN TAX ON CONVERSION. THE A.O WAS DEPUTED INSPECTOR TO MAKE AN ENQUIRY IN RESPECT OF DISTANCE OF THE LAND. THE ENQUIRY OFFICER SUBMITTED A REPORT, WHICH IS EXTRACTED AS UNDER: 'AS DIRECTED BY THE ACIT, CUDDALORE CIRCLE, CUDDALO RE, ! WENT TO BHUVANA&RI TO VERIFY THE DISTANCE OF LANDS OWNED BY THE ABOVE ASSESSEE FROM THE NEAREST MUNICIPALITY. SINCE, CHIDAMBARAM MUNICIPALITY WAS THE NEAREST MUNICIPALITY; / OBTAINED A MAP OF CHIDAMBARAM MUNICIPALITY FROM THE MUNICIPALITY OFFICE AND ASCERTAINED THE MUNICIPAL L IMIT OF. I MEASURED THE DISTANCE OF THE ASSESSEE'S LAND AT KEEZHBHUVANASIRI AND MELBHUVANASIRI (AT R.S. NO.6 2/2, 64/1,2, 65/3,4, 66/3, 6614, 110/34, 110/33, 110/4, 11 0/5), BY CAR, FROM THE MUNICIPAL LIMIT OF THE CHIDAMBARAM MUNICIPALITY . THE ODOMETER OF THE CAR SHOWED THE DISTANCE AS_6.7 KM. I ALSO MA DE SURE THAT THE DISTANCE MEASURED WAS THE SHORTEST ROAD DISTANCE WI TH THE HELP_OF_GOOGGLE_MAP. THE GOOGLE MAP ALSO SHOWED THE DISTANCE AS 6.7 KM. A COPY OF SCREEN SHOT OF GOOGLE MAP IS E NCLOSED FOR ACIT'S KIND PERUSAL.' 3. THE A.O AFTER CONSIDERING REPORT GIVEN BY THE I NSPECTOR, HE HAS NOTED THAT THE LAND IS SITUATED WITHIN 6.7 KM OF TH E MUNICIPALITY AND THEREFORE, THE CLAIM OF THE ASSESSEE IS THAT IT IS ABOVE 8 K.M WAS REJECTED. THE ASSESSEE HAS FILED A CERTIFICATE FROM THE TEHSILDAR. ACCORDING TO THE CERTIFICATE ISSUED BY THE TEHSILDA R, THE LAND IS SITUATED AT ABOUT 8.5 KM FROM THE NEAREST CHIDAMBARAM MUNICI PALITY. THE A.O HAS CONSIDERED THE CERTIFICATE AND HE HAS OBSERVED THAT AS PER THE REPORT GIVEN BY THE INCOME TAX INSPECTOR AS PER PRO VISIONS OF S. 2(14)(III) OF THE ACT THAT THE DISTANCE MEASURED WA S THE SHORTEST ROAD DISTANCE FROM THE MUNICIPAL LIMIT OF NEAREST CHIDAM BARAM MUNICIPALITY I.T.A NO.2807/CHNY/2018 :- 4 -: AND ALSO THE GOOGLE MAP CONFIRMED THE DISTANCE IS 6 .7 K.M. HENCE, THE CERTIFICATE ISSUED BY THE TEHSILDAR IS NOT ENTE RTAINED FOR THE PURPOSE OF CAPITAL GAINS. HE ALSO CONSIDERED THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.17/2015, FOR THE PERIOD PRIOR TO ASSESS MENT YEAR 2014-15, THE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE LA ND UNDER DISPUTE IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD D ISTANCE. THE ASSESSEE ALSO NOT FILED ANY DETAILS CARRYING OUT AN Y AGRICULTURAL ACTIVITIES FROM THE LAND. ACCORDINGLY, THE A.O HAS DECIDED THAT THE ASSESSEE HAS TO PAY CAPITAL GAIN TAX AS PER THE PRO VISIONS OF S. 45(2) OF THE ACT AND CALCULATED THE CAPITAL GAINS. THE ASSE SSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND THE LD. CIT(A) CON FIRMED THE MATTER OF THE A.O. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LAND WHICH IS IN DISPUTE IS AGRICULTURAL LAND A ND IT IS AWAY FROM THE LOCAL MUNICIPALITY I.E., CHIDAMBARAM MUNICIPALITY W HICH IS 8.5 KM AWAY. HE ALSO FILED A CERTIFICATE ISSUED BY THE TEHSILDAR TO THAT EFFECT AND SUBMITTED THAT THIS LAND IS AN AGRICULTURAL LAND TH EREFORE, THE PROVISIONS OF S. 45(2) OF THE ACT HAS NO APPLICATION. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT THE ASSESSEE HAS NOT PROVED ANY EVID ENCE THAT THE LAND IS AN AGRICULTURAL LAND AND THE CERTIFICATE ISSUED BY THE TEHSILDAR THAT I.T.A NO.2807/CHNY/2018 :- 5 -: THE DISTANCE FROM THE MUNICIPALITY I.E., 8.5 K.M IS NO BASIS AND THEREFORE, HE HAS STRONGLY SUPPORTED THE ORDERS PAS SED BY THE A.O AS WELL AS LD. CIT(A). 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE A SSESSEE HAS TO PAY CAPITAL GAINS TO THE DISPUTED CONVERSION OF LAND IN TO STOCK-IN-TRADE. ACCORDING TO THE A.O, THE ASSESSEE CONVERTED A LAND WHICH IS STOCK-IN- TRADE AND SOLD THE PLOTS. ACCORDING TO THE A.O, TH E LAND SOLD BY THE ASSESSEE ATTRACTS THE PROVISIONS OF THE CAPITAL GAI NS HENCE CAPITAL GAINS HAVE TO BE TAXED. THE CASE OF THE ASSESSEE IS THAT THE LAND WHICH IS CONVERTED BY THE ASSESSEE WHICH IS 8.5 K.M AWAY FRO M THE CHIDAMBARAM MUNICIPALITY AND THEREFORE, HE DOES NOT COME TO THE AMBIT OF S. 45(2) OF THE ACT. HE FURTHER SUBMITTED THAT THE LAND IS AN AGRICULTURE LAND. THE ASSESSEE HAS NOT PROVED ANY E VIDENCE THAT THE LAND IS AN AGRICULTURAL LAND. SO FAR AS THE DISTANC E IS CONCERNED, THE A.O HAS DEPUTED THE INSPECTOR TO ASCERTAIN THE DIST ANCE FROM THE MUNICIPALITY LIMIT AND ACCORDINGLY, THE A.O HAS INS PECTED AND SUBMITTED A REPORT THAT AS PER THE ODOMETER OF THE CAR SHOWED THE DISTANCE AS 6.7 K.M AND EVEN ACCORDING TO THE GOOGLE MAP ALSO THE D ISTANCE IS 6.7 K.M. BY CONSIDERING THE REPORT GIVEN BY THE INSPEC TOR, THE A.O CAME TO I.T.A NO.2807/CHNY/2018 :- 6 -: THE CONCLUSION THAT THE DISTANCE IS 6.7 K.M THEREFO RE, THE ASSESSEE CLAIM IS NOT CORRECT. IN SO FAR AS THE CERTIFICATE ISSUED BY THE TEHSILDAR IS CONCERNED WHICH IS AT PAGE NO.1A OF THE PAPER BO OK, IT DOES NOT SHOW THAT FROM THE CHIDAMBARAM HOW IT COMES TO 8.5 K.M AND APART FROM THAT IN OUR VIEW THE TEHSILDAR IS NOT A COMPET ENT PERSON TO DECIDE THE DISTANCE. THEREFORE, WE ARE OF THE OPINION THAT THE CERTIFICATE ISSUED BY THE TEHSILDAR IS NOT A MATERIAL TO BE CONSIDERED THE DISTANCE. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE A .O HAS RIGHTLY TAXED THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AND THE SAME IS CONFIRMED BY THE LD. CIT(A). WE FIND NO INFIRMITY TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). HENCE, THE APPEAL F ILED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 24 TH SEPTEMBER, 2021 IN CHENNAI. SD/ - SD/ - ( ) (G. MANJUNATHA) /ACCOUNTANT MEMBER ( ) (V. DURGA RAO) /JUDICIAL MEMBER /CHENNAI, /DATED: 24 TH SEPTEMBER, 2021 . EDN/- /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF
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