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TMI Blog2010 (9) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act. 2. The Assessing officer has wrongly concluded the fact that the subject matter of asset sold, is not agricultural land (at para 5.7 of his order) 3. The Hon'ble CIT(A) failed to appreciate the documentary evidence of local Government declaring the subject land as agricultural land, on the contrary accepted the hypothetical conclusion of assessing officer that the land is not agricultural land. 4. The extension of local limits by the local government cannot override the notification of central government. 5. Both the assessing officer and Hon'ble CIT(A) have arbitrarily adopted the cost of land at Rs. 35/- as against Rs. 70/- duly supported by appellant. 6. For any other ground or grounds that may be urged at the time of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represented interest income received from bank deposits. After scrutinizing, the assessing officer came to the following conclusions: (i) The land sold by the appellant was situated within the area of Greater Visakhapatnam Municipal Corporation (GVMC). The limits of the GVMC were extended by G.O. Ms.No.938, dt.21.11.2005 vide which the Grampanchayat of Paradesipalem was covered within the limits of GVMC. Thus, the assessing officer was of the view that the appellant's land fell within the definition of capital asset as defined in sec.2(14). (ii) The appellant's contention that in the absence of any notification by the Government of India u/s 2(1A) and 2(14)(iii), the appellant's land cannot be treated as falling within the limits of GVMC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions relatable to agricultural produce. Relying upon the decision in the case of Tarajan Tea Company (P) Ltd Vs. Commissioner of Incometax reported in 227 ITR 649, the assessing officer observed that the lump-sum consideration for sale of land and standing trees is liable to capital gains. Further, relying upon in the case of Raja Binoykumar Sahas Roy reported in 32 ITR 466, the assessing officer observed that the requisite ingredients of agricultural operation were missing in the appellant's case. He stated that the mango and coconut trees etc., which were claimed to have been transferred may be treated as usufruct from land or trees of spontaneous growth since there are no history of agricultural operations in the said land. (v) Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng term capital gain. 6. The Ld. D.R. on the other hand has submitted that the impugned land is admittedly situated within the municipal limit of the GVMC. Therefore, assessee's case falls within the purview of clause (a) of section 2(14)(iii) of the Act and the land which falls within the municipal limit, no notification from the central government is required to notify that the agricultural land which falls within the extended limit of a municipality cease to be the agricultural land. Our attention was invited to both the clauses of section 2(14)(iii) of the Act. The Ld. D.R. further contended that since the impugned land is situated within the municipality limit of GVMC, the revenue has rightly treated to be a capital asset and computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any force in this argument because the municipality or the cantonment board are subject to local laws and within a state subject and are created by a notification by the state government. Central government has no jurisdiction to create a municipality, cantonment board in any state of the country. Central government is concerned with the central act. Once the municipality of the cantonment board is created by a notification by the state government as per local laws, the central act will apply. Therefore once the impugned land is situated within the jurisdiction of the local limit of the GVMC, the impugned land cease to be the agricultural land and on its sale capital gain is to be computed. We therefore, find no infirmity in the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument. Generally, the fair market rate of the lands are much more than the rates notified by the registration department for the purpose of registration of a document. These rates are not regularly revised. It was rather notified after an interval of few years. We have also examined the basis for the adoption of the rate at Rs. 70 per sq.yd. by the assessees and we find that assessee has relied upon the sale deed executed on 25.3.1987 in which the land was sold at Rs. 100 per sq.yd., whereas the rates are to be determined as on 1.4.1981. Therefore, the basis taken by the assessees is also not correct. Now it is a question of pure estimate and we therefore estimate the rate of land at Rs. 60 per sq.yd. keeping in view the rates adopted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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