9911796707
TMI Blog2012 (8) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ee- Respondent. 3. Effective grounds of the Revenue in this appeal read as under- (i) The Learned Commissioner of Income-tax(Appeals) erred in law and facts in accepting the appeal of the assessee and granting relief to the assessee. (ii) The learned Commissioner of Income-tax(Appeals) erred in holding that the land or the capital asset in question transferred by the assessee is under Rajendra Nagar Municipality which is not notified by the Central Government for the purpose of treating the same as capital asset as required by u/s. 2(14)(iii)(b) of ITA Act, 1961. (iii) The learned Commissioner of Income-tax(Appeals) failed to appreciate that the land or the capital asset in question is within the distance of eight kilometers from the mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the legislation otiose, which gives rise to a question of law." 4. Facts of the case in brief are that the assessee alongwith other family members sold land admeasuring 5.16 acres in Peeramcheru village, Rajendra Nagar Mandal Ranga Reddy Dsitrict to M/s. PBEL Property Development(India ) Pvt. Ltd. for a sale consideration of Rs.226.46 crores. The assessing officer observed that out of 216 guntas of land, 199 guntas were relatable to nine HUFs of the Dappu family group of which the assessee is a part and concluded, for the detailed reasons enumerated in his order that the capital gains arising on the sale of 199 guntas of land was clearly taxable in the hands of the nine HUIFs. The assessee HUF is one such taxable entity. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investment in the property disclosed in the individual return was rejected in the current proceedings. Similarly, the claim of exemption from capital gains on Inam land was also rejected. The assessee's share of sale consideration for 35 guntas of land was quantified at Rs.1,35,00,000. After reducing the cost of acquisition adopted at Rs.2 per sq. yard as on 1.4.1981, as per the information obtained from the Sub-Registrar office, the long term capital gain taxable was determined at Rs.1,34,84,928. 6. On appeal, the CIT(A), in the first place dealt with the issue of assessability of capital gains to tax. After referring to the facts of the case, he referred to the Hyderabad Bench decision of the Tribunal in eh case of Srinivas Pandit(HUF) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the rival submissions. We do not find merit in the contention of the assessee. The land in question giving rise to capital gain was, in fact, urban land though agricultural operations have been carried out on them. The assessee placed before the lower authorities pahani patrika, VRO's Certificate and details of electricity Bill/slab pass Book etc. We have held on that basis in earlier paras that the assessee derived agricultural income. But, the question still remains whether the impugned land come within the meaning of "capital asset". The land is situated at Narsing Village of Rajendra Nagar Mandal, R.R. District which is within the municipal limits of Rajendra Nagar. According to the learned counsel for the assessee, Rajendra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the matter, and considering the facts and the circumstances of the present case, in our considered view, the lower authorities are justified in determining the land in question, as capital asset liable for income-tax. With regard to determination of cost of acquisition of the land disposed of, we are of the opinion that considering the proximity of the land to the city, it is reasonable to fix the value of as on 1.4.1981 at Rs.30,000 per acre, instead of Rs.10,000 determined by the Assessing Officer, as against Rs.1,40,000 claimed by the assessee. One of the reasons for which the claim of the assessee for relief under S.54B was rejected by the assessing officer was that what was paid by the assessee was only an advance for purchase, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. We accordingly, set aside the order of the CIT(A) on this aspect. Revenue's grounds on this issue are allowed. 9. Before parting, we may note however, that even though the assessee has raised various issues like deductions under S.54B and 54F of the Act, in whose hands capital gains, if at all, are assessable viz. HUF or assesseeindividual and so on, the CIT(A) having held that the land in question resulting in gains to the assessee is not a capital asset and consequently no tax is leviable in relation to such gains in terms of S.45 of the Act, has not gone into those aspects. In view of our decision on the main issue relating to assessability of capital gains on the sale of the land in question, which we have held hereinabove, as a cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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