TMI Blog2013 (9) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant: Smt. Mrudula Bajpai For the Respondent: Shri S.S. Sheetal O R D E R Per Joginder Singh, judicial member Both these appeals are by the Revenue for the A.Y. 2008-09 challenging the impugned order dated 10th January, 2013 of the learned first appellate authority. The assessee (Shri Rakesh Shukla) has also preferred cross objection (CO No. 69/Ind/2013). We would like to deal with the Department s appeals first wherein the identical ground raised is whether the learned CIT(A) is justified in law in placing reliance upon the decision in the case of Ashok Shukla which has not been accepted by the Department holding that the distance has to be measured as per the road distance and not as per straight line method for the purposes of section 2(14)(iii) of the Act ignoring the report of Tehsildar and Inspector and the method prescribed under the provisions of section 11 of the General Clauses Act, 1897. 2. During hearing, we have heard Smt. Mrudula Bajpai, learned CIT DR, who represented the Department supporting the assessment order. On the other hand, in the case of Shri Satish Shukla, Shri S.S. Sheetal, learned Advocate, appeared w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Counsel for the assessee defended the impugned order by submitting that the impugned land was inherited by all the brothers and was also sold as a composite sale being composite land. It was explained that one of the brothers was carrying out agricultural operation and it is not necessary that every brother will tilt the land himself. A plea was also raised that the Assessing Officer as well as the Inspector of the Income Tax Department visited the land, the map was prepared by the Inspector himself. The learned counsel took us to various pages of the paper book through which he tried to explain that the land in question is situated beyond 9 kms from the municipal limit. Reliance was also placed upon the decision of the Tribunal in ITA No. 506/Ind/2010 along with the decision in CIT vs. Smt. Debbie Alemao; 331 ITR 59 (Bom). 3. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is an advocate practising in High Court of Madhya Pradesh at Indore. The assessee earned income from house property, pension being Ex-MLA in State Legislative Assembly, declared income of ₹ 4,04,690/- on 5.9.2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land in question is about 10 kms from the municipal limit and the population of the village is about 2000 persons. The assessee has also produced a certificate from the land Surveyor (page 14) wherein it has been mentioned that the impugned land is situated at 9.09 kms from the Municipal limit. The assessee has also placed on record the google map (page 13). All these certificates clearly say that the impugned land is situated beyond 9 kms from the municipal limit, therefore, as per section 2(14)(iii) of the Act, the impugned agricultural land is situated in the revenue record of village Lasudia Parmar whose population is about 2000 people which is less than the condition mentioned in section 2(14)(iii)(a) of the Act. So far as the condition mentioned in sub-clause (b) of the aforesaid section is concerned, from record it is clear that the impugned land is beyond the prescribed limit of 8 kms from the municipal limit. From this angle also, there is no mistake in the conclusion drawn in the impugned order. We further find that some cases like Laukik Developers; 303 ITR (AT) 356 have been relied upon in the impugned order/assessment order wherein the issue was examined with resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Guj) the land was situated near railway station and was sold on square yard basis to housing society. The profit from the sale of such land was held to be assessable to capital gains tax. Keeping in view the location and other attendant circumstances, it was held to be assessable to capital gains tax. 5. The learned counsel for the assessee relied on the decision of the Hon ble Bombay High Court in CIT vs. Smt. Debbie Alenao and Joaquiml Alenao; (2011) 331 ITR 59 (Bom) wherein the land, in question, was shown in the revenue record as agricultural land and no permission was taken for conversion of land use. It was held that since no agricultural income was shown in the return is not the material for the purposes of gains from sale of such land. It is pertinent to mention here that this case also pertains to section 45, 54, 54B, etc. of the Act. 6. If the totality of facts available on record is kept in juxtaposition with the judicial pronouncements discussed hereinabove and the intention of the legislature along with relevant sections, we are of the considered opinion that a particular land is agricultural land or not depends upon so many factors. Any agricultural incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asurement of distance is considered straight line distance on horizontal plane or as per crow s flight then it would have no relationship with the statutory requirement of keeping in view the extent of urbanisation. Such a course would be illusory. It is in pursuance of the aforesaid provision that Notification No. 9447 dt. 6th Jan., 1994 has been issued by the Central Government. In respect of the State of Punjab, at item No. 18 the sub-division Khanna has been listed at serial No. 19. It has inter alia been specified that area upto 2 kms from the municipal limits in all directions has to be regarded other than agricultural land. Once the statutory guidance of taking into account the extent and scope of urbanisation of the area has to be reckoned while issuing any such notification then it would be incongruous to the argument of the Revenue that the distance of land should be measured by the method of straight line on horizontal planes or as per crow s flight because any measurement by crow s flight is bound to ignore the urbanisation which has taken place. Tribunal was therefore justified in holding that distance of 2 kms from the municipal limits of city of Khanna has to be reck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortance and weight. If the department is in a position to prove that it was used as agricultural land as a stop gap arrangement and its land use was changed before the sale then the situation may be different. Whether the land is an agricultural land or not is essentially a question of fact. A close reading of section 2(14)(iii)(a) seems to suggest that it is the population of the municipality that has to be taken into account and not the population of any area within the municipality. It may be that a municipality may comprise of many villages, wards and street and each assessee may claim that the limit of population is provided with reference to a place, ward or street. In such an event, the section will have no uniform application and will lead to many anomalies. Panchayat is different from municipality. Municipality is always understood differently from Panchayat, therefore, the land situated beyond prescribed municipal limit and is recorded as agricultural land in the revenue record is to be considered as agricultural land until proved otherwise. Admittedly, the term capital asset has an all embracing connotation and includes every kind of property as generally unders ..... 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