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2022 (7) TMI 18 - AT - Income TaxPower to CIT(A) to set aside the order and remand back to AO - Capital gain - capital asset u/s 2(14) - Limits of urbanization - distance of the land to be measured from the municipal limit - Power of CIT(A) as directed the A.O. to determine the situation of the impugned land from the municipal limits of Ahmedabad as on 06.01.1994 and to delete the addition if the land was found to be beyond the 8KM. - HELD THAT - First plea of the Revenue that the ld. CIT(A) had no power to set aside the issue, we may point out that in the impugned case, the ld. CIT(A) had not set aside any issue for reconsideration but on the contrary had given his findings on the issue and proceeded thereafter to direct the A.O. to act upon these findings. He has given his finding that distance of the land for determining whether it is urban or rural land is to be measured from the municipal limits of Ahmedabad as on 06.01.1994, that is the date when the CBDT notification regarding urbanization was notified in the official Gazette. He has only directed the AO to determine the actual distance based on these findings and then accordingly deal with the adjustment to be made. There is clearly a difference between setting aside an issue to the A.O., which power the Ld. CIT(A) does not have as per Section 251 of the Act, and giving directions to the AO. An issue set aside to the AO is left for adjudication to him, while in a case giving directions, the issue is restored to the AO only for acting on the adjudication done by the CIT(A). - Decided ageist revenue. Distance is to be measured from the municipal limit as on 06.01.1994 - D.R. has been unable to point out any contrary decision either of the Hon'ble High Court and Supreme Court in this regard. We therefore find no infirmity in the order of the ld. CIT(A) who has followed the decision of the ITAT while holding that the distance of the land sold by the assessee is to be measured from the municipal limit of Ahmedabad as on 06.01.1994, that is the date of CBDT Notification specifying limits of urbanization, following the decision of the ITAT in several cases. - Decided against revenue.
Issues Involved:
1. Power of the CIT(A) to set aside an issue to the AO. 2. Determination of the distance of the land from municipal limits for the purpose of capital gains tax under Section 2(14)(iii) of the Income Tax Act. Issue-Wise Detailed Analysis: 1. Power of the CIT(A) to Set Aside an Issue to the AO: The Revenue contended that the CIT(A) erred in law by setting aside the assessment order to the AO, arguing that the CIT(A) lacks the power to do so. However, the Tribunal clarified that the CIT(A) did not set aside the issue for reconsideration but provided clear findings and directed the AO to act upon these findings. The CIT(A) concluded that the distance of the land for determining whether it is urban or rural should be measured from the municipal limits of Ahmedabad as on 06.01.1994, the date of the CBDT notification regarding urbanization. The AO was instructed to determine the actual distance based on this finding and make the necessary adjustments. The Tribunal emphasized that there is a distinction between setting aside an issue for adjudication, which the CIT(A) cannot do as per Section 251 of the Act, and giving directions to the AO to act on the CIT(A)'s adjudication. Consequently, the Tribunal dismissed the Revenue's grounds of appeal on this issue. 2. Determination of the Distance of the Land from Municipal Limits: The CIT(A) directed the AO to measure the distance of the land from the municipal limits of Ahmedabad as on 06.01.1994, based on the CBDT notification. The CIT(A) relied on various decisions of the ITAT Ahmedabad Bench, which held that the distance should be measured from the municipal limits as they existed on the date of the notification, not on the date of the transaction. The CIT(A) cited several cases, including ITO v. Akashdeep Farms P. Ltd. and Nilesh R Patel vs. ITO, which supported this interpretation. The Tribunal noted that the AO's method of measuring the distance from the new municipal limits notified by the Vadodara Urban Development Authority was incorrect. The Tribunal upheld the CIT(A)'s direction to measure the distance from the municipal limits as on 06.01.1994 and dismissed the Revenue's grounds of appeal on this issue. The Tribunal also noted that the Revenue failed to provide any contrary decisions from higher courts. Conclusion: The Tribunal dismissed the appeal filed by the Revenue, upholding the CIT(A)'s order. The Tribunal found no merit in the Revenue's contention that the CIT(A) had set aside the issue to the AO and upheld the CIT(A)'s direction to measure the distance of the land from the municipal limits of Ahmedabad as on 06.01.1994. The Tribunal concluded that the CIT(A) had followed the ITAT's decisions correctly and there was no infirmity in the CIT(A)'s order. The appeal was dismissed in its entirety.
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