ACIT, New Delhi V. Smt. Ashi Aggarwal, New Delhi

ITA 4378/DEL/2011

• Counselvise Citation: 437820114 RSA 2011
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-03-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEV JYOTI DAS
• Assessee Lawyers: MRS RANO JAIN; A K AGARWAL
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 4377 & 4378/DEL/2011 ASSESSMENT YEAR : 2008-09 & 2009-10 ACIT, SMT. ASHI AGARWAL, CENTRAL CIRCLE-1, 12/22, EAST PUNJABI BAGH, NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AGSPA AGSPA AGSPA AGSPA- -- -7394 7394 7394 7394- -- -P PP P APPELLANT BY : SHRI DEV JYOTI DAS, CIT-DR. RESPONDENT BY : MRS. RANO JAIN & SHRI A.K. AGARWAL, ADVOCATES. ORDER PER TS KAPOOR, AM: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST TH E ORDERS OF LD CIT(A)-III, NEW DELHI DATED 12.7.2011 FOR ASSESSMENT YE AR 2008-09 & 2009-10. THESE APPEALS WERE HEARD TOGETHER AND FOR T HE SAKE OF CONVENIENCE ARE DISPOSED OFF BY THIS COMMON ORDER. TH E COMMON GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIO N OF `.2,44,05,529/- & 2,98,13,166/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF SHORT TERM CAPITAL GAIN IN THE RESPECTIVE ASSESSMENT YEARS 2008-09 & 2009-10 2. THE ORDER OF THE LD CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS AND IN LAW. ITA NO437/DEL/2011 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN IN DIVIDUAL AND FOR THE YEARS UNDER CONSIDERATION FILED RETURN DECLAR ING INCOME OF `.5,43,747/- & `.8,54,488/-. ASSESSMENT PROCEEDINGS WERE INITIATED AND DURING THE COURSE THEREOF, IT CAME TO THE NOTICE OF THE ASSESSING OFFICER THAT ASSESSEE HAD SOLD CO-OWNED AGRICULTURAL LA ND AT VILLAGE HYATTPUR, DISTRICT GURGAON IN BOTH YEARS. THE ASSESSEE CL AIMED THAT SHORT TERM CAPITAL GAINS FROM THE SALE PROCEEDS OF AGRI CULTURAL LANDS WERE EXEMPT BECAUSE THE LAND WAS SITUATED AT A DISTANCE OF MORE THAN 8 KMS, FROM THE OUTER MUNICIPAL LIMIT OF GURGAON. I N SUPPORT OF THIS CONTENTION, ASSESSEE FURNISHED A CERTIFICATE OF TEHSILDAR OF GURGAON, MENTIONING THAT THE LAND IN QUESTION WAS AT A DISTANCE OF 9 KMS. THE ASSESSING OFFICER MADE FURTHER ENQUIRY FROM THE DISTRICT TOWN PLANNER, GURGAON WITH REQUEST TO SPECIFY THE DISTANCE OF THE SAI D LAND FROM THE OUTER LIMIT OF GURGAON MUNICIPAL COMMITTEE. THE DI STRICT TOWN PLANNER, GURGAON VIDE LETTER NO.70949 DATED 21.12.2 010 ALSO INFORMED THE ASSESSING OFFICER THAT THE DISTANCE OF LAND FROM OUT ER LIMIT OF MUNICIPAL COMMITTEE GURGAON WAS 8.5 KMS ON THE DATE O F SALE. HOWEVER, THE ASSESSING OFFICER MADE THE ADDITION ON THE BASIS OF POSSIBILITY OF ANY OTHER SHORTEST DISTANCE FROM THE OUTE R LIMIT OF GURGAON WITH THE LAND IN QUESTION (BEING LESS THAN 8 K MS.). THUS THE LAND WAS HELD TO BE CAPITAL ASSET & CONSEQUENTLY THE SUR PLUS EARNED WAS LIABLE FOR SHORT TERM CAPITAL GAINS TAX. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE LD CIT(A). 4. THE LD COUNSEL FOR THE ASSESSEE RAISED FOLLOWING CONT ENTIONS BEFORE THE LD CIT(A):- 1. THAT AGRICULTURAL LANDS WERE NOT A CAPITAL ASSET I N TERMS OF SECTION 2(14) BECAUSE OF THE FACT THAT THE SAID AGRICU LTURAL LAND WAS SITUATED AT MORE THAN 8 KMS. FROM OUTER MUNICIPAL LIMITS OF ITA NO437/DEL/2011 3 GURGAON. THIS FACT WAS SUPPORTED BY A CERTIFICATE ISSUE D BY TEHSILDAR OF GURGAON CERTIFYING THAT THE SAID LAND WA S SITUATED AT 9 KMS. AWAY FROM LOCAL LIMIT OF MUNICIPALITY OF GURG AON. 2. THAT ASSESSING OFFICER HAD HIMSELF MADE INDEPENDENT ENQUIRIES FROM DISTRICT TOWN PLANNER, GURGAON WHO VID E HIS LETTER MEMO NO.70954 DATED 21.12.2010 HAS INTIMATED THAT TH E DISTANCE OF THE SAID LAND FROM THE OUTER LIMITS OF MUN ICIPAL COMMITTEE OF GURGAON WAS 8.5 KMS. ON THE DATE OF SALE. 3. THAT LD ASSESSING OFFICER HOWEVER ERRONEOUSLY MADE AD DITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF AGRI CULTURAL LAND, TREATING THE SAID AGRICULTURAL LAND AS CAPITAL ASSET U/ S 2 (14) OF THE INCOME TAX ACT, 1961 DISBELIEVING THE DISTANCE GI VEN BY THE DISTRICT TOWN PLANNER, GURGAON. 5. THE LD CIT(A) ON THE BASIS OF CONTENTIONS AND MATER IAL AVAILABLE ON RECORD AND STATEMENT MADE BY THE LD COUNSEL DELETE D THE ADDITIONS IN THE BOTH ASSESSMENT YEARS UNDER QUESTION. ORDERS IN RE SPECT OF THE RELEVANT PORTION OF CIT(A) IS REPRODUCED BELOW:- THE DISTRICT TOWN PLANNER, GURGAON VIDE LETTER MEMO 70954 DATED 21.12.2010 HAS INTIMATED THAT THE DISTANCE OF T HE LAND FROM THE OUTER LIMIT OF THE MUNICIPAL COMMITTEE OF GURGAON WAS 8.5 KMS ON THE DATE OF SALE. THUS TWO COMPETENT AUTHOR ITIES VIZ. TEHSILDAR, GURGAON AND DISTRICT TOWN PLANNER, GURGAON BOTH HAVE INDEPENDENTLY CERTIFIED THAT THE SAID LAND IS SIT UATED BEYOND 8 KMS. OF MUNICIPAL LIMITS OF GURGAON. THEREFO RE, THE APPREHENSION OF THE ASSESSING OFFICER THAT THE DISTANCE G IVEN BY DTP, GURGAON IS VERY NARROW AS COMPARED TO THE DISTANC E MENTIONED IN THE ACT AND THEREFORE THE POSSIBILITY OF ANY OTHER ITA NO437/DEL/2011 4 SHORTEST DISTANCE CANNOT BE RULED OUT IS NOT BASED ON AN Y HARD EVIDENCE. SUCH APPREHENSION AND POSSIBILITY CANNOT F ORM BASIS FOR DENIAL OF THE CLAIM OF THE ASSESSEE THAT THE LAND I N QUESTION IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14 ) OF THE ACT. IN FACT THE DISTANCE OF 8 KMS. AS OUTER LIMIT FROM T HE LOCAL LIMITS OF THE MUNICIPAL COMMITTEE HAS BEEN ENVISAGED UNDER T HE IT ACT FOR THE PURPOSE OF A CUT OFF DISTANCE AND THEREFORE I S AN OBJECTIVE CRITERIA FIXED BY THE ACT AND ANY AGRICULTURAL LAND FALLING OUTSIDE THE SAID LIMIT WOULD BE ENTITLED TO EXEMPTION FROM C APITAL GAINS BEING NOT A CAPITAL ASSET. HENCE, ADDITION OF `.2,44 ,05,529/- & `.2,98,13,166/- ON ACCOUNT OF CAPITAL GAINS IN BOTH YEARS IS NOT JUSTIFIED AND IS ACCORDINGLY DIRECTED TO BE DELETED. 6. AGGRIEVED , THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL. 7. LD DR RELIED ON THE ORDER OF ASSESSING OFFICER. 8. LD COUNSEL CONTENDED THAT ASSESSEE IS ONE OF THE CO-OW NERS IN THE IMPUGNED LAND AND IN THE CASE OF OTHER CO-OWNERS THE HON'BLE TRIBUNAL HAD DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. IN SUPPORT HE SUBMITTED COPIES OF SALE & PURCHASE AGREEMENTS OF AGRICU LTURAL LAND AND COPY OF THE TRIBUNAL DECISION OF BENCH E IN TH E CASE OF SMT. MANJU BANSAL & SMT. NIRMAL BANSAL IN I.T.A. NO.5304 & 5305/DEL/10 FOR ASSESSMENT YEAR 2008-09 & 2009-10. HE FURTHER CONTENDE D THAT THE ASSESSEE WAS JOINT HOLDER OF THE SAME LAND ALONG WITH THE CO-OWNERS/ APPELLANTS APPEALS NO.5304 & 5305/DEL/2010 AND THE LA ND WAS JOINTLY SOLD ON THE SAME DAY AND THROUGH SINGLE AGREEMENT OF SA LE. HE, THEREFORE, PLEADED THAT THE CASE OF THE ASSESSEE IS COVER ED BY ITAT ORDER IN THE CASE OF CO-OWNERS. 9. WE HAVE GONE THROUGH THE ABOVE TRIBUNAL ORDER DA TED 31.1.2012 IN THE CASE OF SMT. MANJU BANSAL AND SMT. NIRMAL BAN SAL. WE HAVE ALSO NOTED FROM THE CONTENTS OF SALE AND PURCHASE AGREEMENT S THAT THE ASSESSEE WAS CO-OWNER ALONG WITH SMT. MANJU BANSAL & SM T. NIRMAL ITA NO437/DEL/2011 5 BANSAL, SMT. ASHI AGARWAL AND SMT. CHARU GOEL. AFTER GOING THROUGH THESE DOCUMENTS, WE ARE OF THE CONSIDERED VIEW THAT TH E FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF APPEAL NO. IN I.T.A. NO.5304 & 5305/DEL/2010 (SUPRA). THE TRIBUNAL VIDE ITS ORDER D ATED 31.1.2012 HAD OBSERVED AS UNDER:- WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH MAT ERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAD MADE DISALLOWANCE MERELY ON THE GROUND THAT POSSIBILITY OF SHORTEST DISTANCE LESS THAN 8 KMS. FROM OUTER LIMITS OF MUNICIPAL CORPORATION COULD NOT BE RULED OUT. THE ASSESSEE HAD F ILED CERTIFICATE FROM TEHSILDAR OF GURGAON THAT THE LANDS SOLD BY BOTH THE ASSESSEES WERE SITUATED 9 KMS. AWAY FROM MUNICIPAL CORPORATION LIMITS OF GURGAON. THE ASSESSING OFFICER HA D ALSO OBTAINED A CERTIFICATE FROM THE DISTRICT TOWN PLANNE R,WHO HAD ALSO CERTIFIED THAT THE LANDS WERE SITUATED AT 8.5 KMS. ON THE DATE OF SALE. NO OTHER EVIDENCE WAS BROUGHT ON RECORD BY T HE ASSESSING OFFICER TO PROVE THAT THE IMPUGNED LANDS WERE SITUATED WITHIN 8 KMS. FROM OUTER LIMITS OF MUNICIPAL CORPORA TION OF GURGAON. THE ASSESSING OFFICER HAS NOT DOUBTED THE NAT URE OF AGRICULTURAL LANDS. BEFORE THE CIT(A) THE ASSESSEE IN T HE GROUNDS OF APPEAL HAS SPECIFICALLY MENTIONED THAT BOTH THE ASS ESSEES HAVE SOLD AGRICULTURAL LANDS AND THEREFORE, THE SAID L ANDS DID NOT CONSTITUTE CAPITAL ASSET WITHIN THE MEANING OF SECTION 2 (14) OF THE INCOME TAX ACT, 1961. SINCE NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SUPPORT HIS CONT ENTION THAT THE IMPUGNED LANDS WERE SITUATED WITHIN THE 8 KMS. FRO M THE OUTER LIMITS OF MUNICIPAL CORPORATION OF GURGAON, IN OUR CONSIDERED OPINION, THE PROFITS ARISING ON SALE OF SUCH LANDS WOULD NOT CONSTITUTE CAPITAL ASSET. SINCE THE NATURE O F LAND WAS ITA NO437/DEL/2011 6 NOT DOUBTED BY THE ASSESSING OFFICER, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD CIT-DR THAT THE MATTER SHOU LD BE RESTORED TO THE FILE OF THE LD CIT(A) FOR VERIFICATI ON OF THE FACT WHETHER THE LANDS WERE AGRICULTURAL IN NATURE OR NOT . IN VIEW OF THE ABOVE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD CIT(A) ALLOWING THE RELIEF TO BOTH THE ASSE SSEES IN BOTH THE ASSESSMENT YEARS. RESPECTFULLY FOLLOWING THIS ORDER OF THE HON'BLE TRIB UNAL, WE DECIDE THE MATTER IN FAVOUR OF THE ASSESSEE AND HOLD THAT THE LAND IN QUESTION BEING SITUATED BEYOND 8 KMS. OF GURGAON LIMITS, THE SAM E DOES NOT CONSTITUTE CAPITAL ASSET IN TERMS OF SECTION 2(14) OF TH E ACT. CONSEQUENTLY THE APPEALS FILED BY THE REVENUE ARE DISM ISSED. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVE NUE ARE DISMISSED 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30TH DAY OF MARCH, 2012. SD/- SD/- (R.P. TOLANI) (T.S. KAP OOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 30.3.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). ITA NO437/DEL/2011 7