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2015 (4) TMI 227 - HC - Income TaxMeasurement of distance for the purpose of agricultural land - ITAT held that the distance of 8 kms. ought to be measured by the approach road and not by the straight line method ? - Held that:- If the assessee has earned business income and not the agricultural income, Section 11 of the General Clauses Act will prevail unless a different intention appears to the contrary. The impugned order appears well reasoned in the facts and circumstances to clearly indicate that any consideration received out of sale of the agricultural land cannot be treated as business income for the purpose of income tax. The distance between the municipal limits and assessed property/asset is to be measured having regard to the shortest road distance and not as per the crow's flies i.e. a straight line distance as canvassed by the Revenue. The income out of transactions of immovable property in the nature of agricultural land is held as capital gain exempted under the Income Tax as arising from the agricultural land. See DLF United Ltd. vs. Commissioner of Income Tax [1995 (9) TMI 51 - DELHI High Court] Insofar as relevance of Section 11 of the General Clauses Act is concerned, it needs to be noted that here the relevant amendment prescribing distance to be counted must be aerial has come into force w.e.f. 1st April, 2014. The need of amendment itself shows that, in order to avoid any confusion, the exercise became necessary. The Parliament noticed the Judgments being delivered and therefore, emphatically pointed out aerial distance as the relevant norm. This exercise to clear the confusion, therefore, shows that benefit thereof must be given to the assessee. It is settled law that, in such matters, when there is any doubt or confusion, the view in favour of the assessee needs to be adopted. The Circular No.3/240, dt.24.1.2014 shows vide clause no.4 amendment in definition of 'Capital Asset' and clause 4.5 dealing with applicability expressly stipulates that it takes effect from 1.4.2014 and therefore, prospectively applies in relation to the assessment year 201415 and subsequent assessment years. Hence, the question whether prior to the said assessment year 201415 the Authorities erred in computing the distance by road does not arise at all. The IT cannot be questioned on that ground. For these reasons, Section 11 of the General Clauses Act also has no application in the present matter where the ITAT was concerned with the assessment year 200910 or prior to the time when amendment took effect. - Decided in favour of assessee.
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