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2022 (8) TMI 249 - HC - Income TaxCapital gain - Nature of land sold - capital asset or agricultural land - whether lands sold by the assessee are non-agricultural lands and fall within the definition of capital assets under Section 2(14)(iii) and therefore attract tax on the Capital gains? - HELD THAT:- Section 2(14)(iii)(b) of the Act, prior to amendment, does not indicate measurement of distance aerially. We have also perused the Notification dated 06.01.1994 relied upon by Shri. Shankar. In column No.4 of the Schedule to the Notification, the distance is mentioned as 8 kms. from municipal limits in all directions. It is salutary principle of interpretation of law that a provision of law must be understood in its plain meaning and the effect should be given to each and every word employed therein. Therefore, the language employed in the Act and the Notification cannot be stretched to include the word 'aerial'. As per the Certificate of the Tahasildar produced before the Assessing Officer and PWD Engineer's Certificate produced before the CIT(A), the distance between the lands in question and BBMP is more than 8 kms. Therefore, Shri. Sanmathi's contention with regard to the distance from the Municipal area fails. Conversion of land - as argued admittedly, the lands have been converted and Tribunal was not justified in holding them as agricultural lands - HELD THAT:- As in the case on hand, the Tribunal has recorded that though the land was converted, the assessee had continued agricultural operations which was evident from the fact that the income derived from the agricultural operations declared by the assessee were accepted by the revenue - no evidence was brought on record by the revenue to suggest that the lands in question were used for any other purpose other than cultivation after conversion. The Tribunal has also recorded a finding of fact in para 7.2.5 that the land was inspected by the Tribunal on 10.04.2014 and during the inspection the Tribunal had noticed that the subject property was a part of large tract of land having agricultural operations. There were fruit yielding trees. The Tribunal has also adverted to the certificate of Senior Assistant Director of Horticulture certifying that there were fruit yielding mangoes, sappota, coco, cashew, jackfruit, rose apple, guava trees aged 25 to 30 years. It is settled that ITAT is the last fact finding authority. It has inspected the lands on 10.04.2014 and recorded a finding that agricultural operations were undertaken by the Assessees and there were trees aged 25-30 years on the land. Further, as per the Notification issued by the Central Government, the lands do not fall within 8 kms. from Municipality of Bangalore. Above all, assessments for the accounting years for the period from 2004-05 to 2009-10 have attained finality except for the period 2008-09. Thus order passed by the ITAT is based on evidence on record and does not call for any interference. Lands cannot be treated as agricultural lands as they fall within the notified area under BIAPAA - HELD THAT:- As inclusion of lands in Special Zone cannot be a determining factor. mere inclusion of land without any infrastructure development does not convert the land into non-agricultural land. On appeal, the High Court in Smt. T. Urmila [2013 (7) TMI 1184 - TELANGANA HIGH COURT] has held that HADA is not a body within the meaning of clauses (a) and (b) of Section 2 (14) (iii) of the Act and affirmed the decision of the ITAT that the sale of said land did not form part of capital gains. Thus the argument of Shri. Sanmathi that the lands in these cases fall within the BIAPAA and therefore the sale of lands attract capital gains tax also fails. Decided in favour of assessee.
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