The Income-tax Officer, Muktsar V. Smt. Kanshu Girdhar, Muktsar

ITA 469/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2481 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 17-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR KANCHAN GARG
• Assessee Lawyers: P N ARORA
• Keywords: Capital asset; Bonafide belief; Competent authority
• Section: 143(3); 2(14); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.469(ASR)/2014 ASSESSMENT YEAR:2007-08 PAN: ADCPG4909P INCOME TAX OFFICER, VS. SMT. KANSHU GIRDHAR WARD-II(2), MUKTSAR. W/O SH. DINESH GIRDHAR, 539, SWAMI DAYA NAND STREET, MUKTSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: DR. KANCHAN GARG, DR RESPONDENT BY:SH. P.N. ARORA, ADVOCATE DATE OF HEARING: 18/11/2015 DATE OF PRONOUNCEMENT: 12/01/2016 ORDER THIS IS THE DEPARTMENTS APPEAL AGAINST THE LD. CI T(A)S ACTION IN ALLOWING THE ASSESSEES APPEAL AND DELETING THE PEN ALTY IMPOSED AT RS.4,36,445/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT, THE ACT), ON ACCOUNT OF SHORT TERM CAPITAL GAIN. 2. THE FACTS AS PER RECORDS ARE THAT THE ASSESSEE F ILED HER RETURN DECLARING INCOME OF RS.1,51,820/- FOR THE ASSESSMEN T YEAR 2007-08 ON 31.03.2008 AND THE SAME WAS PROCESSED ON 21.05.2008 . NOTICE U/S 148 WAS ISSUED ON 16.03.2010 AFTER RECORDING REASONS ON THE BASIS OF INFORMATION RECEIVED FROM ACIT, CENTRAL CIRCLE-III, LUDHIANA. AS PER INFORMATION, SH. JAGDISH SINGH ALONGWITH THE OTHER PERSONS SOLD LAND AT VILLAGE BHANOHAR, TEHSIL LUDHIANA FOR RS.1,44,80,00 0/- AND THE TOTAL ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 2 SHORT TERM CAPITAL GAIN COMES TO RS.1,18,11,383/- A ND ASSESSEES SHARE WAS 11.25%, I.E., RS.13,28,781/- BUT NO SHORT TERM CAPITAL GAIN WAS DISCLOSED BY THE ASSESSEE IN HER RETURN OF INCOME. IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE FILED REPLY STATING THAT THE RETURN FILED ON 31.03.2008 MAY BE TREATED AS RETURN FILED IN RESPON SE TO NOTICE U/S 148. THE ASSESSMENT WAS COMPLETED VIDE ORDER U/S 143(3) DATED 30.12.2010 AT AN INCOME OF RS.14,80,600/- AFTER MAKING AN ADDI TION OF RS.13,28,781/- ON ACCOUNT OF SHORT TERM CAPITAL GAI N WHICH AROSE ON THE SALE OF LAND OF VILLAGE BHANOHAR, TEHSIL LUDHIANA. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT( A), BATHINDA. THE MAIN ISSUE IN THIS CASE WAS THE DESCRIPTION OF LAND , WHETHER THE LAND ON WHICH THE CAPITAL GAIN AROSE WAS A CAPITAL ASSET DE FINED U/S 2(14) OF THE ACT. THE AO IN THE ASSESSMENT ORDER HELD THAT THE L AND IN QUESTION ON WHICH THE CAPITAL GAIN AROSE WAS A CAPITAL ASSET AS DEFINED IN SECTION 2(14) AND IS WITHIN 8 KM FROM THE MUNICIPAL LIMITS OF LUDHIANA. THE LD. CIT(A) CONFIRMED THE OBSERVATIONS OF THE AO IN HIS ORDER AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. VIDE PENALTY ORDER DATED 21.04.2014, THE AO IMPO SED THE PENALTY IN QUESTION. BY VIRTUE OF THE IMPUGNED ORDER DATED 23.04.2014, THE LD. CIT(A) DELETED THE PENALTY. THIS BRINGS THE DEPARTM ENT IN APPEAL BEFORE THIS BENCH. 5. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS C ONTENDED THAT THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AND DELETING THE PENALTY IMPOSED AT RS.4,36,445/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN. HE FURTHER CONTENDED THAT THE LD. CIT(A) HAS ALSO ERRED IN DELETING THE PENALTY, AS WHILE DECIDING THE QUANTUM APPEAL, THE LD. CIT(A) ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 3 DISMISSED THE APPEAL OF THE ASSESSEE WITH THE OBSER VATIONS THAT THE IMPUGNED LAND WAS A CAPITAL ASSET, THE SALE OF WHIC H RESULTED IN SHORT TERM CAPITAL GAIN. AS SUCH ADDITION MADE BY THE AO IS CONFIRMED, WHEREAS WHILE DECIDING THE APPEAL AGAINST PENALTY I MPOSED U/S 271(1)(C) OF THE ACT, THE LD. CIT(A) HELD THAT THE AO ERRED IN IMPOSING PENALTY BECAUSE OF THE FACT THAT THE ASSESSEE MADE A BONAFI DE DISCLOSURE IN THE RETURN OF INCOME THAT SHE WAS NOT LIABLE TO TAX AS THE SUBJECT AGRICULTURAL LAND SOLD BY HER WAS NOT A CAPITAL ASSET AS DEFINED U/S 2(14) OF THE ACT AND THAT THE ASSESSEE IS NOT GUILTY OF FILING THE I NACCURATE PARTICULARS OF INCOME RESULTING INTO CONCEALMENT OF INCOME AS ALLE GED BY THE AO. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 7. HAVING CONSIDERED THE RIVAL CONTENTIONS IN THE L IGHT OF THE MATERIAL PLACED ON RECORD, I FIND THAT IN THIS CASE, THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE DURING THE PENALTY PROCEEDINGS, WHICH HAVE BEEN MADE A PART OF THE PENALTY ORDER U/S 271(1)(C) BY THE AO. THE SAME ARE REPRODUCED AS UNDER: .1. THE ASSESSEE PURCHASED AGRICULTURE LAND AT V. BHANAUR DISTRICT LUDHIANA IN A.Y.2006-07 ALONGWITH SOME OTHER CO-OWN ERS WHICH WAS SOLD PARTLY IN A.Y.2006-07 & 2007-08. 2. IT WAS STATED IN THE RETURN OF INCOME THAT SINCE THE LAND WAS MORE THAN 1 .K.M. FROM THE MUNICIPAL LIMIT OF MULLANPUR DAKHA WHICH IS TEHSIL HEADQUARTER OF VILL. BHANPUR, THE AGRI LAND WAS NOT A CAPITAL ASSET AS DEFINED U/S 2(14) AND HENCE NO CAPITAL GAIN AROSE F ROM THE SALE OF THE AGRI LAND. 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE PRODUCED THE FOLLOWING CERTIFICATES FROM REVENUE AU THORITIES;- ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 4 I) JAMABANDI & GIRDWARI CERTIFIED BY THE HALKA PATWARI THAT THE LAND WAS ACTUALLY USED FOR AGRICULTURE PURPOSES AT THE TIME OF PURCHASE AND SALE. II) CERTIFICATE FROM NAGAR PANCHAYAT MULLANPUR AND NAIB TEHSILDAR, MULLANPUR THAT THE DISTANCE OF THE SAID AGRI. LAND WAS 1.5 K.M. FROM MUNICIPAL LIMIT MULLANPUR AND 8.5 K.M. FROM MUNICIP AL LIMIT OF LUDHIANA. THE AO REFERRED THE MATTER TO DEPUTY COMMISSIONER, LUDHIANA FOR VERIFICATION AND IT WAS REPORTED BY THE DEPUTY COMM ISSIONER IN HIS CERTIFICATE THAT ONE WING OF HIS OFFICE STATED THAT THE DISTANCE OF THE LAND FROM THE MUNICIPAL LIMIT OF MULLANPUR & LUDHIANA IS 1.5 K.M. & 8.5 K.M. RESPECTIVELY AND ANOTHER WING STATED THAT THE DISTA NCE OF THE AGRI. LAND WAS ONLY 2 K.M. FROM MUNICIPAL LIMIT OF MULLANPURA AND 8 K.M. FROM MUNICIPAL LIMIT OF LUDHIANA. THE DISTANCE WAS ALSO MEASURED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IT WAS FOUND T HAT THE DISTANCE OF THE SAID LAND WAS ABOUT 7.3 K.M. FROM THE MUNICIPAL LIMIT OF LUDHIANA. III). THE AO HAS GIVEN THE FINDINGS ON PAGE 7 OF THE ASSESSMENT ORDER THAT THE CO-OWNERS OF THE LAND DID NOT USE THE LAND FOR AGRICULTURE PURPOSE AND FURTHER THAT THE LAND WAS SOLD TO A DEVELOPER WHO USED THE SAME FOR DEVELOPING A HOUSING COLONY. THE AGRI. LAND WAS TREATED AS CAPITAL ASSET AS DEFINED U/S 2(14) AND THE GAIN ARISING FROM THE SALE OF THE LAND WAS ASSE SSED AS SHORT TERM CAPITAL GAIN IN THE ASSESSMENT ORDER U/S 143(3) AT RS.13,28,781/-. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS), CENTRAL, LUDHIANA AND IT WAS ARGUED BEFORE THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) AS UNDER;- I) THE REVENUE AUTHORITIES HAD CERTIFIED THAT THE LAND WAS BEING ACTUALLY USED FOR AGRICULTURE PURPOSES BOTH AT THE TIME OF P URCHASE AND SALE AND THE DISTANCE OF THE SAID AGRICULTURE LAND FROM THE MUNICIPAL LIMIT FROM MULLANPUR WAS 1.5 K.M. AND 8.5 K.M. FROM THE MUNICIPAL LIMIT OF L UDHIANA. II) THE RELIANCE WAS PLACED ON THE JUDGEMENT OF BOMBAY HIGH C OURT IN THE CASE OF CIT VS. DEBBIE ALEMAO 46 DTPLMT IN WHICH IT HAS BEEN HELD THAT THE LAND WHICH HAS BEEN SHOWN AS AGR I. LAND IN THE REVENUE RECORD AND WAS NEVER USED FOR NON AGRICULTURE PURPO SES TILL IT WAS SOLD HAS TO BE TREATED AS AGRI. LAND AND NO CAPITAL GAIN WAS TAXABLE ON THE SALE OF SAID LAND. III) IT WAS HELD BY AMRITSAR BENCH OF THE ITAT IN THE CASE OF DCIT VS. CAPITAL LOCAL AREA BANK LTD. 29 SOT 394 THAT THE EX PRESSION FROM THE ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 5 LOCAL LIMIT OF ANY MUNICIPALITY USED IN 2(14)(III) (B) OF THE INCOME TAX ACR REFERS TO ONLY ONE MUNICIPALITY AND NOT A NUMBER OF MUNICIPALITIES. THUS THE AGRI. LAND SOLD BY THE ASSESSEE WAS AT A DISTAN CE OF MORE THAN 1 K. M. FROM THE MUNICIPAL LIMIT OF MULLANPUR AND THE SAME IS NOT A CAPITAL ASSET IN VIEW OF NOTIFICATION NO.9447 DATED 06.01.1994. 5.I) THE WORTHY CIT (A) VIDE ORDER DATED 08.08.2 011 DISMISSED THE APPEAL OF THE ASSESSEE WHILE RELYING 6RT THE JUDGME NT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SMT. ANJA NA SEHGAL DATED MARCH 1, 2011 IN WHICH IT WAS HELD THAT THE DISTANCE FROM THE IMPUGNED LAND HAS TO BE MEASURED FROM ANY MUNICIPALITY WHICH IS ADJACENT TO THE LAND. THE ONLY REASON FOR WHICH THE APPEAL HAS BEEN DISMISSED IS THAT THE DISTANCE OF THE AGRI. LAND SOLD BY THE ASSESSEE FRO M THE MUNICIPAL LIMIT OF LUDHIANA IS LESSTHAN 8 K.M. AND THE SAME IS A CAPIT AL ASSET AS DEFINED U/S 2(14) OF THE INCOME TAX ACT IN VIEW OF THE NOTIFICA TION NO.9447 DATED 06.01.1994. 8. WHILE LEVYING THE PENALTY IN QUESTION, THE AO OBSERVED AS FOLLOWS: 4.2. THE LD. CIT(A) HAS UPHELD THE ACTION OF THE A O BY CONFIRMING THE ADDITION MADE IN THE CASE OF THE ASS ESSEE WITH THE OBSERVATION THAT THE AO IS RIGHT IN CONCLUDING THAT IMPUGNED LAND WAS A CAPITAL ASSET THE SALE OF WHICH RESULTED IN SHORT TERM CAPITAL GAIN. AS SUCH ADDITION MADE B Y THE AO IS CONFIRMED. THE JURISDICTION AND LOCATION OF LAND D ULY BEEN DISCUSSED IN THE BODY OF ASSESSMENT ORDER AS WELL A S IN THE ORDER PASSED BY THE WORTHY CIT(A), BATHINDA. REGARD ING THE EXPLANATION 7 & 8 IT IS ADMITTED FACT THAT THE PENA LTY PROCEEDINGS ARE SEPARATE PROCEEDINGS BUT THE SAME A RE INITIATED ONLY WHEN IT CAME TO KNOWLEDGE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THERE IS A DEFAULT ON T HE PART OF THE ASSESSEE. FURTHER, THE DISCUSSION OF BONAFIDE B ELIEF, IT IS A DUTY OF THE ASSESSEE TO FILE HER RETURN OF INCOME C ORRECTLY. IT IS THE DUTY OF THE ASSESSEE TO FURNISH ACCURATE PARTIC ULARS OF INCOME IN THE RETURN OF INCOME. IN THIS CASE THE AS SESSEE HAS NOT DISCLOSED THE SHORT TERM CAPITAL GAIN TO AVOID HER INCOME TAXABLE FOR THE BEST REASONS KNOWN TO HER. THE DEFA ULT OF FURNISHING INACCURATE PARTICULARS OF INCOME TO THE TUNE OF RS.13,28,781/- ON ACCOUNT OF SHORT TERM CAPITAL ON THE PART OF THE ASSESSEE IS ESTABLISHED. FURTHER FACTS OF THE J UDGMENT QUOTED BY THE ASSESSEE IN HER REPLY ARE DIFFERENT F ROM THE FACT OF THE PRESENT CASE AND HENCE NOT RELEVANT TO THIS CASE. ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 6 5. IN VIEW OF THE ABOVE, IT IS ESTABLISHED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME THER EFORE, THE CONCEALED THE INCOME. AS SUCH THE ASSESSEE HAS COMM ITTED A DEFAULT LIABLE FOR PENALTY U/S 271(1)(C). 9. WHILE DELETING THE PENALTY, THE LD. CIT(A) HAS O BSERVED AS FOLLOWS: AFTER CAREFUL PERUSAL OF THE FACTS OF THE CASE AND THE CASE LAWS RELIED UPON BY THE A/R OF THE APPELLANT, IT IS HELD THAT THE AO ERRED IN IMPOSING PENALTY U/S 271(1)(C) . IT IS BECAUSE OF THE FACT THAT THE APPELLANT MADE A BONAF IDE DISCLOSURE IN THE RETURN OF INCOME THAT SHE WAS NOT LIABLE TO PAY TAX AS THE SUBJECT AGRICULTURE LAND SOLD BY HER WAS NOT A CAPITAL ASSET AS DEFINED U/S 2(14). THIS BONAFIDE B ELIEF STANDS PROVED FROM THE COPIES OF THE REVENUE RECORDS WHICH PROVED THAT THE LAND WAS BEING CULTIVATED FOR AGRICULTURE PURPOSES BOTH AT THE TIME OF PURCHASE AND SALE. THE APPELLAN T ALSO FURNISHED CERTIFICATE FROM COMPETENT AUTHORITY REGA RDING THE DISTANCE OF THE LAND FROM THE MUNICIPAL LIMITS OF M ULLANPUR AND LUDHIANA. THE DEPARTMENT HAS NOT PROVED THAT TH E COPIES OF REVENUE RECORD AND THE CERTIFICATE FURNISHED WER E FALSE. THE BONAFIDE BELIEF OF THE APPELLANT STANDS ALSO SUPPO RTED BY THE ORDER OF THE JURISDICTIONAL BENCH IN THE CASE OF C APITAL AREA LOCAL BANK IN WHICH IT WAS HELD THAT THE DISTANCE OF THE SUBJECT LAND WAS TO BE SEEN ONLY FROM THE MUNICIPAL ITY WITHIN THE JURISDICTION OF WHICH THE SUBJECT LAND WAS SITU ATED BECAUSE TILL TODAY THE FACT THAT THE SUBJECT LAND W AS AT A DISTANCE OF MORE THAN 1 KMS AS NOTIFIED VIDE NOTIFI CATION NO.9447 DATED 06.01.1994 THE SUBJECT AGRICULTURE LA ND WAS NOT A CAPITAL ASSET. THE SUBJECT LAND HAS COME WIT HIN THE AMBIT OF THE DEFINITION OF CAPITAL ASSET AS DEFINED U/S 2(14) ONLY AFTER THE PRONOUNCEMENT OF THE JUDGMENT OF HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANJANA SEHGAL AS THE SAME IS LESS THAN 8 KMS FROM THE MUNI CIPAL LIMITS, LUDHIANA WHICH IS ALSO NOTIFIED IN THE NOTI FICATION DISCUSSED SUPRA. FINALLY, IT IS HELD ON FACTS ITSE LF THAT THE APPELLANT IS NOT GUILTY OF FILING THE INACCURATE PA RTICULARS OF INCOME RESULTING INTO CONCEALMENT OF INCOME AS ALLE GED BY THE AO. HENCE, THE AO IS DIRECTED TO DELETE THE PENALTY U/S 271(1)(C). 10. THE DEPARTMENT HAS NOT BEEN ABLE TO SUCCESSFULL Y CONTROVERT THE FINDINGS OF FACT RECORDED BY THE LD. CIT(A). THE I SSUE IS AS TO WHETHER THE ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 7 DISCLOSURE MADE BY THE ASSESSEE IN THE RETURN OF I NCOME WAS A BONAFIDE DISCLOSURE OR NOT. THE ASSESSEE HAS MAINTAINED ALL THROUGH THAT THE LAND SOLD BY HER WAS AGRICULTURE LAND AND WAS NOT A C APITAL ASSET AS DEFINED U/S 2(14) OF THE ACT. TO SUPPORT HER CASE R EGARDING THE LAND BEING AGRICULTURE LAND, THE ASSESSEE SUBMITTED THAT THE LAND WAS BEING CULTIVATED FOR AGRICULTURAL PURPOSES AT THE TIME OF ITS PURCHASE THROUGH TO THE TIME OF ITS SALE BY HER. TO PROVE THIS CONTENTI ON, THE ASSESSEE FILED THE FOLLOWING DOCUMENTS IN THE ASSESSMENT PROCEEDINGS: I. JAMABANDI & GIRDWARI CERTIFIED BY THE HALKA PAT WARI THAT THE LAND WAS ACTUALLY USED FOR AGRICULTURE PURPOSES AT THE TIME OF PURCHASE AND SALE. II. CERTIFICATE FROM NAGAR PANCHAYAT MULLANPUR AND NAIB TEHSILDAR, MULLANPUR THAT THE DISTANCE OF THE SAID AGRI. LAND WAS 1.5 K.M. FROM MUNICIPAL LIMIT MULLANPUR AND 8.5 K.M. FROM MUNICIP AL LIMIT OF LUDHIANA. THE AO REFERRED THE MATTER TO DEPUTY COMM ISSIONER, LUDHIANA FOR VERIFICATION AND IT WAS REPORTED BY TH E DEPUTY COMMISSIONER IN HIS CERTIFICATE THAT ONE WING OF HI S OFFICE STATED THAT THE DISTANCE OF THE LAND FROM THE MUNICIPAL LI MIT OF MULLANPUR & LUDHIANA IS 1.5 K.M. & 8.5 K.M. RESPECTIVELY AND AN OTHER WING STATED THAT THE DISTANCE OF THE AGRI. LAND WAS ONLY 2 K.M. FROM MUNICIPAL LIMIT OF MULLANPURA AND 8 K.M. FROM MUNIC IPAL LIMIT OF LUDHIANA. THE DISTANCE WAS ALSO MEASURED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IT WAS FOUND THAT THE DI STANCE OF THE SAID LAND WAS ABOUT 7.3 K.M. FROM THE MUNICIPAL LIM IT OF LUDHIANA. 11. NOW, THE KHASRA GIRDAWARI IS THE PRIMARY DOCUME NT WHICH WOULD GO TO PROVE THE NATURE OF THE LAND AS AGRICULTURAL LAND. THE KHASRA GIRDAWARI, AS PRODUCED BY THE ASSESSEE, SHOWED THE ACTUAL USER OF THE LAND FOR AGRICULTURAL PURPOSES, BOTH, AT THE TIME O F ITS PURCHASE BY THE ASSESSEE AND WHEN IT WAS SOLD BY HER. NOTWITHSTANDI NG THE FACTUM OF HER HAVING NOT CHALLENGED THE ASSESSMENT, AS CONFIRMED BY THE LD. CIT(A) IN THIS REGARD, ANY FURTHER, THIS DOCUMENT GAVE THE AS SESSEE, THE NECESSARY BONAFIDE BELIEF THAT THE LAND IN QUESTION WAS INDEE D AGRICULTURAL LAND. ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 8 12. THIS BELIEF WAS FURTHER FORTIFIED BY THE CERTI FICATE FROM THE NAGAR PANCHYAT, MULLANPUR AND THAT FROM THE NAIB TEHSILDA R, MULLANPUR, CERTIFYING THE DISTANCE OF THE LAND TO BE 1.5 KM FR OM THE MUNICIPAL LIMITS OF MULLANPUR AND 8.5 KM FROM THE MUNICIPAL LIMITS O F LUDHIANA. NOT ONLY THIS, ON THE MATTER HAVING BEEN REFERRED TO H IM BY THE AO FOR VERIFICATION, THE DEPUTY COMMISSIONER, LUDHIANA CER TIFIED THE ABOVE RESPECTIVE DISTANCES. 13. FURTHER, IN THE ASSESSMENT PROCEEDINGS, THE DIS TANCE OF THE LAND WAS GOT MEASURED AND IT WAS FOUND THAT THE LAND WAS LOCATED AT A DISTANCE OF ABOUT 7.3 KM FROM THE MUNICIPAL LIMITS OF LUDHIANA. 14. FROM THE ABOVE, IT IS QUITE OBVIOUS THAT THE BE LIEF ENTERTAINED BY THE ASSESSEE REGARDING HER LAND BEING A PIECE OF AG RICULTURAL LAND, WAS A BONA FIDE BELIEF, ILL-INVITING THE LEVY OF PENALTY. 15. THE ABOVE APART, IN HER APPEAL BEFORE THE LD. C IT(A) AGAINST THE ASSESSMENT ORDER, THE ASSESSEE ALSO RELIED ON CIT VS. DEBBIE ALEMAO, 46 DTR 341 (BOM.), WHEREIN IT HAS BEEN HELD THAT TH E LAND WHICH HAS BEEN SHOWN AS AGRICULTURAL LAND IN THE REVENUE RECO RD AND WAS NEVER USED FOR AGRICULTURAL PURPOSES TILL ITS SALE, HAS T O BE TREATED AS AGRICULTURAL LAND AND NO CAPITAL GAIN IS TAXABLE TH EREON. FURTHER, THE ASSESSEE ALSO PLACED RELIANCE ON DCIT VS. CAPITAL LOCAL AREA BANK LTD., 29 SOT 394 (ASR), WHEREIN IT WAS HELD THAT THE EXP RESSION FROM THE LOCAL LIMIT OF ANY MUNICIPALITY, AS USED IN SECTIO N 2(14)(III)(B) OF THE I.T. ACT, REFERS TO ONLY ONE MUNICIPALITY AND NOT TO A NUMBER OF MUNICIPALITIES. THE ASSESSEE CONTENDED THAT AS PER THIS DECISION, THE AGRICULTURAL LAND SOLD BY THE ASSESSEE BEING AT A D ISTANCE OF MORE THAN 1 KM FROM THE MUNICIPAL LIMITS OF MULLANPUR, IT WAS N OT A CAPITAL ASSET IN VIEW OF CBDT NOTIFICATION NO.9447 DATED 06.01.1994 . ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 9 16. THE LD. CIT(A), HOWEVER, CONFIRMED THE ADDITIO N MADE BY THE AO, PLACING RELIANCE ON THE DECISION OF CIT VS. ANJANA SEHGAL, 355 ITR 294 (P&H), AS PER WHICH, THE DISTANCE FROM THE LAND HA S TO BE MEASURED FROM ANY MUNICIPALITY WHICH IS ADJACENT TO THE LAND . NOTICEABLY, CAPITAL LOCAL AREA BANK LTD. (SUPRA), IS DATED 16.01.2009, WHEREAS THE ANJANA SEHGAL (SUPRA), WAS PASSED ON 01.03.2011. 17. BE THAT AS IT MAY, THE FACT REMAINS THAT AS NO TED, ANJANA SEHGAL (SUPRA) IS DATED 01.03.2011. THE ASSESSMENT ORDER W AS PASSED ON 30.12.2010. THE LD. CIT(A)S ORDER IN THE QUANTUM A PPEAL IS DATED 08.08.2011. FROM THESE FACTS, IT IS QUITE CLEAR THA T THE BELIEF ENTERTAINED BY THE ASSESSEE REGARDING LAND NOT BEING A CAPITAL ASSET WAS BASED ON CAPITAL LOCAL AREA BANK LTD.(SUPRA). THEREFORE, I T CAN VERY WELL BE SAID THAT THE BELIEF OF THE ASSESSEE WAS INDEED A BONAFI DE BELIEF. THIS, AS TAKEN NOTE OF BY THE LD. CIT(A), WAS NOT REBUTTED B Y THE DEPARTMENT. THE LAND CAME WITHIN THE PURVIEW OF THE DEFINITION OF CAPITAL ASSET, WITHIN THE MEANING OF SECTION 2(14) OF THE ACT, ONLY ON TH E COMING OF THE DECISION IN ANJANA SEHGAL (SUPRA). 18. BESIDES THE ABOVE, IT IS TRITE THAT PENALTY P ROCEEDINGS ARE DIFFERENT FROM AND INDEPENDENT OF ASSESSMENT PROCEEDINGS AN D THE OBSERVATIONS IN THE ASSESSMENT ORDER OR IN THE QUANTUM FIRST AP PELLATE ORDER ARE NOT DETERMINATIVE OF THE LEVY OF PENALTY, BY THEMSELVE S. THEREFORE, THE OBSERVATIONS IN THE ASSESSMENT PROCEEDINGS/QUANTUM PROCEEDINGS CANNOT LEAD TO AUTOMATIC LEVY OF CONCEALMENT PENAL TY. 17. THE OBSERVATIONS OF THE LD. CIT(A) IN THIS REGA RD ARE ELOQUENT ENOUGH AND THEY HAVE NOT BEEN SUCCESSFULLY UNHINGE D BY THE DEPARTMENT. THEREFORE, FINDING NO MERIT THEREIN, TH E GRIEVANCE SOUGHT TO ITA NO.469/ASR)/2014 ASSTT. YEAR: 2007-08 10 BE RAISED BY THE DEPARTMENT IS HEREBY REJECTED. THE ORDER OF THE LD. CIT(A) DELETING THE PENALTY IN QUESTION IS CONFIRMED. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2 016. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 12/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. KANSHU GIRDHAR, MUKTSAR. 2. THE ITO, WARD II(2), MUKTSAR 3. THE CIT(A), BATHINDA 4. THE CIT, BATHINDA. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.