ITO, Coimbatore V. Chaganlal Lalji Aswin, Coimbatore

ITA 857/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51989 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K RAGHU
• Keywords: Capital asset
• Section: 143(3); 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 857/MDS/2011 (ASSESSMENT YEAR : 2007-08) THE INCOME-TAX OFFICER BUSINESS WARD III(3) 63, RACE COURSE ROAD COIMBATORE (APPELLANT) VS. SHRI CHAGANLAL LALJI ASWIN NEW NO. 12, OLD NO. 65 SYRIAN CHURCH ROAD NO. 3 COIMBATORE 641 001 PAN NO. ACLPA 5362 L (RESPONDENT) ASSESSEE BY : SHRI K. RAGHU, FCA DEPARTMENT BY : SHRI SHA JI P. JACOB, SR. DR. DATE OF HEARING : 18.10.2011 DATE OF PRONOUNCEMENT : O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY DEPARTMENT FOR THE ASSE SSMENT YEAR 2007-08 AGAINST THE ORDER DATED 28.02.2011 OF COMMI SSIONER OF INCOME TAX [A]-I, COIMBATORE. I.T.A. NO. 857/MDS/2011 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT TH E LAND IS LOCATED WITHIN THE DISTANCE OF 8 KMS FROM THE LI MITS OF COIMBATORE CORPORATION, THE POPULATION OF WHICH EXCE EDS 10000 NOS. 3. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT TH E STATED ISSUE OF POPULATION OF THE VILLAGE (SARKAR SAMAKULAM) IN WHICH THE LAND-IN-QUESTION IS SITUATED B EING LESS THAN 10000 AS PER THE CENSUS 2001 IS NEITHER RE LEVANT OR TENABLE; FOR, THE POPULATION OF COIMBATORE CORPOR ATION IS ABOVE 10000 NOS. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE JUDGEMENT IN THE CASE OF G.M. OMERKHAN VS. CIT (1992 ) 196 ITR 269 (SC) WHEREIN IT HAS BEEN CLEARLY HELD, IN THE SAID DECISION, THAT NOT THE VILLAGE IN WHICH THE AG RICULTURAL LAND IS SITUATED IS TO BE CONSIDERED BUT, THE JURISDIC TIONAL MUNICIPALITY, FOR TESTING THE NATURE OF SUCH LAND AS T O WHETHER A CAPITAL ASSET OR NOT. 5. THE LEARNED CIT(A) ERRED IN OVERLOOKING THE REPORT OF THE ASSESSING OFFICER AND DELETING THE ADDITION MADE BY HIM. 6. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT THE LAND IN QUESTION CONSTITUTES CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III)(B) OF THE ACT IN AS MUCH AS THE L AND IS SITUATED WITHIN THE DISTANCE OF 8 KMS FROM THE CORPO RATION LIMITS. I.T.A. NO. 857/MDS/2011 3 7. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT WHEN THE FULL VALUE OF SALE CONSIDERATION AMOUNTED TO RS.1,82,49,000/- NO PRUDENT MAN WOULD UTILIZE THE LAND FOR ANY AGRICULTURAL PURPOSES. 8. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THAT TH E ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR EXPENSES SUCH AS SALES COMMISSION AND OTHER CHARGES ETC. AMOUNTING TO RS.17,38,000/-. 9. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE VAR IOUS FINDINGS GIVEN BY THE ASSESSING OFFICER IN FAVOUR OF REVENUE, IN HIS ASSESSMENT ORDER. 10. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT TH E LAND IN QUESTION WAS TRANSFERRED TO A BUILDER-PROMOTER- COMPANY OF REAL ESTATES. AS SUCH THE INTENTION OF T HE ASSESSEE WAS NOT TO UTILIZE THE LAND FOR ANY AGRICULT URAL PURPOSES AS STATED BY HIM. 3. AS THE FACTS AND ISSUE INVOLVED IN ALL THE GROUN DS OF APPEAL ARE COMMON, THEY ARE BEING DISPOSED OF TOGETHER AS UNDE R. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, AN INDIVIDUAL, FILED RETURN OF INCOME FOR ASSESSMENT Y EAR 2007-08 ON 30.3.2009 ADMITTING TOTAL INCOME OF RS. 86,470/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 AN D SUBSEQUENTLY TAKEN UP OF SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF I.T.A. NO. 857/MDS/2011 4 THE ACT BY RAISING A SHORT TERM CAPITAL GAIN OF RS. 1,62,74,232/- ON SALE OF LAND. 5. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE ADDITION OF RS. 1,6 2,74,232/- BY TREATING THE SALE OF AGRICULTURAL LAND AS CLAIMED B Y THE ASSESSEE TO BE CAPITAL ASSET U/S 2(14)(III)(B) OF THE ACT ON TH E GROUND THAT IT WAS WITHIN THE DISTANCE OF 8 KMS FROM MUNICIPAL LIMITS AND THEREBY LEVYING SHORT TERM CAPITAL GAINS TAX ON THE SAME. 6. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE SU BMITTED AS UNDER: THE APPELLANT HAD SOLD AN AREA OF 4.345 ACRES OF AGRICULTURAL LAND WHICH WAS SITUATED AFTER 8 KMS., FROM THE LOCAL LIMITS OF THE COIMBATORE MUNICIPALITY. THIS SP ACE ON THE SURFACE SHOULD BE SITUATED WITHIN 8 KMS., FROM THE OUTER LIMITS OF THE MUNICIPALITY IN ORDER TO BE CAPITAL AS SET WITH REFERENCE TO THE AGRICULTURAL LAND UNDER S ECTION 2 (14)(III)(B). IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE APPE LLANT ACCOMPANIED THE ASSESSING OFFICER TO PROVE THAT THE AREA OF THE AGRICULTURAL LAND WAS LYING AT A DISTANCE OF MORE THAN 8 I.T.A. NO. 857/MDS/2011 5 KMS., FROM THE LOCAL LIMITS OF THE COIMBATORE MUNICI PALITY. THE APPELLANT ALSO FILED A CERTIFICATE FROM AN APPROVED CHARTERED ENGINEER THAT THE AGRICULTURAL LAND BEARIN G SF NO.589-181 AND 182 IN SARKAR SAMAKULAM VILLAGE IS LOCATED AT A DISTANCE OF 9 KMS:, FROM THE END OF CORPORATION LIMIT OF COIMBATORE ON GANAPATHY MANAGER. THE DISTANCE FROM CORPORATION LIMIT ON VILANKURICHI ROAD WAS 9.7 KMS., AND FROM CORPORATION LIMIT ON AVANASHI ROAD WAS 9.7 KMS. THE DISTANCE WAS STILL LONGER AT 11.3 KMS., FROM THE EN D OF CORPORATION LIMIT ON GANAPATHY - SATHY ROAD. AT PARAGRAPH 8, THE AO HAS STATED THAT THE DISTANCE FROM THE MUNICIPAL CORPORATION LIMIT STARTING FROM VILANKURIC HI ROAD: UP TO THE POINT OF THE LAND WAS MEASURED AND THE DIS TANCE IS 7.6 KMS., WITHIN A RADIUS OF ABOUT 5 KMS., ONLY. MOREOVER, THERE WAS A PUCCA ROAD WHICH JOINS THE ABOVE PROPERTY WITH THE MAIN STREAM. THE APPELLANT OBJECTS TO THIS FIND ING OF THE AO BECAUSE IT IS CONTRARY TO THE FACTS. FIRSTLY, THE AO HAS NOT SPECIFIED THE EXACT S.F. NUMBER OF THE LAND WHICH WA S FOUND AT A DISTANCE OF 7.6 KMS., TO CONTRADICT THE DISTANCE AS PROVED BY THE APPELLANT ACCOMPANYING HIM AT THE TIME OF INSPECTION AND ALSO CERTIFIED BY THE APPROVED VALUER AT 9 KMS., FROM THE CORPORATION LIMIT ON THE VILANKURICHI ROAD TO THE AREA OF LAND IN S. F. NO.589-181 & 182 IN QUESTION. SECONDLY, THE PUCCA ROAD ENDING AT A DISTANCE OF 7.6 KMS., IS NOT ENDING AT I.T.A. NO. 857/MDS/2011 6 S.F.NO.589-181 & 182 AND IT IS NOT SITUATED AT THE END OF 7.6 KMS., BUT SITUATED FARTHER AWAY WELL BEYOND 8 KMS. SARKAR SAMAKULAM VILLAGE ADMITTEDLY IS NOT A VILLAGE REFERRED TO UNDER SECTION 2(14)(III)(B). THE AO WITH A CLOSED MIND CONCLUDED THAT THE AGRICULTURAL LAND IN QUESTION WAS A CAPITAL ASSET UNDER SECTION 2(14)(III)(B); THE AO DID NOT CONFRONT THE APPELLANT ON THE SPOT W ITH HIS FINDING THAT THE PRECISE DISTANCE OF THE AGRICU LTURAL LAND IN QUESTION WAS 7.6 KMS AND NOT BEYOND 8 KMS., AS CONTENDED BY THE APPELLANT AT ANY POINT IN TIME AND IT WAS THROUGH THE ORDER PASSED BY THE AO THAT THE APPELLANT CAME TO KNOW THAT THE AO DID NOT AGREE WI TH HIS STAND ON THE DISTANCE OF THE LAND OWNED BY THE APPELLANT AND SOLD BY HIM. SURPRISINGLY, THE AO HAS NOT REJECTED THE CERTIFICATE OF THE CHARTERED ENGINEER FROM DIFFERENT POINT CERTIFYING THE DISTANCE IS MORE THA N 8 KMS. NOWHERE, THE LAW REQUIRES THE DISTANCE TO BE DETERMINED ON THE BASIS OF RADIUS. THE AO HAS IGNORED THE RECKONING OF URBANIZATION AS THE FACTOR PRESCRIBING THE DISTANCES IS OF SIGNIFICANCE, WHICH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TERMS OF A PPROACH ROAD RATHER THAN BY STRAIGHT LINE ON HORIZONTAL PLA N. THE VILLAGE MAY COMMENCE FROM A DISTANCE OF 7.6 KMS., 'BUT IF THE AREA OF LAND IN QUESTION IS THOUGH SITUATED IN THE V ILLAGE AT A I.T.A. NO. 857/MDS/2011 7 DISTANCE OF MORE THAN 8 KMS., FROM MUNICIPAL LIMIT, IT WILL FALL OUTSIDE THE SCOPE OF CAPITAL ASSET WITHIN THE MEANIN G OF SECTION 2(14)(III)(B). THE ASSESSING OFFICER OBVIOUSLY BEING CONSCIOUS OF FACT HAS CHOSEN TO IGNORE THE SPECIFIED SURVEY NUMBER OF THE AREA OF THE LAND SITUATED AT A DISTANCE OF M ORE THAN8 KMS. 7. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S HELD AS UNDER: 7. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND, ALSO THE ORDER OF THE ASSESSING OFFI CER. AS SEEN FROM RECORDS, MY PREDECESSOR HAS WRITTEN A LET TER TO THE INCOME-TAX OFFICER, WARD-III(3),COIMBATORE ON 11.6. 2010, DIRECTING THE AO TO MAKE A REFERENCE TO MUNICIPAL AUTHORITIES AND OBTAIN A CERTIFICATE ABOUT THE ACTUAL DISTANCE FROM THE CORPORATION LIMIT TO THE LAND IN QUESTION A T THE SHORTEST ROUTE BY PROPER ROAD CONNECTIVITY. REGARDIN G THE NATURE OF THE LAND, THE AO WAS DIRECTED TO REFER THE MATTER TO THE TAHSILDAR OF THE AREA TO DECIDE THE NATURE OF THE LAND AS PER THE LAND RECORDS MAINTAINED IN THE TAHSILDAR OFFICE. AGAIN A LETTER WAS ADDRESSED BY THE CIT(A) ON 17.6. 2010 TO THE APPELLANT REFERRING TO THE AO'S ORDER AT PAGE 5 PARA 12. IN THIS LETTER, THE APPELLANT WAS ASKED TO CERTIFY REGARDING THE RECEIPT OF ADVANCE OF RS.1 CRORE FROM THE PROSP ECTIVE I.T.A. NO. 857/MDS/2011 8 BUYER OF THE LAND IN QUESTION BEFORE THE SAME WAS CON VEYED IN APPELLANT'S FAVOUR BY WAY OF REGISTERED SALE DEE D. THE CIT(A) HAS ALSO ASKED THE APPELLANT TO CLARIFY REGA RDING THE NATURE OF TRANSACTIONS HAVING THE CHARACTERISTIC OF AN ADVENTURE IN THE NATURE OF TRADE. IN REPLY TO THE OBS ERVATIONS OF THE CIT(A), THE APPELLANT VIDE HIS LETTER DATED 16.7.2010 SUBMITTED THAT THE STATEMENT OF THE AO REFERRED TO B Y THE CIT(A), DOES NOT STATE THE FACTS CORRECTLY. THE APP ELLANT EXPLAINED AS UNDER: . THE STATEMENT OF THE AO THAT THE ASSESSEE HAS RECEI VED AN ADVANCE OF RS.1 CRORE FROM THE PURCHASER I.E., THE PROPERTY DEVELOPER ON 9.9.2006 ITSELF, BUT PURCHASED THE PRO PERTY ONLY ON 11.9.2006 IS AN INCORRECT STATEMENT OF FACT S. SHRI ASWIN STATED THAT HE HAS NOT RECEIVED ANY ADVANCE F ROM THE PURCHASER ON 9.9.2006. THE ENTIRE SALE CONSIDERATIO N OF RS.1,82,49,OOO/- WAS RECEIVED BY DD ONLY AT THE TIME OF EXECUTION AND THE REGISTRATION OF THE DOCUMENT OF S ALE BY THE APPELLANT'S POWER OF ATTORNEY SHRI D. RATHINASA MY. THE INVESTMENT IN LAND WAS MADE BY THE APPELLANT ONLY OUT OF HIS OWN FUNDS ONLY AND IT WAS NEVER MADE WITH AN INTENT ION TO TRADE IN THAT SAID LAND. SHRI ASWIN SUBMITTED THAT HE BEING PRACTICING CA., DID NOT HAVE ANY INTENTION DOING REAL ESTATE BUSINESS. HE INVESTED IN THIS PROPERTY WITH A VIEW TO CARRYING ON AGRICULTURAL OPERATIONS ON THE SAID LAND. HOWEVE R, DURING ONE OF HIS VISITS TO THE LAND, AFTER HE BECAME THE OWNER, HE I.T.A. NO. 857/MDS/2011 9 WAS APPROACHED BY THE PURCHASER'S REPRESENTATIVE QU OTING A BENEFICIAL PRICE. TAKING INTO CONSIDERATION, THE SU GGESTION OF THE FAMILY MEMBERS, HE THOUGHT IT FIT TO SELL THE LAND BECAUSE OF THE BENEFICIAL PRICE AND THOUGHT IT WOUL D BE USEFUL FOR HIS DAUGHTER'S EDUCATION AND MARRIAGE SI NCE SHE WAS 20 YEARS OLD. HE SUBMITTED THAT HE HAD NO INTENTION AT ALL AT THE TIME OF INVESTMENT TO SELL THE LAND BUT HOWEVER, THE OFFER FROM THE PURCHASER WAS SO TEMPTIN G THAT HE ACCEPTED 'THE OFFER AND SOLD THE LAND. THE AO HAS MADE INCORRECT FACTS AS A PART OF HIS ORDER THA T THE ASSESSEE RECEIVED A SUM OF RS. L CRORE FROM THE PURCHASER ON A DATE EARLIER TO PURCHASE. THE APPELLANT SUBMITTED THAT HE HAD NO PERSONAL/PROFESSIONAL RELATIONSHIP WITH THE BUYER AND HE WAS A STRANGER TO HIM, AS MUCH AS HE WAS TO HIM. IF THE ALLEGATION OF THE ASSESSING OFFICER IS CORRE CT, THE APPELLANT SUBMITTED THAT HE SHOULD NOT HAVE BEEN LIABLE TO THE ASSESSMENT, AS 'ANY INCOME WOULD HAVE ACCRUED, IN THE ASSESSMENT OF THE PERSON WHO HAD HEL D THE LAND BEFORE 11.9.2006, HAVING HELD THE LAND FOR AGRICULTURAL PURPOSES FOR A LONGER STRETCH OF YEARS. THE APPELLANT SUBMITTED THAT THE ASSET SOLD BY HIM WAS N OT A CAPITAL ASSET BEING LOCATED BEYOND THE PRESCRIBED LIMITS AS DEFINED AND FURTHER THERE WAS NO INTENTION OF I.T.A. NO. 857/MDS/2011 10 ANY REAL ESTATE BUSINESS TO TREAT IT AS ADVENTURE IN THE NATURE OF TRADE. 8. THE ASSESSING OFFICER VIDE HIS, LETTER DATED 1 6.9.2010 SUBMITTED THAT THE APPELLANT'S CASE WAS REFERRED TO THE DIVISIONAL' ENGINEER, HIGHWAYS DEPARTMENT, COIMBATO RE AND A CERTIFICATE ABOUT THE ACTUAL DISTANCE FROM THE CORPOR ATION LIMIT TO THE LAND IN S.F.NO.589/1 OF SARKAR SAMAKUL AM VILLAGE; IN QUESTION AT THE SHORTEST ROUTE BY PROPER ROAD CONNECTIVITY. AS SEEN FROM THE LETTER FROM THE D.E. , SHRI K. VELLINGIRI OF HIGHWAYS DEPARTMENT, THE DISTANCE WAS ARRIVED AT 8.112 KMS., FROM THE COIMBATORE CORPORATION LIMI T TO THE LAND S.F.NO.589/1 OF SARKAR SAMAKULAM VILLAGE. THE D ETAILS ARE AS FOLLOWS: 1. SALEM COCHIN ROAD TO VILANKURICHI ROAD KM. 2.612 2. PANCHAYAT UNION ROAD KM 0/0 2.629 3. DINDUGAL BANGALORE ROAD NH 209 KM 172/8 - 0.391 4. PANC HAYAT ROAD KM 0/0 1/2 , 1.2 18 5. SITRA KURUMBAPALAYAM ROAD KM 0.462 6. EARTHERN ROAD (CART TRACK) 0.800 TOTAL LENGTH 8.112 9. SIMILARLY, THE ASSESSING OFFICER ALSO SUBMITTED A CERTIFICATE ISSUED BY THE TAHSILDAR [NORTH] DATED 26.7.2010 THA T DURING THE YEAR 2004-05, S. F. NO. 589-1B1 AND 1B2 ARE UNDER CULTIVATION OF I.T.A. NO. 857/MDS/2011 11 MAIZE AND TOOR DHAL. FURTHER TO HIS SUBMISSION, TH E APPELLANT VIDE LETTER DATED 13.10.2010 SUBMITTED THAT THE CRE DIT ON, 9.9:2006 INTO HIS SAVINGS BANK ACCOUNT IN RESPECT O F THE BANKER'S CHEQUES ON ICICI BANK DATED 08.09.2006 FOR RS.45 LA KHS AND RS.55 LAKHS WAS THE AMOUNT RECEIVED FROM SHRI S. MARTIN O F COIMBATORE. THE APPELLANT SUBMITTED CONFIRMATION LETTER OF SHRI MARTIN REGARDING THE LOAN AMOUNT OF RS. 1 CRORE GIVEN TO H IM VIDE ICICI BANK CHEQUES OF RS. 45 LAKHS AND RS. 55 IAKHS. THI S PROVES THAT THE OBSERVATION OF THE ASSESSING OFFICER 'THAT THE ASSE SSEE HAS RECEIVED AN ADVANCE OF RS. 1 CRORE FROM THE PURCHASER ON 9.9 .2006 IS FAR FROM FACTS. 10. FURTHER, REGARDING THE SALE CONSIDERATION OF RS . 1,82,49,000/~ RECEIVED ON BEHALF OF THE APPELLANT BY HIS POWER AG ENT, THE DETAILS WERE FURNISHED. THE APPELLANT FURNISHED HIS BANK AC COUNT ALONG WITH THE BANK ACCOUNTS OF HIS FAMILY MEMBERS REGARD ING THE TRANSACTIONS. AS SEEN FROM THE DETAILS OF HIS EARLI ER INCOME-TAX RETURNS, THE APPELLANT WAS NOT IN THE HABIT OF PURC HASING AND SELLING OF LANDS. THIS APPEARS TO BE AN ISOLATED TR ANSACTION IN WHICH I.T.A. NO. 857/MDS/2011 12 HE HAS PURCHASED SAID LAND ON 11.9.2006 AND SOLD THE LAND ON 22.12.2006. HOWEVER, TAKING INTO CONSIDERATION, THE DISPUTE REGARDING THE DISTANCE OF THE LAND SITUATED AT S.F. NO.589-1B1 & 1B2 IN SARKAR SAMAKULAM VILLAGE, FROM THE MUNICIPAL LIMITS OF COIMBATORE, I PERSONALLY VISITED THE PROPERTY IN QU ESTION TO RECORD THE FACTS. I WAS ACCOMPANIED BY MY STENOGRAPHER SH RI R. VASUDEVAN AND THE APPELLANT SHRI ASWIN. THE SHORTES T DISTANCE AS SUGGESTED BY THE ASSESSING OFFICER AND THE NATIONAL HIGHWAYS AUTHORITY REPORT WAS TAKEN AND FROM THE OUTER CITY LIMITS OF COIMBATORE THE DISTANCE UP TO THE POINT OF PROXIMIT Y TO THE LAND SITUATED AT S.F.NO.589-1B1 & 1B2 WAS 8.1 KMS. THE PROPERTY AS SHOWN BY THE APPELLANT WAS STILL AHEAD BY ABOUT 300 METRES FROM THE MOTORABLE ROAD. AS SEEN FROM THE LOCATION, THER E WAS NO APPROACH ROAD TO THE PROPERTY IN QUESTION. THE ROUT E TAKEN IS VILANKURICHI ROAD - VINAYAGAPURAM VIA VALLIAMPALAYA M VILLAGE. THIS IS ALSO THE ROUTE TAKEN BY THE ASSESSING OFFICER ON WHICH HE HAD ARRIVED AT A DISTANCE OF 7.6 KMS. THE STRAIGHT ROUT E FROM THE OUTER LIMITS OF THE PANCHAYAT WAS TAKEN EVEN THOUGH SOME STRETCH OF ROAD IS VERY NARROW. SINCE THE PROPERTY IN QUESTION IS SITUATED I.T.A. NO. 857/MDS/2011 13 MORE THAN 8 KMS. FROM THE OUTER LIMITS OF COIMBATOR E CORPORATION, IT CANNOT BE TREATED AS A CAPITAL ASSET U/S 2(14)(I II)(B) OF THE INCOME-TAX ACT, 1961. IN VIEW OF THIS, THE ASSESSI NG OFFICER IS DIRECTED TO DELETE THE ADDITION MADE. THE GROUNDS OF APPEAL ARE ALLOWED. 8. THE LD. D.R. RELIED ON THE ORDER OF THE ASSESSIN G OFFICER WHEREAS THE LD. A.R. OF THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE PROFIT ON SALE OF AGRICULTURAL LA ND OF RS. 1,62,74,232/- WAS ASSESSED BY THE ASSESSING OFFICER UNDER THE HEAD SHORT TERM CAPITAL GAINS FOR THE REASON THAT AGRI CULTURAL LAND IN QUESTION WAS SITUATED WITHIN 8 KMS OF THE MUNICIPAL LIMITS OF COIMBATORE MUNICIPALITY. I.T.A. NO. 857/MDS/2011 14 10. IN APPEAL, THE LD. CIT(A) CALLED FOR REMAND REP ORT FROM THE ASSESSING OFFICER IN VIEW OF THE ASSESSEES CONTENT ION THAT LAND WAS BEYOND 8 KMS OF MUNICIPAL LIMITS OF COIMBATORE MUNI CIPALITY ON THE BASIS OF REGISTERED VALUERS REPORT. IN THE REMAND REPORT, THE ASSESSING OFFICER SUBMITTED THAT AS PER THE REPORT RECEIVED BY HIM FROM THE DIVISIONAL ENGINEER, HIGHWAYS DEPARTMENT, COIMBATORE, THE AGRICULTURAL LAND IN QUESTION WAS 8.112 KMS AWA Y FROM THE MUNICIPAL LIMITS OF COIMBATORE MUNICIPALITY. IN VI EW OF THIS, THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING THAT AGRI CULTURAL LAND IN QUESTION WAS NOT A CAPITAL ASSET. BEFORE US, THE L D. D.R. COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE LD. CIT(A). IN THE ABSENCE OF ANY MATERIAL BROUGHT BEFORE US TO SHOW THAT AGRICUL TURAL LAND IN QUESTION WAS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT, WE DO NOT FIND ANY GOOD REASON TO INTERFER E WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED. GROUND OF APP EAL OF THE DEPARTMENT IS DISMISSED. I.T.A. NO. 857/MDS/2011 15 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 21 ST OCTOBER, 2011. SD/- SD/- (GEORGE MATHAN) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST OCTOBER, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE