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Bonagiri Narasimha Murthy and Others Versus ITO Ward-3, Rajahmundry

2016 (4) TMI 80 - ITAT VISAKHAPATNAM

Nature of land - whether land sold by the assessee is within 8 kms. from Rajahmundry municipal limits or beyond 8 kms? - Held that:- There is a confusion that the Inspector proceeded by four wheeler along side of the approach road of the lay out to some extent. It is not clear that from that extent to land sold by the assessee, what is the distance? That the inspector travelled only to some extent and stopped their vehicle and the meter is showing 7.7 kms. Therefore, it cannot be said that the d .....

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kms. of Rajahmundry municipal limits. The Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Lalsingh and others (2009 (11) TMI 63 - PUNJAB AND HARYANA HIGH COURT ) has considered the issue of who is competent to measure the distance and observed that “Tahsildar working under the State Government is more competent than the Inspector of the department”. It is further observed that ”without the help of revenue officials, it is difficult for a person to identify the land and then to measure .....

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280/Vizag/2012, I.T.A.No.281/Vizag/2012, I.T.A.No.283/Vizag/2012, I.T.A.No.284/Vizag/2012 - Dated:- 2-3-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri M.K. Sethy, DR ORDER PER V. DURGA RAO, Judicial Member: These appeals filed by different assessees are directed against the order of CIT(A), Visakhapatnam dated 25.1.2012 pertaining to the assessment year 2007-08. Since, the facts are identical .....

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s 133A of the Income Tax Act, 1961 (hereinafter called as 'the Act'), during which the fact of sale of land by the above assessees came to the notice of the department. As the assessee has derived Capital Gain from the sale of above property and did not file his return of income for the year under consideration, a notice u/s 142(1) of the Act was issued to the assessee on 19.9.2008 calling for return of income for the assessment year 2007-08. Since the assessee did not comply with the no .....

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g the entire sale proceeds on sale of 7.65 acres of land at Palacherla village of ₹ 97,92,000/- besides an agricultural income of ₹ 60,000/-. In his return of income, assessee has claimed the entire sale consideration received by him is exempt from the income tax for the reason that the lands that were sold by him are situated beyond 8 kms. from the municipal limits of Rajahmundry. 3. The A.O. has processed the return filed by the assessee u/s 143(1) of the Act. Thereafter, a notice .....

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ed as asset within the meaning of the provisions of section 2(14) of the Act. In response to that, assessee has filed a certificate from Asst. Engineer, Roads & Buildings (R&B), South Section, Rajahmundry, wherein, it is certified that The distance from Rajahmundry Municipal Corporation limits i.e. from 194/8 of Lalacheruvu Junction to Diwancheruvu- Narendrapuram road KM03/400 is beyond 8 kilometers (eight kms only) and submitted that as per the certificate issued by the R&B, the lan .....

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O. has also noted that as per the report given by the Inspector of his Office, wherein it was reported that the actual distance recorded from the municipal limits of Rajahmundry to the land sold by the assessee is less than 8 kms. Accordingly, the A.O. has come to a conclusion that the land sold by assessee constitute asset within the meaning of provisions of section 2(14) of the Act. The gain arising on sale of such lands is taxable u/s 45 of the Act. Accordingly, the assessee s claim of exempt .....

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w of Rajahmundry Municipal Corporation. Therefore, section 2(14)(iii)(a) of the Act has no application. The Ld. CIT(A) by considering the GO issued by the Government of Andhra Pradesh i.e. GO Ms No.389 dated 29.8.2001 has held that clause (a) of section 2(14)(iii) of the Act is not applicable to the present case. The above finding of the CIT(A) is accepted by the department. 7. So far as clause (b) of section 2(14)(iii) of the Act is concerned, the CIT(A) has observed that to ascertain the dista .....

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d. Certified that the distance between Lalacheruvu-Velugubanda near Tatalamma Temple is above 8.00 kms (eight kms only) . However, the said report does not contain the exact distance or the route which was taken to measure the distance and the A.O. has observed that more weightage should be given to the enquiry conducted by the department because it is a specific enquiry. The CIT(A) directed the department to conduct a further enquiry and the inspector of Income Tax again conducted a further enq .....

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ngly, the A.O s action is confirmed. 8. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 9. The Ld. Counsel for the assessee submitted that the certificate issued by the R&B Department should be given more weightage than the enquiry conducted by the Inspector of the department. 10. The certificate issued by the R&B has not been considered by the A.O. as well as CIT(A) for the reason that in the certificate it was mentioned that the distance between Lalacheru .....

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rein it is clearly mentioned that the distance from Rajahmundry Municipal Corporation limits to KM 4/4 of Divancheruvu-Narendrapuram Road (via) Velugubanda of Palacherla village where survey no.158, 159 & 160 of Palacherla village are located is 9.00 kms. (Nine kilometers only) and hence, the Ld. Counsel submitted that the certificate issued by the R&B has to be given more weightage rather than the enquiry conducted by the A.O. He further submitted that in the second enquiry conducted by .....

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or, it is within 8 kms. of municipal limits and therefore it is a capital asset within the meaning of section 2(14) of the Act. Accordingly, gain arising from sale of the land is a taxable income. It is strongly supported by the orders of the authorities below. 12. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The only issue for consideration is whether the land sold by the assessee is within 8 kms. from Rajahmundr .....

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ing an explanation from the assessee that why the land sold by the assessee cannot be treated as a capital asset within the meaning of section 2(14) of the Act. In response to that, assessee has submitted that the land sold by assessee is beyond 8 kms from the Rajahmundry municipal corporation and therefore it is not an asset within the meaning of section 2(14) of the Act. Further, he relied on the certificate issued by the Asst. Engineer, R&B, Rajahmundry, wherein it was certified as per ex .....

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and it is taxable according to section 45 of the Act. 15. On appeal, CIT(A) has considered that the land sold by the assessee is not within the municipal corporation limits as per the GO Ms No.389 dated 29.8.2001 issued by Government of Andhra Pradesh and has observed that Palacherla village was excluded from the Rajahmundry Municipal Corporation. However, he has observed that the certificate issued by the Asst. Engineer R&B is not clear as the exact distance or the route which was taken to .....

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l limit i.e., from Lalacheruvu intersecting junction of highway and reached the agricultural lands. Upto the entry point of the lay out gate, the distance measured 6.2 kms, from where we proceeded further to reach the agricultural lands of the assessees. We travelled alongside the approach road of the lay out to some extent. Even then, the speedometer did not exceed 8 kms. The speedometer accurately and unerringly shown 7.7 kilometeres distance from the end of the municipal corporation limits of .....

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as 6.2 kms., from they proceeded further to reach the agricultural lands of the assessee. They travelled along side of the approach road of the lay out to some extent. Even then, the speedometer did not exceed 8 kms. The speedometer accurately and unerringly shown 7.7 kms. distance from the end of the municipal corporation limits of Rajahmundry. From the above, there is a confusion that the Inspector proceeded by four wheeler along side of the approach road of the lay out to some extent. It is .....

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e assessee s lands. So based on the speedometer, they came to a conclusion that the distance would be 7.7 kms. without reaching assessee s land. Under these mitigating facts and circumstances of the case, it cannot be concluded that the land sold by the assessee is within 8 kms. of Rajahmundry municipal limits. The Hon ble Punjab & Haryana High Court in the case of CIT Vs. Lalsingh and others (2010) 325 ITR 588 (P&H) has considered the issue of who is competent to measure the distance an .....

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