ACIT, New Delhi V. Smt. Nirmal Bansal, New Delhi

ITA 5307/DEL/2011

• Counselvise Citation: 530720114 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 31-01-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RA J TANDON
• Assessee Lawyers: MRS RANO JAIN CAS
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T. A. NOS.5304 & 5305/DEL/2011 ASSESSMENT YEARS : 2008-09 & 2009-2010 ASSTT. COMMISSIONER OF INCOME-TAX, SMT. MANJU BANS AL, CENTRAL CIRCLE-1, NEW DELHI. VS. D-113, PREET VIHAR, NEW DELHI. PAN: AGVPB6292Q I.T. A. NOS.5306 & 5307/DEL/2011 ASSESSMENT YEARS : 2008-09 & 2009-2010 ASSTT. COMMISSIONER OF INCOME-TAX, SMT. NIRMAL BAN SAL, CENTRAL CIRCLE-1, NEW DELHI. VS. A-26, PREET V IHAR, NEW DELHI. PAN: AFCPB7398R (APPELLANT) (RESPONDENTS) APPELLANT BY : SHRI RAJ TANDON, CIT-DR. RESPONDENT BY : SHRI VED JAIN & MRS. RANO JAIN, CAS . O R D E R PER BENCH THESE APPEALS BY THE REVENUE IN THE CASES OF TWO DI FFERENT ASSESSEES ARISE OUT OF SEPARATE ORDERS OF THE LEARNED COMMISS IONER OF INCOME-TAX (APPEALS)-III, NEW DELHI. THESE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, ARE DISPOSED OF BY THIS COMMON ORDER. 2 2. THE COMMON ISSUE INVOLVED IN ALL THE APPEALS REL ATES TO LEVY OF SHORT TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND. EX CEPT DIFFERENCE IN FIGURES THE ISSUE INVOLVED IS IDENTICAL. FOR SAKE OF CONVE NIENCE THE GROUNDS OF APPEAL IN ITA NO.5304/DEL/2011 IN THE CASE OF SMT. MANJU BANSAL ARE REPRODUCED AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E ADDITION OF RS.2,34,70,697/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF SHORT TERM CAPITAL GAIN. 2. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THE ONLY ISSUE FOR CONSIDERATION RELATES TO LEVY OF SHORT TERM CAPITAL GAINS ON SALE OF AGRICULTURAL LAND. THE FACTS OF T HE CASE STATED IN BRIEF ARE THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATI ON HAD SOLD LAND AT VILLAGE HAYATPUR DISTT. GURGAON AND CLAIMED THAT THE CAPITA L GAINS FROM SALE OF AGRICULTURAL LAND WAS EXEMPT BECAUSE THE LANDS WERE SITUATED AT A DISTANCE OF MORE THAN 8 KMS. FROM OUTER LIMITS OF GURGAON. IN SUPPORT OF THEIR CONTENTIONS, THE ASSESSEES HAD FURNISHED CERTIFICAT E FROM TEHSILDAR OF GURGAON STATING THEREIN THAT LANDS IN QUESTION WERE SITUATED AT A DISTANCE OF 9 KMS. THE AO ALSO MADE ENQUIRIES FROM THE DISTRICT TOWN PLANNER OF GURGAON, WHO VIDE HIS LETTER MEMO NO.70954 DATED 21 .12.2010 INTIMATED THE AO THAT THE DISTANCE OF LAND FROM THE OUTER LIM ITS OF MUNICIPAL 3 COMMITTEE OF GURGAON WAS 8.5 KMS. ON THE DATE OF SA LE. HOWEVER, THE AO WAS OF THE VIEW THAT DISTANCE GIVEN BY THE DISTRICT TOWN PLANNER GURGAON WAS VERY NARROW AS COMPARED TO THE DISTANCE OF 8 KM S. MENTIONED IN THE ACT. THE AO THEREFORE, CAME TO THE CONCLUSION THAT THE POSSIBILITY OF ANY OTHER SHORTEST ROUTE COULD NOT BE RULED OUT. HE TH EREFORE, TREATED THE LANDS SOLD BY BOTH THE ASSESSEES AS CAPITAL ASSET WITHIN THE MEANING OF SEC. 2(14) OF THE INCOME-TAX ACT, 1961 AND BROUGHT THE PROFITS TO TAX AS SHORT-TERM CAPITAL GAINS. 4. BEFORE THE CIT(A) IT WAS SUBMITTED BY THE LEARNE D AR OF THE ASSESSEE THAT THE ASSESSEE HAD PURCHASED LANDS JOINTLY WITH FOUR OTHER PERSONS. THE SAID LANDS WERE SOLD ALONG WITH OTHER CO-OWNERS AND SURPLUS INCOME WAS EARNED ON SALE OF AGRICULTURAL LANDS. THE DETAILS OF THE SHARE AND SURPLUS AMOUNT ARE GIVEN AS UNDER:- SL. NO. NAME A.Y. AMOUNT 1. SMT. MANJU BANSAL 2008-09 RS.2,34,70,697/- 2. SMT. MANJU BANSAL 2009-10 RS.2,97,94,499/- 3. SMT. NIRMAL BANSAL 2008-09 RS.2,34,70,697/- 4. SMT. NIRMAL BANSAL 2009-10 RS.2,97,94,502/-. IT WAS FURTHER SUBMITTED THAT ASSESSEES HAVE SOLD A GRICULTURAL LANDS WHICH WERE SITUATED MORE THAN 8 KMS. FROM OUTER MUNICIPAL LIMITS OF GURGAON. THEREFORE, THE SAID AGRICULTURAL LANDS WERE OUTSIDE THE DEFINITION OF CAPITAL ASSETS AS DEFINED IN SEC. 2(14) OF THE IN COME-TAX ACT, 1961. 4 CONSEQUENTLY THE CAPITAL GAINS ARISING ON SALE OF S UCH LANDS WAS NOT SUBJECT TO ANY TAXATION UNDER INCOME-TAX ACT, 1961. IT WAS ALSO SUBMITTED THAT THE AO HAD MADE INDEPENDENT ENQUIRIES FROM THE DISTRICT TOWN PLANNER, GURGAON, WHO HAD ALSO CERTIFIED THAT ON THE DATE OF SALE DISTANCE OF SAID LANDS FROM THE OUTER LIMITS OF THE MUNICIPAL COMMIT TEE OF GURGAON WAS 8.5 KMS. THE ASSESSEES HAD ALSO FILED CERTIFICATE ISSU ED BY TEHSIL GURGAON CERTIFYING THAT THE LANDS WERE SITUATED AT A DISTAN CE OF 9 KMS. FROM MUNICIPAL LIMITS OF GURGAON. IN VIEW OF ABOVE SUBMISSIONS, I T WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE SALE PROCEEDS W ERE NOT LIABLE TO TAX AS SHORT TERM CAPITAL GAINS AS HELD BY THE AO. 5. LEARNED CIT(A) ON CONSIDERATION OF FACTS HAS OBS ERVED THAT CERTIFICATE ISSUED BY TEHSILDAR GURGAON TO THE EFFECT THAT LAND S WHOSE PARTICULARS WERE GIVEN IN THE SALE DEED WERE SITUATED AT A DISTANCE OF 9 KMS. FROM THE OUTER MUNICIPAL LIMITS OF GURGAON. THE AO HAD ALSO MADE ENQUIRIES FROM THE DISTRICT TOWN PLANNER GURGAON WHO HAD ALSO GIVEN A CERTIFICATE THAT THE LANDS SOLD WERE 8.5 KMS AWAY FROM OUTER LIMITS OF M UNICIPAL LIMITS OF GURGAON. LEARNED CIT(A) THEREFORE, CAME TO THE CON CLUSION THAT THE APPREHENSION OF THE AO THAT POSSIBILITY OF ANY OTHE R SHORTEST DISTANCE COULD NOT BE RULED OUT, WAS NOT BASED ON ANY HARD EVIDENC E. SUCH APPREHENSION AND POSSIBILITY COULD NOT FORM BASIS FOR DENIAL OF THE CLAIM OF THE ASSESSEE 5 THAT THE LAND IN QUESTION WAS NOT A CAPITAL ASSET W ITHIN THE MEANING OF SEC. 2(14) OF THE ACT. THE LEARNED CIT(A) THEREFORE, HE LD THAT SINCE LANDS WERE SITUATED MORE THAN 8 KMS. AWAY FROM OUTER MUNICIPAL LIMIT OF GURGAON, THE AGRICULTURAL LANDS WERE NOT CAPITAL ASSET AND THERE FORE, THE PROFITS ARISING ON SALE THEREOF WILL BE EXEMPT FROM INCOME-TAX. 6. BEFORE US, THE LEARNED CIT-DR SUBMITTED THAT TWO CONDITIONS ARE TO BE SATISFIED FOR CLAIM OF EXEMPTION I.E. IT SHOULD BE AGRICULTURAL LAND AND SHOULD BE SITUATED MORE THAN 8 KMS. AWAY FROM MUNICIPAL LI MITS. HE FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS NOT EXAMINED WHETHER THE LANDS SOLD WERE AGRICULTURAL LANDS. THEREFORE, CIT(A) SHOULD HAVE EXAMINED THE NATURE OF LANDS. HE, THEREFORE, SUBMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF LEARNED CIT(A FOR DECIDING THE NATURE OF LANDS S OLD BY BOTH THE ASSESSEES. HE PLACED RELIANCE ON THE DECISION OF ITAT, COCHIN BENCH IN THE CASE OF M.K. REHIMAN VS. DCIT [2011] 16 TAXMANN.COM 406 (CO CH.). IT WAS ALSO SUBMITTED THAT CONTAINER DEPOT IS BEING STIPULATED IN THE VICINITY OF SAID LANDS. THEREFORE, THE NATURE OF LANDS CANNOT BE AG RICULTURAL. HE ALSO SUBMITTED THAT THE ASSESSEES SHOULD HAVE FILED PROO F IN SUPPORT OF THEIR CONTENTION THAT THE SAID LANDS WERE AGRICULTURAL LA NDS. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE AO HA S HIMSELF CARRIED OUT ENQUIRIES FROM THE DISTRICT TOWN PLANNER WHO HAD CE RTIFIED THAT THE SAID 6 LANDS WERE SITUATED MORE THAN 8 KMS. AWAY FROM MUNI CIPAL LIMITS OF GURGAON. THE AO HAS REJECTED THE CLAIM OF THE ASSE SSEES MERELY ON SUSPICION. HE PLACED RELIANCE ON THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF UMACHARAN SHAW & BROS VS. CIT, 37 ITR 2 71 FOR THE PROPOSITION THAT SUSPICION, HOWEVER, STRONG DOES NOT PARTAKE TH E CHARACTER OF EVIDENCE AND HENCE, NO ADDITION/DISALLOWANCE CAN BE MADE ON SUSPICION, SURMISES AND CONJECTURES. HE ALSO SUBMITTED THAT THE ISSUE WHET HER IMPUGNED LANDS WERE AGRICULTURAL OR NOT, IS NOT BEFORE THE TRIBUNAL. T HE AO HAS NOT DISPUTED THE FACT THAT THE SAID LANDS WERE AGRICULTURAL. HE ALS O SUBMITTED THAT THE SAID LANDS ARE SITUATED MORE THAN 8 KMS. AWAY FROM OUTER LIMITS OF MUNICIPAL CORPORATION OF GURGAON. THE TRIBUNAL CANNOT ADJUDI CATE UPON THE ISSUE WHICH HAS BEEN ACCEPTED BY THE AO. HE THEREFORE, S UBMITTED THAT NO CAPITAL GAIN IS CHARGEABLE ON AGRICULTURAL LANDS SOLD BY BO TH THE ASSESSEES. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH MATERIAL AVAILABLE ON RECORD. THE AO HAD MADE DISALLOWANCE MERELY ON THE GROUND THAT POSSIBILITY OF SHORTEST DISTANCE LESS THAN 8 KMS. F ROM OUTER LIMITS OF MUNICIPAL CORPORATION COULD NOT BE RULED OUT. THE ASSESSEE HAD FILED CERTIFICATE FROM TEHSILDAR OF GURGAON THAT THE LAND S SOLD BY BOTH THE ASSESSEES WERE SITUATED 9 KMS AWAY FROM MUNICIPAL C ORPORATION LIMITS OF GURGAON. THE AO HAD ALSO OBTAINED A CERTIFICATE FR OM THE DISTRICT TOWN PLANNER, WHO HAD ALSO CERTIFIED THAT THE LANDS WERE SITUATED AT 8.5 KMS ON THE DATE OF SALE. NO OTHER EVIDENCE WAS BROUGHT ON REC ORD BY THE AO TO PROVE 7 THAT THE IMPUGNED LANDS WERE SITUATED WITHIN 8 KMS. FROM OUTER LIMITS OF MUNICIPAL CORPORATION OF GURGAON. THE AO HAS NOT DO UBTED THE NATURE OF AGRICULTURAL LANDS. BEFORE THE CIT(A) THE ASSESSEE IN THE GROUNDS OF APPEAL HAS SPECIFICALLY MENTIONED THAT BOTH THE ASSESSEES HAVE SOLD AGRICULTURAL LANDS AND THEREFORE, THE SAID LANDS DID NOT CONSTIT UTE CAPITAL ASSET WITHIN THE MEANING OF SEC. 2(14) OF THE INCOME-TAX ACT, 1961. SINCE NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO TO SUPPORT HIS CON TENTION THAT THE IMPUGNED LANDS WERE SITUATED WITHIN THE 8 KMS FROM 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 OF LAND WAS NOT DOUBTED BY THE AO, WE ARE UN ABLE TO ACCEPT THE CONTENTION OF THE LEARNED CIT-DR THAT THE MATTER SH OULD BE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR VERIFICATION OF THE FACT WHETHER THE LANDS WERE AGRICULTURAL IN NATURE OR NOT. IN VIEW OF ABOVE FA CTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) ALLOWING THE RELIEF TO BOTH THE ASSESSEES IN BOTH THE ASSESSMENT YEARS. 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE IN BOTH THE CASES FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED. 9. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 ST JANUARY, 2012. 8 ITA NOS.5304 TO 5307/DEL/2011 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.