TMI Blog2016 (3) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... UMAR, JM For The Revenue : Shri Kailash Mangal (JCIT) For The Assessee : Shri P.C. Parwal (CA) PER: T.R. MEENA, A.M.: The appeal by revenue and cross objection by assessee arise from the order dated 20/08/2013 of Ld. CIT (A)-II, Jaipur. Effective grounds of appeal as well as C.O. are as under:- Grounds in Revenue Appeal. 1.(i) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) has erred in deleting the addition of ₹ 76,83,277/- on account of Short Term Capital Gain on sale of agricultural land holding that said agricultural land is not a capital asset within the meaning of section 2(14)(iii)(b) of the I.T. Act, 1961. (ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) has erred in ignoring the report of the Settlement Commission, Jaipur that the agricultural land is situated at 7.78 Kms. from the Muncipal Limit. (iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) has erred in allowing relief to the assessee by following the decision of the Hon ble Punjab and Haryana High Court in the case of CIT Vs. Sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14)(iii) of the Act. The ld Assessing Officer considered the Government of India, Ministry of Finance, Department of Revenue notification No. S.O.10(E) dated 06/01/1994 and found that the land is located within the limit of 8 Kms from the limit of Jaipur Municipal Corporation. He conducted enquiry from Commissioner of Jaipur Municipal Corporation, Amer Zone, who had informed that the ward No. 77 is upto Jaipur Golden Petrol Pump as such the distance of the agricultural land sold is to be measured from the location of Jaipur Golden Petrol Pump to the actual location of the impugned land. He enquired through Ward Inspector of the distance from the municipal limit of the impugned land. The Inspector had reported that the distance of the said land by way of applying the Pythagoras theorem comes to 7.07 Kms. The application of Pythagoras Theorem was required to get the straight line distance of the said land from the last point of the Jaipur Municipal Corporation. After ensuring that the said land was within the distance of eight Kms from the limits of Jaipur Municipal Corporation a reference was also sent to the Settlement Commissioner, Jaipur for providing actual measurement of distan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allowed the appeal by observing as under:- 2.3 I have considered the facts of the case; assessment order and appellant s written submission. Appellant sold agricultural land during the year and claimed the same as exempt within the definition of capital asset under section 2(14)(iii). Assessing officer found that the agricultural land sold by the appellant during the year was situated within 8 km from Jaipur municipal limit and therefore the land was capital assets and sale thereof was liable for capital gains. Assessing officer got letter from Addl. Commissioner Land settlement, Jaipur that land situated in the village was within 8 km of air distance/from the limit of Jaipur Municipal Corporation. During appeal, appellant took two arguments- (1) for calculating distance from municipal limit, road distance is to be seen and not air distance as done by the AO. Appellant submitted several judicial decisions supporting its contention. (2) The settlement commissioner has taken present municipal limit whereas municipal limit has expanded over a period of time. Considering the entire submissions and documents relied upon by both sides, this issue can be divided in two parts- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (ii) of the proviso to sub-clause (c) of clause (1A), and item (b) of sub-clause (iii) of clause (14), of section 2 of the Income-tax Act, 1961 (43 of 1961), in the Gazette of India, Extraordinary, Part II, section 3, subsection (ii), dated February 13, 1991, under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. S.O. 91(E), dated February 8, 1991, for specifying certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such notification became available to the public; And whereas copies of the said Gazette were made available to the public on February 13, 1991; And whereas the objections and suggestions received from the public on the said draft notification have been considered by the Central Government; Now, therefore, In exercise of the powers conferred by item (B) of clause (ii) of the proviso to sub-clause (c) of clause (1A) and item (b) of sub-clause (iii) of clause (14) of section 2 of the Income-tax Act, 1961 (43 of 1961), and in supersession of the notification of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re covered in clause (a) of section 2(14)(iii) is not correct since JDA is not Municipality or cantonment Board as required under that clause. Appellant also argued that AO has not brought any evidence to establish that the land under consideration is located in the jurisdiction of JDA. Further, JDA cannot be equated to be a municipality. JDA is a development authority and not a town authority. The role of Municipality is all together different than JDA. It has no power to collect tax or cess and it doesn t provide civic amenities etc. Therefore, JDA is not a municipality. Considering these facts, JDA is not considered as Municipality for the purpose of section 2(14)(iii)(a) and accordingly land sold is outside the purview of capital assets. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the ld Assessing Officer. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and further submitted that the impugned land is beyond 8 kms of the municipal limit and the proper way to measure the distance is by road, not straight line method or crow flight method, for which he relied various decisions part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en shown in cash. All the above entries in the cash flow statement showed that it was a cooked up story to create cash balance for cash deposits made in the bank account as such the source of cash deposits shown by the assessee was not acceptable for want of independent evidence and also on human probability that all the purchases were made on credit during the month of April and sold in cash in the same month and thereafter the sales of the entire year were very nominal. Thus the creation of bill book is an afterthought and hence not acceptable to her. The assessee was selling goods without issuing bills and the same was deposited in her bank account with bank of Baroda but when specific query was raised she was having no satisfactory immediate source of the cash deposits as such she has shown cash sale bills but the same are not supported with the purchases. There was a credit in the Bank of Rajasthan of ₹ 3,00,000 on 22/06/2009. The sale consideration of ₹ 82,25,777/- was received by the assessee on 12/06/2009 in her account with Bank of Baroda. The first withdrawal made by her from this account post receipt of the sale proceeds was on 13/7/2009 of ₹ 4,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- from the business. In the return, the assessee had mentioned the gross receipt and net profit of this business as also the cash balance as on 31/3/2010. This cash balance with the cash statement submitted during the course of assessment proceedings only comes purchases and sales are made in cash. Cash account submitted by the assessee cannot be doubted more particularly when the income from such business is assessed to tax. The ld Assessing Officer had considered the cash deposit of ₹ 3,78,000/- made in the bank account up to 22/6/2009 as unexplained. In doing so, she ignored the fact that the assessee had opening cash balance of ₹ 28,896/- and also the realization from the debtors and sale proceeds of the goods from which the deposit is made in the bank account. Thus source of the deposit in the bank account is fully explained. Accordingly, he prayed to delete the addition confirmed by the ld CIT(A). 9. At the outset, the ld DR has vehemently supported the order of the Assessing Officer and argued that the ld CIT(A) has already giving the credit of business income of ₹ 85,420/-, therefore, the same may be confirmed. 10. We have heard the rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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