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TMI Blog2023 (1) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... uery letter dated 26.08.2016 was issued and duly served upon the assessee. In compliance to the same, assessee filed his reply along with copy of sale deed, Khatauni and report of Gram Pradhan regarding situation of land from municipal limit of Hapur. The assesses in his reply before Ld. AO, has stated that he has sold his agricultural land situated in Viliage-Upeda, Hapur, which is more than 7 km from outside of municipal limit from all sides of Hapur. The land in question is not a capital asset within the meaning of Section 2(14) of the I.T. Act. Besides, after sale of land, he has purchased another agriculture land for cultivation. However, the Ld. Ao observed that the assessee had not, filed any evidence for purchase of agricultural land and claim of exemption u/s 54B of the I.T. Act. 2.1 Ld. AO observed that, on the perusal of sale deed it was found that above property was co-owned by two persons namely Vipin Kumar and Sh. Sankoch (assessee). The said Immovable property was sold for total sale consideration of Rs.1,00,00,000/-though the circle rate as per the registering authority is Rs. 1,42,11,000/-. Hence, in view of the provisions of section 50C of the I.T. Act Ld. AO was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any documentary evidence. Where the tubewell has gone on the date of registered deed which has again emerged for fasli year 1418. 3. The sale deed at page no 31 mentions that the area of land sold is 4330 Sq. mts and further that after this sale there is no portion of this khasra left with the seller. How the name of Sankoch and Vipin are still appearing is not known. The sale deed further clarifies that there is a room constructed on this plot on 9 sq mts, Hotel of Krishanveer in the East, Land (not agricultural land) of others in North and In South direction, the land has a front of 8 mts on Garh Delhi Road, i.e. NH- 24, Purpose of purchase has been stated as for residential use. The exact facts are reproduced from the sale deed relevant to the location, construction, utilization and payment of stamp charges, land being located on National Highway and is well covered by Abaadi, 4. The counsel in reply dated 30.09.2016 filed on 05.10.2016 has stated that Besides, after sale of land, the assessee purchased the agriculture land for further cultivation. This clearly indicates that even the counsel was fully aware that the land sold was a capital asset, otherwise further purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of Hon'ble Gujrat High Court the Hon'ble Court has stated many factors to be considered while determining whether a particular land is agricultural land or not. One of the factor is whether there were any previous sales of the portion of land for non-agricultural use. In the instant case, the order u/s 143 by Revenue authorities has been passed for portion of the same land indicating that another portion of the same land was being used for purpose other than agriculture and the same has been sold as non agricultural land. 10. The provisions of section 54B of the I.T.Act, also clearly states that the land which was being used for agriculture two years prior to sale can be a capital asset, the sale of which attracts payment of LTCG. 2.3 Then for further verification of the status of land and the reason for charging of stamp charges as non agricultural land, a letter dated 21.09.2017 was sent to the Sub Registrar-II, Hapur, for furnishing information. On which it was reported that "The words "sale for residential property" simply state that the document refers to sale of a property that is residential in nature and hence the stamp duty charged is as per the relevant provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the dismissal is arbitrary, unjust, uncalled for, and in any case illegal. 4. That under the facts and circumstances of the case, the Ld. CIT(A) has erred to hold that agriculture land sold was a capital assets assessable at Rs. 68,25,450/- u/s 50C as against exempt u/s 2(14)(III). The finding of capital assets at assessibility at Rs. 68,25,450/- is arbitrary, unjust, uncalled for, illegal and gaisnt the material placed on record. 5. That under the facts and circumstances of the case, the ld. CIT(A) has erred to decide the appeal without making the local enquiries which were requested to be made through Tehsildar, SDM and the departmental authorities. The decision without finding of correct facts is arbitrary, unjust, uncalled for, illegal and against the natural justice. 6. That under the facts and circumstances of the case, the ld. CIT(A) has erred to confirm the computation of LTCG at Rs. 68,25,450/- without providing an opportunity to substantiate the value adopted by the AO. The confirmation and finding is arbitrary, unjust, uncalled for, illegal and against the natural justice. 7. That under the facts and circumstances of the case, the Ld. CIT(A) has erred not to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Authorities below have committed no error. It was submitted that when the Stamp Authority have considered the land to be non-agricultural and the land is not established to be within the statutory limits the same has been rightly treated as capital asset. It was submitted that by merely mentioning of growing crops in the revenue record, the nature of land would not change from a capital asset to aggricultural land. 9. The Bench has given thoughtful consideration to the matter on record and submissions and what transpires from the orders of Ld. Tax Authorities below is that on the basis of situation of the disputed land outside the municipal limits the land has not been considered to be capital land for the purpose of Section 2(14) of the Act. Primarily it is on the basis of the fact that in the sale deed, land was mentioned to be sold for residential purpose and that it has been assessed to stamp duty as a non-agricultural land, the land was considered to be of capital in nature. However, the matter of fact is that in the revenue record copies filed before Ld. AO it was mentioned that land is under use for agricultural purposes. It has standing crops and irrigated by tubewell. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agriculture purpose. Ld. AO seems to have fallen in error in reading the revenue records without seeking its due clarification from the assessee. At the stage of appeal, Ld. CIT(A) has fallen in error in not allowing assessee to produce further evidences to show that of land falling in the share of assessee of which he was also co-sharer was not converted, before its transfer by the assessee. 13. The crucial point of controversy thus, needs to be restored to the files of Ld. CIT(A) to allow the additional evidences of the assessee and to let the assessee establish that the land falling in the share of assessee which was sold by the impugned sale deed was not converted to non-agricultural purposes by any order of revenue authorities. If that stands establish the mere fact that it was sold for the purpose of residence of the vendor or that it was valued for the purpose of stamp papers by the registered authority as a non-agricultural land would not be material and assessee will be entitled to benefit of Section 54B of the Act. 14. According the grounds raised are allowed for statistical purposes and the appeal of assessee is allowed for statistical purposes only. The issue is resto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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