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TMI Blog2023 (5) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... erify whether there is any village/municipality by name Daruhera in the entire district of Mahendragarh from the Government of Haryana public document (Annexure-D). We could find none. We have also gone through the list of PIOs as per the Directorate of Urban Local Bodies to verify whether any local body in the name of Daruhera (Annexure-E). We could find none. Hence, we apprehend that an error might have crept in the notification dated 06.01.1994. The concerned authorities may look into this issue. Since, the Tribunal cannot venture to alter/modify the notification, the issue is being adjudicated as per the notification in force. On going through the entire facts, it can be held that Dharuhera of District Rewari do not find place in the notification issued consequence to the provisions of Section 2(14) of the Income Tax Act, 1961. Hence, the land which is situated at Garhi Alawalpur cannot be treated as the capital asset, ergo the proceeds are not liable to tax under the head Long Term Capital Gains . We are conscious of the fact that the amendment in the said Section has been brought w.e.f. 01.04.2014 and the land in question before us was sold on 21.03.2013 perta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alawalpur, Teh- Dharuhera, Rewari wherein the assessee has share. The share of sale consideration of the assessee works out to Rs.3,59,01,592/-. 4. As the land is situated within 5 KMs from the municipality limits of Dharuhera Municipality, the Assessing Officer treated it is a capital asset chargeable to tax u/s 2(14) of the IT Act, 1961. The A.O completed the assessment u/s 143(3) of the IT Act, 1961 determining income of Rs.3,59,20,152/- on account of Long Term Capital Gain. The AO has also denied exemption claimed u/s 54B 54F of the IT Act, 1961 as the assessee had not been able to substantiate the purchase of agricultural land subsequent to the said sale. 5. During the appellate proceedings, the appellant has filed an application u/r 46A of the IT Rules, 1962 for admission of additional evidence with stating that: (1) The land sold by the Assessee comes under the local municipality of Dharuhera and Dharuhera having population 30,344 according to last preceding census 2011. Hence, distance of land will be calculated within 2 KM from the local municipality i.e. Dharuhera. (2) Deductions u/s 54B 54F w.r.t. re-investment in Agriculture land and construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l land purportedly purchased from the sale proceeds of the agricultural land in question was in the name of assessee s wife and sons who had no source of income. Thus, it appears to be a case of benami transaction. The ld. CIT(A) held that the land should be in the name of the assessee who has sold the property to make it eligible for deduction u/s 54B. 9. Aggrieved, the assessee filed appeal before us. 10. The ld. AR argued about the constitutional provisions relating to tax laws with specific reference to Article 245 dealing with extent of laws made by Parliament and by the Legislatures of States, Article 246 dealing with the subject matter of laws made by Parliament and by the Legislatures of States and Article 265 wherein it was declared that no tax shall be levied or collected except by authority of law. The ld. AR argued on the prior recommendation of the President required to bills effecting taxation in which States are interested as per the Article 274 and hence the income from sale of land cannot be taxed by the Union in the absence of specific provisions. The ld. AR also filed application under Rule 29 of ITAT Rules for admitting additional evidences wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than 22 Kms from the Municipality Rewadi as provided in the Notification dated 06.01.1994 applicable in the present case. 2.7 It is humbly submitted that the Ld. AO has not appreciated the notification properly and adamant to treat Dharuhera of District Rewari in the notification which was never mentioned anywhere due to which assessee was unable to submit any evidence or google location. The Ld. CIT(A) also ignored that Dharuhera was not a Municipality in 1994 as it became Municipality in 2007 due to which assessee could not submit any certificate or evidence before the Lower Authorities. On the last date of hearing i.e., on 20.10.2022 along with the additional grounds of appeal google location was submitted in the enclosed Annexures A, B, C and maps clearly shown that Dharuhera was part of District Rewari and notification relates to Daruhera of District Mohindergarh while Dharuhera is part of District Rewadi and more than 20 kms from municipality of Rewadi provided in the notification. The Ld. DR sought time to examine this aspect and required time. During the course of argument it was also stated that certificate has already been obtained but could not reach today thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 22Kms from the municipality of Rewadi as provided in the notification and so is outside the purview of the Income Tax Act. It is necessary to state that assessing officer while recording reasons noticed that notification issued by CBDT on 06.01.1994 is relevant and land in question is covered in the definition of capital asset but ignored that Dharuhera of District Rewadi was never included in the notification but Daruhera of District Mohindergarh was only included and in the notification wherever required name of District against each municipal committee was mentioned and there is no mentioning of Dharuhera which was since beginning was in the district Rewadi. Thus, it is humbly submitted that the Ld. AO is not empowered to bring on its own any land under the purview of Income Tax Act which was never brought by the legislature. The Agricultural land of the assessee is outside the definition of capital asset as provided u/s 2(14) of IT Act. 5. It is humbly submitted that reopening of the assessment made by the Ld. AO is bad in law as the land in question was outside the definition of capital asset and so assessment made is required to be quashed. The assessee being agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldar correctly relied upon by the Ld. CIT(A) and it cannot be discarded. This decision was subsequently followed by Delhi High Court in CIT vs Vijay Singh Kadan reported in 63 taxmann.com 22 (2015). Subsequently Hon ble ITAT Chandigarh Bench in the case of Bhupender Singh and Others also held similarly and held that certificate of land revenue authorities is very much relevant and deleted the addition. Similar view has been expressed by Hon ble ITAT Kolkata bench reported in 106 taxmann.com 191 (2019) in the case of Naiyer Sultan Vs. ITO Kolkata in which assessment u/s 147 was challenged and the Hon ble Bench held that such assessment are liable to be cancelled being bad in law. Copy of all these decisions in the separate PB filed on 20.10.2022 at Pages 1 to 7, 8-14,15-20 and 21-33 respectively. 11. The ld. DR submitted that the Village-Ghari, Alawalpur is to 2.3 KM from the Municipal limit of Dharuhera and hence it should be considered as a capital asset. He has submitted the google map depicting the distance. Further, he relied on the orders of the ld. CIT(A) in support of his arguments. 12. Heard the arguments of both the parties and perused the material available on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gazette47;] 15. In accordance with the provisions of Section 2(14), the notification dated 06.01.1994 has been issued wherein the Municipalities and Cantonment Boards have been notified. The said notification is reproduced as under: INCOME-TAX ACT, 1961: NOTIFICATION UNDER SECTION 2(1A)(C), PROVISO, CLAUSE (II)(B) AND SECTION 2(14)(III)(B) : URBANISATION OF AREAS Notification No. [SO 9447] (File No. 164/3/87-ITA.I)], dated 6-1-1994 Whereas a draft notification was published by the Central Government in exercise of the powers conferred by item (B) of clause (ii) of the proviso to sub-clause (c) of clause (1A), and item (b) of sub-clause (iii) of clause (14), of section 2 of the Income-tax Act, 1961 (43 of 1961), in the Gazette of India, Extraordinary, Part II, section 3, subsection (ii), dated February 13, 1991, under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. S.O. 91(E), dated February 8, 1991, for specifying certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bawani Khera (Distt. Bhiwani) Areas up to a distance of 5 kms. from the municipal limits in all directions. 8. Bhiwani Areas up to a distance of 5 kms. from the municipal limits in all directions. 9. Charkhi Dadri (Distt. Bhiwani) Areas up to a distance of 2 kms. from the municipal limits in all directions 10. Chika (Gulla) (Distt. Kurukshetra) Areas up to a distance of 2 Kms. from the municipal limits in all directions. 11. Debawali (Distt. Mohindergarh) Areas up to a distance of 5 kms. from the municipal limits in all directions 12. Daruhera (Distt. Mohindergarh) Areas up to a distance of 5 kms. from the municipal committee in all directions 13. Ellanbad (Distt. Sirsa) Areas up to a distance of 2 kms. from the municipal limits in all d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 kms. from the municipal limits in all directions 28. Kaithal (Distt. Kurukshetra) Areas up to a distance of 5 kms. from the municipal limits in all directions. 29. Kalanaur (Distt. Rohtak) Areas up to a distance of 2 kms. from the municipal limits in all directions. 30. Kalka (Distt. Ambala) Areas up to a distance of 5 kms. from the municipal limits in all directions. 31. Kallanwali (Distt. Sirsa) Areas up to a distance of 2 kms. from the municipal limits in all directions. 32. Karnal Areas up to a distance of 8 kms. from the municipal limits in all directions. 33. Kharkhauoda (Distt. Sonepat) Areas up to a distance of 2 kms. from the municipal limits in all directions. 34. Thanesar (Distt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. from the municipal limits in all directions. 48. Padaur (Distt. Yamunanagar) Areas up to a distance of 2 kms. from the municipal limits in all directions. 49. Rewadi Areas up to a distance of 5 kms. from the municipal limits in all directions. 50. Rohtak Areas up to a distance of 8 kms. From the municipal limits in all directions. 51. Sidhaure (Distt. Ambala) Areas tip to a distance of 2 kms. from the municipal limit's in all directions. 52. Safidon (Distt. Jind) (a) Areas falling within 2 kms. on either side of Safidon Jind Road up to a distance of 5 kms. from the municipal limits on that road. (b) Areas (other than in (a) above) up to a distance of 2 kms. from the municipal limits in all directions. 53. Samalkha (Distt. Karnal) Areas up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting on the date on which the limits as existing on the date on which the notification is published in the Official Gazette. 16. On going through the notification, we find that in the State of Haryana mentioned at Serial No. 9 in the Column 1, the Municipality of Daruhera of District Mohindergarh has been mentioned at Serial No. 12 in Column 3. 17. The land in question is undisputedly situated in the village Garhi Alawalpur situated in the District Rewari which is within 5 KMs of the present Municipality Dharuhera . We find that this Municipality has not been mentioned in the said notification. The Revenue could not bring to our notice any other notification issued wherein the Municipality Dharuhera situated in District Rewari is mentioned for the purpose of provisions of Section 2(14) of the Income Tax Act, 1961. 18. Further, we have also gone through the details from the Government of Haryana with regard to Municipalities situated in the District Rewari and we find that the District Rewari has three Municipalities namely, Dharuhera, Bawal and Rewari as notified Municipalities as on today (Annexure-A). We have also gone through the Municipalities situated in Di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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