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TMI Blog2011 (10) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... . SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER For the Appellant: Shri K. Raghu, FCA For the Respondent: Shri Shaji P. Jacob, Sr. DR. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : This is an appeal filed by department for the assessment year 2007-08 against the order dated 28.02.2011 of Commissioner of Income Tax [A]-I, Coimbatore. 2. The Revenue has raised the following grounds: 1. The order of the learned Commissioner of Income Tax (Appeals) is against facts and circumstances of the case. 2. The learned CIT(A) ought to have considered that the land is located within the distance of 8 kms from the limits of Coimbatore Corporation, the population of which exceeds 10000 Nos. 3. The learned CIT(A) ought to have considered that the stated issue of population of the village (Sarkar Samakulam) in which the land-in-question is situated being less than 10000 as per the Census 2001 is neither relevant or tenable; for, the population of Coimbatore Corporation is above 10000 Nos. 4. The learned CIT(A) ought to have considered the judgement in the case of G.M. Omerkhan Vs. CIT (1992) 196 ITR 269 (SC) wherein it has been clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: The appellant had sold an area of 4.345 acres of agricultural land which was situated after 8 kms., from the local limits of the Coimbatore municipality. This space on the surface should be situated within 8 kms., from the outer limits of the municipality in order to be capital asset with reference to the agricultural land under section 2 (14)(iii)(b). In the course of the assessment proceedings the appellant accompanied the Assessing Officer to prove that the area of the agricultural land was lying at a distance of more than 8 kms., from the local limits of the Coimbatore municipality. The appellant also filed a certificate from an Approved Chartered Engineer that the agricultural land bearing SF No.589-181 and 182 in Sarkar Samakulam village is located at a distance of 9 kms:, from the end of corporation limit of Coimbatore on Ganapathy Manager. The distance from corporation limit on Vilankurichi Road was 9.7 kms., and from corporation limit on Avanashi Road was 9.7 kms. The distance was still longer at 11.3 kms., from the end of corporation limit on Ganapathy - Sathy Road. At paragraph 8, the AO has stated that the distance from the municipal corporation limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f more than8 kms. 7. The ld. CIT(A), after considering the submissions held as under: 7. I have gone through the submissions made by the appellant and, also the order of the Assessing Officer. As seen from records, my predecessor has written a letter to the Income-tax Officer, Ward-III(3),Coimbatore on 11.6.2010, directing the AO to make a reference to municipal authorities and obtain a certificate about the actual distance from the corporation limit to the land in question at the shortest route by proper road connectivity. Regarding the nature of the land, the AO was directed to refer the matter to the Tahsildar of the area to decide the nature of the land as per the land records maintained in the Tahsildar Office. Again a letter was addressed by the CIT(A) on 17.6.2010 to the appellant referring to the AO's order at page 5 para 12. In this letter, the appellant was asked to certify regarding the receipt of advance of ₹ 1 crore from the prospective buyer of the land in question before the same was conveyed in appellant's favour by way of registered sale deed. The CIT(A) has also asked the appellant to clarify regarding the nature of transactions having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant submitted that the asset sold by him was not a capital asset being located beyond the prescribed limits as defined and further there was no intention of any real estate business to treat it as adventure in the nature of trade. 8. The Assessing Officer vide his, letter dated 16.9.2010 submitted that the appellant's case was referred to the Divisional' Engineer, Highways Department, Coimbatore and a certificate about the actual distance from the corporation limit to the land in S.F.No.589/1 of Sarkar Samakulam village; in question at the shortest route by proper road connectivity. As seen from the letter from the D.E., Shri K. Vellingiri of Highways Department, the distance was arrived at 8.112 kms., from the Coimbatore corporation limit to the land S.F.No.589/1 of Sarkar Samakulam village. The details are as follows: 1. Salem Cochin Road to Vilankurichi Road Km. 2.612 2. Panchayat Union Road Km 0/0 2.629 3. Dindugal Bangalore Road NH 209 Km 172/8 - 0.391 4. Panchayat Road Km 0/0 1/2 , 1.218 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question. The route taken is Vilankurichi Road - Vinayagapuram via Valliampalayam village. This is also the route taken by the Assessing Officer on which he had arrived at a distance of 7.6 kms. The straight route from the outer limits of the Panchayat was taken even though some stretch of road is very narrow. Since the property in question is situated more than 8 kms. from the outer limits of Coimbatore Corporation, it cannot be treated as a capital asset u/s 2(14)(iii)(b) of the Income-tax Act, 1961. In view of this, the Assessing Officer is directed to delete the addition made. The grounds of appeal are allowed. 8. The ld. D.R. relied on the order of the Assessing Officer whereas the ld. A.R. of the assessee relied on the order of the ld. CIT(A). 9. We have heard the rival submissions and perused the orders of the lower authorities and the material available on record. In the instant case, the profit on sale of agricultural land of ₹ 1,62,74,232/- was assessed by the Assessing Officer under the head 'short term capital gains' for the reason that agricultural land in question was situated within 8 kms of the municipal limits of Coimbatore municipality. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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