ACIT 33(1), MUMBAI V. ALKESH KANTILAL PATEL, MUMBAI

ITA 4270/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1357 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADEV
• Assessee Lawyers: MANISH J SHETH
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Earning of tax free income; Additional evidence; Competent authority; Capital receipt
• Section: 143(3); 2(14)

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.4270 /MUM/2015 ( / ASSESSMENT YEARS : 2011-12) ASSTT. COMMISSIONER OF INCOME TAX 33(1), 308, C-11, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051. / V. MR. ALKESH KANTILAL PATEL, B-2/401, KAMLA NAGAR CO. OP. HSG. SOCIETY, M.G. ROAD, KANDIVALI (W), MUMBAI 400 067 ./ PAN :AFNPP7953F ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI RAJESH KUMAR YADEV (D.R.) ASSESSEE BY : SHRI MANISH J. SHETH / DATE OF HEARING : 21-03-2017 / DATE OF PRONOUNCEMENT : 03-04-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 4 270/MUM/2015 IS DIRECTED AGAINST THE APPELLATE ORDER DATED 17 TH APRIL, 2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 45, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEARS 2011-12, THE APP ELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDE R DATED 28 TH MARCH, 2014 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTE R CALLED THE AO) U/S 143(3) OF THE INCOME-TAX ACT,1961 (HEREINAFTER CALL ED THE ACT). ITA 4270/MUM/2015 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI (HER EINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- I) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS 4,10,1 4,760/- RELYING ON THE CERTIFICATE ISSUED BY SARPANCH OF SANATHAL GRAM P ANCHAYAT, TAL: SANAD DIST. AHMEDABAD, WHO IS NOT COMPETENT AUTHORITY . II) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) FAILED TO JUSTIFY THAT WHETHER THE LAND IN QU ESTION COMES UNDER THE PURVIEW OF 'CAPITAL ASSET' AS DEFINED IN SEC TION 2(14) OF THE IT ACT, 1961-. III) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED DELETING THE ADDITION OF RS. 4,10,14,7 601- FOLLOWING THE DECISION OF THE HON. ITAT 'D BENCH, AHMEDABAD IN TH E CASE OF CIT(A) VIS. ASHABEN L DESAI(ITA NO.2122/AHD/2012), WHERE TH E FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE, AS IN THE AFORESAID CASE THE LD.CIT(A) HIMSELF PERSONALLY VISITED THE SITE AND ASCERTAINED T HE DISTANCE. IV) THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A ) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY AND OTHER SOURCES VIZ. B ANK INTEREST. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 143(2) OF 1961 ACT, THE A.O. OBSERVED THAT THE ASSESSEE HAS SOLD AN IMMOVAB LE PROPERTY DURING THE YEAR. THE ASSESSEE WAS ASKED TO FURNISH THE DETAIL S RELATED TO THE TRANSACTION WHEREBY THE ASSESSEE FURNISHED THE FOLLOWING DETAIL S:- SALE OF AGRICULTURAL PROPERTY WE ARE ENCLOSING HERE WITH THE PHOTOCOPY OF AGREEME NT FOR SALE OF AGRICULTURAL LAND BY THE ASSESSEE. KINDLY NOTE THAT THE AFORESAID LAND HAS BEEN SITUATED 8 KM AWAY FROM MUNICIPAL COR PORATION LIMIT AND THE POPULATION AT VILLAGE IS LESS THAN 10 000/-. HENCE THE SAME SHOULD BE CONSIDERED AS CAPITAL RECEIPTS A ND NOT LIABLE TO TAX. ITA 4270/MUM/2015 3 WE ARE ENCLOSING HERE WITH A COPY OF CERTIFICATE RE CEIVED FROM GRAM PANCHAYAT IN RESPECT OF THE SAME. WE ARE ALSO SUBMITTING COPIES OF 7/12 AND 8-A IN RESPECT OF THE SAID LAND. WE ARE ALSO FURNISHING A GOOGLE MAP SHOWING DISTANC E OF AGRICULTURAL LAND FOR YOUR READY REFERENCE. THE ASSESSEE ALSO SUBMITTED CERTIFICATE FROM GRAM P ANCHAYAT MENTIONING THAT THE AGRICULTURE LAND SOLD BY THE ASSESSEE HAD BEEN SITUATED 8 KM AWAY FROM THE AHMEDABAD MUNICIPAL CORPORATION LIMIT AND THE P OPULATION OF THE VILLAGE IS LESS THAN 10,000. THE ASSESSEE ALSO SUBMITTED GO OGLE MAP SHOWING DISTANCE OF SANATHAL VILLAGE FROM AHMADABAD, CONSID ERING AHMADABAD MUNICIPAL CORPORATION BEING THE MAIN MUNICIPAL CORP ORATION. THE AO ASKED ASSESSEE TO FURNISH DISTANCE OF SANATHAL VILLAGE FR OM SARKHEJ VILLAGE CONSIDERING THAT MUNICIPAL WARD IS LOCATED AT SARKE HJ VILLAGE. THE ASSESSEE SUBMITTED THAT SARKHEJ VILLAGE WAS NOT BEING CONSID ERED AS MUNICIPAL WARD AT THE TIME WHEN THE AGRICULTURAL LAND WAS SOLD BY THE ASSESSEE. IT WAS ALSO SUBMITTED THAT ACTUAL DISTANCE BETWEEN SARKHEJ VILA LGE AND AGRICULTURAL LAND OF THE ASSESSEE IN SANTHAL VILLAGE IS MORE THAN 8 K M. IT WAS ALSO SUBMITTED THAT AGRICULTURAL LAND SOLD WAS SITUATED NEAR THE B OUNDARY OF KOLAT VILLAGE AND SANTHAL VILLAGE, AND THE SAME BEING VERY FAR FR OM THE STARTING POINT FROM SANATHAL VILLAGE AND SAKHREJ VILLAGE. THE SATELLITE MAPS SHOWING THE EXACT LOCATION OF THE AGRICULTURAL LAND AND ITS DISTANCE FROM SARKHEJ VILLAGE WAS SUBMITTED. IT WAS ALSO SUBMITTED BY ASSESSEE THAT T HE AGRICULTURAL LAND IS ADJACENT TO GULMOHAR GREENS AND GOLF & COUNTRY CLUB WHICH IS ADJACENT TO THE AGRICULTURAL LAND SOLD BY THE ASSESSEE. THE A.O. REJECTED THE CONTENTION OF THE ASSESSEE O N THE GROUND THAT FROM THE DETAILS AVAILABLE ON THE GOOGLE MAPS, IT WAS SEEN T HAT THE LAND SOLD IS ADJACENT TO GULMOHOR GREENS, GOLF AND COUNTRY CLUB AND THE LAND COMES WITH IN MUNICIPAL LIMIT OF SANAND MUNICIPALITY. THE SHORTEST DISTANCE OF ITA 4270/MUM/2015 4 SANAND MUNICIPALITY TO GULMOHOR GREENS, GOLF AND CO UNTRY CLUB IS 7.1 KM, WHICH IS LESS THAN 8 KM. . IT WAS OBSERVED BY THE A O THAT SANAND IS CITY AND THE MUNICIPALITY OF AHMADABAD DISTRICT HAVING THE P OPULATION OF 32,348 ACCORDING TO 2001 CENSUS. THE MAP SHOWING THE SAID DETAILS WERE REPRODUCED BY AO IN THE ASSESSMENT ORDER DATED 28-03-2014 . TH E A.O. OBSERVED FROM THE GOOGLE MAPS IMAGES THAT THE LAND SOLD BY THE AS SESSEE IS WITHIN THE LIMIT OF SANAND MUNICIPALITY I.E. IT IS 7.1 KM AWAY FROM THE MUNICIPALITY AND IS IN THE MUNICIPAL LIMIT. SO AS PER AO IT WAS NOT THE AG RICULTURE LAND AS PER SECTION 2(14) OF 1961 ACT. THUS, THE AO HELD THAT I NCOME EARNED BY THE ASSESSEE ON THE SALE OF THE AFORE-STATED LAND IS NO T AGRICULTURAL INCOME AND IS NOT AN EXEMPT INCOME UNDER THE PROVISIONS OF 1961 A CT. THE A.O. ACCORDINGLY COMPUTED THE LONG TERM CAPITAL GAIN EARNED BY THE A SSESSEE ON SALE OF SAID LAND AT RS. 4,10,14,760/- WHICH WAS BROUGHT TO TAX VIDE ASSESSMENT ORDER DATED 28-03-2014 PASSED BY THE AO U/S 143(3) OF 196 1 ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-03-20 14 PASSED BY THE A.O. U/S. 143(3) OF 1961 ACT, THE ASSESSEE FILED FIRST A PPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAD FILED BEFORE THE AO FORM NO. 8A AND 7/12 EXTRACT OF LAND FROM SHRI CHIMANBHAI SOLANKI, SARPANCH OF SANATHAL GRAM PANCH AYAT REGARDING DISTANCE OF HIS PARCEL OF AGRICULTURAL LAND FROM SA NAND MUNICIPAL CORPORATION WHICH IS MORE THAN 8 KMS. . FURTHER IT WAS SUBMITTE D THAT AS PER THE GOVERNMENT OF INDIA NOTIFICATION NO.9447 DATED 6.1. 1994, THE NOTIFIED MUNICIPAL LIMIT OF SANAND IS AT SR. NO. 34 OF THE S CHEDULE AND THE AREA UPTO A DISTANCE OF 2 KMS FROM SANAND MUNICIPAL CORPORATION IS TO BE TREATED AS WITHIN MUNICIPAL LIMITS AND ABOVE THAT WILL BE TREA TED AS OUTSIDE THE MUNICIPAL LIMITS. THUS, THE ASSESSEE SUBMITTED THAT HIS LAND IS BEYOND 2 KM FROM SANAND MUNICIPAL CORPORATION AND AS PER CENTRA L GOVERNMENT ITA 4270/MUM/2015 5 NOTIFICATION NO. 9447 DATED 06-01-1994 , THE ASSESS EES LAND SHALL QUALIFY AS AGRICULTURAL LAND AS PER PROVISIONS OF SECTION 2(14 )(III)(B) OF 1961 ACT. THE ASSESSEE SUBMITTED THAT A.O. RELIED ON THE DISTANCE FROM SANAND MUNICIPALITY TO GULMOHOR GOLF & COUNTRY CLUB AS PER THE GOOGLE M AP. THE ASSESSEE CONTENDED THAT THE A.O. SHOULD HAVE TAKEN THE DISTA NCE UPTO ASSESSEE'S AGRICULTURAL LAND AND NOT UP TO THE GULMOHOR GOLF & COUNTRY CLUB. THE ASSESSE ALSO SUBMITTED A CERTIFICATE FROM THE EXECU TIVE ENGINEER, AHMEDABAD SPECIFYING THAT THE ASSESSEE'S LAND IS SITUATED AT DISTANCE OF MORE THAN 8 KMS. FROM SANAND MUNICIPAL CORPORATION. THE ASSESSEE REL IED UPON DECISION OF AHMEDABAD-TRIBUNAL VIDE ORDERS DATED 24.01.2013 IN ITO V. ASHABEN LALLUBHAI DESAI IN ITA NO. 2122/AHD/2012 WHEREIN IN THE IDENTICAL CASE , THE LAND SITUATED AT 3.3 LM AWAY FROM SANAND MUNICIPAL CORPORATION WAS HELD TO BE AGRICULTURAL LAND AS PER SECTION 2(14)(III)(B) O F 1961 ACT. 6. THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE AS SESSEE THAT THE GRAM PANCHAYAT HAS GIVEN THE RELEVANT CERTIFICATE REGARD ING DISTANCE OF THE AGRICULTURAL LAND OF THE ASSESSEE FROM SANAND MUNIC IPAL CORPORATION AND THE NOTIFICATION OF THE GOVERNMENT OF INDIA EXISTS CLAS SIFYING THE LAND BEYOND 2 KMS. FROM SANAND MUNICIPAL CORPORATION AS BEING AGR ICULTURAL LAND. THE LD. CIT(A) RELIED UPON THE DECISION OF AHMADABAD-TRIBUN AL IN THE CASE OF ASHABEN LALLUBHAI DESAI (SUPRA) IN ITA NO. 2122/AHD/2012 VI DE ORDERS DATED 24.01.2013 AND ALLOWED THE APPEAL OF THE ASSESSEE B Y HOLDING THAT SALE OF AGRICULTURAL LAND BY THE ASSESSEE IS THEREFORE EXEM PT FROM TAX BEING CLASSIFIED AS NON-TAXABLE CAPITAL RECEIPT, VIDE APPELLATE ORDE R DATED 17.04.2015 PASSED BY LEARNED CIT(A) . 7. AGGRIEVED BY THE APPELLATE ORDER DATED 17.04.2 015 PASSED BY THE LD. CIT(A) , THE REVENUE IS IN APPEAL BEFORE THE TRIBUN AL. ITA 4270/MUM/2015 6 8. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS SOL D IMMOVABLE PROPERTY DURING THE YEAR WHICH WAS CLAIMED AS AN AGRICULTURA L LAND BEING EXEMPT FROM TAX AS THE SAME WAS TREATED AS NOT BEING CAPITAL AS SET WITHIN MEANING OF SECTION 2(14)(III)(B) OF 1961 ACT. IT WAS SUBMITTE D THAT THE LD. CIT (A) HAS ADMITTED THE ADDITIONAL EVIDENCES FILED BY THE ASSE SSEE WITHOUT REMANDING THE EVIDENCES TO THE A.O. FOR HIS COMMENTS AFTER EXAMIN ATION AS STIPULATED U/R 46A(3) OF INCOME-TAX RULES, 1962. IT IS SUBMITTED T HAT THE ASSESSEE FILED CERTIFICATE FROM EXECUTIVE ENGINEER, AHMADABAD AND ALSO RELIED UPON NOTIFICATION NO 9447 DATED 6.1.1994 TO TAKE AN ADDI TIONAL PLEA THAT DISTANCE OF MORE THAN 2 KM MORE SANAND MUNICIPAL CORPORATION IS TO BE TAKEN FOR DETERMINING WHETHER THE SAID LAND FALLS WITHIN MEAN ING OF SECTION 2(14)(III)(B) OF 1961 ACT , WHICH ADDITIONAL EVIDENCES/PLEAS WERE NOT TAKEN BEFORE THE AO AND IN FITNESS OF THINGS IN TERMS OF RULE 46A(3) OF 1962 RULES, THE LEARNED CIT(A) SHOULD HAVE GRANTED OPPORTUNITY TO THE AO TO GIVE HIS COMMENTS AFTER EXAMINATION OF THE ADDITIONAL EVIDENCES/ PLEAS OF T HE ASSESSEE, VIDE REMAND REPORT BUT THE LEARNED CIT(A) JUST ADMITTED ADDITIO NAL EVIDENCES/ PLEAS RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE LEARNED C IT(A) AND ADJUDICATED THE APPEAL WITHOUT GRANTING ANY OPPORTUNITY TO AO FOR R EBUTTAL. IT IS SUBMITTED THAT THE COMPETENT AUTHORITY BEING TEHSILDAR HAS NO T GIVEN CERTIFICATE MEASURING THE DISTANCE OF THE SAID LAND FROM MUNICI PALITY AS PER THE PROVISIONS OF THE ACT. THE LD. D.R. SUBMITTED THAT TAHSILDAR IS THE COMPETENT AUTHORITY AND NOT THE EXECUTIVE ENGINEER OR SARPANC H, AND THE CERTIFICATES ISSUED BY THEM ARE NOT RELEVANT. THE ASSESSEE HAS TO PRODUCE THE RELEVANT CERTIFICATE FROM THE TAHSILDAR MEASURING DISTANCE F ROM NEAREST MUNICIPALITY ETC. AS STIPULATED U/S 2(14) OF 1961 ACT. 9. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF THE CERTIFICATE IS REQUIRED FROM THE COMPETENT AUTHORITY AS REQUIRED U NDER LAW, AN OPPORTUNITY MAY BE GRANTED AND THE MATTER MAY BE REMANDED TO TH E A.O. WHEREBY THE ASSESSEE CAN PRODUCE THE RELEVANT CERTIFICATES BEFO RE THE AO , WHICH CAN BE ITA 4270/MUM/2015 7 VERIFIED BY THE AO.IT IS ALSO SUBMITTED THAT DISTAN CE BE COMPUTED IN A MANNER AS LAID DOWN IN PRE-AMENDED SECTION 2(14) OF 1961 A S THE IMPUGNED ASSESSMENT YEAR UNDER APPEAL IS 2011-12, WHILE THE AMENDMENTS TO MEASURE DISTANCE BETWEEN THE MUNICIPALITY AND THE LAND TO B E MEASURED AERIALLY WAS BROUGHT BY FINANCE ACT, 2013 W.E.F. 01-04-2014. THE LEARNED COUNSEL RELIED UPON CIRCULAR NO. 17/2015 DATED 06-10-2015 ISSUED B Y CBDT TO THAT EFFECT. 10. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASS ESSEE HAS CLAIMED TO HAVE SOLD AN AGRICULTURAL LAND DURING THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR , WHICH IS STATED TO BE SITUATED NE AR THE BOUNDARY OF KOLAT VILLAGE AND SANATHAL VILLAGE. THE ASSESSEE HAD CON TENDED THAT THE ASSESSEE HAD SOLD AGRICULTURAL LAND WHICH IS MORE THAN 2 KM FROM SANAND MUNICIPAL CORPORATION . THE ASSESSEE HAD CLAIMED THAT THE ASS ESSEE IS ENTITLED TO THE BENEFIT OF NOTIFICATION NO. 9447 DATED 06-01-1994 I SSUED BY CENTRAL GOVERNMENT AND SINCE THE ASSESSEE LAND IS BEYOND 2 KM FROM SANAND MUNICIPAL CORPORATION, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF ABOVE NOTIFICATION . THE ASSESSEE HAS CLAIMED THAT THE SA LE CONSIDERATION SHOULD BE TAKEN TO BE NON-TAXABLE CAPITAL RECEIPT ARISING FRO M SALE OF AGRICULTURAL LAND IN ACCORDANCE WITH DEFINITION OF CAPITAL ASSET AS C ONTAINED IN SECTION 2(14) OF 1961 ACT. HOWEVER, THE RELEVANT CERTIFICATE FROM T HE COMPETENT AUTHORITY HAS NOT BEEN SUBMITTED BY THE ASSESSEE AS REQUIRED UNDE R LAW FOR DETERMINATION OF THE DISTANCE OF LAND IN QUESTION FROM MUNICIPALI TY ETC. . THE LD. CIT(A) RELIED UPON THE CERTIFICATE FROM EXECUTIVE ENGINEER , AHMADABAD AND OF SARPANCH OF THE VILLAGE, WHO ARE NOT COMPETENT AUTH ORITY AS PRESCRIBED UNDER LAW. THE ASSESSEE NEED TO PRODUCE THE SAID CERTIFIC ATE FROM COMPETENT AUTHORITY AS PRESCRIBED UNDER LAW FOR ISSUE OF SUCH CERTIFICATE. THE CERTIFICATE FROM EXECUTIVE ENGINEER , AHEMDABAD WAS INTRODUCED BY THE ASSESSEE FOR THE FIRST TIME BEFORE LEARNED CIT(A) AND ALSO CLAIM OF BENEFIT OF NOTIFICATION NO. 9447 ISSUED BY CENTRAL GOVERNMENT DATED 06-01-1994 WAS CLAIMED BY THE ITA 4270/MUM/2015 8 ASSESSE FOR THE FIRST TIME BEFORE LEARNED CIT(A). T HE LEARNED CIT(A) DID NOT FORWARDED THESE ADDITIONAL EVIDENCES AND FRESH CLAI MS TO THE AO FOR HIS EXAMINATION AND COMMENTS FOR REBUTTAL , AS NO REMAN D REPORT WAS CALLED BY LEARNED CIT(A) FROM THE AO. THERE IS BREACH OF RULE 46A(3) OF INCOME-TAX RULES, 1962 AS NO REMAND REPORT WAS CALLED BY LEARN ED CIT(A) FROM AO AND PRINCIPLES OF NATURAL JUSTICE IS ALSO BREACHED AS T HE REVENUE HAS NOT BE GRANTED OPPORTUNITY OF BEING HEARD. CONSIDERING THE FACTUAL MATRIX OF THE CASE, WE ARE INCLINED TO SET ASIDE THIS MATTER BACK TO THE FILE OF THE A.O. FOR DE-NOVO DETERMINATION OF THE ISSUE ON MERITS. THE A SSESSEE IS DIRECTED TO SUBMIT CERTIFICATE FROM THE COMPETENT AUTHORITY FOR CLAIMING OF THE EXEMPTION FROM CHARGEABILITY OF THE TAX W.R.T. SALE OF AGRICU LTURAL LAND AND TREATMENT OF THE SAME AS NON TAXABLE CAPITAL RECEIPTS IN ACCORDA NCE WITH PROVISIONS OF 1961 ACT. WE WOULD ALSO LIKE TO CLARIFY THAT DISTAN CE BETWEEN THE MUNICIPAL LIMIT AND THE AGRICULTURAL LAND SHALL BE MEASURED H AVING REGARDS TO THE SHORTEST ROAD DISTANCE, AS THE IMPUGNED ASSESSMENT YEAR UNDER APPEAL IS ASSESSMENT YEAR 2011-12 WHILE THE AMENDMENT TO SECT ION 2(14) OF 1961 ACT WAS BROUGHT IN BY FINANCE ACT, 2013 W.E.F. 01-04-20 14 WHEREIN THE SAID DISTANCE IS TO BE MEASURED AERIALLY , AND THE SAID AMENDMENT IS HELD TO BE PROSPECTIVE BY NAGPUR BENCH OF HONBLE BOMBAY HIGH COURT VIDE ORDERS DATED 30-03-2015 IN THE CASE OF SMT MALTIBHAI R KAD U IN ITA NO. 151 OF 2013. . THIS POSITION IS ACCEPTED BY CBDT VIDE CIRC ULAR NO. 17/2015 DATED 06-10-2015 . THE SAID CIRCULAR IS REPRODUCED HEREU NDER : CIRCULAR NO.17/2015 [F.NO.279/MISC./140/2015-ITJ] SECTION 2(1A), READ WITH SECTION 2(14)(III), OF THE INCOME-TAX ACT, 1961 - AGRICULTURAL LAND - MEASUREMENT OF DISTANCE FOR PURPOSE OF SECTION 2(14)(III)(B) FOR PERIOD PRIOR TO ASSESSMEN T YEAR 2014-15 CIRCULAR NO.17/2015 [F.NO.279/MISC./140/2015-ITJ], DATED 6-10-2015 ITA 4270/MUM/2015 9 'AGRICULTURAL LAND' IS EXCLUDED FROM THE DEFINITION OF CAPITAL ASSET AS PER SECTION 2(14)(III) OF THE INCOME-TAX ACT BASED, INTER ALIA ON ITS PROXIMITY TO A MUNICIPALITY OR CANTONMENT BOARD. TH E METHOD OF MEASURING THE DISTANCE OF THE SAID LAND FROM THE MU NICIPALITY, HAS GIVEN RISE TO CONSIDERABLE LITIGATION. ALTHOUGH, TH E AMENDMENT BY THE FINANCE ACT, 2013 W.E.F. 1-4-2014 PRESCRIBES THE ME ASUREMENT OF THE DISTANCE TO BE TAKEN AERIALLY, AMBIGUITY PERSISTS I N RESPECT OF EARLIER PERIODS. 2. THE MATTER HAS BEEN EXAMINED IN LIGHT OF JUDICIAL D ECISIONS ON THE SUBJECT. THE NAGPUR BENCH OF THE HON'BLE BOMBAY HIG H COURT VIDE ORDER DATED 30-3-2015 IN ITA 151 OF 2013 IN THE CASE OF SMT. MALTIBAI R KADU HAS HELD THAT THE AMENDMENT PR ESCRIBING DISTANCE TO BE MEASURED AERIALLY, APPLIES PROSPECTI VELY I.E. IN RELATION TO ASSESSMENT YEAR 2014-15 AND SUBSEQUENT ASSESSMEN T YEARS. FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2014-15, THE HI GH COURT HELD THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMIT AND THE AG RICULTURAL LAND IS TO BE MEASURED HAVING REGARD TO THE SHORTEST ROAD D ISTANCE. THE SAID DECISION OF THE HIGH COURT HAS BEEN ACCEPTED AND TH E AFORESAID DISPUTED ISSUE HAS NOT BEEN FURTHER CONTESTED. 3. BEING A SETTLED ISSUE, NO APPEALS MAY HENCEFORTH BE FILED ON THIS GROUND BY THE OFFICERS OF THE DEPARTMENT AND APPEAL S ALREADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. NEEDLESS TO SAY THAT THE AO SHALL GRANT PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRIN CIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW . THE RELEVANT EVIDENCES SUBMIT TED BY THE ASSESSEE SHALL BE ADMITTED BY THE AO BEFORE ADJUDICATION OF THE IS SUE ON MERITS. WE ORDER ACCORDINGLY. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IN I TA NO. 4270/MUM/2015 FOR THE ASSESSMENT YEAR 2011-12 IS ALLOWED FOR STAT ISTICAL PURPOSE. ITA 4270/MUM/2015 10 ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD APRIL, 2017. # $% &' 03-04-2017 ( ) SD/- SD/- (D.T. GARASIA) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 03-04-2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI