Income Tax Officer, Ward- 2, Margao V. Smt. Sherin Antao, Margao

ITA 385/PAN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79689 (ITAT-PANAJI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT K LD
• Assessee Lawyers: D E ROBINSON
• Keywords: Capital asset; Rule of consistency; Bonafide belief
• Section: 143(3); 2(14); 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO.384 /PNJ/2013 (ASSESSMENT YEAR - 2007 - 08) THE INCOME TAX OFFICER, WARD NO.2 , MARGAO . (APPELLANT) VS. SHRI ROY ANT A O OPP. SANTOSH GARAGE, NEAR ART ADS, VIDYANAGAR, MARGAO (RESPONDENT) PAN: AEAPA3194H CROSS OBJECTION NO . 06 /PNJ/2014 ARISING OUT OF ITA NO.384/PNJ/2013 SHRI ROY ANTAO OPP. SANTOSH GARAGE, NEAR ART ADS, VIDYANAGAR , MARGAO PAN: AEAPA3194H (OBJECTOR) VS. THE INCOME TAX OFFICER, WARD NO. 2 , MARGAO. (RESPONDENT) ITA NO. 385/PNJ/2013 (ASSESSMENT YEAR - 2007 - 08) THE INCOME TAX OFFICER, WARD NO. 2, MARGAO. (APPELLANT) VS. SMT. SHERINANTAO OPP. SANTOSH GARAGE, NEAR ART ADS, VIDYANAGAR, MARGAO (RESPONDENT) PAN: AEAPA3193A CROSS OBJECTION NO . 07 /PNJ/2014 ARISING OUT OF ITA NO.385 /PNJ/2013 (ASSESSMENT YEAR 2007 - 08) SMT. SHERINANTAO OPP. SANTOSH GARAGE, NEAR ART ADS, VIDYANAGAR, MARGAO (OBJECTOR) PAN: AEAPA3193A VS. THE INCOME TAX OFFICER, WARD NO. 2, MARGAO. (RESPONDENT) APPELLANT BY : SHRI NISHANT K. , LD. DR. RESPONDENT BY : SHRI D.E. ROBINSON , ADV. DATE OF HEARING : 0 3/07 /2014 DATE OF PRONOUNCEMENT : 18 /07/2014 2 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) O R D E R PER: D.T. GARASIA BOTH THESE APPEAL S HAVE BEEN FILED BY THE DEPARTMENT AGAINST THE ORDER O F CIT(A) - PANAJI, DATED 28.09.2013 FOR THE ASSESSMENT YEAR 2007 - 08, WHEREIN CIT(A) HAS DELETED THE PENALTY. THE CROSS OBJECTION S HA VE NOT BEEN PRESSED BY THE ASSESSEE. 2. THE GROUNDS ARE RAISED BY THE DEPARTMENT WHICH READ AS UNDER: 1. THE ORDER OF LD. COMMISSIONER OF INCOMETAX(APPEALS) IS OPPOSED TO LAW AND FACT OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS NOT APPRECIA TED THE FACT THAT MENSREA NOT ESSENTIAL FOR CIVIL LIABILITIES OF PENALTY - PENALTIES UNDER FISCAL STATUTES ARE FOR BREACH OF CIVIL LIABILITIES AS HELD BY THE SUPREME COURT IN THE CASE OF UNION OF INDIA VSDHARMENDRA TEXTILE PROCESSORS (SC) 306 ITR 277. THE D ECISION OF SUPREME COURT IN THE ABOVE CASE IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE. ACCORDINGLY THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S. 271(1)(C) LEVIED BY AO BY PLACING RELIANCE ON THE JUDGMENT OF THE MUMBAI BENCH IN CASE OF RADHASOA WAMI V. CIT(1992) 193 ITR 321. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE AND HIS WIFE SOLD JOINTLY OWNED AGRICULTURAL LAND SITUATE IN BATALBATIMSALCETE GOA, F OR A TOTAL CONSIDERATION OF RS. 1,73,85,000/ - . THE ASSESSEES WERE ADVISED THAT LAND SITUATED BEYOND 8 KM. FROM THE MUNICIPAL LIMITS OF MARGAO MUNICIPALITY WOULD NOT BE TREATED AS URBAN LAND AND CONSEQUENTLY ON SALE OF SAME, THERE WOULD BE NO LIABILITY TO CAPITAL GAINS TAX. THE ASSESSEE APPROACHED THE PANCHAYAT OF BETALBATIM WHO CERTIFIED THAT THE SAID LAND SOLD WAS BEYON D 8 KM. FROM MARGAO MUNICIPAL LIMITS. THE CONCERNED ENGINEER OF THE PWD ALSO CERTIFIED THAT THE LAND SOLD WAS BEYOND 8 K.M FROM THE MUNICIPAL LIMITS. THE RETURN S FILE D W ERE PROCESSED AND ASSESSEES CLAIM S W ERE REJECTED. TH E ASSESSEES ARE INDIVIDUALS AND THE RETURNS OF INCOME FOR THE SUBJECT ASSESSMENT YEAR WAS FILED ON 28.03.2008 DECLARING THE TOTAL INCOME OF RS.45,115/ - AND AGRICULTURAL INCOME OF RS.4,25,460/ - . THE ASSESSMENT WAS COMPLETED U/S. 143(3) MAKING THE ADDITION I N RESPECT OF SHORT TERM CAPITAL GAIN AMOUNTING TO RS.6,87,500/ - AND LONG TERM 3 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) CAPITAL GAIN AMOUNTING TO RS.55,58,525/. CONSEQUENTLY, ORDER U/S 155 WAS PASSED IN THE CASE OF THE ASSESSEES SINCE THE ASSESSES ARE GOVERNED BY PORTUGUESE CIVIL CODE. HENCE AS PE R THE PROVISION OF THE SECTION 5A OF THE INCOME TAX ACT 1961 THE INCOME WAS APPORTIONED EQUALLY BETWEEN THE HUSBAND AND THE WIFE. THE PENALTY PROCEEDINGS WERE INITIATED SEPARATELY AND NOTICED U/S. 274 R.W. SECTION 271 WAS ISSUED ON 08.10.2009. THEREFORE, AS SESSEE S WENT IN APPEAL BEFORE CIT(A) AND BEFORE CIT(A) THE ASSESSEE S HA VE WITHDRAWN THE C L AIM OF AGRICULTURE INCOME. THE AO ISSUED A NOTICE A S THE AO WAS OF THE VIEW THAT ASSESSEE S HA D DECLARED THAT ALL THE PROPERTY SOLD IS AG RICULTURAL PROPERTY BEYOND 8 KM. FROM MUNICIPAL LIMITS WHE REAS IT IS ONLY FIVE KILOMETRES FROM THE MUNICIPAL LIMITS , THEREFORE, ASSESSEE S HAVE DELIBERATELY CONCEALED THE INCOME CHARGEABLE TO TAX AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE, PENALT Y U/S. 271(C) WAS LE VIED AT RS. 1 4,40,912/ - TO THE BOTH HUSBAND AND W IFE I.E., SRI ROY ANTAO AND SMT. SHERINANTAO. 4. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER: 9. DURING THE COURSE OF APPELLATE PROCEEDINGS, ON MERITS, THE LEARNED COUNSEL OF THE APPELLANT PLACED RELIANCE ON THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH IN THE CASE OF CIT - TI, LUDHIANA V/S SH. SATINDER PAL SINGH, IN ITA NO.646 OF 2009, DATE OF DECISION 07.01.2010. THE DECISION IN THE ABOVE MENTIONED CASE IS REPRODUCED AS UNDER: THIS ORDER SHALL DISPOSE OFF TWO APPEALS BEARING ITA NO. 646 AND 647 OF 2009 AS THE ISSUE RAISED IN BOTH THE APPEALS IS THE SAME. THE REVENUE HAS FILED THE INSTANT APPEALS UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 (FOR BREVITY THE ACT) IN RESPECT OF ASSESSMENT YEAR 200 1 - 02 CHALLENGING ORDER DATED 3 1.03.2009 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH (FOR BREVITY THE TRIBUNAL) IN IT A NO. 641 - CHD - 2004 ALONGWITH CROSS OBJECTION 38 CHANDI/2006. THE TRIBUNAL AFTER DEALING WITH VARIOUS ASPECTS OF THE MATTER HAS DISPOSED OF THE APPEAL FILED BY THE REVENUE ALONGWITH THE CROSS OBJECTION OF THE ASSESSEE - RESPONDENT. IN RESPECT OF THE QUESTION CONCERNING DISTANCE OF THE AGRICULTURAL LAND FROM THE MUNICIPAL LIMITS OF CITY OF KHANNA THE TRIBUNAL HAS DECIDED THE ISSUE HOLDING THE DISTANCE OF 2 KMS. FROM THE MUNICIPAL LIMITS OF CITY OF KHANNA HAS TO BE RECKONED FOR THE PURPOSES OF SECTION 2(14)(III ) OF THE ACT BY MEASURING THE 4 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) SAME AS PER THE ROAD DISTANCE AND NOT AS PER STRAIGHT LINE DISTANCE ON A HORIZONTAL PLANE OR AS PER CRO WS FLIGHT. AFTER HOLDING IN THE AFORESAID MANNER, THE TRIBUNAL HAS REMANDED THE MATTER TO THE ASSESSING OFFICER TO ASCERTA IN AS TO WHETHER THE AGRICULTURAL LAND IN QUESTION FALLS WITHIN THE DEFINITION OF CAPITAL ASSETS UNDER SECTION 2(14) OF THE ACT BY CONSIDERING THE DISTANCE IN TERMS OF THE APPROACH BY ROAD. THE REVENUE HAS CLAIMED THAT FOLLOWING THREE QUESTIONS OF LAW WOUL D ARISE FOR DETERMINATION OF THIS COURT: (1)WHETHER ON THE FACTS AND IN LAW, THE HONBLE ITAT WAS RIGHT IN LAW IN HOLDING THAT DISTANCE OF 2 KILOMETERS FOR THE PURPOSE OF SECTION 2(14)(III) OF THE INCOME TAX ACT, 1961 HAS TO BE TAKEN IN TERMS OF APPROACH BY ROAD AND NOT AS PER STRAIGHT LINE DISTANCE ON A HORIZONTAL PLANE; (2) WHETHER ON THE FACTS AND IN LAW, THE HONBLE ITAT WAS LEGALLY JUSTIFIED IN CONFIRMING THE ORDER OF CIT (A)IN DELETING ADDITION MADE BY THE A.O. ON ACCOUNT OF REPAYMENT OF LOAN TO CANA RA BANK FROM UNEXPLAINED SOURCES WHEN THE ASSESSEE FAILED TO ESTABLISH ANY NEXUS BETWEEN THE SALE OF HORSES AND THE AMOUNT OF REPAYMENT OF LOAN IN THE CANARA BANK; AND (3) WHETHER ON THE FACTS AND IN LAW, THE HONBLE ITAT WAS LEGALLY JUSTIFIED IN CONFIRMIN G THE ORDER OF CIT(A) IN DELETING ADDITION MADE BY THE A.O. ON ACCOUNT OF REPAYMENT OF LOAN TO CANARA BANK FROM UNEXPLAINED SOURCES WHEN THE ASSESSEE FAILED TO DISCHARGE THE ONUS BY ADDUCING ANY SUPPORTING DOCUMENTARY EVIDENCE REGARDING THE SOURCES OF REPA YMENT OF LOAN BEFORE THE ASSESSING OFFICER: DURING THE COURSE OF HEARING, WE HAVE FOUND THAT QUESTION NOS. (2) AND (3) ARE PURE QUESTIONS OF FACT AND WOULD NOT RESULT INTO ANY SUBSTANTIVE QUESTIONS OF LAW WHICH ARE REQUIRED BY THIS COURT. ACCORDINGLY, WE PROCEED TO CONSIDER QUESTION NO. 1.A PERUSAL OF THE ORDER PASSED BY THE TRIBUNAL SHOWS THAT ONCE THE PRINCIPAL OF MEASURING DISTANCE HAS BEEN SETTLED NAMELY THAT THE DISTANCE OF THE AGRICULTURAL LAND BELONGING TO THE ASSESSEE - RESPONDENT HAS TO BE MEASURED IN TERMS OF THE APPROACH BY ROAD AND NOT BY A STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. THE TRIBUNAL HAS PLACED FIRM RELIANCE ON A JUDGEMENT DELIVERED BY MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF LAUKIK DEVELOPERS V. DCIT 105 LT D 657 WHEREIN THE AFORESAID PRINCIPLE HAS BEEN ACCEPTED. HAVING HEARD THE LEARNED COUNSEL WE ARE OF THE CONSIDERED OPINION THAT THE VIEWS EXPRESSED BY THE TRIBUNAL ON THE PRINCIPLE OF MEASUREMENT MERITS ACCEPTANCE. THERE IS STATUTORY GUIDANCE AVAILABLE IN SECTION 2(14) (III) OF ACT. IT WOULD BE PROFITABLE TO READ THE AFORESAID PROVISION WHICH IS AS UNDER: 2.14. CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE XX XXXXXXXX (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 5 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) 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 THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED. B) IN ANY AREA WITHIN SUCH DISTANC E, NOT BEING MORE THA N EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFIED I N THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE. A PERUSAL OF THE AFORESAID PROVISION SHOWS THAT CAPITAL ASSET WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NOT SITUATED ANY AREA WITHIN SUCH DISTANCE AS MAY BE SPECIFIED IN THIS BEHALF BY A NOTI FICATION IN THE OFFLCIAL GAZETTE WHICH MAY BE ISSUED BY THE CENTRAL GOVERNMENT. THE MAXIMUM DISTANCE PRESCRIBED BY SECTION 2(14) (III) (B) OF THE ACT WHICH MAY BE INCORPORATED IN THE NOTIFICATION COULD NOT BE MORE THAN 8 KMS. FROM THE LOCAL LIMITS OF MUNIC IPAL COMMITTEE OR CANTONMENT BOARD ETC. THE NOTIFICATION HAS TO TAKE INTO ACCOUNT THE EXTENT OF, AND SCOPE FOR URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS. THE RECKONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFI CANT 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 FIGH T THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT OF URBANIZATION. SUCH A COURSE WOULD BE ILLUSORY. IT IS IN PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICATION NO. 9447 DATED 06.01.1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESPECT OF THE STATE OF PUNJAB, AT ITEM NO. 18 THE SUB DIVISION KHANNA HAS BEEN LISTED 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 AGRICULTURAL LAND. ONCE THE STATUTORY GUIDANCE OF TAKING INTO ACCOUNT THE EXTENT AND SCOPE OF URBANIZATION OF THE AREA HAS TO BE RECKONED WHILE ISSUING ANY SUCH NOTIFICATION THEN ITWOULD BE INCONGRUOUS TO THE ARGUMENT OF THE REVENUE THAT THE DISTANCE OF LAND SHOULD BE MEASURED BY THE METHOD OF STRAIGHT LINE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT BECAUSE ANY MEASUREMENT BY CROWS FLIGHT IS BOUND TO IGNORE THE URBANIZATION WHICH HAS TAKEN PLACE. MOREOVER, THE JUDGEMENT OF THE MUMBAI BENCH APPEARS TO HAVE ATTAINED FINALITY. KEEPING IN VIEW THE PRINCIPLE OF CONSISTENCY AS LAID DOWN IN RADHASOAWAMISATSANG V. CIT (1992) 193 ITR 321, WE ARE OF THE VIEW THAT THE OPINION EXPRESSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGAL INFIRMITY WARRANTING INTERFERE NCE OF THIS COURT, ACCORDINGLY QUESTION NO. (1) IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY UPHOLDING THE ORDER OF THE TRIBUNAL. 10. NOW THIS INSTANT CASE HAS TO BE ANALYSED IN THE LIGHT OF THE ABOVE QUOTED JUDGEMENT. THE ASSESSEE DI SCLOSED CORRECT AMOUNT OF SALE CONSIDERATION, THERE IS NO DISPUTE ABOUT THIS FACT. REGARDING CLAIMING DEDUCTION/EXEMPTION FOR AGRICULTURAL LAND IT RE LIED UPON THE CERTIFICATES OF (I ) VILLAGE PANCHAYAT OF BETALBETIM, 6 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) (II) KADAMBA TRANSPORT CORPORATION LIMITED AND (III) P.W.D. ENGINEER OF MARGAO, WHEREIN THEY CERTIFIED THAT ROAD DISTANCE WAS MORE THAN 8 KMS. FROM THE NEAREST MUNICIPAL LIMITS. HOWEVER, THE A.O. MADE FURTHER INVESTIGATION AND PROVED THAT AERIAL CROW FLY DISTANCE OR ST RAIGHT LINE DISTANCE OF THE LAND IN QUESTION WAS LESS THAN 8 KMS AND CONFRONTED THE ASSESSEE. ON CONFRONTATION, THEASSESSEE AGREED FOR THE ADDITION ON ACCOUNT OF CAPITAL GAINS AND PAID THE TAXES DUE. 11. IN VIEW OF THE ABOVE FACTS, WHEREIN THE ASSESSEE CL AIMED EXEMPTION UNDER THE BONAFIDE BELIEF DEPENDING UPON CERTAIN CERTIFICATES FROM GOVT. AS WELL AS LOCAL SELF - GOVERNMENT AUTHORITIES, JUST BECAUSE HE AGREED FOR ADDITION, DOES NOT AUTOMATICALLY ENTAIL HIM FOR PENALIZATION. IN MY OPTION, THE APPELLANT DID NOT CONCEAL ANY INCOME NOR FILED ANY INACCURATE P ARTICULAR. IN THE PENALTY ORDER, THE A.O. HAS ALSO MENTIONED THAT THE ASSESSEE IS NOT A HABITUAL DEFAULTER. THEREFORE, IN MY CONSIDERED OPINION, THIS IS NOT AS FIT CASE FOR LEVY OF CONCEALMENT PENALTY U/S. 271(1) AND THE A.O. IS DIRECTED TO DELETE THE SAME. 12. SINCE, FACTS ARE EXACTLY THE SAME IN THE CASE OF WIFE MRS.SHERINANTAO, THIS ORDER SHALL BE APPLICABLE IN HER CASE ALSO. IN THE RESULT, THE APPEAL IS ALLOWED. 5. WE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CASE THE ASSESSEE HAS DISCLOSED CORRECT AMOUNT OF SALE CONSIDERATION. THERE IS NO DISPUTE ABOUT THIS. THE ASSESSEE HAS SOLD THE LAND AND HAS NOT SHOWN THE LONG TERM CAPITAL GAINS ON THE AMOUNT OF THE LAND SOLD BY HIM. THE ASSESSEE CLAIMED THAT THIS CAPITAL GAINS IS EXEMPT BEING SALE OF AGRICULTURAL LAND. THE ASSESSEE CLAIMED THAT THE DISTANCE OF AGRICULTURAL PROPERTY IS MORE THAN 8 KMS. FROM THE MARGAO MUNICIPAL LIMITS. THE ASSESSEE RELIED UPON THE CERTIFICATE ISSUED BY THE VILLAGE PANCHAYAT OF BETALBETIM AS WELL AS FROM THE KADAMBA TRANSPORT CORPORATION. PWD ENGINEER OF MARGAO ALSO CERTIFIED THAT THE ROAD DISTANCE OF THE ABOVE PROPERTY IS MORE THAN 8 KMS. FROM THE NEAREST MUNICIPAL LIMITS. THE AO HAS PROVED THAT AERIAL CROW FLIGHT DISTANCE OR STRAIGHT LINE DISTANCE OF LAND IN QUESTION WAS LESS THAN 8 KMS. THE ASSESSEE WAS CONFRONTED WITH THIS ISSUE. THE ASSESSEE AGREED FOR AD DITION ON ACCOUNT OF CAPITAL GAINS AND PAID THE TAXES DUE. WE FIND THAT THE AO HAS PROVED THAT THE DISTANCE IS LESS THAN 8 KMS. BY AERIAL CROW FLIGHT BUT AS PER THE DEFINITION OF CAPITAL ASSET U/S 2(14) UNDER 7 . ITA NO. 384 & 385 /PNJ/2013 (A.Y.2007 - 08 ) WHICH AGRICULTURAL LAND IS DEFINED TO BE A NY PROPERTY NOT WITHIN 8 KMS. FROM THE LOCAL MUNICIPAL LIMIT SHOULD BE CONSIDERED AS URBAN LAND. THE SAID AMENDMENT TO SEC. 2(14)(III)(B) WAS INSERTED FROM 1.4.2014 WHEREIN IT IS MENTIONED ANY AREA WITHIN THE DISTANCE, MEASURED AERIALLY . THE ASSESSMENT YEAR IN APPEAL IS 2007 - 08. THEREFORE, WE ARE OF THE VIEW THAT THE AOS INVESTIGATION WILL NOT BE HELPFUL TO THE DEPARTMENT. THE ASSESSEE HAS PAID THE TAXES BUT THE AMENDED SEC. 2(14) IS APPLICABLE FROM 1.4.2014, THEREFORE, WE ARE OF THE VIEW THAT CIT(A) IS JUSTIFIED IN DELETING THE PENALTY. WE CLARIFY THAT CIT(A) HAS DELETED THE PENALTY ON A DIFFERENT GROUND BUT AS STATED ABOVE, LEGALLY THE PENALTY IS NOT TENABLE. THEREFORE, CIT(A) IS JUSTIFIED IN DELETING THE PENALTY AND OUR INTERFERENCE IS NOT REQUIR ED. 6. IN THE RESULT, BOTH THE DEPARTMENTS APPEAL ARE DISMISSED AND BOTH THE C.OS ARE ALSO DISMISSED AS THEY ARE SUPPORTING THE ORDER OF CIT(A). ORDER PRONOUNCED IN THE OPEN COURT ON 18 .07.2014. SD/ - SD/ - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 18 .07.2014 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT(A) CONCERNED ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER