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2015 (11) TMI 1372 - ITAT CHENNAI

2015 (11) TMI 1372 - ITAT CHENNAI - TMI - Addition 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, .....

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om 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 .....

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imed 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 - ITA No. 410 /Mds/2015, ITA No. .....

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gether and disposed off by this common order for the sake of convenience. 2. The common grounds raised by the assessees in these appeals are as under: 2.1. The C!T(A) erred in directing the AO to delete the addition on account of capital gains in the hands of the assessee on account of transfer of the land. 2.2 The learned CIT(A) erred in, the land sold was an agricultural land and situated at a distance of more than 8 km from the nearest Avadi Municipality and therefore the profit on the sale o .....

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K,61D and 61E playing between Avadi and Morai Village is 10 KMs. From the letter itself it was established that various route are available to reach Morai village and hence it will not be treated as concrete evidence for measuring distance between Avadi and Morai village. 2.5 The C!T(A) has failed to note that the Assessing Officer had clearly established that the land was very much within 8 Kms from the Avadi Municipality. He deputed three Income-tax Inspector to ascertain actual distance and a .....

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ducational institutions run by the Trusts in which the assessee is one of the Trustees. The assessee's premises were also searched u/s.132 of the Act on 27.08.2008. For the AY 2009-10, the assessee filed a e-return of income on 31.07.2009 disclosing a total income of ₹ 3,50,07,409/-. He filed a revised return of income on 29.10.2009 disclosing a total income of ₹ 4,38,44,341/-. Subsequently a revised return was filed on 22.12.2010 declaring a total income of ₹ 1,29,32,780/- .....

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e of more than 8 km from the nearest Avadi Municipality and the land being agricultural land the profit on sale of such land is not liable to tax. On verification it was found that the land was not agricultural land and it was sold to a Trust and the assessment was completed by bringing the entire capital gains of ₹ 3,09,11,561/- as originally offered in the return of income and determined the income at ₹ 4,38,44,341/-. On appeal, the CIT(A) confirmed the assessment of capital gains .....

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ined under sec 2 (14) of I.T. Act. There is no certificate from the Revenue Authorities, no evidence showing agricultural operations, agricultural receipts, agricultural expenses and any agricultural income or loss that was made. Even in response to the report of the Inspector of income-tax after joint verification, the appellant has not produced any evidence to establish the land as an agricultural land. No evidence has also been produced during the appellate proceedings to establish that the l .....

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ore than 8 kms from Avadi limits. The assessee had also filed a certificate from the VAO that the land was given on lease to M/s. Vel Horticultures Ltd for doing agricultural operations. As the evidences produced before the ITAT was not considered originally by the AO, the ITAT set aside the orders of the lower authorities and remanded the matter back to the file of the Assessing Officer for re-adjudicating the issue afresh after verifying all the documents and thereafter passing a speaking orde .....

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om the nearest Avadi Municipality, the land was barren as reported by the Inspector, no crop was grown on the land and that the plot of land was transferred to a Trust running Engineering Colleges with a view to get the Deemed University status. The Id. CIT(A) confirmed the order of the Assessing Officer for the very same reasons. We observe that the submissions of the Id. A.R made during the course of hearing, have not been controverted by the Id. CIT/DR. Thus, we find that the evidences filed .....

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no reasons for not accepting these evidences have been given by him in the assessment order. Further, no reasons have been given by the Assessing Officer as to why the Inspector's report should be relied upon and the certificates filed by the assessee should be ignored. During the course of hearing, the Id. A.R of the assessee has also submitted that he had no objection if the matter was restored back to the file of the Assessing Officer for considering the evidences filed by the assessee a .....

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. In the set aside assessment made afresh, the AO has relied on the decision of Supreme Court in the case of Sarifabibi Mohamad Ibrahim V ClT (204 ITR 631) and has stated that the assessee's land was not agricultural land, as it does not fulfil the criteria laid down by the court in the aforesaid decision. The AO has also stated in the assessment order that the land was barren when the Inspector inspected the land, and the buyer was not an agriculturist and the land was situated in a develop .....

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before the CIT(Appeals). 4. On appeal, the CIT(Appeals) after going through the earlier appellate orders in this case and the submissions of the assessee observed that in view of the pieces of evidence which were available before the AO as well as before him in particular the certificate of the VAO, certificates from the Deputy Surveyor Ambattur Taluk and General Manager, Metropolitan Transport Corporation (Chennai) Ltd's certifying the land to be situated at a distance more than 8 km from A .....

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Bhushna Devi, Tehsildar, Ambattur (supra), had made independent enquiries with regard to the distance of the land in question from the nearest Municipality (Avadi), the result of which clearly shows that the land in question is not situated within a distance of 8kms from the nearest Municipality. No reason has been given by the AO in the assessment order for not accepting the report of the Tehsildar (supra). With regard to the report of the Inspector that the land in question was situated at a d .....

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Mrs. Shakunthala Vedachalam and Mrs. Vanitha Manickavasagam, which is reported in 369 ITR 558 and following the aforesaid decision of the Jurisdictional High Court, the Commissioner of Income-tax(Appeals) held that the assessee s land in question is an agricultural land situated at a distance of more than 8 kms from the nearest Avadi Municipality and the profit on sale of such land is not liable to tax and he deleted the addition on account of capital gains in the hands of the assessee on accou .....

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n (Chennai) Ltd., as per which the land was situated at a distance of more than 8 kms. from Avadi Municipality. The AO has also disputed the lease deed between the assessee, other family members and M/s. Vel Horticultures leasing the land for agricultural operations, which had been accepted in the scrutiny assessment and as a source of investment made by the assessee. The AO has also made independent enquiries from the Tehsildar, Ambattur with regard to the distance of the land in question. The .....

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. Thus, the contention of the DR that the nearest route is to be considered to access the distance of the property from the nearest Municipality limit is not acceptable. It is to be noted that the distance to be measured from the accessible road and not from the road made under the control of the CRPF. 6. In our opinion, 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 roa .....

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