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2023 (11) TMI 499 - AT - Income TaxNature of land sold - Capital gain earned on sale of land - capital asset or rural agricultural land - Measurement of Distance - AO rejected this contention of the assessee treating the land as not qualifying in the exception provided in section 2(14)(iii) and accordingly subjected to the gain thereon to tax and thereafter applied the provisions of section 50C substituting the consideration actually received by the assessee with the stamp duty value thereon - HELD THAT - As is evident, agricultural and situated within the jurisdiction of municipality or cantonment board or within the specified limits of such municipality or cantonment board, qualify as capital asset. The limits from the respective municipalities or cantonment boards, have been specified by the CBDT in its Notification No.SO-9447 F.No.164/3-ITA-I dated 6.1.1994. The Revenue has held the land qualifying as capital asset on the basis that the land was included in the AUDA, and are therefore within 8 kms. from the outer point of AMC. As noted that identical issue has been deal in the case of Shri Dashratbhai Gopalbhai Patel, 2021 (9) TMI 346 - ITAT AHMEDABAD wherein they have held that the Development Authority cannot be equated with the Municipal Corporation, and therefore, the measurement of the Revenue Department fails. Thus distance measurement by the Revenue is not in accordance with law. As for the distance measurement submitted by the assessee, the same is based on Google Map and that submitted by the Dy. Engineering, Road Building Department, we fail to understand how this measurement can be treated as authentic. In our view, authority keeping records of land is the correct authority to issue certificate, and therefore, measurement certificate submitted by the assessee is also rejected. Since, there is no basis before us for determining the distance for the land sold by the assessee, the issue, we find, need reconsideration, and therefore the same is restored back to the AO to obtain necessary distance certificate from the appropriate authority, and thereafter adjudicate the issue in accordance with law. Appeal of the assessee is allowed for statistical purpose. Addition u/s 68 - Unexplained source of deposits in the bank account - HELD THAT - AO has accepted explanation of source with respect to the deposits of Rs. 1.34 crores, there can be no grievance of the AO. Therefore, order of the ld.CIT(A) deleting the addition of unexplained cash deposits to this amount upheld. Balance cash deposited, we have noted that the ld.CIT(A) has accepted the explanation of the assessee giving detailed finding with respect to each deposits. CIT(A) has given a finding of fact that the amount received by the assessee from them was from the opening balance outstanding in their name which were confirmed by the said parties. With respect to the other parties CIT(A) noted with respect to such parties, the assessee has submitted relevant bank accounts proving creditworthiness of the said parties, as also their confirmation and copy of the return of income. CIT(A) also noted that the said amounts were shown to have been returned also, therefore, relying upon the decision of Aayachi Chandrakshekar Narsangi 2013 (12) TMI 372 - GUJARAT HIGH COURT CIT(A) deleted the addition made. CIT(A) has given detailed finding of being satisfied with the genuineness of the credit, noting that the said parties had filed their confirmation, returned income and bank statement. As above detailed factual finding of the CIT(A), which have not been controverted by the Revenue, no reasons to interfere - Decided against revenue.
Issues Involved:
1. Addition towards capital gains. 2. Application of Section 50C of the Income Tax Act. 3. Exemption claim under Section 54B. 4. Deletion of additions made under Section 68. Summary: 1. Addition towards capital gains: The assessee contested the addition of Rs. 1,04,48,973/- towards capital gains, arguing that the agricultural land sold did not qualify as a "capital asset" under section 2(14)(iii) of the Income Tax Act, 1961. The AO rejected this contention, treating the land as a capital asset and subjecting the gain to tax. The CIT(A) confirmed the AO's decision. 2. Application of Section 50C: The AO applied Section 50C, substituting the consideration received by the assessee with the stamp duty value. The CIT(A) upheld this application. The assessee appealed against this decision, arguing that the land did not qualify as a capital asset and thus should not be subject to Section 50C. 3. Exemption claim under Section 54B: The assessee claimed exemption under Section 54B for reinvesting the capital gains in agricultural land. The AO rejected this claim, but the CIT(A) allowed it. The Revenue appealed against this allowance, arguing that the land was not used for agricultural purposes in the two immediate preceding years as required by Section 54B. 4. Deletion of additions made under Section 68: The AO added Rs. 6,62,35,000/- under Section 68 due to unexplained cash deposits. The CIT(A) deleted these additions, accepting the assessee's explanations and supporting documents. The Revenue appealed against this deletion, but the Tribunal upheld the CIT(A)'s decision, noting detailed factual findings and confirmations from the parties involved. Final Decision: The Tribunal restored the issue of determining the distance of the land from the municipality to the AO for reconsideration, impacting the application of Section 2(14)(iii) and Section 50C. The assessee's claim of exemption under Section 54B was also restored for reconsideration. The deletion of additions under Section 68 was upheld. The appeals were allowed for statistical purposes.
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