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TMI Blog2022 (7) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... rom State land revenue authorities and re-compute the indexed cost of acquisition as per the circle rates. Needless to say that Assessing officer would provide adequate opportunity of hearing to the assessee in this regard. Ground no. 2 of assessee s appeal is allowed for statistical purpose. - ITA no. 3665/Del/2018 - - - Dated:- 15-7-2022 - Shri Kul Bharat, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Appellant : None For the Respondent : Ms. Moninder Kaur, Sr. DR ORDER PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of learned CIT(Appeals), Ghaziabad 29.03.2018 pertaining to the assessment year 2010-11. The assessee has raised following grounds of appeal: 1. The Ld. CIT (Appeal) did not consider the fact of the case and set aside order without any basis. 2. The Ld CIT (Appeal) could not justifying the fair market value Rs. 60/-per sq. mtr adopting by the Ld. A.O. on 01.04.1981 of the land sold to compute the long term capital gain is objectionable. 3. The tax assessed Rs. 10165760/- is highly objectionable. The grounds to make the tax assessed is objectionable. 3. At the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations were carried on till the sale. The assessee has agricultural income of Rs. 16,000/- for the year under consideration. It is also not in dispute that the land sold does not fall within the definition of capital asset u/s 2(14) of the I. T. Act, 1961, at the time of the registered agreement to sell on 09.01.2009. The use of land sold was changed on 28.01.2009 and treated as industrial land for the purpose of sale-deed executed on 03.08.2009 only on the intention of the purchaser, since the purchaser had purchased the agricultural land for the use of non-agricultural, i.e. industrial purposes. GROUNDS AND ARGUMENTS REGARDING GROUNDS NO. 1 and 3: It is submitted that the assessee had sold his agricultural land for a sale consideration of Rs. 3,20,04,000/- vide a registered agreement to sell on 09.01.2009 and received Rs. 2,80,04,000/- as a part of the said sale consideration on the same date i.e. 09.01.2009. The sale-deed was executed on 03.08.2009. The land sold was an ancestral agricultural land and had been truly used for agricultural purposes till the sale as per agricultural land records, i.e., Khatauni and Khasra. The use of land sold was changed on 28.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd expression is not specifically defined under the Income-Tax Act, 1961. But in the definition of agricultural income given under section 2(1 A) of the Income-tax Act, 1961, there is a mention of what types of land will be treated as agricultural land and emphasis has been given on the use of land. Here the law specifies that identification of agricultural land depends on its use, if any land situated in India is being used for agricultural purposes, it shall be treated as agricultural land and any income derived from such land shall be exempt and it shall not be treated as capital asset by fulfilling certain conditions mentioned in sec. 2(14) of the Income-tax Act, 1961. Here, the assessee was using the land sold for agricultural purposes only and truly carried out activities related to agriculture and through these activities he was earning agricultural income, which has already been accepted by both the Ld. AO and CIT(A). As both the Ld. AO and CIT(A) have themselves accepted agricultural income of Rs. 16,000/-from the land sold and exempted it for the year under consideration, then how could they raise an objection towards the agricultural nature of the land sold. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto Page No. 8 to 10 J has observed that, the agricultural land was sold after dividing the same into plots having named Shiv Vihar Colony. As the agricultural operations were carried on till the date of transfer of the said agricultural land situated outside the municipal limits as well as outside the notified area u/s 2(14)(iii)(b), therefore, the same was not included in the definition of capital assets as given in sec. 2(14)(iii) and no capital gain tax was eligible. Here, the Hon ble High Court did not accept the plea as the said land was under regulated area for which the Addl. District Magistrate had fixed a circle rate and it was situated in the proximity of buildings and building side as well as had been converted into non-agricultural land before the date of the agreements to sell . It is also pertinent to mention here, the judgment dated 10.04.2019 on similar facts and circumstances, in case of, Sh. Jitender Kumar namely ITO, Ward-2, Bulandshahr Vs. Sh. Jitender Kumar [ ITA No. 3909 / Del / 2015 ] [Enclosed hereto Page No. 11 to 17 j, in which the Hon ble ITAT Delhi, Bench G has lengthily discussed and held that, the agricultural land sold in the shape of indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in personam is created, has a legitimate right to enforce specific performance of the agreement, if the vendor, for some reason is not executing the sale deed. Thus, by virtue of the agreement to sell some right is given by the vendor to the vendee. Though the entire property cannot be said to have been sold at that time when an agreement to sell is entered into. However, looking at the provisions of section 2(47) of the Act, which defines the word transfer in relation to a capital asset, one can say that if a right in the property is extinguished by execution of an agreement to sell, the capital assets can be deemed to have been transferred. In the light of definition of transfer as defined under section 2(47), it is clear that when any right in respect of any capital asset is extinguished and that right is transferred to someone, it would amount to transfer of a capital asset . Finally, it may be said that the agricultural land sold in the shape of industrial plot is at all an agricultural land and the same is not liable for capital gains to tax, therefore, the addition towards long term capital gain may kindly be deleted. REGARDING GROUND NO. 2 : It is submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The objection of the assessee that land was an agricultural land is devoid of merit, hence, rejected. The case laws as relied by the assessee are distinguishable on the facts of the present case. Thus, ground nos. 1 3 of appeal are dismissed. 6. Another objection is regarding adoption of indexed cost of acquisition. The assessee has filed circle notified rates of the area. It would be in the interest of justice to set aside this issue for verification. Therefore, the impugned order is hereby set aside on the issue of computation of indexed cost of acquisition as on 01.04.1981. The Assessing Officer would verify the cost of acquisition as on 01.04.1981 from State land revenue authorities and re-compute the indexed cost of acquisition as per the circle rates. Needless to say that Assessing officer would provide adequate opportunity of hearing to the assessee in this regard. Ground no. 2 of assessee s appeal is allowed for statistical purpose. 7. The charging of interest u/s 234A and 234B of the Act, raised in ground no. 4, is consequential. 8. The contention raised in ground no. 5 is premature and needs no adjudication at this stage. 9. In the result, assessee s appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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