9911796707
TMI Blog2020 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... n disaalowing the commission paid to brokers to arrange the buyers of Rs. 7,50,000/- and Rs. 29,75,000/- paid to protect the property 4. The learned Assessing Officer earned in calculating interest U/s 234A, 234B of the Income-tax Act. 3. The facts of the case are that the assessee filed her Return of Income on 12-10-2007 declaring income of Rs. 2,69,996. A survey was conducted under section 133A of the Act in the assessee's business premises and Notice under section 148 of the Act dt.27-1-2009 was issued. In response to the Notice the assessee declared total income of Rs. 1,93,89,780 including capital gains of Rs. 1,91,19,782. During the period under consideration the assessee sold an immovable property for a consideration of Rs. 2,50,05,000 and claimed expenses of Rs. 29,75,000 being compensation paid to the tenants for vacating the land and an amount of Rs. 7,50,000 being commission paid. The assessee claimed exemption of Rs. 16 lakhs under section 54F of the Act. The assessment was completed under section 143(3) r.w.s. 147 on 23-12-2009 disallowing the claim of expenditure for vacating the tenants and also commission paid. During the first round of dispute, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the Devanahalli Municipality Offfice as per which the impugned property is situated 3 K.M. away from Devanahalli City. He also drew out attention to letter dated 25-8-2012 issued by the Public Works Ports & Inland Water Transport Department Devanahalli wherein stated that Sy. No. 54/2, 1 Acre 38 Guntas, Akkupete Village is 3 km away from Devanahalli City. 5.2 Further, he submitted that ld. Assessing Officer himself has obtained certificate from Public Works Ports & Inland Water Transport Department Devanahalli vide letter No. AEE/PWD/D.HALLI/2008-091836 dated 26-10-2009 wherein mentioned that distance from Devanahalli town to Sy No 54/2 Akkupete village is 3 Km. According to him there is no dispute regarding this fact as the ld. assessing officer in the assessment order dated 27-2-2015 in page 6 para 6 stated that " It is unambiguous from the above that the land is situated only with in 3 Kms from Devanahalli Town and it is not more than 8 kms from the local limits of Devanahalli Municipality". Hence he submitted that as per section 2(14)((iii)(a) the above land is agricultural land and hence the sale of appellant land does not attract capital gain tax. 5.3 According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipalities lies with the state government. So the Act is very clear that if the property in question is within 8km of a municipality it has to be treated as a capital asset for the purpose of calculating capital gains. The appellant has not disputed that the land falls within 3kms of Devanahalli Municipality and hence the contention that it is an agricultural land and not a capital asset as per the provision of section2(14)(iii) (b) of the Act is devoid of merit. Therefore, the contention of the appellant is rejected and the ground of appeal fails" He submitted that the First appellate authority not properly understood the direction of the Tribunal while disposing of the appeal of the assessee and he overlooked the observation of the Tribunal where the Tribunal in its order dated 9-1-2014 in Page 11 Para 18, it was mentioned that : "As far as Section 2(14)(iii)(b) is concerned the Municipality or Cantonment Board referred to in item(a) is concerned had to notified by Central Government". Hence, he submitted that as per section 2(14)(iii)(b) also the land sold by the appellant is an agricultural land and the sale of agricultural land does not attract capital gain tax. 5.7 Rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a committee, town committee, or cantonment committee and which has a population of not less than 10,000. Section 2(14)(iii)(b) of the Act covers the situation where the subject land is not only located within the distance of 8 kms from the local limits, which is covered by clause (a) to section 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a "Capital Asset. According to AR , the subject land is located within the limits of Devanahalli Municipality therefore, clause (a) to section 2(14)[iii] of the Act is not attracted. Further contented that though it is located within 8 KM,, of the municipal limits of Devanahalli Municipality in the absence of any notification issued under clause (b) to section 2(14)(iii) of the Act, it cannot be considered as a capital asset within the meaning of Section 2(14)(iii)(b) of the Act also and therefore the subject land cannot be considered as a 'capital asset'. In our opinion that itself is not sufficient to hold that the land in question is an agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in purchasing the land? 5. Whether, the permission under s. 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such user and/or alternative user was of a permanent or temporary nature? 7. Whether the land, though entered in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? 8. Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Motibhai D. Patel v. CIT (1982) 27 CTR (Guj) 238 : (1981) 127 ITR 671 (Guj) referring to the Constitution Bench of the Hon'ble Supreme Court had stated that if agricultural operations are being carried on in the land in question at the time when the land is sold and further if the entries in the Revenue records show that the land in question is agricultural land, then, a presumption arises that the land is agricultural in character and unless that presumption is rebutted by evidence led by the Revenue, it must be held that the land was agricultural in character at the time when it was sold. The Division Bench of the Hon'ble Gujarat High Court further held that there was nothing on record to show that the presumption raised from the long user of the land for agricultural purpose and also the presumption arising from the entries of the Revenue records are rebutted. 6.3 The Hon'ble Bombay High Court in the case of CWT v. H. V. Mungale (1983) 32 CTR (Bom) 301 : (1984) 145 ITR 208 (Bom) held that the Hon'ble Supreme Court had pointed out that the entries raised only a rebuttable presumption and some evidence would, therefore, have to be led before taxing authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble Gujarat High Court and upheld by the Hon'ble Supreme Court in the case of Sarifabibi Mohammed Ibrahim v. CIT 204 ITR 631 (SC). It is also to be seen that the question whether a particular land is agriculture land or not is basically a question of fact. As laid down by various High Courts in different judgements, a series of tests are applied to decide whether a land is agriculture land or not. It is also to be understood that all the tests are in the nature of guidelines and have to apply depending upon the facts and circumstances of each case. In the present case, the RTC produced by the assessee does not show the crop grown by the assessee. There was no details of crops cultivated by the assessee. The column relating to mentioning the crop cultivated by the assessee were kept blank. Being so, the RTC cannot be considered as conclusive evidence to prove that the assessee's land is agriculture land is collapsed. At initial stages, the property might have been agriculture land. That is why the land is classified in the revenue records as agriculture land. That position continued in a religious manner without any further verification of the nature of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis, the land would be held to be non- agriculture land. In the present case, the assessee has not produced any evidence of having spent human labour in the sense of preparing the land for cultivation, tilling, sowing seeds, planting on a regular basis. The property is situated in fast developing area and access to all modern facilities. There was a real estate activity in the area where the property is situated. The assessee sold the property of 1.35 acres of agriculture land for a consideration of Rs. 2,50,05,000. The sale consideration received by the assessee show that no bona fide agriculturist would pay such huge price for 1.35 Acres of land. Another fact is that the land is situated in Devanahalli Taluk in Bangalore North where there is rapid development activities and it has become a bustling suburban. The area is upcoming residential area with many private residential flats are coming up. The property sold by the assessee is in the middle of development activity being carried out by builders in and around Devanahalli Taluk on the reason of coming up of Kempe Gowda Airport in immediate vicinity. In view of the same, the sale price received by the assessee is very high whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
