9911796707
TMI Blog2010 (10) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... eater Visakhapatnam Municipal Corporation, it falls within the 8 kms. from the municipal limit. But no notification as required u/s 2(14)(iii)(b) of the I.T. Act was issued in the Official Gazette by the Central Government. This issue was examined by us in the case of SMT. C. GIRIJA VERSUS ACIT [ 2010 (9) TMI 1133 - ITAT VISHAKAPATNAM] in which we have given a categorical finding that to bring a land within the purview of clause (b) of section 2(14)(iii), the Central Government is required to issue a notification in the Official Gazette and without a notification a land falls within the 8 kms. from the local limit of any municipality would not cease to be an agricultural land. Appeal of Revenue dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... d agricultural land (as certified by the Village Revenue Officer) of Ac. 0.13 at Kapula Uppada Village, Bheemunipatnam Mandal, Vizag District, on 25.1.08/14.02.08. As per the Certificate issued bythe Roads and Buildings Department (a copy of which is enclosed) the location of the land is more than 8 km from Visakhapatnam Municipal limits, as contemplated/notified by Notification No.9447 dated 6.1.1994 as amended by Notification No.11186 dated 28.12.1999. This is the sole criterion presently in existence for determining the scope of rural agricultural land for purposes of Capital Gains. According to Explanation 2 thereto, the reference to municipal limits in the Schedule to the said Notification is to the limits as existing on the date on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of the said notification, the impugned land cannot be ceased from the agricultural land only for its location within the 8 kms. Of the Greater Visakha Municipal Corporation limit. The assessee has also placed the reliance upon the various orders of the Tribunal. The CIT(A) re-examined the issue in the light of relevant provisions of the Act and finally came to the conclusion that unless a fresh notification in the natural course of law taking into consideration the extended limit of municipality and corporation issued, the deeming provision will apply only with reference to the city, town limit as on the date of notification in force at the material time. The relevant observation of the CIT(A) is extracted hereunder: After hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force at the material time. In any case, it is the Central Board of Direct Taxes which determines which municipalities are to be covered for the purposes of taxing agricultural lands in the vicinity and not the state governments. The state governments may extend the limits of certain municipalities as much as they want, but till the Central Board of Direct Taxe3s does not decide whether these limits are to be taken cognizance of, by issuance of a Notification in the Gazette, the limits cannot be determined to have been extended automatically for the purposes of determining what constitutes a capital asset u/s 2(14) of the Act. (ii) What does the term "municipality" in Explanation 1 to Notification No.9447 denote:- I am of the conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Deputy Commissioner of Income Tax vs. Capital Local Area Bank Ltd.,), I hold that the land in question should be taken as rural agricultural land which is not liable for capital gains tax." 5. Now the revenue has preferred an appeal in all these cases and has contended that the fresh notification is not required to be issued by the Central Government. If the land falls within the 8 kms. of the municipal limit of any municipalities, it may cease to be the agricultural land and the profits on the sale is exigible to capital gain. 6. The Ld. Counsel for the assessee have placed a heavy reliance upon the order of the CIT(A). Besides our attention was also invited to the order of the Tribunal in the case of Smt. C. Girija Vs. ACIT 424/Vizag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the lower authorities in this regard and the provisions of section 2(14)(iii) of the Act relating to agricultural land, we find that as per clause (a), any land which situated in an area which is comprised within the jurisdiction of municipality or a cantonement board which has a population of not less than 10,000 according to the last preceding census would not be an agricultural land. The clause (b) of section 2(14)(iii) deals with those lands which situates in any area within such distance not being more than 8 kms. from the local limits of the municipality or cantonment board as the central government may having regard to the extent of and scope for urbanisation of that area and other relevant consideration specify in this be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
