9911796707
TMI Blog2012 (12) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer as an undisclosed income, instead of agricultural income as claimed by the assessee. It was established that the land in question was not cultivated and also the party to whom the agricultural produce was claimed to have been sold was non existent. 3. That the appellant craves leave to amend or add any or more grounds of appeal." 3. The brief facts of the present case are that the assessee had declared income from bank interest alongwith agricultural income. The assessee by way o note to return of income has stated that the assessee had sold a piece of land situated at village Fazilpur, Jharsa, Gurgaon, which is beyond 8 KMs of the local municipal limits of any Municipality/Cantonment Board. The said land is not a capital asset as per section 2(14)(iv) and accordingly the capital gain arising on the said land is treated as an agricultural income u/s 2(IA). The assessee has conducted agricultural operation on the said land during the current year and in the preceding years. The AO did not accept the explanation of the assessee during the assessment proceedings and treated the said income as business income and Rs.40,000/- shown declared as agricultural income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mentioned in the said letter is not from the outer limit of Municipal Corporation till the land situated under consideration as the assessment was getting barred on 31.12.2010. He ignored the evidences filed of two Tehsildars and a Surveyor of distance more than 8 km. Even the information called for as mentioned by the AO in his letter from Town Planner speaks about the village Fazilpur Jharsa and not the area where the land situated therein which reads as under: "Vide this letter 20.12.2010, the District Town Planner (Planning), Sector 14, Gurgaon was requested to furnish the following information: 1. The actual Arrow Fly distance of the village Fazilpur Jharsa from the municipality limits of Gurgaon as on 24.01.2008. 2. Please state whether the village Fazilpur Jharsa has been covered under any development plant of constructions or industrial activities or for some other social activities by the Town Planner of by other concerned authority. In response to the above letter, the District Town Planner Gurgaon vide his office letter No.7114 dated 22.12.2010 has furnished the information which is reproduced as under: 1. On the subject cited above, it is inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub clause (iii) of clause (14) of this section]" Section 1(14)(iii)(a)(b) reads as under: (a) in any area which is comprised within 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 thousand 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 an municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette." As a result of the insertion of new Explanation at the end of section 2(IA) by the Finance Act, 1989 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation is 5 km. The AO referred the matter for confirming the distance from village and not from the place of land which was sold. Since the assessee had obtained a certificate from the Senior Town Planner confirming the motorable distance of the area of land from municipal corporation limit is beyond 8km which had already been furnished by separate letter as an additional evidence before the ld. CIT(A). The Ld. counsel relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Satinder Pal Singh (2010) 229 CTR 82, where it has been held that distance of the agricultural land belonging to the assessee within the meaning of section 2(14)(iii)(b) has to be measured in terms of the approach by road and not by a straight line distance on horizontal plane or as per crow's flight. Reference was also made to the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Lal Singh Others (2010) 228 CTR 575. 7.8. It was also argued that the assessee vide letter dated 15.11.2010 had submitted that the land was fit for agriculture and had been cultivated. The assessee had grown Sarson during the year under consideration and the yield of Sarson was between 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO failed to procure fresh distance measuring certificate in contradiction to the assessee's additional evidence and instead of doing this, furnished a certificate dated 27.04.2011 of one Sh. Surinder Bhadwaj, Patwari Halka Islampur wherein instead of indicating the required distance certificate, the Patwari has laid stress on the fact that the land in question is vacant and has not been cultiviated for the last 2-3 years, therefore, the period referred to in this certificate is post sale & not pre-sale. Therefore, no new facts are emerging and the earlier distance certificate of the Distt. Town Planner, Gurgaon also does not serve any purpose as the same is describing the measurement from the village Fazilpur Jharsa to the Gurgaon Municipal Committee limits and not from the point of limitation of assessee's land to the Gurgaon Municipal Limits. The assessee's evidence is well more relevant and specific to the point of actual distance involved in the present case. The assessee's land was purchased as agricultural piece of land and was sold as agricultural land " as it is where it is" basis, except carrying season crop of Sarson which crop having been harvested before the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the same nomenclature of "Agricultural Land" would not make this transaction as "Business Income." 9. Therefore, in the facts and circumstances of the case and various decisions relied upon by the assessee before the Ld. CIT(A) and before us, we concur with the views of the ld. CIT(A) that the A.O. is not justified in treating the assessee's solitary transaction of sale of part of its land holdings on 'as it is and where it is' basis without recording it as its stock-in-trade as assessee's business income by applying provisions of section 45(2) of the Act and without establishing that the assessee is actually engaged in making frequent dealings in real estate business during the previous year relevant to the assessment year under consideration. The assessee had rather been able to substantiate that as per latest certificate bearing No.2152 dated 08.03.2011 of the Senior Town Planner, Gurgaon, the assessee's land is situated beyond 8 kms from the Gurgaon Municipal Committee limitation prevalent at the time of its sale executed on 24/25.01.2008 much before its conversion into Municipal Corporation in July, 2008 and even the Urban Development Plans relied upon by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
