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2015 (11) TMI 1372 - AT - Income TaxAddition on account of capital gains on account of transfer of the land - whether the land sold was situated at a distance of 10Kms from the nearest Avadi Municipality based on the VAO's certificate ? - main argument of the Department is that the land sold by the assessee is a capital asset, as it is situated within the distance of 8 kms. from the nearest Municipality limit (Avadi) - Held that:- Tehsildar is the competent authority to issue certificate, which is to be accepted. Further, the distance of agricultural land has to be measured in terms of the approach by road and not by a straight-line distance on horizontal plane or as per crow’s flight as held by the Punjab & Haryana High Court in the case of CIT vs. Satinder Pal Singh (2010 (1) TMI 752 - Punjab and Haryana High Court). In view of this, the AO has no material to prove the contention of the assessee that the distance of the land as on date of sale has to be held more than 8 kms. from the nearest Municipality, is not correct. Therefore, the assessee has to prove one essential condition that the land owned by him or her is situated at a distance more than 8 kms. from the nearest Municipality, which was proved by the assessee. To sum up, in our opinion, the distance has to be measured in terms of the approach by road and not by a straight-line distance on horizontal plane or as per crow’s flight. Further, the assessee has also proved that the land was situated at a distance more than 8 kms. from the nearest Avadi Municipality. Measurement of aerially distance came into force with effect from 1.4.2014 under sec. 2(14)(iii)(b) of the Act and it cannot be applied to the present assessment year 2009-10. Regarding carrying out of agricultural activities in the said land, there is an evidence in the form of lease deed between the assessee (and other family members) and M/s. Vel Horticultures leasing the land for agricultural operations, the leasing company claimed agricultural income which had been accepted in the scrutiny assessment as noted by the CIT(Appeals) in his order, which was not controverted by the ld. DR. As such it cannot be denied that the land in question was an agricultural land situated at a distance more than 8 kms. from the nearest Municipality (Avadi).Therefore, there is no merit in the argument of the ld. DR and we are inclined to dismiss the appeals of the Revenue. - Decided in favour of assessee
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