ITO WARD - 1, PANIPAT V. SANTOSH AHLAWAT, PANIPAT

ITA 1771/DEL/2020

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-1, Panipat against the order of the Learned Commissioner of Income Tax (Appeals)-Karnal, which had deleted the addition made on account of Long Term Capital Gain by the Assessing Officer. The primary contention was whether the land sold by the assessee, Santosh Ahlawat, qualified as a capital asset under section 2(14)(iii)(II) of the Income Tax Act, 1961, given its distance from the municipal limits of Panipat. The Assessing Officer had initially taxed the capital gain, asserting the land was within the municipal limits, contrary to the assessee's claim of it being agricultural land beyond 8 K.M. The CIT(A) ruled in favor of the assessee, which the Revenue challenged, leading to this appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474604 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: ADITYA KAUSHIK
• Keywords: Set aside; Capital asset; TDS; Assessment record; FORM 26AS
• Section: 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1771/Del/2020 (ASSESSMENT YEAR 2016-17) Income Tax Officer, Ward-1, Panipat. Vs. Santosh Ahlawat, House No.172, Model Town, Panipat, Haryana-132103 PAN-ADBPA2928B (Appellant) (Respondent) Assessee by Sh. Aditya Kaushik, CA Department by Shri Sahil Kumar Bansal, Sr. DR Date of Hearing 10/02/2025 Date of Pronouncement 19/02/2025 ORDER PER MANISH AGARWAL, AM: This is appeal filed by the Revenue against the order of Learned Commissioner of Income Tax (Appeals)-Karnal (‘the Ld. CIT(A)’ for short), dated 06/07/2020 for Assessment Year 2016-17. 2. The Revenue has challenged the order of Ld. CIT(A) by taking following grounds of appeal: “1. Whether on the facts & in the circumstances of the case, the Ld. CIT(A), Karnal was right in law in deleting the addition of Rs.9.63,15,593/- made on account of Long Term Capital Gain. 2. Whether on the facts & in the circumstances of the case, the Ld. CIT(A), Karnal was right in law in allowing the appeal of the assessee by holding that there is no notification to calculate the distance as per crow's flight, whereas as per section 2(14)(b) of the I.T. Act, 1961, it is clearly 2 ITA No.1771/DEL/2020 ITO vs. Santosh Ahlawat mentioned in the statute that distance will be calculated 'aerially from the local limits of any municipality'. 3. Whether on the facts & in the circumstances of the case, Ld. CIT(A) was right in allowing the appeal of the assessee by holding that the report obtained from District Town Planner, Panipat was not confronted to the assessee and cannot be used as evidence whereas the same was confronted to the assessee vide notice dated 28.12.2018 as evident from the assessment record. 4. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or finally disposed.” 3. The brief facts of the case are that assessee is an individual and filed her return of income on 16/03/2017 declaring total income of Rs.2,39,090/-. The case was selected for scrutiny and during the course of appellate proceedings, from the perusal of Form 26AS available in Individual Transaction Statement, it was found that the assessee sold immovable property for a consideration of Rs.11,00,00,000/- and had claimed the credit of TDS of Rs.11,00,000/- in the return of income filed, however, sale proceeds of the property was not declared in the relevant column of the return of income, therefore, the AO sought clarification on this from the assessee. In response, assessee has submitted the copy of the sale deed and contended that the land of the assessee is situated beyond 8 K.M from the Municipal Limit of Panipat, therefore, the same is agriculture land and not covered by the definition of the capital asset within the meaning of this section 2(14)(iii)(II) of the Income Tax Act, 1961. The assessee also filed the photocopy of the distance certificate of the land issued by the Tehsildar dt. 03/12/2015, in support of the claim that land assessee was situated beyond 8 K.M. from the limit 3 ITA No.1771/DEL/2020 ITO vs. Santosh Ahlawat of the Municipal Corporation, Panipat. The AO in order to make verification of the distance of the land from the limits of the Municipal Corporation beyond 8 K.M., sought clarifications from the District Town Planner, Panipat by issuing of notice u/s 133(6) of the Act. In response, the District Town Planner, Panipat informed that the land sold by the assesse is situated at distance of 1.5 K.M. from the Municipal Limit, therefore, the AO provided an opportunity to the assessee vide show cause notice to explain why the long term capital gain from the sale of such land should not be taxed as the land of the assessee is capital asset. Since, no reply was furnished by the assessee, therefore, the AO hold that the land of the assessee is capital asset and made the addition of Rs.9,63,15,593/- as long term capital gain from the sale of such land. 4. The Ld. CIT(A) after considering the facts of the case and also considering the submissions of the assessee and the report of the Tehsildar, Panipat held that land of the assessee is situated beyond the 8 K.M. from the limits of Municipal Corporation, Panipat. The Ld. CIT(A) further observed that as per the last census population of Panipat is less than 10 lakhs, and, therefore, the distance is to be taken at 6 K.M. in terms of crow flies and not 8 K.M. as taken by AO. 5. During the course of hearing, the Ld. Sr. DR submit that the Ld. CIT(A) has failed to appreciate that the Tehsildar, Panipat has not specified whether distance measured by him of the land from the Municipal Limit of Panipat is as crow flies or distance by road. Ld. 4 ITA No.1771/DEL/2020 ITO vs. Santosh Ahlawat Sr. DR further submit that the District Town Planner, Panipat has already filed the report that land of the assessee is situated at 1.5 K.M. from the Municipal Limit of Panipat. He further submitted that the Ld. CIT(A) also relied upon and gave his finding on the basis of the Google Map to verify the distance of the assessee land from the Municipal Limit, Panipat. However, the said Google Map was never confronted with the Assessing Officer. Therefore, the Ld. Sr. DR submit that the addition deleted by Ld. CIT(A) is based on wrong appreciation of the fact and deserves to be reversed. 5. On the other hand, the Ld. AR of the assessee vehemently supported of the orders of the CIT(A) and submitted that Tehsildar of Minicipal Corporation, Panipat has given a certificate stating that the land of the assessee is situated at beyond the 8 K.M. from the Municipal Limit, Panipat. He further submit that as per the Google Map the land of the assessee is situated beyond the 8 K.M. of Minicipal Limit of Panipat. He further submit that the distance of 6 K.M. from the Municipal Limits is to taken into consideration as against 8 K.M., since as the population of Panipat according to last census was less than 10 lacs. During the course of hearing, the Ld. AR also filed a certificate from the Global Techno Services (Geographic Information System) stating that exact location and distance to the municipal limit from the land of the assessee. This is in support of the claim that the said land is situated beyond 6 K.M. if measured through crow flies beyond the municipal limit, Panipat. He therefore, prayed that order of Ld. CIT(A) deserves to be upheld. 5 ITA No.1771/DEL/2020 ITO vs. Santosh Ahlawat 6. We have heard the rival submissions and perused the materials available on record. In this case, it is seen that the assessee has not made any compliance against the show cause notice issued by the Assessing Officer with regard to the character of the land sold by the assessee whether it is a capital asset or not in terms of section 2(14)(iii)(II) of the Act. We find that there are three certificates available on record, first issued by Tehsildar, Municipal Corporation, Panipat, (ii) by the District Town Planner, Panipat (iii) the Google Map of the land. Further, before us, the assessee has filed certificate from the Global Techno Services (Geographic Information System) regarding exact location and distance of the sold land from the municipal limit. On perusal of all these certificates, we find that all the certificates states different distance of the land from the Municipal Corporation Limits of Panipat. Further, it is not clear whether the said distance is measured as per crow flies view or measured by road distance. As per last census the population of Panipat was less than 10 lacs, therefore, distance of 6 K.M. is to be considered as against the 8 K.M. taken by AO. In view of this facts, we set aside the issue to the file of the AO to make verification of the fact whether the land of the assessee is situated beyond distance of 6 K.M. from the municipal limit of the Panipat, by measuring distance from crow flies view and decided the issue in accordance with law. With these directions all the grounds of appeal of the Revenue are partly allowed for statistical purposes. 6 ITA No.1771/DEL/2020 ITO vs. Santosh Ahlawat 7. In the result, the appeal of the Revenue is partly allowed for statistical purposes. Order pronounced on 19/02/2025. Sd/- Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:19/02/2025 PK/Sr.Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "