Smt. Savithri Ammal, CHENNAI V. ITO, Pondicherry

ITA 487/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61282 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.487/MDS/2012 (ASSESSMENT YEAR: 2008-09) SMT. SAVITHRI AMMAL, C/O. S.SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI-600 020. PAN:ADEPV0492L VS. THE INCOME TAX OFFICER, WARD-1(2), PONDICHERRY. (APPELLANT) (RESPONDENT) & ITA NO.583/MDS/2012 (ASSESSMENT YEAR: 2008-09) SHRI V.VIJAYASEKAR, C/O. S.SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI-600 020. PAN:ADEPV0492L VS. THE INCOME TAX OFFICER, WARD-1(2), PONDICHERRY. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. S.SRIDHAR, ADVOCAT E RESPONDENT BY : MR. VI KRAMADITYA, JCIT DATE OF HEARING : 12 TH JULY, 2012 DATE OF PRONOUNCEMENT : 12 TH JULY, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT SET OF APPEALS I.E. ITA NO.487/MDS/2012 & ITA NO.583/MDS/2012 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A), CHENNAI DATED 23.01.2012. SINCE BOTH THE AP PEALS ITA NO.487 & 583/MDS/2012 2 HAVE COMMON ISSUE, THEY ARE TAKEN UP TOGETHER AND D ECIDED BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME RELEVANT TO THE ASSESSMENT YEAR 20 08-09 ON 24.12.2008 DECLARING INCOME OF ` 3,02,440/- ALONG WITH AGRICULTURAL INCOME OF ` 75,000/-. DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE/APPELLANT HAD SOLD AGRICULTURAL LAND SITUATED IN KORKADU VILLAGE, BAHO UR COMMUNE, PONDICHERRY, WHICH ACCORDING TO THE ASSESS EE IS SITUATED AT A DISTANCE OF 14 KMS. FROM THE MUNICIPA L LIMITS OF PONDICHERRY. THE RETURN OF THE ASSESSEE WAS TAKEN U P FOR SCRUTINY AND A NOTICE UNDER SECTION 143(2) WAS ISSU ED TO THE ASSESSEE ON 9.9.2009. DURING THE COURSE OF ASSESS MENT PROCEEDINGS THE ASSESSEE ADMITTED BEFORE THE ASSE SSING OFFICER THAT SHE SOLD AGRICULTURAL LAND MEASURING 1 HECTARES 81 ACRES AND 28 CENTIARES FOR ` 59,55,000/-. IN ORDER TO ASSESS WHETHER THE LAND SOLD BY THE ASSESSEE IS WIT HIN THE MUNICIPAL LIMITS OR NOT, THE ASSESSING OFFICER MADE REFERENCE TO THE REGISTERING AUTHORITY. THE REGISTERING AUTHO RITY ISSUED A MAP, ACCORDING TO WHICH, THE LAND IN QUESTION IS LOCATED ITA NO.487 & 583/MDS/2012 3 WITHIN 8 KMS OF THE MUNICIPAL LIMITS OF PONDICHERRY . THE ASSESSING OFFICER ON THE BASIS OF THE MAP CHARGED T HE PROFIT ARISING FROM SALE OF THE LAND AS CAPITAL GAIN UNDER SECTION 45 OF THE INCOME TAX ACT BY TREATING THE SAID LAND AS CAPITAL ASSET IN ACCORDANCE WITH THE PROVISION OF SECTION 2 (14)(III)(B) OF THE ACT. IT IS RELEVANT TO MENTION HERE THAT BOT H THE ASSESSEES/APPELLANTS WERE THE CO-OWNERS OF THE LAND . IN CASE OF THE ASSESSEE/APPELLANT IN ITA NO.583/MDS/2012 TH E SALE CONSIDERATION WAS ` 67,72,000/- AND THE LONG TERM CAPITAL GAIN ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE W AS ` 65,98,485/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 30.12.2010, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE FINDINGS OF THE ASSESSING OFFICER ON THE ISSUE. 3. THE COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE CIT(A) AS WELL AS THE ASSESSING OFFICER HAVE ERRED IN MEASURING DISTANCE OF 8 KMS. BY A ST RAIGHT LINE ON HORIZONTAL PLANE, WHEREAS THE DISTANCE SHOULD HA VE BEEN MEASURED IN TERMS OF THE APPROACH ROAD. THE COUNSEL ITA NO.487 & 583/MDS/2012 4 APPEARING ON BEHALF OF THE ASSESSEE, IN ORDER TO SU PPORT HIS CONTENTION, RELIED ON THE NOTIFICATION DATED 6.1.19 94, FURTHER AMENDED BY NOTIFICATION DATED 28.12.1999. IN ORDER TO FORTIFY HIS SUBMISSIONS, THE COUNSEL FOR THE ASSESSEE RELIE D ON THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF CIT VS. SATINDER PAL SINGH, REPORTED AS 229 CTR (P &H) 82, WHEREIN IT HAS BEEN HELD THAT DISTANCE OF A GRICULTURAL LAND WITHIN THE MEANING OF SECTION 2(14)(III)(B) H AS TO BE MEASURED IN TERMS OF APPROACH ROAD AND NOT BY STRAI GHT LINE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. 4. ON THE OTHER HAND, THE D.R. REPRESENTING THE DEPARTMENT SUPPORTED THE ORDER PASSED BY THE CIT(A) STATING THAT THE IMPUGNED ORDER IS A WELL-REASONED AND DETA ILED ORDER. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE PARTIE S, HAVE GONE THROUGH THE ORDERS PASSED BY THE AUTHORIT IES BELOW AND HAVE CONSIDERED THE JUDGEMENT REFERRED TO BY TH E COUNSEL FOR THE ASSESSEE. WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) AS WELL AS THE ASSESSING OFFICER HA S ERRED IN RELYING ON THE MAP WHICH HAS BEEN AUTHENTICATED BY THE ITA NO.487 & 583/MDS/2012 5 REGISTERING AUTHORITY IN ORDER TO DETERMINE THE DIS TANCE OF 8 KMS. SO AS TO TREAT THE LAND IN QUESTION AS CAPITAL ASSET WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 2(14)(III) (B) OF THE ACT. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SATINDER PAL SINGH (SUPRA) HAS HELD AS UNDER:- 6. A PERUSAL OF THE AFORESAID PROVISION SHOWS THAT CAPITAL ASSET WOULD NOT INCLUDE ANY AGRICULTURAL LAND WHICH IS NOT SITUATED IN ANY AREA WITHIN SUCH DISTANCE AS MAY BE SPECIFIED IN THIS BEHALF BY A NOTIFICATION IN THE OFFICIAL GAZETTE WH ICH 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 MUNICIPAL 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 SIGNIFICA NT 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 FLIGHT THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW THE EXTENT OF URBANIZATION. SUCH A COURSE WOULD BE ILLUSORY. I T IS IN PURSUANCE OF THE AFORESAID PROVISION THAT NOTIFICATION NO.9447 DATED 6.1.1994 HAS BEEN ISSUED BY THE CENTRAL GOVERNMENT. IN RESPECT OF ITA NO.487 & 583/MDS/2012 6 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 REGARD ED 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 I T WOULD 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 AN Y MEASUREMENT BY CROWS FLIGHT IS BOUND TO IGNORE THE URBANIZATION WHICH HAS TAKEN PLACE. 6. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF LAUKIK DEVELOPERS VS. DCIT REPORTED AS 108 TTJ (MUM) 364 H AS ALSO DEALT WITH THE SIMILAR ISSUE AND HAVE ACCEPTE D THE PRINCIPLE THAT THE DISTANCE OF AGRICULTURAL LAND BE LONGING TO THE ASSESSEE HAS TO BE MEASURED IN TERMS OF APPROACH RO AD AND NOT BY STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE O R AS PER CROWS FLIGHT. IN VIEW OF THE ABOVE JUDGEMENT OF THE HONBLE PUNJA B & HARYANA HIGH COURT AND THE ORDER OF THE TRIBUNAL IN LAUKIK DEVELOPERS (SUPRA) ON THE IDENTICAL ISSUE, WE REMIT THE MATTER BACK TO THE ASSESSING OFFICER IN BOTH THE APPEALS T O ITA NO.487 & 583/MDS/2012 7 DETERMINE THE DISTANCE OF THE AGRICULTURAL LAND SOL D BY THE ASSESSEE IN THE RESPECTIVE CASES FROM THE MUNICIPAL LIMITS OF PONDICHERRY BY ROAD. 7. NO OTHER ISSUE WAS PRESSED BY THE COUNSEL FOR TH E ASSESSEE IN BOTH THESE APPEALS. 8. THE FINDINGS OF THE CIT(A) ON THE ISSUE IN THE IMPUGNED ORDERS ARE SET ASIDE, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 12 TH OF JULY, 2012 AT CHENNAI. SD/- SD/- ( ABRAHAM P.GEORGE ) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 12 TH JULY, 2012. SOMU COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .