ITO, Tambaram V. Geetha Venugopal, CHENNAI

ITA 636/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90499 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS
• Assessee Lawyers: J RADHAKRISHNAN
• Keywords: Capital asset
• Section: 2(14)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . !' , # $% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A. NO.636/MDS/2013 ( / ASSESSMENT YEAR : 2009-2010) INCOME TAX OFFICER, WARD I(1), TAMBARAM, CHENNAI -45 ( &' /APPELLANT) VS SMT. GEETHA VENUGOPAL, 105, OLD TRUNK ROAD, PALLAVARAM, CHENNAI 600 043 [PAN:AQEPG 6451H] ( ()&' /RESPONDENT) / APPELLANT BY : SHRI. S. DASGUPTA, IRS, JCIT. / RESPONDENT BY : SHRI. J. RADHAKRISHNAN, ADVOCATE /DATE OF HEARING : 28.04.2015 ! /DATE OF PRONOUNCEMENT : 19.06.2015 * / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY REVENUE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IX, CHENNAI, D ATED 28.12.2012 FOR THE ASSESSMENT YEAR 2009-10. I.T.A.NO.636/MDS/2013. :- 2 -: 2. THE SOLE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS WITH REGARD TO TREATING THE LAND ACQUIRED BY THE GOVERNM ENT OWNED BY THE ASSESSEE IS AGRICULTURAL LAND AND THEREFORE IS NOT A CAPITAL ASSET FOR THE PURPOSE OF CHARGING CAPITAL GAINS TAX. 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL FILED A RETURN OF INCOME ON 19.01.2010 ADMITTING A TOTAL INCOME OF E2,09,960/- AND THE CASE WAS SELECTED FOR SCRUTINY . THE ASSESSEE HAD OWNED SOME AGRICULTURAL LANDS AT KOLAPPAKKAM VILLAG E BLOCK NO.1, SRIPERUMBUDUR TALUK. THE SAID LANDS WERE ACQUIRED BY THE GOVERNMENT FOR THE PURPOSE OF AIRPORT EXTENSION. T HE TOTAL COMPENSATION PAID BY THE GOVERNMENT WAS E53,00,890/ - AND E1,36,97,192 TO THE ASSESSEE WITH A TOTAL TDS DEDUC TED OF E24,27,521/-. THE ASSESSEE CLAIMED EXEMPTION FROM CAPITAL GAINS U/S.10(37) OF THE INCOME TAX ACT AS THE ASSET TRANS FERRED WAS AGRICULTURAL LAND AND AGRICULTURAL LAND IS NOT A CA PITAL ASSET WITHIN THE DEFINITION CONTAINED IN SECTION 2(14) OF THE ACT. 2.2 THE ASSESSING OFFICER OBSERVED THAT THE LA NDS BELONGING TO THE ASSESSEE WERE ACQUIRED BY THE GOVERNMENT OF TAMILNA DU FOR THE EXTENSION OF SECOND RUNWAY OF CHENNAI AIRPORT. THE LANDS WITH SURVEY NOS.272, 271/1 ARE SITUTATED AT NO.75, KOLAPAKKAM V ILLAGE, BLOCK NO.1, I.T.A.NO.636/MDS/2013. :- 3 -: SRIPERUMBUDUR TALUK. THE NEAREST MUNICPOLAITY IS P ALLAVARAM AND THE KOLAPAKKAM IS 14.4 KMS AND FROM MEENAMBAKKAM IT IS 14.6 KMS. THE GOVERNMENT HAD PAID A CONSIDERATION OF E2,14,25,603 /-. THE ASSESSEE FILED THE RETURN OF INCOME ADMITTING A TAXABLE INCO ME OF E2,09,960/- FOR THE ASSESSMENT YEAR 2009-10 AFTER CLAIMING THE AMOUNT OF E2,14,25,603/- AS EXEMPTED INCOME U/S.10(37) OF THE ACT. ACCORDING TO THE ASSESSEE, THE ABOVE LANDS ACQUIRED BY THE GO VERNMENT OF TAMILNADU WILL NOT BE FAILING IN THE DEFINITION OF SEC. 2(14) OF THE ACT. DURING THE SCRUTINY, THE ASSESSING OFFICER DENIED THE CLAIM MADE BY THE ASSESSEE AND TREATED THE PROFITS FROM THE SALE (THE COMPENSATION RECEIVED) OF THE LANDS, I.E E2,12,41,412/- AS CAPIT AL GAINS AND BROUGHT TO TAX. WHILE DOING SO, THE ASSESSING OFFICER HAS RELIED ON THE DECISION RENDERED BY THE HONBLE APEX COURT IN THE CASE OF SMT. SARIFABIBI MOHD. IBRAHIM VS. CIT 204 ITR 631 (SC). THE ASSESSING OFFICER HAS APPLIED THE TEST AND LAID DOWN BY THE HONBLE APEX COURT AND CONCLUDED THE ASSESSMENT BY TREATING THE LANDS ACQU IRED BY THE GOVT OF TAMILNADU ARE CAPITAL ASSETS U/S.2(14) OF THE AC T. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS ) OBSERVED THAT THE SAID LAND IS SITUATED BEYOND 10KMS FROM NEAREST MUNICAPLITY LIMITS I.E. PALLAVARAM MUNICIPALITY, KANCHIPURAM DIST, AND THE POPULATION OF I.T.A.NO.636/MDS/2013. :- 4 -: THE KOLAPAKKAM IS 2594. IT IS CLEARLY SEEN THAT THE SAID LANDS NEITHER FORM PART OF CHENNAI METRO DEVELOPMENT AUTHORITY (C MDA) NOR SITUATED IN ANY AREA WITH A POPULATION OF 10,000. FURTHER THE SAID LANDS ARE LOCATED AWAY FROM THE LIMITS NOTIFIED BY THE CENTRAL GOVERNMENT FOR THE PURPOSE OF SECTION 2(14) OF INCO ME TAX ACT, 1961, AND THE FACT WAS NOT DISPUTED BY THE ASSESSING OFFI CER. THE LANDS AS SEEN FROM REVENUE RECORDS SUGGEST THAT SAID LANDS A T SURVEY NO.272, 271/1 ARE SITUATED AT NO.75, KOLAPAKKAM VILLAGE, BL OCK NO.1, SRIPERUMBUDUR TALUK IS CLASSIFIED AS AGRICULTURAL L AND. THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD THAT THE SAID LANDS ARE NOT AGRICULTURAL LANDS. THE ASSESSEE HAS SUBMITTED BAS IC EVIDENCES THAT THE LAND IS AGRICULTURAL LAND BY FURNISHING COPIES OF ADANGAL. WHEN THE ASSESSEE SUBMITTED OVERWHELMING EVIDENCES SUGGESTIN G THAT THE LAND IS AGRICULTURAL, THE BURDEN IS ON THE ASSESSING OFF ICER TO PROVE THAT THE LAND IS NON-AGRICULTURAL ONE. IN THE ABSENCE OF AN Y FINDING CONTRARY TO THE EVIDENCES SUBMITTED BY THE ASSESSEE, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN TREATING THE SAID LANDS AS NON-AGRICUL TURAL LANDS AND THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE AD DITION MADE BY THE ASSESSING OFFICER. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. I.T.A.NO.636/MDS/2013. :- 5 -: 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, THE LAND WITH SURVEY NOS.272 , 271/1 ARE SITUATED AT NO.75, KOLAPAKKAM VILLAGE, BLOCK NO.1,SRIPERUMBU DUR TALUK. THE NEAREST MUNICIPALITY IS PALLAVARAM AND THE KOLAPAKA M IS 14.4 KMS AND FROM MENNAMBAKKAM/CHENNAI IT IS 14.6 KMS. THE A SSESSEE RECEIVED A CONSIDERATION OF E2,14,25,603/- ON ACQUI SITION BY GOVERNMENT OF TAMIL NADU. ACCORDING TO THE ASSESSE E, IT IS NON CAPITAL ASSET SO AS TO BRING IT TO CAPITAL GAIN TA X AS THE PROPERTY FALLS BEYOND AN AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY OR A CANTONMENT BOARD WHICH HAS A POPU LATION OF NOT LESS THAN TEN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF PREVIOUS YEAR. IN OTHER WORDS, LAND DOES NOT FALL UNDER SUCH-CLAUSE (A) TO SEC 2(14) (III) OF THE ACT AS LAND IS OUTSID E THE NOTIFIED MUNICIPALITY. NOW, WE HAVE TO SEE WHETHER THE LAND FALL IN CLAUSE (B) TO SEC 2(14)(III) OF THE ACT, AS CENTRAL GOVERNMEN T MAY, HAVING REGARD TO THE EXTEND TO THE SCOPE OF URBANIZATION THAT ARE A AND OTHER RELEVANT CONSIDERATION SPECIFIED IN THIS BEHALF BY NOTIFICAT ION IN THE OFFICIAL GAZETTE. THE NOTIFICATION ISSUED BY THE CENTRAL GO VERNMENT U/S.2(1A) (C) PROVISO (II)(B) AND 2(14) (3B) VIDE NO.9447, ( F.NO.164/(3)/87/ITA- I, DATED 06.01.1994, AS AMENDED BY NOTIFICATION NO .11186 DATED 28 TH I.T.A.NO.636/MDS/2013. :- 6 -: DECEMBER, 1999 PROVIDED THAT AGRICULTURAL LAND SITUATED IN AREA LY ING WITHIN THE DISTANCE NOT EXCEEDING 8 KM FROM THE LOC AL LIMITS OF MUNICIPALITY, IT COVERED BY AMENDED DEFINITION CA PITAL ASSETS. THE CENTRAL GOVERNMENT IN EXERCISE OF SUCH POWERS AS ISSUED BEFORE NOTIFICATION AS AMENDED BY NOTIFICATION 11186, DATE D 28.12.1999, CLEARLY CLARIFYING THAT AGRICULTURE LAND SITUATED I N LOCAL AREA, OUTSIDE MUNICIPALITY OR CONTENTMENT BOARD ETC. HAVING POPUL ATION OF LESS THAN TEN THOUSAND AND ALSO BEYOND DISTANCE NOTIFIED BY C ENTRAL GOVERNMENT FROM LOCAL LIMITS I.E. OUTSIDE LIMITS OF OTHER SUCH MUNICIPALITY OR CONTENTMENT BOARD ETC. STILL CONTINUES TO BE EXCLU DED FROM THE DEFINITION CAPITAL ASSET. ACCORDINGLY, LAND S ITUATED IN LOCAL AREAS CONTINUES TO BE EXCLUDED FROM THE DEFINITION. IN T HE PRESENT CASE, ADMITTEDLY THE IMPUGNED LAND IS OUTSIDE MUNICIPAL L IMIT OF CHENNAI AND ALSO 8KMS AWAY FROM OUTER LIMIT OF THIS MUNICIPALIT Y AND ALSO ANY OTHER MUNICIPALITY. THE ASSESSEE LAND DOES NOT COME WIT HIN THE PREVIEW OF SECTION 2(14)(III) OF THE ACT EITHER UNDER SUB-CLAU SE U/S.(A) OR (B) OF THE ACT. HENCE, IT CANNOT BE CONSIDERED AS CAPITAL ASSET WITHIN THE MEANING OF THE SECTION AND NO CAPITAL GAIN CAN BE C HARGED ON THE TRANSFER OF THIS LAND BY THE ASSESSEE. MERE INCLUS ION OF LAND WITHIN JURISDICTION OF AIRPORT DEVELOPMENT AUTHORITY BY ST ATE GOVERNMENT NOTIFICATION DOES NOT CHANGE THE CHARACTER OF LAND IF THE LAND STILL I.T.A.NO.636/MDS/2013. :- 7 -: CONTINUES TO BE AGRICULTURAL LAND AT THE POINT OF A CQUISITION OF LAND BY GOVERNMENT. ACCORDINGLY, WE INCLINED TO CONFIRM TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN THIS ISSUE. 4. IN RESULT, THE APPEAL OF THE REVENUE IN IT A NO.636/MDS/2013 IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 19 TH DAY OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . !' ) V. DURGA RAO # / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER '# /CHENNAI. $% /DATED:19.06.2015. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.