M/S RAKESH KUMAR JAIN HUF, Jaipur V. ACIT, Jaipur

ITA 877/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74886 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: JAV ED
• Keywords: Capital asset
• Section: 2(14); 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAINI ) ITA NO. 877/JP/2012 ASSESSMENT YEAR: 2009-10 PAN: AAEHR 2852 M M/S. RAKESH KUMAR JAIN (HUF) VS. THE ACIT 4365, KGB KA RASTA CIRCLE-2 JOHRI BAZAR, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL & JAVE D DEPARTMENT BY : SHRI D.C. SHARMA DATE OF HEARING : 24.01.2014. DATE OF PRONOUNCEMENT : 07.03.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 IS DI RECTED AGAINST THE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 15.10.2012 ,WHEREIN ,TH E ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN CONSIDERING THE SALE OF AGRICULTURE LAND AS SALE OF CAPITAL ASSET AND THEREBY HOLDING PROFIT OF RS. 1,31,24,500/- FROM SALE OF AG RICULTURE LAND AS INCOME FROM CAPITAL GAIN, ARBITRARILY. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORI NG THE VITAL EVIDENCE IN THE SHAPE OF CERTIFICATE FROM COMPETENT AUTHORITIES I.E. TEHSILD AR NAGAR NIGAM, JAIPUR CLEARLY MENTIONING THAT THE LAND UNDER QUESTION IS SITUATED AT A DISTANCE OF MORE THAN 8 KMS. FROM THE MUNICIPAL LIMITS, THUS THE LAND BEING AN AGRICULTURE LAND, THE ADDITION OF RS. 1,31,24,500/- SO MADE DESERVES TO BE DELETED . 2 2.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE-HUF FILED ITS RETURN OF INCOME (ROI) FOR THE A.Y. 2009-10 ON 21.07.2009 DEC LARING TOTAL INCOME OF RS. 15,34,410/- . THE ASSESSEE HAS EARNED EXEMPT IN COME OF RS. 1,30,97,051/- FROM THE SALE OF AGRICULTURE LAND. HOWEVER, THE A.O. HAS NO T TREATED THIS INCOME AS EXEMPT AND, THUS, HAS THE INCOME OF THE ASSESSEE AT RS. 1,46,5 8,910/- BY MAKING ADDITION OF RS. 1,31,24,500/- AFTER REJECTING ASSESSEES CLAIM FOR THE LAND TRANSFERRED AS AN AGRICULTURE LAND AND THEREBY APPLYING THE PROVISIONS FOR TAXING THE RESULTANT INCOME AS CAPITAL GAINS. 2.2 AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), TH E ASSESSEE HAS FILED THIS APPEAL. 2.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE RECORDS. THE ASSESSEE OWNED A PIECE OF LAND SITUATED IN REV ENUE ESTATE OF VILLAGE GONER, TEHSIL SANGANER, DISTRICT JAIPUR WHICH WAS PURCHASED VIDE SALE DEED DATED 09.05.2006 AND SOLD VIDE SALE DEED DATED 06.05.2008. FROM THIS TRANSA CTION A PROFIT OF RS. 1,30,52,700/- WAS EARNED WHICH HAS BEEN CLAIMED EXEMPTED ON THE BASI S THAT THE THIS LAND WAS NOT A CAPITAL ASSET BUT WAS AN AGRICULTURE LAND IN TER MS OF THE PROVISIONS OF SECTION 2(14)(III) OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT). THE AO HAS HELD THE LAND AS CAPITAL ASSET AND WORKED OUT SHORT TERM CAPITAL GAIN (STC G) AT RS. 1,31,24,500/- AS AGAINST THE SURPLUS OF RS. 1,30,52,700/- DECLARED BY THE ASSESS EE ON THE BASIS OF DLC VALUE ADOPTED BY THE STAMP AUTHORITIES AT RS. 2,00,27,500/- AS AG AINST THE CONSIDERATION RECEIVED AT RS. 1,99,55,700/-. IT WAS ARGUED BY THE LD. AR THAT THE ASSESSEE HAS SATISFIED THE CONDITION AS PER CLAUSE (B) OF SECTION 2(14)(III) OF THE ACT SIN CE IT IS SITUATED AT A DISTANCE WHICH IS BEYOND 8 KM. FROM THE LOCAL MUNICIPAL LIMITS. THE A O TO MAKE VERIFICATION OF THE CLAIM THAT THE INCOME FROM THE SALE OF THIS LAND WAS EXEM PTED U/S 2(14), HAS CALLED INFORMATION 3 FROM JAIPUR NAGAR NIGAM TO ASCERTAIN ITS DISTANCE F ROM THE MUNICIPAL LIMITS. A LETTER WAS ALSO WRITTEN TO THE TEHSILDAR SANGANER IN THIS REGA RD WHO INFORMED THAT THE LAND IS SITUATED WITHIN 8 KM. OF THE LIMITS OF JAIPUR MUNIC IPAL CORPORATION. IN THE MEANTIME, THE TEHSILDAR JAIPUR MUNICIPAL CORPORATION ALSO GAVE HI S REPORT WHEREIN IT IS CERTIFIED THAT THE LAND IS SITUATED AROUND 8.5 KM. FROM THE END OF THE LIMITS OF JAIPUR MUNICIPAL CORPORATION. THE AO AFTER OBSERVING THAT THE TEHS ILDAR SANGANER IS THE MOST RELIABLE AUTHORITY TO DETERMINE THE DISTANCE FROM MUNICIPAL LIMITS BEING THE REVENUE AUTHORITY OF THE STATE GOVERNMENT , AND BEING THE REPOSITORY OF ALL ORIGINAL REVENUE / LAND RECORDS ENJOYS A COMMANDING POSITION TO GIVE AUTHENTIC INF ORMATION ABOUT LAND RECORD, HAS FOLLOWED THE REPORT GIVEN BY THE TEHSILDAR SANGANER AND HELD THAT THE LAND IS AS CAPITAL ASSET. THE LD. CIT(A) HAS ALSO SUPPORTED THE ORDE R OF THE AO BY GIVING PREFERENCE TO THE CERTIFICATE ISSUED BY TELSILDAR SANGANER IN RES PECT TO THE DISTANCE OF THE SUBJECT LAND OVER THE TWO CERTIFICATES - FIRST ISSUED BY THE TE HSILDAR JAIPUR AND SECOND BY THE JAIPUR MUNICIPAL CORPORATION, TO TREAT THE LAND AS CAPIT AL ASSET. BEFORE US THE LD. AR HAS SUBMITTED THAT FOR THE DETERMINATION OF THE DISTANC E OF A PARTICULAR LAND FROM THE MUNICIPAL LIMITS, THE RECORDS AVAILABLE WITH THE MU NICIPAL CORPORATION, THE CONCERNED AUTHORITY OF THE MUNICIPAL CORPORATION IS THE MOST AUTHENTIC AND APPROPRIATE PERSON. TO SUPPORT THIS VERSION, THE LD. AR HAS FURNISHED A DE TAILED WRITTEN SUBMISSION WHICH IS BEING EXTRACTED, VERBATIM, AS UNDER:- IN SUPPORT OF THE CONTENTION THAT IN TERMS OF THE PROVISIONS OF SECTION 2(14)(III)(B) THE SUBJECT LAND IS AN AGRICULTURE LAND, THE APPELLANT HAS SUBMITTED A CERTIFICATE OBTAINED FROM THE PATWARI OF GONER DULY VERIFYING THE DISTANCE BE TWEEN SUBJECT LAND AND LOCAL LIMITS OF JAIPUR NAGAR NIGAM (APB 4) . FURTHER THE LETTER ISSUED BY THE TEHSILDAR JAIPUR NAGAR NIGAM DATED 23.11.2011 ADDRESSED TO THE AO (APB-1) ALSO RE-CONFIRMED THESE FACTS. 4 THEREFORE, ON PERUSAL OF BOTH THE CERTIFICATES SUBM ITTED BY THE PATWARI AND THAT SUBMITTED BY JAIPUR NAGAR NIGAM, IT IS ESTABLISHED THAT THE L AND SITUATED IS BEYOND THE LIMIT OF 8 KMS. HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS , LD. AO MADE CERTAIN ENQUIRIES AND CONCLUDED THAT THE LAND UNDER QUESTION IS SITUA TED WITHIN THE MUNICIPAL LIMIT OF JAIPUR DISTRICT AND THEREFORE IS A CAPITAL ASSET AND THE P ROFIT ARISEN FROM THE SALE OF SUCH PROPERTY IS TAXABLE UNDER THE HEAD INCOME FROM CAPITAL GAIN AND ACCORDINGLY A SUM OF RS. 1,31,24,500/- WAS ADDED BACK IN THE HANDS OF THE AP PELLANT BEING THE DIFFERENCE BETWEEN THE SALE PRICE AS TAKEN BY STAMP AUTHORITIES AND CO ST OF ACQUISITION. THE ACTION OF THE AO AND LD. CIT(A) IN HOLDING THE LAND AS CAPITAL AS SET IS BASED ON THE FOLLOWING CONSIDERATIONS BASED ON LETTER OF TEHSILDAR:- 1. LETTER OF TEHSILDAR, SANGANER DATED 24.11.2011 (APB-3) AND 01.12.2011 (APB-2) STATING THAT THE SAID LAND IS SITUATED WITHIN 8KM. OF THE MUNICIPAL LIMIT. 2. CERTIFICATE GIVEN BY THE PATWARI IS NOT AS AUT HENTIC AS GIVEN BY THE TEHSILDAR SANGANER WHO IS RANKED ABOVE PATWARI IN ADMINISTRAT IVE HIERARCHY AND CUTTING HAS BEEN DONE. 3. CERTIFICATE GIVEN BY THE TEHSILDAR, JAIPUR MU NICIPAL CORPORATION IN WHICH IT WAS MENTIONED THAT THE DISTANCE OF SUBJECT AGRICULTURE LAND WAS APPROX. 8.5 KM. FROM MUNICIPAL LIMITS OF JAIPUR IS NOT ACCEPTABLE SINCE THE DISTANCE BEING NEGLIGIBLE FROM PRESCRIBED LIMITS AND TEHSILDAR, SANGANER BEIN G THE AUTHORITY WHO IS THE REPOSITORY OF ALL ORIGINAL REVENUE / LAND RECORDS A ND NO OTHER AUTHORITY IS IN A MORE COMMANDING POSITION TO GIVE AUTHENTIC INFORMATION A BOUT THE LAND RECORDS. WHILE ALLEGING THE AFORESAID DOUBT THE LD. CIT(A) H AS FAILED TO APPRECIATE THAT THE CERTIFICATE OF PATWARI HAS CLEARLY SPELLED THE DIST ANCE OF LAND FROM GRAM GONER, THEN DISTANCE OF GONER FROM NAGAR NIGAM ETC. HOWEVER, TH E SAME WAS NOT ENTERTAINED BY THE AO AS WELL AS THE LD. CIT(A) FOR THE REASON THAT TH E PATWARI IS AT LOWER RANK IN THE HIERARCHY AND FURTHER DOUBTED THE AUTHENTICITY OF T HE CERTIFICATE FOR FLIMSY REASONS SUCH AS CUTTING WHICH COULD HAVE BEEN VERIFIED EVEN BY DEPU TING THE CIRCLE INSPECTOR WHICH HAS NOT BEEN DONE. FURTHER THE CERTIFICATE OF THE TEHSILDAR AS RELIED UPON BY THE AO AS WELL AS THE LD. CIT(A) IS VAGUE AND SUFFERS FROM THE FOLLOWING DEFE CTS:- 1. THE SAID CERTIFICATE DOES NOT HAVE THE SPECIFIC MENTION OF THE ACTUAL DISTANCE OF THE LAND FROM THE BOUNDARY OF JAIPUR NAGAR NIGAM LIMITS AND HAS SIMPLY WRITTEN THAT IT IS WITHIN 8 KMS. 2. THE SAID CERTIFICATE DO NOT SPECIFICALLY MENTION THAT THE MODE OF MEASURING THE DISTANCE BY THE TEHSILDAR WHETHER IT IS BASED ON AR IAL ROUTE OR SHORTEST POSSIBLE ROAD DISTANCE AS IT HAS BEEN JUDICIALLY SETTLED THAT THE DISTANCE NEEDS TO BE MEASURED ON APPROACHABLE ROAD DISTANCE. 5 3. THE SAID CERTIFICATE FAILS TO MENTION THE VILLAG E UPTO WHICH THE LIMIT OF JAIPUR NAGAR NIGAM APPLIES. 4. THE APPROPRIATE AUTHORITY TO ISSUE SUCH TYPE OF CERTIFICATE IS THE OFFICE OF THE JAIPUR NAGAR NIGAM WHO KNOWS THEIR PERIPHERAL BOUNDARIES A ND NOT THE TEHSILDAR, SANGANER, WHO DOES NOT HAVE ANY AUTHORITY TO COMMEN T UPON THE JURISDICTION OF JAIPUR MUNICIPAL CORPORATION. THE TEHSILDAR SANGANER SIMPLY STATED THAT VARIOUS K HASRA NOS. COMPRISING OF THE ENTIRE LAND ARE SITUATED WITHIN 8 KMS. OF THE MUNICIPAL LI MITS OF JAIPUR AND SUM UP THE WHOLE ISSUE BY STATING THAT SUBJECT LAND IS WITHIN 8KM. O F THE MUNICIPAL LIMIT. THUS THE CERTIFICATE ISSUED BY THE TEHSILDAR, SANGANER IS SK ETCHY, UNTIDY AND BASED ON NO MATERIAL. THE NAGAR NIGAM HAS BEEN ASSIGNED THE DUTY TO MAINT AIN STATISTICS RELATED TO ITS LIMITS AND POSSESS ALL DETAILS I.E. THE AREA, DISTANCE ETC . FROM MUNICIPAL LIMIT INCLUDING POPULATION DATA. IT IS ALSO SUBMITTED THAT THE APPELLANT HAS ALSO OB JECTED THE MODE AND MANNER OF THE MEASUREMENT OF DISTANCE DONE BY THE TEHSILDAR, SANG ANER BUT LD. AO HAS FAILED TO GET CLARIFICATION ON SUCH ISSUE FROM THE TEHSILDAR. THE FACT OF DEVELOPMENT OF THE COUNTRY PARTICULARLY IN CITIES LIKE JAIPUR WHICH ARE TIER T WO CITIES THE FASTER SPREAD OVER OF URBAN AREA TOWARDS RURAL AREA ALSO NEEDS TO BE TAKEN DUE COGNIZANCE. IT IS WORTHWHILE TO MENTION THAT THE LAND SOLD IN 2008 WAS ACCESSIBLE BY TAKING A ROOT BY ROAD OF NEARLY MORE THAN 9 KMS. AND DEVELOPMENT OF ROADS FOR SUCH A DISTANCE O F CONNECTING ROADS KEEPS REDUCING BY EVERY EVOLVEMENT OF OVER BRIDGES, UNDERPASSES AN D OBLIQUE AND HORIZONTAL CONNECTIVITY. THE DISTANCE REQUIRED TO BE WORKED OU T CANNOT BE BASED ON CROWS FLIGHT BUT IT HAS TO BE MEASURED BY THE MOTERABLE REACH BY ROA D . THE HONBLE PUNJAB & HARYANA HIGH COURT IN A RECENT DECISION IN THE CASE OF CIT V. SATINDER PAL SINGH [2010] 188 TAXMAN 54 AFFIRMING THE TRIBUNAL'S CHANDIGARH BENCH 'S DECISION WHICH WAS, IN TURN, BASED ON LAUKIK DEVELOPERS' CASE IN THE CONTEXT OF SECTION 2(14)( III )( B ) HELD AS UNDER:- '...IF PRINCIPLE OF MEASUREMENT OF DISTANCE IS CONS IDERED STRAIGHT LINE DISTANCE ON HORIZONTAL PLANE OR AS PER CROW'S FLIGHT THEN IT WOULD HAVE NO RELATIONSHIP WITH THE STATUTORY REQUIREMENT OF KEEPING IN VIEW T HE EXTENT OF URBANIZATION BECAUSE ANY MEASUREMENT BY CROW'S FLIGHT IS BOUND T O IGNORE THE URBANIZATION, WHICH HAS TAKEN PLACE. MOREOVER, THE JUDGMENT OF TH E MUMBAI BENCH APPEARS TO HAVE ATTAINED FINALITY. KEEPING IN VIEW THE PRIN CIPLE OF CONSISTENCY AS LAID DOWN IN RADHASOAMI SATSANG V. CIT [1992] 193 ITR 321 WE ARE OF THE VIEW THAT THE OPINION EXPRESSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGAL INFIRMITY WARRANTING INTERFERENCE OF THIS COURT'. 105 ITD 657, 667 LAUKIK DEVELOPERS VS. DY. CIT (MUM .) PARA 8 6 THE OTHER CONTROVERSY REGARDING THIS PROVISIO N IS THAT THE REVENUE INSIST THAT STRAIGHT LINE DISTANCE HAS TO BE MEASUR ED IN ACCORDANCE WITH PROVISIONS OF SECTION 11 OF THE GENERAL CLAUSES ACT WHEREAS THE CASE OF THE APPELLANT IS THAT THE DISTANCE BETWEEN THE MUNICIPA L LIMITS AND THE APPELLANTS SITE HAS TO BE MEASURED HAVING REGARD TO THE ROAD D ISTANCE ONLY. WE FIND THAT THE ISSUE REGARDING DISTANCE TO BE MEASURED WITH RE GARD TO ROAD DISTANCE OR A STRAIGHT LINE DISTANCE IS COVERED WITH THE DECISION OF THE PUNE TRIBUNAL IN THE CASE OF MANGALAM INORGANICS PVT. LTD. (SUPRA) WHERE IN HELD THAT THE DISTANCE BETWEEN THE MUNICIPAL LIMITS AND APPELLANTS INDUST RIAL UNDERTAKING IS TO BE MEASURED HAVING REGARD TO THE ROAD DISTANCE AND NOT AS PER THE CROWS FLIES, I.E., A STRAIGHT LINE DISTANCE AS CANVASSED BY THE REVENUE.. SIMILARLY, THE DELHI BENCH OF THE TRIBUNAL ALSO IN THE CASE OF KHACHERU SINGH V. ITO [IT APPEAL NO. 2953 (DELHI) OF 2009, DATED 30-11-2009] FOUND THE ISSUE TO BE COVERED BY LAUKIK DEVELOPERS CASE ( SUPRA ) AND MANGLAM IN-ORGANICS (P.) LTD.'S CASE ( SUPRA ) AND HELD THAT WHEN THE WORD 'DISTANCE' HAS NOT BEEN DEF INED IN THE ACT IT HAS TO BE UNDERSTOOD IN THE COMMON PARLANCE AND IN ITS ORDINARY MEANING. THE BENCH VIEWED THAT IN COMMON PARLANCE, IF ANY PERSON IS REQUIRED TO STATE THE DI STANCE OF A PARTICULAR PLACE FROM A PARTICULAR PLACE, THEN THE DISTANCE WILL BE TOLD TO HIM BY WHICH THAT PLACE CAN BE ACCESSED. THEREFORE, THE BENCH, OBSERVED THAT THE 'CROW FLIGH T' DISTANCE AND STRAIGHT-LINE DISTANCE MAY BE RELEVANT FOR TECHNICAL PURPOSES, BUT CANNOT BE UNDERSTOOD TO HAVE RELEVANCE FOR COMMON MAN AND, HENCE, THE 'DISTANCE' REFERRED TO I N SECTION 2( 14 ) AND IN THE RELEVANT NOTIFICATIONS SHOULD BE UNDERSTOOD AS ROAD DISTANCE AND NOT CROW FLY OR STRAIGHT-LINE DISTANCE. IN THE CIRCUMSTANCES IT IS THEREFORE SUBMITTED THAT THE LAND UNDER QUESTION IS SITUATED BEYOND 8 KMS. FROM THE MUNICIPAL LIMITS OF JAIPUR, THUS THE SAME IS DESERVES TO BE TREATED AS AGRICULTURE LAND IN TERMS OF THE PROVISI ONS OF SECTION 2(14) OF THE INCOME TAX ACT, 1961 AND THEREFORE THE PROFIT FROM THE SALE OF SUCH PROPERTY DESERVES TO BE HOLD AS EXEMPTED INCOME AND THE ADDITION OF RS. 1,31,24,500 /- MADE ON ACCOUNT OF CAPITAL GAIN ON TRANSFER OF SUCH PROPERTY DESERVES TO BE DELETED . 2.4 PER CONTRA, THE LD. DR HAS SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND HAS REITERATED THE CONCLUSIONS DRAWN IN THE ASSESSMENT AND THE APPELLATE ORDERS. 2.5 AFTER CONSIDERING THE ABOVE SUBMISSIONS VIS--V IS THE EVIDENCE AVAILABLE ON RECORD, WE ARE CONVINCED THAT THE LAND IN QUESTION IS A PIECE OF AGRICULTURE LAND AND NOT A CAPITAL ASSET. THE AO AND THE LD. CIT(A) BOTH HA VE RELIED ON THE LETTERS ISSUED BY THE 7 TEHSILDAR SANGANER WHO HAS STATED THAT THE LAND IS SITUATED WITHIN THE 8 KMS. OF THE MUNICIPAL LIMITS. THIS REPORT IS AVAILABLE AT PAGE S 2 & 3 OF ASSESSEES PAPER BOOK. THE LETTERS ISSUED BY THE TEHSILDAR JAIPUR AND MUNICIPA L CORPORATION CONFIRMING THAT THE SUBJECT LAND IS SITUATED BEYOND THE LIMITS OF JAIPU R MUNICIPAL CORPORATION AND THE DISTANCE IS AROUND 8.50 KM. FROM THE MUNICIPAL LIMI TS , COPIES ENCLOSED AT PAGE 1 OF ASSESSEES PAPER BOOK. THE TEHSILDAR SANGANER IN HI S LETTER HAS NOT SPECIFIED THE MUNICIPAL LIMITS FROM WHERE HE HAD MEASURED THE DI STANCE. FURTHER THE DISTANCE IS TO BE MEASURED FROM THE PLACE OF LAND PRECISELY AND NOT F ROM THE PLACE OF THE VILLAGE IN WHICH THE LAND IS SITUATED OR WHERE THE MUNICIPAL LIMITS ENDS. THE TEHSILDAR MUNICIPAL CORPORATION HAS CLEARLY STATED THE POINT OF END OF THE MUNICIPAL LIMITS AND FROM THAT POINT THE DISTANCE OF THE PLACE OF LAND, WHICH AS PER HIS VERSION IS ABOUT 8.5 KM. I.E. BEYOND 8 KM. AS PRESCRIBED IN SECTION 2(14)(III)(B ) OF THE ACT. NOW THE QUESTION ARISES AS TO WHICH AUTHORITY SHOULD BE GIVEN PREFERENCE FO R THE DETERMINATION OF THE DISTANCE FROM THE JAIPUR MUNICIPAL CORPORATION . WHETHER IT IS THE TEHSILDAR SANGANER OR IT IS THE TEHSILDAR JAIPUR MUNICIPAL CORPORATION ? IN THIS R EGARD WE ARE IN AGREEMENT WITH THE LD. AR WHO ARGUED THAT FOR THE DETERMINATION OF DISTAN CE OF ANY LAND SITUATED BEYOND THE MUNICIPAL LIMITS, THE MOST APPROPRIATE AUTHORITY IS THE CONCERNED MUNICIPAL CORPORATIONS AUTHORITY WHO HAS THE ACTUAL CUSTODY OF RECORDS OF THE PERIPHERAL BOUNDARIES OF THAT MUNICIPAL CORPORATION AND NOT THE TEHSILDAR OF THE STATE REVENUE WHO DO NOT HAVE SUCH AUTHENTIC INFORMATION. IT IS TRUE THAT THE TEHSILDA R SANGANER IS THE CUSTODIAN OF THE REVENUE RECORDS BUT IT IS CONFINED TO THE MAINTENAN CE OF THE RECORDS IN RELATION TO A PARTICULAR LAND FALLING IN THE AREA BUT IT HAS NOTH ING TO DO WITH THE PERIPHERAL (BOUNDARY ) LIMITS OF ANY MUNICIPAL CORPORATION WHO IS A SEPARATE BODY CONSTITUTED UNDER 8 THE LAW. IN THIS CASE, THE TEHSILDAR MUNICIPAL CORP ORATION JAIPUR IS HAVING PRECISE AND CONCISE DETAILS OF THE LIMITS AND BOUNDARIES OF THE JAIPUR MUNICIPAL CORPORATION AND THUS HE SHOULD BE GIVEN PREFERENCE OVER ANY OTHER REVENU E AUTHORITY. FURTHER IT HAS BEEN ESTABLISHED WITH THE HELP OF TWO INDEPENDENT CERTIF ICATES THAT THE LAND IN QUESTION IS SITUATED BEYOND THE 8 KM. FROM THE MUNICIPAL LIMITS OF THE JAIPUR MUNICIPAL CORPORATION AS HAS BEEN VERIFIED AND CERTIFIED BY THE TEHSILDA R JAIPUR MUNICIPAL CORPORATION AND IS SITUATED IN THE AREA OF GONER PANCHAYAT SAMITI WHER E THE POPULATION AS PER LAST CENSUS WAS 5043. THE AUTHORITIES BELOW HAVE DOUBTED THE CE RTIFICATE ISSUED BY THE TELSHIDAR JAIPUR MUNICIPAL CORPORATION FOR THE REASON THAT HE STATED THE DISTANCE AS APPROXIMATELY 8.5 KMS. HOWEVER , SUCH APPROXIMATION IN ANY CASE I S MORE THAN 8 KMS AS PRESCRIBED UNDER THE ACT. THEREFORE, FOR THIS REASON, THE CER TIFICATE CANNOT BE HELD AS UNRELIABLE MORE PARTICULARLY WHEN NO FURTHER INQUIRY WAS MADE BY THE AO FOR MAKING ANY FURTHER VERIFICATION FROM THE TEHSILDAR JAIPUR MUNICIPAL CO RPORATION WITH REGARD TO THE CORRECTNESS OF THE CERTIFICATE ISSUED BY HIM EITHER BY MAKING CORRESPONDENCE OR BY DEPUTING WARD INSPECTOR AS HAS BEEN DONE IN THE CAS E OF TEHSILDAR SANGANER. IT IS THEREFORE, HELD THAT THE ASSESSEE CAN NOT BE PUNIS HED FOR THE NON-ENQUIRY BY THE ASSESSING AUTHORITIES WHO ARE SUPPOSED TO ACT IN MOST JUDICIO US MANNER AND BRING FORTH THE ACTUAL TRUTH. IT IS THUS CLEARLY ESTABLISHED THAT THE LAND SOLD BY THE ASSESSEE IS AN AGRICULTURE PIECE OF LAND WHICH IS EXEMPT U/S 2(14)(III) OF THE ACT A ND CANNOT BE TREATED AS A CAPITAL ASSET. ACCORDINGLY WE HOLD THAT THE INCOME ARISING FROM THE TRANSFER OF SALE OF AGRICULTURE LAND TO THE TUNE OF RS. 1,31,24,500/- I S NOT AN INCOME FROM CAPITAL GAIN AND IT IS AN EXEMPTED RECEIPT ARISING FROM THE SALE OF AGR ICULTURE LAND. ACCORDINGLY, THE GROUND NOS. 1 & 1.1 OF THE ASSESSEES ARE ALLOWED. 9 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07-0 3-2014. SD/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER *MISHRA COPY FORWARDED TO :- 1. M/S. RAKESH KUMAR JAIN, HUF, JAIPUR 2. THE ACIT, CIRCLE-2, JAIPUR 3. THE LD.CIT(A) 4. THE LD CIT 5. THE D/R 6. GUARD FILE (ITA NO.877/JP/2012) BY ORDER, AR ITAT, JAIPUR 10 11