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TMI Blog2022 (8) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law as follows: 1. Whether the lands in question fall within the definition of 'Capital Asset' under Section 2(14) of the Act? 2. Whether the Tribunal was justified in law in holding that lands which were converted and lapsed and which have been cultivated and yielding agricultural income can be held to be agricultural lands for the purpose of Section 2(14) of the Act? 3. Whether the Tribunal was justified in holding that BIAPAA does not constitute a municipality for the purposes of Section 2(14) of the Act? 2. Brief facts of the case are, assessees are owners of different pieces of lands. They have entered into several sale transactions, the details of which are as follows: Owner extent date of sale M R Seetha Ram 6 acres 1 guntas 14.02.2007 M R Pattabhi Ram 5 acres 37 guntas 14.02.2007 MR Kodanda Ram 10 acres 8 guntas 14.02.2007 MR Ananda Ram 21 acres 27 guntas 14.02.2007 MR Prabhavathy 2 acres 10 guntas 5 acres 38 guntas 9 acres 12 guntas 5 acres 26 guntas 08.02.2008 08.02.2008 08.02.2008 14.01.2008 MR Sampangiramaiah 11 acres 08.02.2008 MR Padmavathy Trust 9 acres 32 guntas 08.02.2008 3. Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen measured aerially. Therefore, they fall within the definition of Section 2(14)(iii) of the Act; * the lands are situated within the limits of BIAPAA Bangalore International Area Plan Approval Authority. 6. Thus, in substance, Shri. Sanmathi contended that the lands sold by the assessees are non-agricultural lands and fall within the definition of capital assets under Section 2(14)(iii) of the Act and therefore attract tax on the Capital gains. 7. Opposing the appeals, Shri. A. Shankar, learned Senior Advocate submitted that: * though the lands were converted in 2004, assessees have not diverted the use of land but continued their agricultural operation. They have offered huge sums of income as 'agricultural income' for the A.Y. 2004-05 to 2009-10. The Revenue has accepted the same and passed assessment orders, which have attained finality; * Only such lands which fall within the area specified in the Official Gazette published by the Central Government, fall within the definition of 'Capital Asset' under Section 2(14) of the Act. The Notification issued in the year 1994 was in force and only the lands within a distance of 8 kms. from the Municipal limits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldar, Devanahalli, stating that the distance was 11 kms. A letter under Section 133(6) of the Act was issued to the Tahasildar to furnish the shortest possible distance, but there was no response. On verification of google map, it was noticed that several areas of BBMP are located within 8 kms. from the lands in question. On this premise, the Assessing Officer has held that the lands are within 8 kms. from Bengaluru Municipality(BBMP). The CIT(A) in para 4.8 of his order has upheld Assessing Officer's conclusion that BIAPAA is a Municipal body and dismissed the appeal. The ITAT has framed two issues for its consideration. The second question is with regard to treating BIAPAA as Municipality. On this aspect, ITAT has recorded in para 8.3 of its order that a BIAPAA is merely a planning authority. A Municipality has to be necessarily an elected body and therefore, BIAPAA does not qualify to be considered as a Municipality. Further, by placing reliance on CIT Vs. Murali Lodge (1992)194 ITR 125 (Ker) has held that the Assessing Authority and CIT(A) were not justified in holding that the subject land could not be treated as agricultural lands. 16. Thus, the Assessing Officer, the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and it is held that all those factors would not be present or absent in any given case and that in each case one or more of the factors may make appearance and the ultimate decision will have to be reached on the balanced consideration of totality of circumstances. 23. Shri. Sanmathi has relied upon CIT Vs. Gemini Pictures Circuit (P) Ltd [1996] 220 ITR 43 and contended that the lands in the case on hand cannot be considered as agricultural lands. In the case of Gemini Pictures, the Assessing Officer had held that the property known ahs Spencers Hotel on the Mount Road in Chennai comprising of 70 acres and 16 grounds was not an agricultural land and the same was affirmed by the first appellate authority. There was difference of opinion between the members of the ITAT and it was referred to the Vice President and he agreed with the Judicial Member holding that it was not an agricultural land. Assessee challenged the same before the High Court and High Court held the land as agricultural land. The revenue challenged High Court's decision in the Supreme Court of India. Allowing Revenue's appeal, the Apex Court has held as follows: ".. that for ascertaining the true character and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounting years for the period from 2004-05 to 2009-10 have attained finality except for the period 2008-09. 27. In view of the above, we are of the considered opinion that the order passed by the ITAT is based on evidence on record and does not call for any interference. Re: Question No.3 28. In reply to Shri. Sanmathi's argument that the lands cannot be treated as agricultural lands as they fall within the notified area under BIAPAA, Shri. Shankar submitted that inclusion of lands in Special Zone cannot be a determining factor. Shri. Shankar has placed reliance on the decision of Andhra Pradesh High Court in CIT Vs. Smt. T. Urmila ITTA No. 297 of 2013 decided on 17.07.2013 dismissing Revenue's appeal. He has also placed the order passed by the ITAT in that case for perusal. In that case the land in question was notified by the Government declaring that the area would fall within the jurisdiction of HADA which is a statutory body. The ITAT held that mere inclusion of land without any infrastructure development does not convert the land into non-agricultural land. On appeal, the High Court has held that HADA is not a body within the meaning of clauses (a) and (b) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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