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2022 (5) TMI 1270 - AT - Income TaxNature of land sold - Capital asset or agricultural land - assessee reiterated that the land sold in village Bhaniyara is situated beyond 8 km of VMC limit and accordingly does not qualify as a capital asset under section 2(14) - AO invoked section 50C - “competent authority” to measure distance between the land sold and the municipal limits. - HELD THAT:- We are of the considered view, that since there is no prescribed authority to decide upon the distance between the village land and the limit of the closest municipal Corporation, therefore, we are unable to accept the assessee’s argument that the report of Executive Engineer, Vadodara (R and B) division cannot be relied upon for determining the distance between the impugned land at village Bhaniyara and the nearest local municipal Corporation. However, at the same time, before reliance is placed on any document/ report by the Ld. CIT(A) which is proposed to be used against the assessee while holding that the village land is not an agricultural land, he is bound to give the opportunity to the assessee to rebut the evidence being used against him. Also, the Ld. CIT(A) should also consider the evidence placed by the assessee on record i.e. report of “Talati cum Mantri” regarding certificate of distance of impugned land from VMS and give his observations as to why the report placed by the assessee in support of his contention cannot be relied upon or whether there is any factual inaccuracy in such report. It may be important to point out, that for the impugned assessment year, it has been clarified by the CBDT vide Circular No.17/2015 [f.no.279/misc./140/2015- itj] dated 6-10-2015 that that the distance between the municipal limit (VMC in this case) and the agricultural land is to be measured having regard to the shortest road distance. In light of the above observations, we think it fit in the interest of justice to restore the matter to the file of Ld. CIT(A) to take a decision afresh, on facts, in light of direction issued vide CBDT Circular No.17/2015 [f.no.279/misc./140/2015-itj] dated 6-10-2015 (Measurement Of Distance For Purpose Of Section 2(14)(iii)(b) For Period Prior To Assessment Year 2014-15) and after taking into consideration the certificates placed on record by the assessee in support of the proof of distance between the land situated at village Bhaniyara and VMC (report of Talati cum Mantri and any other certificate the assessee may wish to place reliance upon) and also if the Ld. CIT(A) wishes to place reliance on any certificate issued by any competent authority, the assessee may be provided the opportunity to examine the same/ rebut the same. Accordingly, on this issue, the matter is being restored to the file of the Ld. CIT(A) with the above directions. Assessee’s appeal is allowed for statistical purposes. Addition under section 44AD - cash deposit in the assessee’s bank account held with Cosmos Bank - AO made addition of 12% under section 44AD - assessee submitted that the above receipts were on account of contract receipts for construction of temple and the assessee has offered 8% of such receipts as his income u/s 44AD - HELD THAT:- We note that on similar set of facts, Ld. CIT(A) in appeal for immediately succeeding year that is assessment year 2013-14, has allowed the assessee’s appeal. Since, the appeal of the assessee in respect of ground number 1 mentioned above is being restored to the file of Ld. CIT(A) for his consideration, keeping in view the principles of consistency, wherein the courts have held that when the facts & circumstances continue to remain the same, then there should not be any variation in the treatment from earlier year, in the interest of justice, we are restoring this matter to Ld. CIT(A) to grant relief if there are no change in facts as compared to facts for assessment year 2013-14. Accordingly, ground number 2 of the assessee is appeal is allowed. Disallowing 10% of total agricultural expenditure claimed - assessee had claimed almost 60% of agricultural receipts as agricultural expenses - HELD THAT:- When asked to produce the relevant supporting bills/voucher or any other supporting documents to evidence the agricultural expenses, the same were not produced before the Ld. Assessing Officer, who in absence of any supporting documents disallowed 20% thereof. In appeal, the Ld. CIT(A), restricted disallowance to 10% of the expenses. We note that while the assessee has given a summary list of details of agricultural expenditure viz. electricity and diesel expenses, fertilizer and pesticide expenses, ploughing and labour charges, seeds purchased, depreciation, however, the assessee has not produced any supporting bills/vouchers/documents in support of his claim of incurring the expenditure before any of the authorities. Accordingly, in our view, the Ld. CIT(A) has not erred in facts and in law in restricting the disallowance to 10% of agricultural expenses in absence of any bills/vouchers/supporting evidence produced in support of proof of claim of expenditure. In the result, ground number 2 of the assessee’s appeal is dismissed.
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