Shri Bipinbhai Bhimjibhai Patel, Bhavnagar V. The Income Tax Officer, Ward-2(3), Bhavnagar

ITA 30/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1451 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Competent authority
• Section: 54B; 50C; 2(14)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.30/AHD/2016 / ASSTT. YEAR: 2011-2012 SHRI BIPINBHAI BHI M JIBHAI PATEL NR.BRAHMANI MAA TEMPLE ADHEWAD, BHAVNAGAR PAN : AGRPP 3160 F. VS ITO, WARD - 2(3) BHAVNAGAR. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.B. PARMAR, AR REVENUE BY : SHRI SANJAY KUMAR, SR.DR / DATE OF HEARING : 09/06/2016 / DATE OF PRONOUNCEMENT: 10/06/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-6, AHMEDABAD DATED 23.10.2015 PASSED FOR THE ASSTT.YEAR 2011- 12. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) R ULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. HIS GRI EVANCE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.9,70,671 /- AND DISALLOWANCE OF RS.46,512/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO GOT INFO RMATION THAT THE ASSESSEE HAS SOLD AGRICULTURE LAND FOR A CONSIDERATION OF RS .12 LAKHS VIDE SALE DEED DATED 8.11.2010 AND PAID STAMP DUTY AT THE RATE OF 4.9%. HOWEVER, IT CAME TO THE NOTICE OF AO THAT FOR THE PURPOSE OF STAMP DUTY , THE TOTAL CONSIDERATION ITA NO.30/AHD/2016 2 WAS VALUED AT RS.27,37,800/-. THE LD.AO OBSERVED T HAT SECTION 50C OF THE INCOME TAX ACT CONTEMPLATES THAT WHERE CONSIDERATIO N RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF ANY CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUT Y THEN THAT VALUE BE DEEMED AS FULL SALE CONSIDERATION. THUS, WITH THE HELP OF THIS, THE LD.AO SOUGHT TO MAKE ADDITION. THE ASSESSEE CONTENDED TH AT LAND SOLD BY THE ASSESSEE WAS AN AGRICULTURE LAND AND IT DOES NOT FA LL WITHIN THE DEFINITION OF CAPITAL ASSET GIVEN IN SECTION 2(14) OF THE ACT. ALTERNATIVELY, THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54B OF THE ACT. 4. BEFORE ME, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE ASSESSEE HAS PRODUCED A CERTIFICATE FROM SARPANCH OF VILLAGE, WHO HAS ALLEGED THAT THE LAND OF THE ASSESSEE WAS SITUATED BEYOND 8 KMS. FRO M THE CITY. THE LD.AO CALLED FOR CERTIFICATE FROM DY. EXECUTIVE ENGINEER, BHAVNAGAR, WHO HAS REPORTED GEOGRAPHICAL LOCATION OF THE LAND WITHIN 4 KMS. FROM THE MUNICIPAL LIMIT OF THE CITY. HE CONTENDED THAT DY. EXECUTIVE ENGINEER IS NOT COMPETENT AUTHORITY TO PROVIDE SUCH TYPE OF CERTIFICATE, THER EFORE, IT SHOULD NOT BE RELIED UPON. 5. ON OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. SECTION 2(14) OF THE INCOME TAX ACT HAS DIRECT B EARING ON THE CONTROVERSY. IT READS AS UNDER: (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND S ITUATE: (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOT IFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAN D; OR (B) IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIA LLY: ITA NO.30/AHD/2016 3 (I) NOT BEING MORE THAN TWO KILOMETRES, FROM THE LO CAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAS A POPULATION OF MORE THAN TEN THOUSAND BUT NOT EXCEEDING ONE LAKH; OR (II) NOT BEING MORE THAN SIX KILOMETRES, FROM THE L OCAL 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 KILOMETRES, FROM TH E LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHI CH 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 O F WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PRE VIOUS YEAR. 7. A BARE PERUSAL OF SECTION 2(14)(III) OF THE ACT IT WOULD REVEAL THAT IF AGRICULTURE LAND OWNED BY THE ASSESSEE WAS SITUATED BEYOND 8 KMS. FROM THE LOCAL LIMIT OF ANY MUNICIPAL OR CANTONMENT BOARD, T HEN, IT WOULD NOT INCLUDE IN THE DEFINITION OF CAPITAL ASSET, AND IF SUCH LAN D WAS SOLD, THEN NO CAPITAL GAIN WOULD ACCRUE TO THE ASSESSEE. THE DISPUTES RE LATE TO QUALITY OF EVIDENCE BROUGHT ON RECORD FOR DEMONSTRATING THE FACT THAT W HETHER IT WAS SITUATED WITHIN 8 KMS OR BEYOND 8 KMS. THE ASSESSEE IS HARB ORING UPON THE CERTIFICATE ISSUED BY MANTRI OF GAM I.E. SARPANCH , WHEREAS, THE AO IS HARPING UPON THE CERTIFICATE OF DY. EXECUTIVE ENGINEER. TO MY MIND, THE COMPETENT AUTHORITY FOR PROVIDING DEMARCATION OF A REVENUE ST ATE IS THE REVENUE OFFICER UNDER THE GUJARAT LAND REVENUE ACT. THE TALATI /ASSISTANT COLLECTOR (AGRICULTURE) WOULD BE A COMPETENT AUTHORITY TO ISS UE CERTIFICATE ON THE BASIS OF REVENUE RECORD MAINTAINED IN THEIR OFFICE EXHIBI TING THE DISTANCE OF A REVENUE STATE, VIS--VIS FROM A MUNICIPAL AREA. TH E DEPUTY EXECUTIVE ENGINEER CAN GIVE MEASUREMENT OF DISTANCE ON THE BA SIS OF DETAILS OF PWD ROADS AVAILABLE IN THEIR OFFICE. FACED WITH THIS S ITUATION, I SET ASIDE BOTH THE ORDER AND RESTORE THIS ISSUE TO THE FILE OF AO FOR RE-ADJUDICATION. THE LD.AO SHALL CALL FOR REPORT FROM THE REVENUE OFFICIAL OF THE STATE GOVERNMENT AND THEN APPRISE HIMSELF ABOUT THE EXACT DISTANCE BETWE EN THE REVENUE STATE ITA NO.30/AHD/2016 4 WHERE THE LAND OF THE ASSESSEE WAS SITUATED VIS--V IS MUNICIPAL LIMIT. AFTER ADJUDICATING THIS ISSUE, THE LD.AO, IF NEED ARISE, THEN ADJUDICATE ALL OTHER ISSUES IN ACCORDANCE WITH THE LAW. 8. THE OBSERVATIONS MADE BY ME WILL NOT IMPAIR OR I NJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 10 TH JUNE, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER