ITO 11(2)(3), MUMBAI V. HARI J THAKUR, MUMBAI

ITA 996/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93047 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 29-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Keywords: Capital asset; Competent authority

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI H BENCH , , , BEFORE S/SH. JOGINDER SINGH,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 996 /MUM/201 3 , / ASSESSMENT YEAR - 200 9 - 10 INCOME TAX OFFICER - 11(2)(3) ROOM NO.479, 4 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020. VS MR. HARI J. THAKUR 71/72, HIMMAT APARTMENTS DR.R.P . ROAD,MUMBAI - 400 080. PAN: AAJPT 3008 N ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI TARUN GHIA / REVENUE BY :SHRI JEETENDRA KUMAR - DR / DATE OF HEARING : 29 - 06 - 2015 / DATE OF PRONOUNCEMENT : 03 - 07 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 19.11.2012 OF THE CIT(A) - 3, MUMBAI, THE ASSESSING OFFICER (AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL : '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD C I T(A) WAS JUSTIFIED IN DELETING THE ADDITION ON SALE OF LAND BY TREATING THE SAME AS AGRICULTURAL LAND? 2 O N THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW WHETH ER THE LD. C I T (A) WAS JUSTIFIED IN NOT APPRECIATING THE PROVISIONS OF SECTION 2(L4)( III )(B) OF THE ACT CORRECTLY IN AS MUCH AS HE HELD THAT THE CAPITAL GAIN ON THE SALE OF LAND, EVEN THOUGH SITUATED WITHIN 5 KMS. OF NAVI MUMBAI MUNICIPAL CORPORATION WILL NOT BE TAXABLE. 3THE APPELLANT PRAYS THAT THE ORDER OF THE C I T(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4 THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD NEW GROUND WHICH MAY BE NECESSARY. ' ASSE SSEE,AN INDIVIDUAL,FILED HIS RETURN OF INCOME ON 30.9.2009 DECLARING INCOME OF RS.L 0,00, 254/ - .THE AO COMPLETED THE ASSESSMENT ON 30.12.2011 U/S. 143 (3) OF THE ACT DETERMINING INCOME AT RS.2,67,36,810 / - . 2.THE EFFECTIVE GROUND OF APPEAL IS ABOUT DELE TING THE ADDITION ON SALE OF LAND BY TREATING THE SAME AS AGRICULTURAL LAND. AS PER THE AIR INFORMATION THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY AT A COST 3.80 CRORES.ON PERUSAL OF COMPUTATION OF INCOME,THE AO FOUND THAT THE ASSESSEE HAD NOT DISCLOSED ANY INCOME FROM CAPITAL GAIN.VIDE LETTER DT.18.8.11,THE ASSESSEE FURNISHED COPY OF PURCHASE DEED OF AGRICULTURAL LAND. THE PERUSAL OF THE AGREEMENT REVEALED THAT THE ASSESSEE HAD SOLD AGRICULTURAL LAND COMPRISING OF SURVEY NO.30,37, 38 AND 46 SITUATED AT NIGH U VILLAGE VIDE AGREEMENT DATED 26.5.2008 FOR A SALE CONSIDERATION OF RS.3,80,80,000 / - , THAT HE HAD PURCHASED THE AGRICULTURAL LAND VIDE AGREEMENT DATED 22.2 . 2001 FOR RS .4 .50 LACS, THAT ASSESSEE HAD PAID RS.15,000 / - AS ON DATE OF AGREEMENT, THAT INITIALLY T HE AGREEMENT WAS ITA NO.996/M/13 HARI(09 - 10) 2 NOT REGISTERED, THAT LATER ON THE ASSESSEE REGISTERED THE PURCHASE AGREEMENT BY WAY OF CONFIRMATION DEED EXECUTED DT.26.7.2006. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT AGRICULTURAL LAND WAS SITUATED BEYOND 8 KMS FROM THE MUNICIPAL LIMIT . IN HIS SUPPORT,THE ASSESSEE FILED A CERTIFICATE DATED 18.9.99 ISSUED TO HIM BY THANE URBAN AGGLOMERATION AND AGRICULTURAL DEPTT., THAT NIGHU VILLAGE WAS 8 KMS BEYOND THANE MUNICIPAL CORPORATION(TMC), THAT THE POPULATION WAS 12357. AFTER CONSIDERING THE S UBMISSION OF THE ASSESSEE,THE AO HELD THAT THE ASSESSEE HAD NOT DECLARED ANY INCOME FROM CAPITAL GAINS FROM SALE OF PLOTS, THAT DURING COURSE OF ASSESSMENT PROCEEDINGS HE HAD STATED THAT THE SALE CONSIDERATION PERTAINING TO HUF OF RS.52.29 LACS WAS WRONGLY CREDITED TO HIS INDIVIDUAL ACCOUNT,THAT THE PLOT WAS PURCHASED BY HIM IN HIS INDIVIDUAL CAPACITY. THE AO DIRECTED THE ASSESSEE TO PROVE THE CLAIM THAT THE DISPUTED PLOT OF LAND WAS JOINTLY HELD BY THE ASSESSEE AND THE HUF AND THAT THE NIGHU VILLAGE WAS NO T WITHIN 8 KMS OF THE NAVI MUMBAI MUNICIPAL CORPORATION(NMMC).HE ASKED THE ASSESSEE TO JUSTIFY THE CLAIM THAT PLOT OF AGRICULTURAL LAND WAS NOT AN ASSET WITHIN THE MEANING OF OF S2(14) BY PRODUCING NECESSARY CERTIFICATE. THE AO MADE ENQUIRIES U/S.133(6) OF THE ACT. THE MUNICIPAL AUTHORITY OF NMMC INTIMATED TO HIM THAT 13 VILLAGES INCLUDING NIGHU HAD BEEN SEPARATED FROM THE CORPORATION, VIDE NOTIFICATION 8.6.2007, THAT NIGHU WAS WITH 5 KMS OF THE LIMIT OF NMMC. THE ASSESSEE MADE FURTHER SUBMISSION IN THAT RE GARD.THE AO,FINALLY HELD THAT NIGHU FELL WITHIN 5 KMS FROM THE LOCAL LIMITS OF NMMC, THAT NIGHU WAS REMOVED OUT OF THE JURISDICTION OF NMMC VIDE NOTIFICATION DT.8.6.2007, THAT NOWHERE IT WAS MENTIONED THAT JURISDICTION OFNIGHU WAS TRANSFERRED TO THANE OR A NY OTHER MUNICIPAL CORPORATION, THAT IN 2008 NIGHU WAS NOT IN ANY MUNICIPAL CORPORATION. INVOKING THE PROVISIONS OF SECTION2(III)(B) OF THE ACT,THE AO DETERMINED THE NET SALE CONSIDERATION AT RS.2.63 CRORES AND CALCULATED THE LTCG AT RS.2.57 CRORES. 3.A GGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER,THE FAA HELD THAT THE ASSESSEE HAD SOLD AGRICULTURAL LAND SITUATED AT N I GHU AT A SALE CONSIDERATION OF 3.03 CRORES IN WHICH THE ASSESSEE'S SALE CONSIDERATION WAS RS2.63 CRORES, THAT THE ASSESSEE HAD FILED CERTIFICATE DT.18.9.2009, ISSUED BY THANE URBAN AGGLOMERATION AND AGRICULTURAL DEPTT., THAT NIGHU WAS BEYOND 8 KMS FROM TMC , THAT AS PER LETTER ISSUED BY COMPETENT AUTHORITY THE ASSESSEE WAS INTIMATED THAT 13 VILLAGES INCLUDING NIGHU HAD BEEN SEPARATED FROM NMMC, THAT WHEN PLOT OF LAND WAS SOLD ON 26.5.2008 NIGHU WAS NOT WITHIN THE JURISDICTION OF NMMC, THAT REGISTRATION AND P URCHASE OF SALE DEED OF THE PROPERTY HAD BEEN CARRIED OUT WITH SUB - REGISTRAR THANE, THAT THE JURISDICTION OF LAND WAS WITH TMMC, THAT NIGHU WAS NOT WITHIN THE DISTANCE OF 8 KMS FROM TMC,THAT CAPITAL GAIN ARISING THEREFORE, WAS NOT CHARGEABLE UNDER THE ACT. ACCORDINGLY, LTCG ASSESSED BY AO AT RS.2.57 CRORES WAS DELETED. 4. BEFORE US DEPARTMENTAL REPRESENTATIVE (OR) SUBMITTED THAT ISSUE WAS COVERED IN FAVOUR OF THE DEPARTMENT BY THE JUDGMENTS DELIVERED IN THE CASES OF ANJANA SEHGAL (40 TAXMANN.COM 485), KHAZA N SINGH (46 TAXMANN,COM 238);SMT. NEERU AGGARWAL ( 44 TAXMANN.COM 295).AUTHORISED REPRESENTATIVE(AR) SUPPORTED THE ORDER OF THE FAA AND ARGUED THAT THE AGRICULTURAL LAND WAS BEYOND 8 KMS FROM TMC, THAT THOUGH IT WAS WITHIN 8 KMS OF NMMC IT WAS NOT THE JURI SDICTIONAL MUNICIPALITY, THAT AO HAD NOT BROUGHT ON RECORD ANY EVIDENCE THAT THE AREA FELL WITHIN THE SPECIFIED LIMITS AS PER NOTIFICATION OF 1994. HE RELIED UPON THE DECISIONS OF CAPITAL LOCAL AREA BANK LTD. (29 SOT 394) AND R. THANIGAIMALAI (ITA 35/BANG/ 20 11 AY 05 - 06 DATED 25.5.12) 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. UNDISPUTED FACT OF THE CASE ARE THAT THE ASSESSEE HAD PURCHASED PLOTS OF LANDS IN NIGHU VILLAGE IN THE YEAR ITA NO.996/M/13 HARI(09 - 10) 3 JOINTLY WITH THE HUF, THAT THE PLOTS WERE SOLD DURING THE YEAR UNDER CONSIDERATION FOR RS. ,THAT THE ASSESSEE DID NOT DISCLOSE L TCG ON SALE OF PLOTS OF LAND AS HE WAS OF THE OPINION THAT THE LAND WAS NOT WITHIN 8 KM.OF MUNICIPAL LIMIT,THAT THE FAA DELETED THE ADDITION MADE BY THE ASSESSEE ,THAT THE FAA HELD THAT NIGHU VILLAGE WAS BEYOND 8 KMS.FROM TMC AND THAT NMMC DID NOT HAVE JURISDICTION OVER THE VILLAGE. IT IS TRUE THAT VIDE NOTIFICATION DATED NIGHU WAS SEPARATED FROM NMMC AND IT WAS A SEPARATE PANCHAYAT AREA.THE POPULATION OF THE VILLAGE MOR E THAN 10000.THE SHORT QUESTION TO BE DECIDED IS WHETHER THE DISTANCE OF 8 KMS.IS TO BE TAKEN FROM TMC OR NMMC. THE AR HAS RELIED UPON THE DECISIONS OF THE TRIBUNAL WHEREAS THE D R REFERRED TO THE JUDGMENT OF THE HON'BLE HIGH COURT. WE FIND THAT THE JUDG MENTS OF ANJANA SEHGAL AND KHAZAN SINGH (SUPRA) WERE DELIVERED ON 01.03.2011 AND ON 20.02.14 WHEREAS THE DECISIONS OF VARIOUS BENCHES OF THE TRIBUNAL,RELIED UPON BY THE AR,ARE OF THE YEAR 2009,2010 AND 2012.CLEARLY,THE BENCHES OF THE TRIBUNAL DID NOT HAVE THE BENEFIT OF THE ORDER OF THE HON'BLE HIGH COURT. THE HON'BLE COURT HAS DECIDED THE ISSUE AGAINST THE ASSESSEE.JUDICIAL DECISION AND PROPRIETARY STIPULATE THAT IN SUCH MATTER THE WISDOM OF HIGHER FORUM SHOULD PREVAIL. SO FOLLOWING THE DECISIONS OF THE HO N'BLE P& H HIGH COURT WE ARE REVERSING THE DECISIONS OF THE FAA. HERE,WE WOULD ALSO LIKE TO REPRODUCE THE RELEVANT PORTION OF THE JUDGMENT OF ANJANA SEHGAL (SUPRA)AND SAME READS AS UNDER: 'A PERUSAL OF SECTION 2( 14) MAKES IT CLEAR THAT WHAT IS INTEND ED TO BE COVERED IN THE TERM'CAPITAL ASSET', IS AGRICULTURAL LAND COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY AND WITHIN THE SPECIFIED DISTANCE FROM THE LOCAL LIMITS OF MUNICIPALITY OR OTHER LOCAL BODIES MENTIONED THEREIN AS SPECIFIED IN THE NOTI FICATION. IT IS UNDISPUTED THAT THE LAND IN QUESTION IS WITHIN THE SPECIFIED DISTANCE FROM THE PANCHKULA MUNICIPALITY WHICH FALLS IN THE STATE OF HARYANA WHILE THE LAND IS IN THE STATE OF PUNJAB. THUS, THE LAND IS URBAN LAND FOR THE PURPOSE OF DEFINITION OF 'CAPITAL ASSET' UNDER SECTION 2(14). THE CONCEPT OF MUNICIPALITY AS A UNIT OF STATE OR THE FACT THAT A STATE HAS NO JURISDICTION TO MAKE LAW BEYOND ITS TERRITORY HAVE NO RELEVANCE FOR THE PURPOSE OF DETERMINING WHETHER A PARTICULAR LAND WAS 'CAPITAL ASSET' OR NOT FOR THE PURPOSE OF TAXING CAPITAL GAINS. IF A LAND IS ADJACENT TO A MUNICIPALITY AND IS URBAN LAND COVERED UNDER SECTION 2(14), EVEN THOUGH MUNICIPALITY AND LAND FALL IN DIFFERENT STATES, LAND WILL CONTINUE TO BE URBAN LAND. IF SUCH LAND IS EXCLUDED FROM THE DEFINITION OF' CAPITAL ASSET', THE PURPOSE OF THE STATUTORY SCHEME WILL NOT BE ACHIEVED. [PARA 9 ] 7. TO APPRECIATE THE CONTROVERSY, IT WILL BE APPROPRIATE TO REFER TO THE RELEVANT PROVISIONS OF SECTION 2 (14) OF THE ACT: '2. ( 14) 'CAPITAL ASSET' MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE - (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATE - (A) IN ANY AREA WHICH IS COMPRISED WITHI N THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUS AND 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 MORE THAN EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPA LITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION ITA NO.996/M/13 HARI(09 - 10) 4 OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFIED IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE. ' 8. THE NOTIFICATION DATED JANUARY 6, 1994, ISSUED BY THE CENTRAL GOVERNMENT IS AS UNDER (SEE [1994] 205 ITR (ST) 121,122): 'NOW. THEREFORE, IN EXERCISE OF THE POWERS CONFERRED BY ITEM (B) OF CLAUSE (II) OF THE PROVISO TO SUB - CLAUSE (C) OF CLAUSE (1 A) AND ITEM (B) OF SUB - CLAUSE (III) OF CLAUSE (14) OF SECTION 2 OF THE INCOME TAX ACT. 1961 (43 OF 1961). AND IN SUPERSESSION OF THE NOTIFICATION OF THE GOVERNMENT OF INDIA THE ERSTWHILE MINISTRY OF FINANCE (DEPARTMENT OF REVENUE AND INSURANCE) NO. S. 0. 77(E), DATED, FEBRUARY 6,1973 SEE [1973] 89 ITR (ST) 145., THE CENTRAL GOVERNMENT HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR URBANIZATION OF THE AREAS CONCERNED AND OTHER RELEVANT CONSIDERATIONS, HEREBY SPECIFIES THE AREAS SHOWN IN COLUMN (4) OF THE SCHEDULE HERETO ANNEXED AND FALLING OUTSIDE THE LOCAL LIMITS OF MUNICIPALITY OR CANTONMENT BOARDS, AS THE CASE MAY BE, SHOWN IN THE CORRESPONDING ENTRY IN COLUMN (3) THEREOF AND AGAINST THE STATE OR UNION TERRITORY SHOWN IN COLUMN (2) THEREOF FOR TH E PURPOSES OF THE ABOVE MENTIONED PROVISION OF THE INCOME - TAX ACT. 1961 (43 OF 1961). X XXXXX 9. A PERUSAL OF THE ABOVE PROVISIONS MAKES IT CLEAR THAT WHAT IS INTENDED TO BE COVERED IN THE TERM 'CAPITAL ASSET' IS AGRICULTURAL LAND COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY AND WITHIN THE SPECIFIED DISTANCE FROM THE LOCAL LIMITS OF MUNICIPALITY OR OTHER LOCAL BODIES MENTIONED THEREIN A SPECIFIED IN THE NOTIFICATION. IT IS UNDISPUTED THAT THE LAND IN QUESTION IS WITHIN THE SPECIFIED DISTANCE F ROM THE PANCHKULA MUNICIPALITY WHICH FALLS IN THE STATE OF HARYANA WHILE THE LAND IS IN THE STATE OF PUNJAB. THUS, THE LAND IS URBAN LAND FOR THE PURPOSE OF DEFINITION OF 'CAPITAL ASSET' UNDER SECTION 2(14). THE CONCEPT OF MUNICIPALITY AS A UNIT OF STATE OR THE FACT THAT A STATE HAS NO JURISDICTION TO MAKE LAW BEYOND ITS TERRITORY HAVE NO RELEVANCE FOR THE PURPOSE OF DETERMINING WHETHER A PARTICULAR LAND WAS 'CAPITA L ASSET'' OR NOT FOR TH E PURPOSE OF TAXING CAPITA L GAINS. IF THE LAND IS ADJACENT TO A M UNICIPALITY AND IS URBAN LAND COVERED UNDER SECTION 2(14), EVEN IF MUNICIPALITY AND THE LAND FALL IN DIFFERENT STATES, THE LAND WILL CONTINUE TO BE URBAN LAND. IF SU CH LAND IS EXCLUDED FROM T HE DEFINITION OF CAPITAL ASSET', THE PURPOSE OF THE STATUTOR Y SCHEME WILL NOT BE ACHIEVED. ( EMPHASIS BY US) 10. THE JUDGMENTS RELIED UPON TO SUBMIT THAT ALL WORDS OF A STATUTE SHOULD BE ASSIGNED MEANING DO NOT SUPPORT THE CONTENTION OF THE ASSESSEE, INCLUDING THE LAND IN DISPUTE IN 'CAPITAL ASSET' DOES NOT IGN ORE ANY WORD IN THE DEFINITION AS ASSUMED BY THE LEARNED COUNSEL. THE SPEECH OF THE FINANCE MINISTER ALSO DOES NOT HELP THE ASSESSEE. THE RELEVANT EXTRACT THEREOF IS AS UNDER (SEE[1970) 75ITR (ST) 17,69) : 'SUB - CLAUSE (A) SEEKS TO AMEND CLAUSE (J 4) O F SECTION 2 OF THE INCOME - TAX ACT WHICH DEFINES THE TERM 'CAPITAL ASSET'. THE AMENDMENT SEEKS TO BRING WITHIN THE TERM 'CAPITAL ASSET' AGRICULTURAL LAND SITUATED WITHIN THE LIMITS OF ANY MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATI ON,NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE OR BY ANY OTHER NAME) OR A CANTONMENT BOARD HAVING A POPULATION OF 10,000 OR MORE ACCORDING TO THE LAST CENSUS FOR WHICH THE FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR. FURTHER, AGRICULTURAL LAND SITUATED IN AREAS LYING WITHIN A DISTANCE NOT EXCEEDING 8 KILOMETERS FROM THE LOCAL LIMITS OF SUCH MUNICIPALITIES OR CANTONMENT BOARDS WILL ALSO BE COVERED BY THE AMENDED DEFINITION OF 'CAPITAL ASSET', IF SUCH AREAS ARE, HAVING REGARD TO THE EXTENT OF AND SCOPE FOR THEIR URBANISATION AND OTHER RELEVANT CONSIDERATIONS, NOTIFIED BY THE CENTRAL ITA NO.996/M/13 HARI(09 - 10) 5 GOVERNMENT IN THIS BEHALF. THE EFFECT OF THE PROPOSED AMENDMENT WILL BE THAT CAPITAL GAINS ARISING FROM THE. TRANSFER OF AGRICULTUR AL LAND SITUATED IN MUNICIPAL OR OTHER URBAN AREAS OR NOTIFIED ADJOINING AREAS WILL BE LIABLE TO INCOME - TAX FOR THE ASSESSMENT YEAR 1970 - 71 AND SUBSEQUENT YEARS. SIMILARLY,IN THE CASE OF KHAZAN SINGH(SUPRA)THE HON'BLE HIGH COURT HAS HELD AS UNDER: 7. FROM THE PLAIN AND UNAMBIGUOUS LANGUAGE USED IN CLAUSE (A) OF THIS SUB - SECTION, IT IS CLEAR THAT IF THE AGRICULTURAL LAND IS SITUATED OUTSIDE THE JURISDICTION OF A MUNICIPALITY, THEN NO TAX ON ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF SUCH LAN D WILL BE CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS'. HOWEVER, UNDER CLAUSE(B) ANY AREA WITHIN 8 KMS FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT REFERRED IN CLAUSE (A) OR WITHIN SUCH AREA AS THE CENTRAL GOVERNMENT MAY SPECIFY BY WAY OF A NOTIF ICATION HAVING REGARD TO THE EXTENT AND SCOPE OF URBANISATION OF THAT AREA WOULD BE WITHIN THE AMBIT OF CAPITAL ASSET. 8.IN THE CASE IN HAND, IT IS EVIDENT THAT AT NO POINT OF TIME THE ASSESSEE HAD DISPUTED THAT THE LAND IN QUESTION DID NOT FALL WITHIN TH E AREA OF 5 KMS FROM MUNICIPAL LIMITS OF SANGRUR. EVEN CIT(A) HAS ALSO MENTIONED IN ITS ORDER THAT THE LAND IS SITUATED WITHIN 5 KMS FROM SANGRUR MUNICIPAL COMMITTEE. NOT ONLY THIS A PERUSAL OF NOTIFICATION DATED 6.1.1994 ISSUED BY THE - GOVERNMENT OF INDIA UNDER THE PROVISIONS OF SECTION 2(L4)(III)(B), MAKES IT CLEAR THAT AREAS UP TO DISTANCE OF 5 KMS FROM MUNICIPAL LIMITS OF SANGRUR IN ALL DIRECTIONS FALLS WITHIN THE LOCAL LIMITS OF SANGRUR MUNICIPALITY. ONCE THERE WAS NO DENIAL OF THE FACT THAT THE LAND IN QUESTION FALLS WITHIN 5 KMS OF SANGRUR MUNICIPAL COMMITTEE, THERE WAS NO OCCASION FOR THE CIT(A) AS WELL AS THE TRIBUNAL TO INTERPRET OTHERWISE AND HOLD THAT THE LAND IN QUESTION WOULD NOT CONSTITUTE A CAPITAL ASSET WITHIN THE MEANING OF PROVISIONS IBID. RESPECTFULLY, FOLLOWING THE ABOVE DECISIONS,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY , 2015. 3 , 2015 SD/ - SD/ - ( / JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 03.07 .2015 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FI LE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.