SHRI CHOUTH MAL JANGIR, Jaipur V. ITO, NEEMKATHANA

ITA 803/JPR/2012

• Counselvise Citation: 80323114 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 15-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: SHRAVAN KUMAR GUPTA
• Keywords: Capital asset; Additional evidence; Onus to prove
• Section: 143(3); 234B; 68; 2

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI H.M. MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER) I.T.A. NO. 803/JP/2012 ASSTT. YEAR- 2009-10 SHRI CHOUTH MAL JANGIR THE INCOME TAX OFFICER, M/S GAJANAND FURNITURE & SUPPLIERS VRS. WARD- NEEM KATHANA SARGOTH, NEAR JHURMUT HOTEL REENGUS, SIKAR. PAN NO. AEXPJ7901A (APPELLANT) (RESPONDENT) ASSESSEE BY :- SHRI SHRAVAN KUMAR GUPTA DEPARTMENT BY :- SHRI D.C. SHARMA, D.R. DATE OF HEARING : 20/01/2014 DATE OF PRONOUNCEMENT : 26/02/2014 O R D E R PER: N.K. SAINI, A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 24 TH SEPTEMBER, 2012 OF THE LD. CIT(A)-III, JAIPUR. FOLLOWING GROUN DS HAVE BEEN RAISED IN THIS APPEAL. 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 26/12/2011 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JUR ISDICTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDL Y BE QUASHED. 2. RS. 8,585/-:- THE LD. CIT(A) HAS GROSSLY ERRED I N LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING ADDITION OF RS. 8,585/- (I.E. 10%) OUT OF RS. 17,171/- (I.E. 20%) MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF THE DISALLOWANCE OF VARIOUS E XPENSES. THE ITA 803/JP/2012 2 ADDITION SO MADE BY THE ASSESSING OFFICER AND PARTL Y CONFIRMED BY THE LD. CIT(A) IS TOTALLY CONTRARY TO THE PROVISION S OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME MAY KINDLY BE DELE TED IN FULL. 3. RS. 45,000/-: LD. CIT(A) HAS GROSSLY ERRED IN LA W AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 45,000/- ON ACCOUNT OF CASH CREDIT U/S 68. THE ADDITION SO MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) I S TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME MAY KINDLY BE DELETED IN FULL. 4.1 RS. 5,000/-: LD. CIT(A) HAS FURTHER GROSSLY ERR ED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 5,000/- OUT OF RS. 1,08,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES . THE ADDITION SO MADE BY THE ASSESSING OFFICER AND PARTLY CONFIRM ED BY THE LD. CIT(A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME MAY KINDLY BE DELETED IN FULL. 4.2 THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT GIVING THE SET OFF OF HOUSE HOLD EXPENS ES ADDITION AGAINST THE ADDITION SUSTAINED BY HIM ON ACCOUNT OF CASH CREDIT U/S 68. HENCE THE ASSESSING OFFICER MAY KINDLY BE DIREC TED TO GIVE SET OFF OF HOUSE HOLD EXPENSES IF SUSTAINED ANY AGAINST THE ADDITION ON ACCOUNT OF CASH CREDIT US/ 68, IF SUSTAINED. 5. RS. 57,54,596/-: THE LD. CIT(A) HAS FURTHER GROS SLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN CHARGING THE LONG TERM CAPITAL GAIN (LTCG) ON SALE OF AGRICULTURE LAND WHICH IS OUT OF THE PR EVIEW OF S. 2(14)(III) OF THE IT ACT AND HAS ERRED THEREBY CONF IRMING THE ADDITION OF RS. 57,54,596/- ON ACCOUNT OF SUCH SALE BY GIVING DIFFERENT FINDING WHICH IS NOT COMING EITHER FROM T HE ASSESSMENT ORDER OR RECORDS AVAILABLE. HENCE THE LTCG SO CHARG ED AND ADDITION SO MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE CIT(A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME MAY KINDLY BE DELETED IN FULL. 6. THE LD. ASSESSING OFFICER ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN CHARGING OF INTEREST U/S 234A&B. THE APPELL ANT TOTALLY DENIES IT LIABILITY OF CHARGING OF ANY SUCH INTERES T. HENCE THE ITA 803/JP/2012 3 INTEREST SO CHARGED, BEING CONTRARY TO THE PROVISIO NS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 7. THE APPELLANT PRAYS YOUR HONOURS INDULGENCE TO A DD, AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFOR E THE DATE OF HEARING. 2. DURING THE COURSE OF HEARING, GROUNDS NO. 1, 2, 4.1 AND 4.2 WERE NOT PRESSED. SO THESE ARE DISMISSED AS NOT PRESSED. GRO UND NO. 7 IS GENERAL IN NATURE, SO DO NOT REQUIRE ANY COMMENTS ON OUT PART. 3. VIDE GROUND NO. 3, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS. 45,000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF CASH CREDIT U/S 68 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSIN G OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THAT DURING THE YEAR THAT THERE WERE TWO DEPOSITS OF RS. 20,000/- AND 25,000/- IN THE NAME O F SMT. SAMPATI DEVI. THE ASSESSING OFFICER FURTHER NOTICED FROM THE BANK STA TEMENT OF THE CREDITOR THAT EQUIVALENT AMOUNT OF CASH WAS DEPOSITED IN THE BANK ON THE SAME DAY BEFORE ISSUING CHEQUE TO THE ASSESSEE. HE, THEREFORE, CONS IDERED THE ABOVE SAID AMOUNT AS UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSES SEE. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE CREDITOR IS REGULARLY ASSESSED T O TAX AND ALSO DEPOSITED RS. 91,000/- IN THE EARLIER YEAR, WHICH HAD BEEN ACCEPT ED BY THE DEPARTMENT. IT WAS FURTHER STATED THAT THE ASSESSEE DISCHARGED HIS INI TIAL ONUS TO PROVE THE IDENTITY OF ITA 803/JP/2012 4 THE CAPACITY OF THE CREDITOR AND THE GENUINENESS O F THE TRANSACTION AS REQUIRED U/S 68 OF THE ACT. HE ALSO FILED COPY OF CAPITAL AC COUNTS, BALANCE SHEET AND THE RETURN OF INCOME OF THE CREDITOR. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT A MERE FILING OF RETURN OF INCOME DOE S NOT PROVE THE CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIO N. HE FURTHER OBSERVED THAT THE CREDITOR SMT. SAMPATI DEVI (WIFE OF THE ASSESSEE) H AD SHOWN INCOME FROM INTEREST ON MONEY LENDING AND INCOME FROM GRIH UDOY OG BUT SHE HAD NO LICENSE TO DO THIS BUSINESS AND THERE WAS NO EVIDENCE TO SU PPORT THE EXPENSES OF THE BUSINESS. HE FURTHER OBSERVED THAT THE BANK STATEME NT OF THE CREDITOR REVEALED THAT DURING THE YEAR, CASH WAS DEPOSITED ON SIX OCC ASIONS AGAINST WHICH CHEQUES WERE ISSUED ON FOUR OCCASIONS TO THE ASSESSEE AND T HERE WAS NO OTHER WORTHWHILE TRANSACTION IN THE SAID BANK ACCOUNT. HE ALSO OBSER VED THAT THE CREDITOR HAD NOT CHARGED ANY INTEREST ON THE SAID DEPOSIT WHILE HER BUSINESS WAS ALLEGEDLY OF MONEY LENDING. THE LD. CIT(A) CONFIRMED THE ADDITIO N MADE BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE FAILED TO DISC HARGE HIS ONUS OF PROVING THE CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS. NOW THE ASSESSEE IS IN APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT IDENTI TY OF THE CREDITOR WAS PROVED AS MUCH AS SHE IS WIFE OF THE ASSESSEE AND ASSESSED TO INCOME TAX. IT WAS FURTHER ITA 803/JP/2012 5 STATED THAT THE CREDITOR WAS EARNING INCOME HAVING SUFFICIENT FUNDS AND IN THE PAST ALSO THE ASSESSEE RECEIVED A LOAN OF RS. 91,00 0/- FROM HER WHICH HAD BEEN ACCEPTED BY THE REVENUE, THEREFORE, THE CAPACITY WA S PROVED. AS REGARDS TO THE GENUINENESS OF THE TRANSACTIONS, IT WAS STATED THAT THE STATED AMOUNTS WERE DULY BEEN RECEIVED THROUGH CHEQUE BY THE ASSESSEE, THERE FORE, THE TRANSACTION WAS A GENUINE TRANSACTION, AS SUCH, THE ASSESSEE DISCHARG ED THE ONUS CAST UPON HIM TO PROVE THE IDENTITY OF THE CREDITOR, HER CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTION. 8. IN HIS RIVAL SUBMISSIONS, THE LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE CREDITOR SMT. SAMPATI DEVI IS THE WIFE OF THE ASSESSEE AND REGULARLY ASSESSED TO THE INCOME TAX. SHE ALSO CONF IRMED THE GIVING OF LOAN TO THE ASSESSEE, THE COPY OF THE SAME IS PLACED AT PAG E NO. 8 OF THE ASSESSEES COMPILATION. IN THE PRESENT CASE, NOTHING IS BROUGH T ON RECORD THAT THE INCOME EARNED BY THE ASSESSEE AMOUNTING TO RS. 98,990/- WA S UTILIZED ELSEWHERE. COPY OF THE RETURN OF INCOME OF THE ASSESSEE AND COMPUTA TION OF TOTAL INCOME IS PLACED AT PAGE NO. 96 & 97 RESPECTIVELY OF THE ASSESSEES PAPER BOOK. FROM THE ABOVE DOCUMENTS, IT IS CLEAR THAT THE CREDITOR WAS HAVING THE CAPACITY TO ADVANCE A LOAN OF RS. 45,000/- OUT OF HER INCOME OF RS. 98,990/- A ND THE TRANSACTION WAS ITA 803/JP/2012 6 THROUGH BANKING CHANNEL. THEREFORE, THE ASSESSEE DI SCHARGED THE ONUS CAST UPON HIM TO PROVE THE IDENTITY, CAPACITY OF THE CREDITOR TO ADVANCE THE LOAN AND THE GENUINENESS OF THE TRANSACTION. SO THE ADDITION MAD E BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. WE, THEREFORE, DELETE THE SAME. 10. THE NEXT ISSUE VIDE GROUND NO. 5 RELATES TO SUS TENANCE OF ADDITION OF RS. 57,54,596/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF LONG TERM CAPITAL GAIN ON THE SALE OF AGRICULTURAL LAND. 11. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THAT THE ASSESSEE HAD SOLD HIS IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS. 1,24 ,90,356/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE INCOME FROM CAPITAL GAIN WAS NOT SHOWN IN THE COMPUTATION OF INCOME. THE ASSESSE E STATED THAT THE LAND SOLD WAS AGRICULTURAL LAND OUTSIDE THE JURISDICTION OF M UNICIPAL AREA, AS SUCH IT WAS NOT A CAPITAL ASSET. THE ASSESSING OFFICER DID NO T FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE LAND SOLD WAS SITUATED IN VILLAGE SARGOT, WHICH IS A COMMERCIAL AREA, THEREFORE, THE ASSESSEE WAS LIABLE TO PAY CAPITAL GAIN TAX ON THE SALE OF THE LAND. THE ASSESSING OFFICER WORKED OUT THE CAPITAL GAIN OF RS. 57,54,596/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 12. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE LAND SOLD WAS AN AGRICULTURAL LA ND SITUATED OUTSIDE THE ITA 803/JP/2012 7 MUNICIPAL LIMITS WITHIN THE MEANING OF SECTION 2(14 )(III) OF THE ACT. THE ASSESSEE FILED THE COPIES OF PURCHASE AND SALE DEED S OF THE SAID LAND ALONGWITH A COPY OF KHASARA GIRDAWARI AND A CERTIFICATE ISSUED BY GRAM PANCHAYAT SAMITI TO PROVE THAT THE SAID LAND WAS AGRICULTURAL LAND. SINCE THE EVIDENCE IS FILED BY THE ASSESSEE IN THE FORM OF KHASARA GIRDAWARI AND C ERTIFICATE OF GRAM PANCHAYAT SAMITI WERE NOT PRODUCED BEFORE THE ASSESSING OFFIC ER. THE SAME WERE REQUESTED TO BE ADMITTED AS AN ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962. THE LD. CIT(A) FORWARDED THE ADDITIONA L EVIDENCES TO THE ASSESSING OFFICER FOR VERIFICATION AND COMMENTS. TH E ASSESSING OFFICER SUBMITTED HIS REPORT VIDE LETTER DATED 25/6/2012 ST ATING THAT THE ADDITIONAL EVIDENCES SHOULD NOT BE ADMITTED SINCE SUFFICIENT O PPORTUNITY OF HEARING WAS NOT GIVEN TO THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDE RING THE SUBMISSIONS OF THE ASSESSEE AND THE REPORT OF THE ASSESSING OFFICER AD MITTED ADDITIONAL EVIDENCES AS REQUIRED UNDER RULE 46A OF THE I.T. RULES. THE LD. CIT(A) OBSERVED THAT THE LAND WAS SOLD PRIMARILY TO NON-AGRICULTURIST FOR NO N-AGRICULTURAL PURPOSES AND AS THE LAND WAS SITUATED IN THE COMMERCIAL AREA NEAR AN INDUSTRIAL LAY OUT AND THAT NO AGRICULTURAL INCOME WAS DISCLOSED BY THE ASSESSE E FOR THE A.Y. 2008-09 AND 2009-10, WHICH MEANS THAT THE LAND WAS NOT UNDER CU LTIVATION SINCE LAST MORE THAN A YEAR BEFORE THE SALE. THE LD. CIT(A) HELD T HAT THE LAND SOLD WAS NOT AN AGRICULTURAL LAND, THEREFORE, PROVISIONS OF SECTION 2(14)(III) OF THE ACT WERE NOT RELEVANT TO DECIDE THE ISSUE. HE UPHELD THE VIEW OF THE ASSESSING OFFICER THAT THE ITA 803/JP/2012 8 CAPITAL GAIN WAS LEVIABLE ON THE SALE OF THE SAID L AND. REFERENCE WAS ALSO MADE TO THE FOLLOWING CASE LAWS:- I. SARIFABIBI MOHAMMED IBRAHIM, 204 ITR 631 (SC). II. CHEMMANCHERRY ESTATES CO., 188 TTJ 691 (CHENN AI). III. GOPAL C. SHARMA , 209 ITR 946 BOM). IV. KALPETTA ESTATES LTD., 185 ITR 318 (KERELA). V. FAZALBHOY INVESTMENT CO. LTD., 176 ITR 523 (B OM). NOW THE ASSESSEE IS IN APPEAL. 13. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE LA ND IN QUESTION WAS AN AGRICULTURAL LAND, WHICH WAS SITUATED BEYOND 8 KMS OUTSIDE THE MUNICIPAL LIMIT AND THIS FACT WAS ACCEPTED BY THE ASSESSING OFFICER , THEREFORE, THE LAND WAS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(I II) OF THE ACT. IT WAS EXPLAINED THAT THE LAND WAS SITUATED IN A VILLAGE SARGOT PANC HAYAT, TEHSIL SRIMADHOPUR, DISTRICT- SIKAR, WHICH WAS BEYOND 50 KMS FROM SIKAR AND DID NOT FALL IN THE LOCAL LIMITS OF NEARBY MUNICIPALITY I.E. REENGUS OR SRIMA DHOPUR. THEREFORE, LAND IN QUESTION DID NOT ACQUIRE THE NATURE OF CAPITAL ASSE T WITHIN THE MEANING OF SECTION 2(14)(III) OF THE ACT. RELIANCE WAS PLACED ON THE F OLLOWING CASE LAWS:- I. DCIT VS. CAPITAL LOCAL AREA BANK LTD. (2009) 25 DTR 136 (ASR)(TRIB). II. CIT VS. SMT. LILAVATI THAKORELAL PATEL, 152 I TR 565 (GUJ). III. CIT VS. SMT. SANJEEDA BEGUM 154 TAXMAN 346 ( ALL), IV. CIT VS. MINGUEL CHANDRA PAIS & ANRS. 282 ITR 618 (BOM). V. ITO VS. SURJAN SINGH, 3 ITD 438 (DEL) VI. ITO VS. P. VENKATARAMAN 46 TTJ 706 (HYD). VII. CIT VS. MADHU KUMAR N (HUF) 78 DTR 391 (KAR ). ITA 803/JP/2012 9 IT WAS FURTHER STATED THAT THE ASSESSEE FURNISHED T HE COPIES OF JAMABANDI AND KHASARA GIRDAWARI BEFORE THE LD. CIT(A), WHO ASKED THE REMAND REPORT FROM THE ASSESSING OFFICER AND BOTH THE AUTHORITIES DID NOT DISPUTE THIS FACT THAT THE NAME OF THE ASSESSEE WAS SHOWN IN THOSE DOCUMENTS A ND IT WAS CLEAR FROM THE COPY OF KHASARA GIRDAWARI PLACED AT PAGE NOS. 93 AN D 94 OF THE ASSESSEES PAPER BOOK THAT THE LAND AT THE RELEVANT TIME WAS A N AGRICULTURAL LAND. IT WAS SUBMITTED THAT NEITHER THE ASSESSING OFFICER NOR TH E LD. CIT(A) NO WHERE DISPUTED ABOUT THE CONDITIONS LAID DOWN IN SECTION 2(14)(III) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE LAND SHOULD HAVE BEEN US ED FOR AGRICULTURAL PURPOSE AND NO WHERE IT IS PROVIDED THAT SOME AGRICULTURAL INCOME SHOULD BE DISCLOSED, THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DISA LLOWING THE CLAIM OF THE ASSESSEE BY OBSERVING THAT NO AGRICULTURAL INCOME W AS SHOWN BY THE ASSESSEE FROM THE SAID LAND. IT WAS SUBMITTED THAT THE ASSES SEE HAD SHOWN AGRICULTURAL INCOME FOR THE A.Y. 2007-08 AND IN EARLIER YEARS, W HICH IS EVIDENT FROM THE INCOME TAX RETURN AND COMPUTATION OF INCOME FILED T O THE INCOME TAX DEPARTMENT. REFERENCE WAS MADE TO PAGE NOS. 122-132 OF THE ASSESSEES PAPER BOOK. IT WAS, ACCORDINGLY, SUBMITTED THAT THE LD. C IT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER AND DISALLOWING THE CLAIM OF THE ASSESSEE. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I. CIT VS. SMT. DEBBIE ALEMAO 46 DTR 341/196 TAMA N 230 (BOM). II. HINDUSTAN INDUSTRIAL RESOURCES LTD. VS. ACIT 22 1 CTR 710/180 TAXMAN 114 (DEL.) ITA 803/JP/2012 10 III. CIT VS. MINGUEL CHANDRA PAIS & ANR. 282 ITR 6 18 (BOM). IV. CIT VS. P.C. JOSHI & ANR. 202 ITR 1017 (BOM). V. CWT VS. TARA CHAND JAIN 164 ITR 516 (PAT) VI. HARESH V. MILANI VS. JCIT 111 TTJ 310 (PUNE) VII. LAVLEEN SINGHAL VS. DCIT 111 TTJ 326 (DEL.) 14. THE LD. D.R. IN HIS RIVAL SUBMISSIONS, SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW. 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE LAND SOLD BY THE ASSESSEE WA S SITUATED BEYOND 8 KMS FROM THE MUNICIPAL LIMIT AND AS PER THE KHASARA GIRDAWAR I, COPY OF WHICH IS PLACED AT PAGE NOS. 93 AND 94 OF THE ASSESSEES PAPER BOOK, T HE LAND WAS USED FOR CULTIVATION. SO IT IS IMMATERIAL WHETHER FROM THE C ROPS CULTIVATED BY THE ASSESSEE, THE INCOME WAS POSITIVE INCOME BECAUSE TH ERE MAY BE SO MANY REASONS FOR NOT HAVING THE POSITIVE INCOME E.G. EXPENSES MA Y BE MORE OR THE CROPS GOT DESTROYED BUT THE FACT REMAINS THAT THE LAND IN QUE STION WAS AN AGRICULTURAL LAND, WHICH WAS ALSO CERTIFIED BY THE GRAM PANCHAYAT OF T HE VILLAGE IN WHICH THE SAID LAND WAS SITUATED. COPY OF THE CERTIFICATE IS PLACE D AT PAGE NO. 92 OF THE ASSESSEES PAPER BOOK. THE PROVISION CONTAINED IN C LAUSE (III) OF SUB-SECTION (14) OF SECTION 2 OF THE ACT DEFINES THE CAPITAL ASSET, WHICH ARE NOT TO BE INCLUDED IN CAPITAL ASSET. RELEVANT PROVISIONS READ AS UNDER:- ITA 803/JP/2012 11 2(14):- CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINES S OR PROFESSION, BUT DOES NOT INCLUDE- (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND S ITUATE- (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNI CIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COM MITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONME NT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN T EN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR; OR (B) IN ANY AREA WITHIN SUCH DISTANCE, NOT BEING MOR E THAN EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALI TY OR CANTONMENT BOARD REFERRED TO IN ITEM (A,) AS THE CE NTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHALF BY NOTIFICAT ION IN THE OFFICIAL GAZETTE;] FROM THE ABOVE PROVISIONS, IT IS CLEAR THAT THE LAN D WHICH IS NOT TO BE INCLUDED IN CAPITAL ASSETS, MUST BE AN AGRICULTURAL LAND AND IT SHOULD NOT BE SITUATED IN ANY AREA, WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY OR IN ANY AREA WITHIN SUCH DISTANCE NOT LESS THAN 8 KMS. IN THE PR ESENT CASE, THE LAND WAS NOT SITUATED EITHER IN THE AREA WITHIN THE JURISDICTION OF ANY MUNICIPALITY OR WITHIN 8 KMS FROM THE LOCAL LIMIT OF ANY MUNICIPALITY. THE S AID LAND WAS CULTIVATED AS PER THE CERTIFICATE OF THE GRAM PANCHAYAT AND THE ENTRI ES MADE BY THE HALKA PATWARI IN THE KHASARA GIRDAWARI, THE OWNERSHIP OF THE LAND WAS PROVED FROM THE JAMABANDI, COPIES OF WHICH ARE PLACED AT PAGE NOS. 93 AND 94 RESPECTIVELY OF THE ASSESSEES PAPER BOOK. THEREFORE, BY CONSIDERIN G THE TOTALITY OF THE FACTS AS ITA 803/JP/2012 12 DISCUSSED HEREINABOVE, WE ARE OF THE VIEW THAT THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE PROFIT EARNED BY THE ASSESSEE ON T HE SALE OF LAND WAS SUBJECT TO CAPITAL GAIN. ACCORDINGLY, WE, SET ASIDE THE IMPUGN ED ORDER ON THIS ISSUE AND THE ADDITION SUSTAINED BY THE LD. CIT(A) IS DELETED. 16. GROUND NO. 6 OF THIS APPEAL RELATES TO CHARGING OF INTEREST U/S 234A AND 234B OF THE ACT. AS REGARDS TO THIS ISSUE, IT WAS T HE COMMON CONTENTION OF BOTH THE PARTIES THAT IT IS CONSEQUENTIAL IN NATURE, WE ORDER ACCORDINGLY. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2014) SD/- SD/- (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26/02/2014 * RANJAN COPY FORWARDED TO :- 1. APPELLANT SHRI CHOUTH MAL JANGIR, SIKAR.. 2. RESPONDENT- THE ITO, WARD- NEEMKATHANA 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 803/JP/2012) BY ORDER, AR ITAT JAIPUR.