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2016 (3) TMI 362 - ITAT JAIPUR

2016 (3) TMI 362 - ITAT JAIPUR - TMI - Capital assets as per Section 2(14)(iii) - measuring the distance from municipal limit - Held that:- For measuring the distance from municipal limit to the land is by road, not straight line method or crow flight method. Therefore, the impugned land is not capital assets as per Section 2(14)(iii) of the Act. Accordingly, we uphold the order of the ld CIT(A).

Addition on account of unexplained cash deposit in the bank - Held that:- CIT(A) has fair .....

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2013, C.O. No. 60/JP/2013 - Dated:- 29-1-2016 - SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, 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 (Ap .....

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. (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. Satinder Pal Singh (229 CTR 82) without appreciating the facts of the case. 2. (i) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) was justified in holding that the municipal limits existing on the date of issue of No .....

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ion No. 9447 dated 06.01.1994. (iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) was justified in admitting and deciding this issue for the first time at appellate stage without giving opportunity to the Assessing Officer to rebut the same. The action of Id. CIT(A) is against the principle of natural justice. Grounds in Cross Objection 1. The ld CIT(A) has erred on facts and in law in confirming the addition of ₹ 2,92,580/- out of addition of .....

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,25,777/- on 11th June, 2009. The Assessing Officer gave reasonable opportunity of being heard on this issue. The assessee submitted reply vide letter dated 03/6/2012 and claimed that agricultural land bearing khasra No. 201/212/2 in village Chakhalyawas, Kacherawala, Tehsil- Amer, district Jaipur admeasuring 1.09 hectares had been sold vide sale deed executed on 10/6/2009 to Shri Maqsood Ali S/o- Shri Ahmed Bux for consideration of ₹ 82,25,777/-. The land is situated 10 kms outside the Ja .....

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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 distanc .....

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impugned land from Jaipur Golden Petrol Pump is 7.78 Kms. The distance between the impugned land and the Jaipur Golden Petrol Pump had been measured scientifically using imagery and geo stationary references. The ld Assessing Officer again gave the show cause notice on short term capital gain. The assessee again replied vide letter dated 27/2/2013, which has been reproduced by the Assessing Officer on page Nos. 4 to 6 of the assessment order. After considering the assessee s reply, it has been .....

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in it has been provided that the distance has to be measured in the straight line on a horizontal plane unless a different intention has been provided in the Act. In the Income Tax Act, there is no definition of distance. He further defined objects and functions of the Jaipur Development Authority and treated with Municipal Corporation on page 8 and 9 of assessment order and held that the jurisdiction of the Jaipur Development Authority is defined in Section 2(8) of the Jaipur Development Author .....

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al gain at ₹ 76,83,777/- and added the same in the income of the assessee. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had 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 off .....

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mit, 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- (1) while computing distance from municipal limit, which distance- air distance or road distance to be consider .....

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ave also upheld this view. There is no judicial decision contrary to this view. Even if Department has not accepted these decisions, these are binding on the appellate authorities. To remove this controversy, there is an amendment in the act with effect from 1-4-2013 that Air distance will be considered in computing distance for capital asset. This is not retrospective and therefore not applicable for this year. Respectfully following these decisions. I hold that Assessee is justified in computi .....

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Asset, the land should not be situated within such distance from the local limits of ANY municipality {referred to in clause(a)} as specified by the central government by notification in the Official gazette. The said notification i.e Notification No. (SO 9447) (File No.164/3/87-ITA.I) dated 06.01.1994 for the purpose of item (b) of sub clause (iii) of clause (14) of section 2 of the Income Tax Act 1961 is reproduced below: INCOME-TAX ACT, 1961: NOTIFICATION UNDER SECTION 2(1A)(C), PROVISO, CLA .....

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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 .....

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(Department of Revenue and Insurance) No. S.O. 77(E), dated February 6, 1973, the Central Government having regard to the extent of, and scope for urbanisation of the areas concerned and other relevant considerations, hereby specifies the areas shown in column (4) of the schedule hereto annexed and falling outside the local limits of municipality or cantonment board, as the case may be, shown in the corresponding entry in column (3) thereof and against the State or Union Territory shown in colum .....

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from Jaipur municipal corporation limit is urban land and to be treated as capital asset. However land situated outside 8 km limit will be agricultural land not to be treated as capital asset For computing the distance of 8 km. the municipal limit is also defined. Since municipal limit is dynamic and changing over a period of time, an explanation is given at the end of the aforesaid notification that municipal limit is the limit as existing on the(date of publication of the notification and not .....

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at limit, agricultural lands were situated much beyond 8 km distance. Considering this also Agriculture land sold is not capital assets. As regards AO s claim that land is situated in village which is part of Jaipur development Authority and therefore 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 .....

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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 particularly the decision of Hon ble ITAT, Indore Bench in ca .....

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Mad-Trib) (vi) ACIT Vs Gaurav Khandelwal 194/Agra/2010 (Agra-Trib). (vii) Khacheru Singh Vs ITO IT Appeal No. 2953 (Delhi) of 2009 dated 30/11/2009. 5. We have heard the rival contentions of both the parties and perused the material available on the record. It is held by the various Hon ble Courts as well as the ITATs that for measuring the distance from municipal limit to the land is by road, not straight line method or crow flight method. Therefore, the impugned land is not capital assets as p .....

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in cash on different dates, the details of which has been reproduced by the Assessing Officer on page No. 11 and 12 of the assessment order. The Assessing Officer gave reasonable opportunity of being heard on this issue. After considering the assessee s reply, it was found that the receipt shown in the cash flow statement revealed that total sales made during the year were of ₹ 4,02,758/- and out of it till 05/05/2009 i.e. in one month and five days sale of ₹ 3,18,000/- had been made .....

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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 .....

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/2009 of ₹ 4,00,000/-. Thus the deposits made thereafter could be linked with the withdrawal of ₹ 3,00,000/-. And of ₹ 4,00,000/- made on 13/7/2009 from Bank of Baroda. She further held that the assessee had utterly failed to explain the cash deposit at ₹ 3,78,000/-, accordingly, he made addition U/s 68 of the Act. 7. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal partly by observing .....

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ment submitted by the appellant had no evidentiary value since it is not part of regular books of accounts kept by the appellant. There is no contemporary evidence to explain the source of cash deposits in the bank account and therefore I agree with the assessing officer that the source of cash deposit is not explained. However I also agree with the appellant that income from business activity is disclosed at ₹ 85,420 and at least to that extent source of cash deposit can be explained beca .....

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account represents the assessee s business transaction, which was made in cash. He further submitted that the cash deposited in the bank account is fully verifiable from the bank account submitted by the assessee in course of assessment proceedings. The assessee had income from garment processing work and for its own she had not maintained any regular books of account but had disclosed income of ₹ 85,420/- from the business. In the return, the assessee had mentioned the gross receipt and .....

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