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2015 (4) TMI 227 - BOMBAY HIGH COURT

2015 (4) TMI 227 - BOMBAY HIGH COURT - [2015] 374 ITR 531 (Bom) - Measurement 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 .....

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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 b .....

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ause 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 .....

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: 1. As requested by the parties, since the question of law canvassed in all these matters are same, Income Tax Appeal No.120 of 2013 is treated as a lead case and arguments are heard therein with an understanding that adjudication therein will dispose of the other appeals also. 2. Income Tax Appeal No.120 of 2013 is preferred against the Order dt.22­03­2013 passed by the Income Tax Appellate Tribunal, Nagpur Bench in ITA No. 113/Nag/2012 with a prayer to quash and set aside the same. 3 .....

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ation and details from the assessee on specific seizure materials. The assessee had, in response, filed its return of Income on 23­04­2010 for total income of ₹ 3,30,450. The assessee had, in regular income, shown the same income. It was noticed that the assesee had, along with three partners namely Shri Sanjay Nagorao Padwalkar, Shankarrao Jairanmji Diote, Shishir Shankarrao Diote, on 10.04.2007, purchased the land Patwari Halka No. 38, bearing Survey No. 90/1 for a consideration .....

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be measured by shortest distance as per the crows flight or straight line method and not by the road distance. Thus, the income of ₹ 12,64,895/­ was added to the income as short term capital gain. The assessee had also purchased land Patwari Halka No.38 admeasuring 2.02 hectares with the above mentioned individuals on 23­08­2007 for a consideration of ₹ 61,66,540/­ and the same was resold for a consideration of ₹ 1,50,00,000/­ with proportionate gain of S .....

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that ITAT was not correct to hold that distance of 8 kms. is not to be measured by the approach Road, but by the straight line method. 4. The substantial question of law, thus, raised is as to whether the ITAT was correct to hold that the distance of 8 kms. ought to be measured by the approach road and not by the straight line method ? 5. We have heard the rival submissions at the Bar and perused the rulings cited before us. 6. Learned Advocate Shri K.P.Dewani submitted that there are rulings i .....

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involved in this appeal relates to measurement of distance for the purpose of agricultural land within the meaning of section 2(14)(iii)(b) of the Income Tax Act. The assessee took stand that the distance should be taken through the approach road while the Assessing Officer has taken the aerial distance and accordingly, held that the land sold by the assessee is a capital asset as being situated within 8 kms. of the Municipal Limit. 7. In Laukik Developers Vs Deputy Commissioner of Income Tax re .....

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of approach road and not by the straight line method on horizontal plane. The Division Bench of this Court in Commissioner of Income Tax vs. Smt Debbie Alemao (2011) 239 CTR (Bom) 326 considered the fact that an agricultural land shown in the revenue records and when no any permission was sought for non­agricultural use by the assessee, the distance has to be measured by the approach road. The nature of the land whether agricultural or non-agricultural would be decisive to arrive at the conc .....

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auses Act will prevail, unless a different intention appears to the contrary. Shri Parchure contended that the business income cannot be equated with the agricultural income. When capital assets were sold, the income is business income and not the agricultural income. The only dispute involved in this appeal relates to measurement of distance for the purpose of non­agricultural land within the meaning of section 2(14)(iii)(b) of the Income Tax Act. The assessee took stand that the distance s .....

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Aerial distance and accordingly, held that the land sold by the assessee is a capital asset being situated within 8 kms. of the Municipal Limits. The assessee went in appeal before the CIT(A). The CIT (A) held the land to be an agricultural land and not a capital asset by holding as under : "3.2. On the above issue, the Hon'ble P&H High Court in the case of CIT vs. Santinder Pal Singh 33 DTR 281(P&H)(2010) has approved the decision of Hon'ble ITAT Mumbai in the case of Lauki .....

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n our National interest to meet the increasing needs of foodstuffs for growing population and would serve the interest of justice. Agricultural lands are already subjected to land revenues and other local taxes need not be overburdened. The revenue can tap other alternative resources to meet the revenue requirements. 11. Another submission of learned Advocate Shri Dewani is that any amendment to a taxing statute is intended to remove any hardship caused to taxpayers and not to the tax department .....

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ot 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 no .....

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t challenged by the Revenue. 13. In the ruling in the case of DLF United Ltd. vs. Commissioner of Income Tax, (1995) 129 CTR (Del) 33, the Hon'ble Delhi High Court referred to explanation 2(1)(A) relied upon by the Counsel for the Revenue and held that surplus of the compensation amount arising as a result of acquisition of agricultural land in question was capital asset and not the income at all. The question of change in the definition of agricultural income because of insertion of the exp .....

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of the Land Acquisition Act and the Company received compensation for the land after assessment under the Land Acquisition Act, the Income Tax Officer, while assessing that the Company was a dealer in lands, had held that the acquired land constituted the Company's stock­in­trade and compensation received by the Company was liable to be taxed as an income in three assessment years under consideration. The question which was raised was answered by the Delhi Court in paragraph 9 of th .....

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the compensation had been paid for the acquisition of agricultural land, the question really involved a determination as to whether the price paid for the land by way of compensation could be included within the definition of agricultural income. It was further held that agricultural land was excluded from the definition of 'capital asset' occurring in s. 2(14)(iii) and accordingly any gain resulting from the acquisition of agricultural land was not income, and accordingly the answer to .....

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ain arising from the transaction in respect of agricultural land cannot be considered as business income. The ruling is squarely applicable to the facts and circumstances under our consideration in the present case as well. 15. 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 orde .....

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