SHRI BHANWAR LAL SHARMA, Jaipur V. ITO, Jaipur

ITA 522/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7826 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEEPH
• Assessee Lawyers: G M MEHTA
• Keywords: Capital asset
• Section: 54B; 54F

Judgement Text

ITA NO. 522/JP/2012 SHR I BHANWAR LAL SHARMA VS. ITO WARD- 7 (2), JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 522/JP/2012 ASSESSMENT YEAR: 2007-08 PAN : BONPS 1745 A SHRI BHANWAR LAL SHARMA VS. THE ITO VILLAGE. BHAMBHORIYA, SARANGPURA WARD- 7 (2) AMER ROAD, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G,M. MEHTA DEPARTMENT BY: MRS. NEENA JEEPH DATE OF HEARING: 28-10-2014 DATE OF PRONOUNCEMENT: 05-12-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 20-04-20129 WHEREIN THE A SSESSEE HAS RAISED FOLLOWING GROUNDS IN HIS APPEAL. (1) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE ACTION OF THE LD. AO IN TAXING THE G AIN OF RS. 92,46,373/- ON SALE OF AGRICULTURAL LAND WHICH IS A NON-CAPITAL ASSET WITHIN MEANING OF SECTION 2(14)(I II) (B) OF I.T. ACT. (2) WITHOUT PREJUDICE TO GROUND NO. (1), LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF THE L D. AO IN DISALLOWING THE FOLLOWING DEDUCTIONS:- ITA NO. 522/JP/2012 SHR I BHANWAR LAL SHARMA VS. ITO WARD- 7 (2), JAIPUR 2 (I) DEDUCTION OF RS. 44,17,500/- U/S 54B OF I.T. AC T ON ACCOUNT OF PURCHASE OF NEW AGRICULTURAL LAND AT VI LLAGE KANKRALA (DISTT. JAIPUR ). (II) DEDUCTION OF RS. 5,00,000/- U/S 54F OF I.T. AC T ON ACCOUNT OF CONSTRUCTION OF RESIDENTIAL HOUSE. 2.1 LD. COUNSEL FOR THE ASSESSEE AT THE OUT SET CON TENDS THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE DECISION OF THI S BENCH OF ITAT DATED 30- 12-2010 IN ITA NO. 996/JP/2007 FOR THE ASSESSMENT Y EAR 2006-07 IN THE CASE OF OTHER CO-OWNER OF THE LAND I.E. BROTHER OF THE ASSESSEE SHRI RAM NIWAS SHARMA. THE IMPUGNED AGRICULTURAL LAND WAS SO LD BY BOTH THE BROTHERS. THUS THE DESCRIPTION, LOCATION AND NATURE OF THE LAND IN THE CASE OF BOTH THE BROTHERS ARE THE SAME. ITAT HAS HELD THAT THE LAND IN QUESTION IS AGRICULTURAL LAND AND NOT A CAPITAL ASSET WITHIN TH E MEANING OF SECTION 2(14)(III)(B) OF THE ACT BY FOLLOWING OBSERVATIONS: - 8. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PE RUSING THE MATERIAL ON RECORD, WE FIND THAT THIS MATTER NEEDS RE-VERIFI CATION AT THE END OF THE AO. THE AO HAS TAKEN THE DISTANCE FROM THE LIM IT OF MCD TO THE VILLAGE BHAMBHORIA WHEREAS DISTANCE SHOULD BE TAKEN FROM LIMIT OF MCD TO THE RESPECTIVE LAND. THE DPS IS TO BE TAKEN LIMIT OF MCD AS THE SAME IS SITUATED AT THE BORDER AS STATED BY LD. A/R, WHICH IS NOT IN DISPUTE. THEREAFTER, THE DISTANCE HAS TO BE TAKEN UPTO THE RESPECTIVE LAND AND NOT FROM THE VILLAGE BHAMBHORIA. DISTANCE IS ALSO TO BE ITA NO. 522/JP/2012 SHR I BHANWAR LAL SHARMA VS. ITO WARD- 7 (2), JAIPUR 3 TAKEN BY ROAD AND NOT ON THE BASIS OF STRAIGHT LINE I.E. AIR. THE HONBLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT D ISTANCE OF AGRICULTURAL LAND BELONGING TO THE ASSESSEE HAS TO BE MEASURED IN TERMS OF APPROACH BY ROAD AND NOT A STRAIGHT LINE D ISTANCE ON HORIZONTAL PLANE OR AS PER CROWS FLIGHT. ACCORDIN GLY, WE DIRECT THE AO TO MEASURE THE DISTANCE OF AGRICULTURAL LAND BEL ONGING TO THE ASSESSEE WITHIN THE MEANING OF SECTION 2(14)(III)(B ) IN TERMS OF APPROACH BY ROAD AND NOT A STRAIGHT LINE DISTANCE O N HORIZONTAL PLANE OR AS PER CROWS FLIGHT. ACCORDINGLY ALL THE ISSUE S INVOLVED IN THESE APPEALS ARE SET ASIDE TO THE FILE OF AO TO DECIDE A FRESH IN VIEW OF OUR OBSERVATIONS AND AFTER AFFORDING REASONABLE OPPORTU NITY OF BEING HEARD TO THESE ASSESSES. 2.2 CONSEQUENT TO SETTING ASIDE THE APPEAL OF SHRI RAM NIWAS SHARMA (SUPRA) BY ITAT, THE AO IN THE REFRAMED ASSESSMENT , ALLOWED ASSESSEE'S CLAIM AND HELD THE SOLD AGRICULTURAL LAND BEING NOT A CAPITAL ASSETS IN TERMS OF SECTION 2(14)((III)(B ) BY FOLLOWING OBSERVATION S. IN COMPLIANCE TO THE DIRECTIONS GIVEN BY THE HON' BLE ITAT, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND INFORMATION WAS ALSO GATHERED WITH RESPECT TO THE D ISTANCE OF THE LAND SOLD FROM THE JAIPUR MUNICIPAL LIMITS. IN COMPLIANCE, THE ASSESSEE A/R SHRI G.M. MEHTA ATTENDED AND FILED DETAILS AND THE MATTE WAS DISCUSSED. ITA NO. 522/JP/2012 SHR I BHANWAR LAL SHARMA VS. ITO WARD- 7 (2), JAIPUR 4 IN VIEW OF THE DETAILED FILED AND THE VERIFICATION MADE DURING THE ASSESSMENT PROCEEDINGS, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- (A) INCOME FROM OTHER SOURCES(FD INTEREST AS ASSESS ED U/S 143(3): RS. 7,96,306/- (B) GROSS TOTAL INCOME RS. 7,96,306/- LESS: DEDUCTION UNDER CHAPTER VIA:- RS. NI L ASSESSED TOTAL INCOME RS. 7,96,306/- ROUNDED OFF U/S 288A : RS. 7,96,310/- 2.3 COPIES OF THE SALE DEEDS IN BOTH THE CASES ARE ALSO PLACED ON RECORD WHICH ARE FOR THE SALE OF SAME AGRICULTURAL LAND OW NED AS CO-OWNERS. IN ASSESSEE'S CASE ALSO, THE TEHSILDAR, JAIPUR MUNICIP AL CORPORATION HAS CERTIFIED THAT THE LAND IN QUESTION IS SITUATE AT 8 .5 KILOMETER AWAY FROM JAIPUR MUNICIPAL CORPORATION WHICH IS ALSO PLACED O N RECORD. 2.4 THE LD. DR IS HEARD. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, RESPECTFULLY FOLLOWING THE DEC ISION OF THIS BENCH IN THE CASE OF SHRI RAM NIWAS SHARMA (ITA NO. 996/JP/2007 DATED 30-12-2010), SUPRA, WE ALLOW GROUND NO. 1 OF THE ASSESSEE. THE A SSESSEE'S CAPITAL GAINS ARE EXEMPT AS THE LAND IN QUESTION IS OUTSIDE THE S PECIFIED JAIPUR CORPORATION LIMIT AND THEREFORE, THE ASSETS ARE NOT LIABLE FOR CAPITAL GAINS. CONSEQUENTLY, THE GROUND NO. 2 OF THE ASSESSEE ABOUT SECTION 54B AND SECTION 54F ITA NO. 522/JP/2012 SHR I BHANWAR LAL SHARMA VS. ITO WARD- 7 (2), JAIPUR 5 BECOMES ACADEMIC IN NATURE AND THUS IS INFRUCTUOUS. CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED ON ABOVE TERMS. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05- 12-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 05 TH DEC. 2014 *MISHRA COPY FORWARDED TO:- 1.SHRI BHANWAR LAL SHARMA, JAIPUR 2. THE ITO, WARD- 7 (2), JAIPUR 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 522JP/2012) AR ITAT, JAIPUR