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TMI Blog2016 (10) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... g agricultural land as capital assets under section 2(14) of the Act. 1.3. Without prejudice: 1.3.1. Without prejudice to the above, under the facts and circumstances of the case, the learned CIT(A) was not justified in confirming the addition of gains arising out of lands sold in an earlier assessment year, to the income of the current assessment year. 1.3.2. Without prejudice to the above, under the facts and circumstances of the case, the learned CIT(A) was not justified in confirming the adoption of the sale value as per section 50C of the Act, by ignoring the fact that the difference between actual sale price and market value was not more than 10% of the sale value. 1.3.3. Without prejudice to the above, under the facts and circumstances of the case, the learned CIT(A)was not justified in confirming the adoption of wrong indexation of cost of purchase resulting in a lower cost of purchase and a higher Capital Gain.? 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in the business of construction from the year 1983 under the name and style of a proprietary concern M/s Periera Juchandra Land Developers (PJLD). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd some of which are in his name as per land records and for some he holds the Sathe-Karars or Agreement to Sale. In view of the discussions as above, both these are 'capital assets' as per the provisions of section 2(14) and profits/gains arising from transfer of these land forms part of taxable income. Thus, the entire profit arising on sale of land was brought to tax net under the head long term capital gains. 3. By the impugned order the CIT(A) confirmed the action of AO, against which assessee is in further appeal before us. 4. It was contended by ld. AR that the plots of land sold during the year are 'agricultural land' on the ground that he has continued agricultural operations after acquiring them and therefore the surplus from sale of land is 'agricultural income' and exempt from tax as per the provisions of the I. T. Act viz. Section 2(1A) and section 2(14). In support thereof he relies on 7/12 extracts from Land Revenue records and that he has sold such land on as-is-where-is basis without doing any development work. 5. He invited our attention to the submission made by the assessee before the lower authorities to the effect that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is not reached due to a petition pending which is before the High Court, the same is not tenable since as on-date, the present notifications are final and have already taken effect. Relying on these notifications of the Government of Maharashtra, large-scale urbanization, rapid development of high-rise housing structures, transport facilities, etc. have found a place in and around the areas mentioned in the notification. These cannot be denied nor reversed. Therefore, it is only proper that the said vii/ages and the land located within, be construed as forming part of the 'larger urban area' as per the Notifications. Moreover assessments and tax need not be held up, pending finality of other legal proceedings since Income tax assessments, are time-bound which have to made every year and cannot be held-up until the final outcome of other legal proceedings are pronounced." 6. However the contention of AR was that the VVMC has been formed only on 31st May 2011; and therefore was not in place during the period in which he has sold the land. It was further argued by ld. AR that the plots of land sold by him are not 'capital asset' since they do not fall within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 32A( 4) of the Bombay Stamp Act 1958, whereas the 10% difference in the value stamp duty value and agreement value is allowed. For this purpose, reliance was placed on the decision of Hon. Pune Bench in the case of Rahul Constructions Vs. Dy. CIT (2010) 38 DTR 19 wherein the Tribunal directed the assessing officer to take the consideration at Rs. 70 lakhs against the estimated value by valuation officer at Rs. 75,76,712/- as the value of the property so estimated that a difference of +-10% which is because of the opinion of the individual valuation officer. No one is expected to value the property accurately since some of the items are to be valued on guess work or nationality. This being so, the difference of +/- less than 10% is to be ignored. As per ld. AR the Agricultural land were held by the assessee since the year 1989, as per tribunal order No. (2008) 23 SOT 459 (Mumbai) onwards has been the same in nature and no improvements thereon have been made, more over they have been sold on a where is basis and surplus arising out of sale of Agricultural Land have been shown in assessee's accounts. The said agricultural land was sold under the compulsion, which involves lots of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on date, the present notification are final. Therefore, assessee's argument that the VVMC has been formed only on 31st May 2011 is factually incorrect. 9. We have considered rival contentions and carefully gone through the orders of authorities below. From the record we found that the land so sold by assessee was not within the jurisdiction of any of the municipality and further the agricultural lands sold are not situated within 8 Km from any of the municipality i.e. Vasai Municipal Council, Navgarh Manikpur Municipal Council, Nalasopara Municipal Council and virar Municipal council. Out of the said municipalities, only Virar and Vasai municipalities were notified vide Notification: No. SO10(E), dated 06/01/1994, as amended by Notification No. SO 1302, dated 28/12/1999). Since the land is not within the 8 km from the limits of notified municipalities, hence, the surplus from the agricultural land is exempt from tax. In so far as Vasai Virar mahanagar council (VVMC) is concerned the said municipality is not Notified under Income Tax Act and as far as State Government Notifications are concerned we found that the first Draft Notification was published by Government of Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore clear that the impugned agricultural land was not situate within jurisdiction of VVMC during the impugned assessment year. We also find that VVMC was also not a notified municipality during the impugned assessment year, as per last available notification no. 8010(E) dated 6th 1994 as amended by notification no. SO 1302 dated 28th Dec 1999. In fact the Vasai Virar Municipal Corporation is still not notified under Income Tax Act, even as on date since it is not in the list of Municipalities as per last available notification no. 8010(E) dated 6th 1994 as amended by notification no. S.O. 1302 dated 28th Dec 1999, under Income Tax Act. There is no dispute to the fact that at the time of Sale the subject agricultural land is situated in the village Juchandra of Taluka Vasai, the population of which was 5,912 as per the census, so is less than 10,000. We have also verified the following documents as placed on record: A. Population certificate of village Juchandra Grampanchayat dated 02/06/2008. B. Map showing location of 4 municipalities Vasai, Navghar, Nalasopara and Virar along with population density which clearly shows village Juchandra is yet not populated. C. Dist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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