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TMI Blog2013 (1) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... 680/- and agricultural income of ₹ 65,213/-. The notice u/s. 143(2) was issued to the assessee and also certain information called by issuing notice u/s.142(1) of the IT Act. During the year under consideration, the assessee sold the following properties: Sr. No. Details of sale deed Sale price and date of sale Purchase price & dated of purchase 1 Document no. 4878/2008, Village - Soyla, SurveyNo. 313 ₹ 70,25,760/- Dated: 16.07.2008 ₹ 1,33,000/- Date: 29.03.2008 2 Document no. 4879/2008, Village - Soyla, Survey No. 326 ₹ 3,68,50,800/- Dated: 25.06.2008 ₹ 4,50,000/- Date: 27.12.2006 The ld. A.O. had considered Section 2(14)(iii)(b) of the Income Tax Act,1961, which is reproduced as under: "(b) In any area within such distance, not being more than eight kilometers, from the local limits of any 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;]" He further held that by notification dated 6th January, 1994, Sanand Municipal area had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicating dates of conversion of land into non-agricultural land. These details were not found relevant as the lands are situated within two kms of Municipal limits of Sanand and these lands are capital assets within the meaning of Section 2(14)(iii)(b) of the IT Act. The distance ascertained on the basis of certificate and statement given by the Talati cum Mantri who is the authority keeping land records of village. The reply of the appellant dated 23.12.2011 was related to the boundary of Sanand Town to the boundary of Soyala village. The statement was against the fact that no revenue village situated between Sanand and Soyala. Thus, he observed that no gap of three kms between boundaries of two villages. As per the A.O., the fact has confirmed by Talati cum Mantri on oath that there is no other revenue village situated between Sanand and Soyala. 2.1 He further observed without prejudice to the above that land was not in used for agricultural purpose and also he considered the Hon'ble Gujarat High Court decision in case of CIT vs. Shhidhartha J. Desai (139 ITR 628). He also verified the tests for agricultural land laid down by the Hon'ble Gujarat High Court in case of Shhidharth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was only to earned profit on sale of land as the assessee earned huge profit of ₹ 4,32,93,560/- within a short period and purchase price of both land was ₹ 5,83,000/-. Hence, the motive of owner was to earn profit and not agricultural purpose. The A.O. further issued show cause notice dated 13.12,2011, which was replied by the appellant, which had not been found convincing to the A.O. on the basis of following reasons: "A. The nature and character of land was non agricultural in view of decision of the Hon'ble High Court in CIT V/s. Siddharth J. Desai (139 ITR 628). B. The land was falling within two kilometers of municipal limits of Sanand. As per provisions of sections 2(14)(iii)(b) such land is falling under the definition of capital assets. C. Hence, both the lands were capital assets and being taxed under the head Short Term Capital Gain accordingly. Short Term Capital Gain in the case of the assessee is computed as under: Sr. No. Details of sale deed Sale price and date of sale Purchase price & dated of purchase Short Term Capital Gain 1 Document no.4878 / 2008, village - Soyla, Survey No. 313 ₹ 70,25,760/- Date: 16.07.2008 Rs.1,33,000/- D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is as per state line or corw's flight as per page nos. 78 & 79 of the paper book. He further argued that as per Talati cum Mantri report dated 13.06.2012 (page no. 71 of paper book) distance was measured by him from land mark Bhagirat Lake City which is exactly situated at the end of Municipal limit of the Sanand and falls within the revenue area of village Soyla. As per this report, total distance from the Sanand Municipal limit is 3.3 km, Survey no. 313 Paiki was 0.5 km far away from the Survey no. 326. There was no road between Survey no.313 to 326. This method of measurement is not correct. It should be direct from the Municipal limit as per State Line Method or Corw's flight. Ld. CIT D.R. has also drawn our attention in case of Sarifabibi Mohmed Ibrahim vs. CIT [1993] 204 ITR 0631. From the other side, ld. Counsel for the appellant contended that the appellant is an individual and basically an agriculturist holding two acres of agriculture lands at Village Govana, Taluka Harij, District Patan and the agriculture land in question situated at Village Soyla. The appellant regularly carried on agricultural activities on the said lands growing bajra, Juwar, Paddy etc. and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all of them by a process of evaluation. The inference has been drawn on cumulative consideration of all the relevant facts as held in case of Sarifabibi Mohmed Ibrahim vs. CIT (supra). Further, in case of CIT vs. Madhabhai H. Patel 208 ITR 638 (Guj), It is held that if the land is recorded as agricultural land in the Revenue record and if till the date on its sale, it is used and exploited as agricultural land and if the one of the land have not taken any step which would indicate his intention to exploit the land thereafter as nonagricultural land, then, such piece of land would have to be regarded as agricultural land. Even though, it was included within the Municipal limit. The purpose, for which such a land is sold, is not relevant after sale. In case of appellant, the land was purchased as agricultural land only as per Gujarat Revenue Act, only agriculturist can purchase the agriculture land. The appellant had shown gross agriculture income ₹ 1,24,985/- and in the impugned order, the ld. A.O. verified the fact with reference to record and he assessed agricultural income for rate of purchase. He further argued that the ld. A.O. quoted two different certificated of Vill ..... 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