Midnapore Agro United Hatchery Pvt. Ltd., Hooghly V. ACIT, CIR-2, MIDNAPUR, Paschim Medinipur

ITA 777/KOL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0167 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Cost of acquisition
• Section: 143(3); 50C; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI A T VARKEY, JM, & SHRI M.BAL AGANESH, AM] I.T.A NO. 777/KOL/201 5 ASSESSMENT YEAR : 2011-1 2 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. -VS- ACIT, CIRCLE-2, MIDNAPORE [PAN: AADCM 5292 Q ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SOMNATH GHOSH , ADVOCATE FOR THE RESPONDENT : SHRI SAURABH KUMAR, ADDL . CIT SR. DR DATE OF HEARING : 29.11.2018 DATE OF PRONOUNCEMENT : 05.12.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-11, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO. 62/CIT(A)- 11/R-2/MID/14-15/KOL DATED 13.03.2015 AGAINST THE O RDER PASSED BY THE ACIT, CIRCLE- 2, MIDNAPORE [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2011-1 2. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE TOWARDS L ONG TERM CAPITAL GAIN ON TRANSFER OF LAND AND BUILDING IN THE SUM OF RS. 1,12,09,581/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 2 3. BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN COMMERCIAL & BOILER CHICK HATCHING BUSINESS AND HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 17.09.2011 DECLARING TOTAL INCOME OF RS. NIL. AS PER THE AUDITED STATEMENT OF ACCOUNT, THE ASSESSEE DERIVED INTO PROFIT OF RS. 34,919/- FROM BUSINESS DURING THE PREVIOUS YEAR 2010-11 AND THE P ROFIT WAS FULLY SET OFF AGAINST THE BROUGHT FORWARD BUSINESS LOSS OF ASSESSMENT YEAR 20 08-09. AS PER INFORMATION RECEIVED FROM THE DISTRICT SUB-REGISTRAR, PURBA MEDINIPUR, T HE ASSESSEE HAD SOLD A PIECE OF LAND ADMEASURING 15 DECIMAL TOGETHER WITH TWO-STOREYED B UILDING THEREON DURING THE YEAR UNDER CONSIDERATION TO ONE SHRI NIKHILESH BERA OF V ILL-CHATRA, P.O.-RAMTARAKHAT, PS.- TAMLUK, DIST. MIDNAPORE (EAST). COPY OF RELEVANT DE ED OF CONVEYANCE DATED 09.04.2010 WAS OBTAINED AND EXAMINED. IT IS FOUND THAT VALUE O F CONSIDERATION RECEIVED AS A RESULT OF TRANSFER WAS DECLARED AT RS. 35, 00,000/- IN THE DEED [RS. 15,00,000/- FOR LAND + RS. 20,00,000/- FOR BUILDING THEREON]. IN COURSE OF HEA RING THE LD. AR WAS ASKED TO EXPLAIN WHY THE TRANSFER OF AFORESAID CAPITAL ASSET WAS NOT DISCLOSED IN RETURN FOR ASSESSMENT YEAR 2011-12. ON PERUSAL OF RECORDS IT IS OBSERVED THAT THE ASSESSEE HAD PURCHASED ACQUIRED THE LAND FROM ONE SK. ATIAR RAHMAN OF PUJA LI CHHOTO BOTTOLA, PS. BUDGE BUDGE, DIST. 24 PARGANAS (SOUTH) IN PY. 2000-01. TH E LAND IS SITUATED IN MOUZA SANTIPUR, PS. KOLAGHAT, DIST. MIDNAPORE(EAST) AND W AS ACQUIRED BY ASSESSEE FOR A SUM OF RS. 2,50,000/-. LATER ON A BUILDING MEASURING 19 74 SQ. FT. WAS CONSTRUCTED ON THE LAND AND THE LAND TOGETHER WITH THE BUILDING WERE SOLD I N PY 2010-11 TO SHRI NIKHILESH BERA. THE ASSET TRANSFERRED BY ASSESSEE WAS LONG TE RM CAPITAL ASSET AS DEFINED U/S 2(29A), SINCE THE PERIOD OF HOLDING WAS MORE THAN 3 6 MONTHS IMMEDIATELY PRECEDING THE DATE OF TRANSFER. FURTHER, THE INCOME ARISING O UT OF TRANSFER OF SAID ASSET IS CHARGEABLE TO TAX AS PER PROVISIONS OF SECTION 45, READ WITH S ECTION 48. 4. THE LD. AO ADOPTED THE VALUE AS PER THE STAMP VA LUATION AUTHORITY IN TERMS OF SECTION 50C OF THE ACT IN THE SUMS OF RS. 89,73,843 /- IN RESPECT OF LAND AND RS. 3 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 3 26,73,535/- IN RESPECT OF BUILDING AS AGAINST RS. 1 5LACS AND RS. 20LACS ADOPTED BY THE ASSESSEE AS PER THE SALE DEED RESPECTIVELY. THE LD. AO ACCORDINGLY COMPUTED THE LONG TERM CAPITAL GAINS ON TRANSFER OF THIS LAND AND BUI LDING AS UNDER: 5. BEFORE THE LD. CIT(A), THE ASSESSEE PLEADED THAT THE LAND WHICH WAS SOLD WAS RURAL AGRICULTURAL LAND SITUATED IN A RURAL AREA I.E. IN THE VILLAGE- MANDALGHAT, MOUZA- SANTIPUR, DISTRICT- PURBA MEDINIPUR AND FOR MORE TH AN 8 KMS. OF LOCAL LIMITS OF ANY MUNICIPALITY AND CANTONMENT BOARD HAVING POPULATION OF 10000 OR MORE. THE LANDED PROPERTY WAS MEASURED 15 DECIMALS I.E. 65332.50 SQ. FT AND IS AGRICULTURAL IN NATURE. IT WAS PLEADED THAT IN THE RECORDS OF THE REVENUE DEPA RTMENT OF GOVERNMENT OF WEST BENGAL, THE LAND IN QUESTION WAS RECORDED AS AGRICU LTURAL LAND. IT WAS SUBMITTED THAT THE LAND WAS PUT TO USE BY THE ASSESSEE TOWARDS AGRICUL TURAL ACTIVITY SINCE ITS ACQUISITION IN FINANCIAL YEAR 2000-01 AND ONLY A PORTION OF 987 SQ . FT WAS UTILIZED TO SET UP YEAR TWO STORIED BUILDING FOR HATCHERY AND POULTRY BUSINESS OF THE ASSESSEE. IT WAS SUBMITTED THAT THE POULTRY BUSINESS OF THE ASSESSEE. IT WAS SUBMIT TED THAT THE POULTRY BUSINESS OF THE ASSESSEE WAS NOT RUNNING WELL AND ACCORDINGLY THE A SSESSEE DID NOT CONCENTRATE ITS ACTIVITIES ONLY ON AGRICULTURE. FINALLY THIS AGRICU LTURAL LAND ALONG WITH BUILDING SITUATED ON IT WAS SOLD ON 09.04.2010 RELEVANT TO ASSESSMENT YEAR 2011-12. SINCE THE LANDED PROPERTY BEING AGRICULTURAL IN NATURE, HE DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSESSEE U/S 2(14) OF THE ACT WITHOUT PREJUDICE TO THIS ARGUMENT. IT WAS PLEADED THAT THE LD. AO DID NOT REDUCE THE INDEXED COST OF RETURN OF VALUE BUILDING SO TRANSFERRED WHILE COMPUTING THE LONG TERM CAPITAL GAIN AMOUNTING TO R S. 7,19,290/-. 4 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 4 6. THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM T HE LD. AO IN RESPECT OF THIS SUBMISSION MADE BY THE ASSESSEE. THE LD. AO REITERA TED THE STAND TAKEN IN THE ASSESSMENT IN HIS REMAND REPORT. THE ASSESSEE IN IT S REJOINDER TO ITS REMAND REPORT STATED THAT THE ASSESSEE SPECIFICALLY STATED THAT THE LD. AO VIDE WRITTEN SUBMISSION DATED 07.10.2013 THAT THE LAND IN QUESTION BEING AGRICULT URAL LAND AND HENCE NO TAX WAS PAID ON SALE OF THE SAME. THE ASSESSEE HAD ALSO PLACED O N RECORD THE ENTRY IN THE REVENUE RECORDS OF GOVERNMENT OF WEST BENGAL WITH REGARD TO CLASSIFICATION OF LAND AS AGRICULTURAL LAND. WITH REGARD TO OBJECTION MADE BY THE LD. AO THAT IN PAGE 2 OF THE SALE DEED DATED 08.04.2010 SUBMITTED BY THE ASSESSEE WHE REIN THE DESCRIPTION OF LAND WAS MENTIONED AS HOMESTEAD , THE ASSESSEE EXPLAINED T HAT IN THE SALE DEED IT WAS INADVERTENTLY MENTIONED AS HOMESTEAD AND FURTHER EXPLAINED THAT A LANDED PROPERTY CAN BE DESCRIBED AS HOMESTEAD ONLY WHEN THE SAID PR OPERTY IS CONVERTED IN THE GOVERNMENT RECORDS FROM AGRICULTURAL LAND TO HOMEST EAD. IN THIS REGARD IT WAS SUBMITTED THAT A FRESH RECORD DATED 20.10.2014 HAS BEEN TAKEN FROM THE LAND REVENUE DEPARTMENT OF GOVERNMENT OF WEST BENGAL WHEREFROM IT WAS CLEAR TH AT THE SAID LANDED PROPERTY CONTINUED TO BE AGRICULTURAL IN NATURE. THE LD. CIT (A) OBSERVED IN HIS ORDER AS UNDER: IN THE APPELLANT PROCEEDINGS THE AR ADMITTED THAT THE TWO STORIED BUILDING WAS USED FOR HATCHERY AND POULTRY BUSINESS. THE LANDED PROPE RTY ADMEASURED 6532.50 SQ.FT. (15 DECIMALS) AND THE POULTRY BUILDING OCCUPIES 982 SQ. FT. (AS PER THE ASSESSEE). AS PER THE ASSESSEE THE LAND IS AGRICULTURAL LAND AND IN THE D EED OF THE SALE IT IS DECLARED AS JAL/JALJAMIN AND IS ASSESSED TO LAND REVENUE AS LAN D & BUILDING SEPARATELY. THE ASSESSEE FILED CERTAIN RECEIPTS TO SHOW THIS FACT. HOWEVER, THE CLAIM OF THE ASSESSEE THAT THE RECEIPTS OF THE OFFICE OF LAND AND LAND REFORMS PROVE THAT THE LAND REVENUE IS PAID FOR THE ENTIRE 15 DECIMAL OF LAND IS NOT ACCEPTED A S THE NOTING OF TAX PAID ON 15 DECIMALS OF LAND IS IN A DIFFERENT HANDWRITING AND IN ENGLISH WHEREAS THE REST OF THE MATTER IN THE RECEIPTS ARE PRINTED AS WELL AS ARE W RITTEN TOTALLY IN BENGALI LANGUAGE. FURTHER THE PAGE 2 OF THE DEED OF SALE DECLARES THE PROPERTY SOLD AS BASTUJAMIN I.E. NON-AGRICULTURAL HOMESTEAD. THOUGH THE AR HAS CONTE STED THIS ENTRY IN THE SALE DEED BY SEEKING TO RELY ON THE REVENUE RECEIPTS, IT IS HELD THAT A MERE ENTRY IN THE REVENUE RECORD BY ITSELF IS NOT DETERMINATIVE OF THE QUESTI ON AS TO WHETHER THE LAND IS AGRICULTURAL OR NOT. IN THE INSTANT CASE, THE PROPERTY SOLD IS A POULTRY BUSINESS WHERE THERE IS A TWO STORIED CONSTRUCTED BUILDING A LSO. THE SALE HAS BEEN MADE OF THE 5 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 5 PROPERTY AS SUCH DECLARING IT TO BE A HOMESTEAD LAN D. THE LAND HAS BEEN VALUED FOR STAMP DUTY AT A VERY HIGH PRICE OSTENSIBLY DUE TO I TS COMMERCIAL NATURE. EVEN THE ASSESSEE HAS ATTRIBUTED MORE SALE VALUE TO THE BUIL DING THEN TO THE LAND PART OF THE PROPERTY. THERE IS NO RECORD OF ANY AGRICULTURAL AC TIVITIES BEEN PERFORMED BY THE ASSESSEE ON THIS PROPERTY. FURTHER THE ASSESSEE IS A COMPANY AND ITS VERY NAME INDICATES THAT IT IS DOING BUSINESS OF POULTRY. THE CLAIM OF THE ASSESSEE THAT IT HAD USED THE VACANT PORTION FOR AGRICULTURAL ACTIVITIES IS N OT SUPPORTED BY ANY EVIDENCE. ON THE CONTRARY THE OPEN SPACE IS REQUIRED FOR THE MOVEMEN T OF VEHICLES AND EQUIPMENT FOR POULTRY BUSINESS. EVEN WHEN THE AO REITERATED IN TH E REMAND REPORT THAT THE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE OF IT EVER HAVING CARR IED OUT ANY AGRICULTURAL ACTIVITIES, THE RESPONSE OF THE ASSESSEE WAS ONE OF MERE DENIAL ONLY AND NO SUPPORTING DOCUMENTS WERE FILED. {IT IS ALSO SEEN THAT THE MOUZA SANTIPU R IS LOCATED IN CLOSE PROXIMITY TO KOLAGHAT TOWN WHICH HAS A POPULATION OF 22,707 AS P ER THE CENSUS 2001 ALSO.} IN VIEW OF THE ABOVE FACTS, THE CLAIM OF THE ASSESS EE THAT IT HAD SOLD AN AGRICULTURAL PROPERTY IS HELD BASELESS AND IS REJECTED. THE ADDI TION ON ACCOUNT OF CAPITAL GAINS IS APPROVED BUT IT IS SEEN THAT WHILE THE AO HAS ALLOW ED THE DEDUCTION OF THE INDEXED COST OF ACQUISITION OF THE LAND, THE AO HAS NOT ALLOWED AS A DEDUCTION THE WRITTEN DOWN VALUE OF THE BUILDING CONSTRUCTED ON THE LAND. THE COST O F THE BUILDING (LESS DEPRECIATION) ALSO REQUIRES TO BE ALLOWED AS A DEDUCTION FROM THE DEEM ED SALE CONSIDERATION. THE AO IS DIRECTED TO ALLOW THE DEDUCTION OF THE SAME AFTER V ERIFICATION FROM THE RECORD. AS A RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THE ASSESSEE HAS SOLD A PIECE OF LAND SITUATED AT MOUZA SANTIPUR, PS.KOLKAGHAT, DIST RICT-MIDNAPORE(EAST) VIDE A REGISTERED DEED DATED 09.04.2010. THE LAND WAS SOLD ALONG WITH A DOUBLE STOREYED BRICK STRUCTURE HAVING CONCRETE FLOOR ON 1974 SQ. FT. OF LAND. THE PROPERTY WAS SOLD BY THE ASSESSEE TO ONE SHRI NIKHILESH BERA FOR A TOTAL DE CLARED CONSIDERATION OF RS. 35,00,000/- . THE LAND IS DESCRIBED AS J.L. NO. 3, R.S. 481/1 N O. KHATIAN L.D. 3044, R.S. 524 DAG, LR 467 DAG, MEASURING 15 DECIMAL FOR A DECLARED CON SIDERATION OF RS. 15,00,000/- FOR LAND AND RS. 20,00,000/- FOR THE CONSTRUCTED PORTIO N THEREON. THE STAMP VALUATION AUTHORITY HAD VALUED THE LAND AT RS. 89,73,843/- AN D THE BUILDING AT RS. 26,73,535/- TOTALING RS. 1,16,47,389/- FOR THE PURPOSES OF STAM P DUTY. IN THE ASSESSMENT ORDER THE AO SUBSTITUTED THE TOTAL FIGURE OF RS. 1,16,47,389/ - IN PLACE OF THE CONSIDERATION DECLARED AT RS. 35,00,000/- AS PRESCRIBED U/S 50C O F THE ACT AND CALCULATED THE TAXABLE LONG TERM CAPITAL GAIN AT RS. 1,12,09, 581/- A CCORDINGLY. THE SALE DEED FOR RS. 35 LACS 6 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 6 EXECUTED BY THE ASSESSEE NORMALLY CONTAINED THE SAL E CONSIDERATION ATTRIBUTABLE TO THE LAND AT 15 LACS AND TOWARDS BUILDING FOR RS. 20 LAC S. THE LD. AO DIRECTLY APPLIED THE PROVISION OF SECTION 50C OF THE ACT AND ADOPTED THE SALE CONSIDERATION AS PER STAMP VALUATION AUTHORITY. AT THE OUTSET THE PRIMARY FACT WHICH IS TO BE DECIDED IS WHETHER THE SUBJECT MENTIONED LAND WHICH WAS TRANSFERRED IS AGR ICULTURAL LAND OR NOT. THE LD. AR STATED THE LAND IS CLASSIFIED AS JAL AND PLACED RELIANCE ON THE RECORD OF BLOCK LAND & LAND REFORM OFFICER- KHARAGPUR-1,, PASCHIM MEDINIPU R DATED 28.11.2008 WHEREIN IT HAS BEEN CATEGORICALLY STATED IN THE CASE OF ANOTHE R PERSON MR. PRADIP KUMAR THAT THE LANDED PROPERTY CLASSIFIED AS KALA , JAL & DHANI SOEM ARE ALL AGRICULTURAL IN NATURE. HE ALSO ARGUED THAT THE LAND IN QUESTION IS WET LAND AS COULD BE EVIDENT FROM THE SALE DEED. IT WAS ALSO ARGUED THAT THE ASSESSEE HAD PAID THE LAND REVENUE ON SUCH LAND AND BUILDING AS TAX ON AGRICULTURAL LAND. EVEN THOU GH NO AGRICULTURAL ACTIVITIES WERE CARRIED ON THIS LAND BY THE ASSESSEE, THE LAND ARE CULTIVABLE LANDS ENTITLED AND FIT FOR CARRYING ON AGRICULTURAL PORTION ONLY. WE FIND THA T THIS TRIBUNAL HAD AN OCCASION TO ADJUDICATE SIMILAR ISSUE AS TO WHETHER THE LAND REG ISTERED AS WET LAND COULD BE CONSTRUED AS AGRICULTURAL LAND CONSEQUENTIALLY SALE OF SUCH L AND WAS NOT TO BE EXCISABLE TO CAPITAL GAIN TAXED IN THE CASE OF DCIT VS. SMT. LAXMI SINGH IN I.T.A. NO. 815/KOL/2011 FOR ASSESSMENT YEAR 2008-09 DATED 12.08.2011 WHEREIN IT WAS HELD AS UNDER: 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS RELATING TO THIS CASE ARE THAT ASSE SSEE SOLD A LAND SITUATED AT K. BADAGA VILLAGE MADIBERI TALIK, DISTRICT KODAGU IN KARNATAK ON 13/07/2007 FOR A CONSIDERATION OF RS. 60 LAKH WHICH WAS ACQUIRED ON 24/03/2003 FOR A CONSIDERATION OF RS. 5,87,400. ASSESSEE SUBMITTED EVIDENCES OF PURCHASE DEED, SALE AGREEMENT, CERTIFICATE OF REVENUE INSPECTOR SPECIFYING LAND IN QUESTION SITUATED IN R URAL AREA. HOWEVER, ASSESSING OFFICER FOUND THAT ASSESSEE COULD NOT ESTABLISH OR FURNISH ANY EVIDENCE TO SHOW THAT AGRICULTURAL ACTIVITIES WERE CARRIED OUT IN THIS LA ND FOR IT TO QUALIFY AS AGRICULTURAL LAND AND UNABLE TO SHOW ANY AGRICULTURAL INCOME FROM THI S LAND IN ANY PRECEDING YEAR AND THEREFORE FOUND THAT IN ABSENCE OF ANY AGRICULTURAL ACTIVITY IT CANNOT BE CALLED AN AGRICULTURAL LAND. ASSESSING OFFICER REJECTED THE C LAIM OF APPELLANT THAT PROFIT OF RS. 49,59,767/- ON SALE OF THIS LAND COULD BE CLAIMED A S EXEMPT FROM TAXATION AS IT WAS NOT AN AGRICULTURAL LAND. WE FIND FROM RECORDS THAT NO DOUBT THERE IS ABSENCE OF ANY AGRICULTURAL ACTIVITY ON THE LAND BUT THE SAME IS C HARACTERIZED AS 'WET LAND' OR ABANDONED COFFEE LAND. WE FIND FROM SALE DEED THAT THIS LAND IS CLASSIFIED AS PLANTATION 7 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 7 LAND AS DEFINED UNDER KARNATAKA LAND REFORMS ACT, 1 961 AND WHICH CLEARLY REVEALED FROM SALE DEED. THE DESCRIPTION OF LAND IN SALE DEE D IS AS 10.62 ACRES OF 'COFFEE SAGU LAND' WITH ANOTHER 5.31 ACRES OF 'WET LAND' IN BOTH THE PURCHASE DEED AS WELL AS AGREEMENT FOR SALE. ONCE IT IS NOT REBUTTED THAT TH IS IS NOT 'WET LAND' OR 'COFFEE LAND' THE INITIAL ONUS BY ASSESSEE IS DISCHARGED AND THIS IS TO BE TREATED AS AGRICULTURAL LAND. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) AND THI S ISSUE OF REVENUE'S APPEAL IS DISMISSED. IN THE INSTANT CASE THE DISTINCTION OF THE LAND BE ING SITUATED BEYOND 8 KILOMETERS FROM THE CONCERNED MUNICIPALITY CANTONMENT BOARD HAS NOT BEEN DISPUTED BY THE REVENUE. THE ASSESSEE HAD ALREADY PLACED ON RECORD THAT IN THE L AND REVENUE RECORDS OF GOVERNMENT OF WEST BENGAL THE SUBJECT MENTIONED LAND HAS BEEN CLA SSIFIED AS AGRICULTURAL LAND AND THAT THE SAID LAND ARE CULTIVABLE LANDS. THE ASSESSEE HA S ALSO PLACED ON RECORD THE REPORT OF THE OFFICE OF BLOCK LAND & LAND REFORM OFFICER , KH ARAGPUR DATED 28.11.2008 I THE CASE OF ANOTHER PERSON WHEREIN THE LANDED PROPERTY CLASSIFIED AS JAL ARE CONSIDERED TO BE AGRICULTURAL IN NATURE. IN VIEW OF THE AFORESAID FACTS AND RESPECTFULLY FOLLOWING JUDICIAL PRECEDENT RELIED UPON HEREINABOVE WE HOLD THAT THE SUBJECT MENTIONED LAND IS AGRICULTURAL LAND AND HENCE AGRICULTURAL LAND SITUA TED BEYOND THE REQUISITE KILOMETERS FROM ANY MUNICIPALITY CANTONMENT BOARD AND HENCE D OES NOT FALL WITHIN THE AMBIT OF DEFINITION OF CAPITAL ASSET AS PER SECTION 2(14) OF THE ACT. HENCE THE GAINS DERIVED THEREON ON SALE OF SUCH LAND CANNOT BE BROUGHT TO T AX UNDER THE HEAD CAPITAL GAINS WITH REGARD TO VALUE OF BUILDING ADOPTED BY THE LD. AO B ASED ON STAMP VALUATION AUTHORITY AT RS. 26,73,535/- AS AGAINST THE VALUE OF RS. 20 L ACS DISCLOSED BY THE ASSESSEE, THE ASSESSEE HAS SUBJECTED TO THE VALUE ADOPTED BY THE LD AO AND HENCE IN THAT SCENARIO THE LEGISLATURE HAD ALREADY PROVIDED THE WAY TO RESOLVE THE DISPUTE IN TERMS OF SECTION 50C(2) OF THE ACT BY MAKING RENTAL INCOME TO DEPART MENTAL VALUE OFFICER FOR DETERMINING THE VALUE OF BUILDING. IT IS NOT IN DIS PUTE THAT THE COMPLETE SALE DEED BY THE ASSESSEE IS LIABLE FOR CAPITAL GAINS THOUGH THE ASS ESSEE HAD NOT ADMITTED THE SAME IN THE RETURN OF INCOME. WE DIRECT THE LD. AO TO DETERMINE THE VALUE BUILDING IN TERMS OF SECTION 50C(2) OF THE ACT AND GRANT DEDUCTION TOWAR DS INDEXED COST OF BUILDING AS PER 8 ITA NO.777/KOL/2015 MIDNAPORE AGRO UNITED HATCHERY PVT. LTD. A.YR. 2011-12 8 LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 05.12. 2018 SD/- SD/- [A T VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.12.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. MIDNAPORE AGRO UNITED HATCHERY PRIVATE LIMITED, C/O, S.N. GHOSH & ASSOCIATES, ADVOCATES SEVEN BROTHERSLODGE, P.O.-BUROSHIBTALA, P.S. CHINSURAH, DIST. HOOGHLY, PIN-712105. 2. ITO, SAHOO BHAWAN, KHUDIRAM NAGAR, P.O. & P.S. M IDNAPORE, DIST. PASCHIM MIDNAPORE, PIN-721101. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES