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2016 (9) TMI 704 - ITAT CHENNAI

2016 (9) TMI 704 - ITAT CHENNAI - TMI - Capital gains arise for assessment on transfer of land by the assessee along with other person - Transfer in terms of Section 2(47)(v) - Joint Development Agreement (JDA) entered by the assessee on 09.07.2005 with the developer - Held that:- What was the intention of the assessees at the time of acquiring the land or interval action by the assessee between the period from purchase and sale of the land and the relevant improvement/development taken place du .....

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to show, an intention to trade at the inception. In a case where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant factor and unless it is offset by the presence of other factors it would raise as strong presumption that the transaction is an adventure in the nature of trade. Even so, the presumption is .....

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and even there was no intention to sell the land in future at that point of time. It was due to certain compelling circumstances came into picture at a later stages, the assessees were forced to sell the land. Merely because of the fact that the land was sold in a short period of holding, it cannot be held that income arising from the sale of land was taxable as profit arising from the adventure in the nature of trade. The period of holding should not suggest that the activity was an adventure i .....

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ces, in our opinion, such transfer like the case before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income. Accordingly, the ground raised by the Revenue is dismissed.. - I.T.A.No.1371/Mds./2013 - Dated:- 17-8-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Mr.Durai Pandian .....

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which was in continuation of the Joint Development Agreement (JDA) entered by the assessee on 09.07.2005 with the developer. 3 The facts of the case are that the assessee is the owner of 50% of the land at Egattur Vilalge, measuring 6 acres and 21 cents. The other 50% was owned by her brother. The assessee sold the property vide document registered on 01.04.2008 to M/s.OMR Mall Developers Pvt Ltd., and received consideration as follows:- 1,45,295 Sq.ft. Rs.13,68,00,280/- i) ₹ 1,44,00,000/- .....

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ee claimed that the said property was sold, which is an agricultural land and there is no liability of capital gains tax. More so, the assessee originally entered into JDA with M/s.Allied Majestic Promoters on 09.07.2005 and according to the assessee, the transfer took place in the assessment year 2006-07 and not in the assessment year 2009-10. The AO disagreeing with the contention of the AO observed that the transfer took place vide registered sale deed dated 01.04.2008 to M/s.OMR Mall Develop .....

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r the revenue records, and also under cultivation-of agricultural crops till the assessee handed over the possession of lands to Megistic Promotors on 09.07.2005, under Joint Development agreement. Even in the joint development agreement the lands were shown as agricultural lands with standing crops. Assessee s declaration of agricultural income in her returns of income filed up to A.Y.2006-07 clearly proves that the lands are agricultural lands and are under agricultural use only. Further, sinc .....

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tanding crops) only; and hence will not constitute capital asset for the purpose of sec.2( 14) of the Act. According to Ld.CIT(A), consequent to the Joint Development Agreement with M/s. Allied Megistic Promotors on 09.07.2005, the assessee and her brother, received part of the consideration of ₹ 2,00,00,000/- as advance, handed over the possession of the property to M/s. Allied Megistic Promotors and also executed General Power of Attorney in favour of Shri A. Abdul Wadood (the managing p .....

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M/s. Allied Megistic Promotors. This can further be visualized from the following facts:- • The GPAs executed as per the Joint Development Agreement on 09.07.2005 are still in force and in fact they were being used even after the final registration of the lands in the name of M/s.OMR Mall Developers P Ltd. • The advance of ₹ 2 00 00000 June 2005 (by M/s.Allied Megistic Promotors) was shown as the advance paid by M/s.OMR Mall Developers P Ltd. • M/s.OMR Mall Developers P Ltd. .....

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ailed to deliver his part ofcontract. Therefore, handing over the possession of the property, based on the Joint Development Agreement on 09.07.2005, to M/s. Allied Megistic Promoters, will amount to part performance under sec.53A of the Transfer of Property Act. The same amounts to transfer within the definition of Clause (vi) of sec.2(47) of the Act. Therefore there was a clear transfer of property on 09.07.2005 (i.e. in the F.Y.2005-06). In fact, the assessee also cleared the transfer of the .....

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06-07. In either case, chargeability of the consideration to tax under the head capital gains (or other heads) does not arise in the financial year 2008-09, relevant to the assessment year 2009-10. Therefore, the Assessing Officer s action of bringing the sale proceeds of the said agricultural lands to capital gains tax, especially in A.Y.2009- 10, is not justified and deleted. Aggrieved by the order of Ld.CIT(A), the Revenue is in appeal before us on this issue. 4. The Ld.D.R submitted that mer .....

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s is fit for taking possession of the project. It is stated here that the consideration could not even be quantified at the time of JDA as the cost of construction relating to the owner could be quantified only at the time of completion of the project. Ld.D.R submitted that the JDA was a conditional agreement for specific performance by the Developer, which they failed to comply with and hence there was no transfer as on the date of JDA. Ld.D.R further submitted that the subject land was agricul .....

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o invoke the provisions of the section 2(27)(v) of the Act. Ld.D.R submitted that there was no transfer in terms of Section 2(47)(v) of the Act in respect of impugned property, though the registration was done on 01.04.2008 which was in continuation of the Joint Development Agreement (JDA) entered by the assessee on 09.07.2005 with the developer. Ld.D.R relied on the decision of the Tribunal, Hyderabad Bench in the case of Ms.K.Radhika Vs. CIT (2011)(13 Taxmann 92) and Hon ble Apex Court in the .....

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k place on 09.07.2005. Subsequent sale deed is only to continuation of this JDA. Further referring to the copy of JDA dated 09.07.2005,ld.A.R submitted that as per clause No.(iv) assessee handed over the possession of entire agricultural land to developer. Further, he submitted that the assessee has received considerable amount of deposits vide clause (ii) of the said deed i.e. JDA. As per clause (vi) of JDA, the time is the essence of the contract agreement and within 30 days, the developer has .....

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essee authorized to enter into the necessary agreements and deal with their portion and allotted of the building with the undivided share in the land in the manner deemed fit by the developer. The assessee, as per clause (34), had also undertaken to execute the register sale deed in favour of the developer and their Nominee conveying to them the Schedule B mentioned therein. According to him, readings of the JDA in whole give the impression that the transfer took place in term of section 2(47)(v .....

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ing or enabling the enjoyment of immovable property also treats as transfer. In this case, the assessees in exchange of 27% of the constructed area, transferred 73% of the land to the builder and handed over the physical possession. Therefore, it is an exchange of property between the parties. In other words, the assessees exchanged 73% of the landed area for 27% of the constructed area. According to A.R, there is a transfer within the meaning of Section 2(47) (i) of the Act on the date on which .....

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has the effect of transferring the landed property for enjoyment of the builder. In other words, the assessees transferred 73% of the land area to the builder for its enjoyment. He stated that there was a transfer on 09.07.2005 within the meaning of Section 2(47)(i) and 2(47)(vi) of the Act. Therefore, the relevant transaction took plâce in the financial year 2005-06 which falls in the assessment year. 5.2 According to ld.A.R, the assessee entered into an agreement and handing over the phy .....

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8 dated 04.05.2012. iv) Mrs.P.A.Sarala in ITA No.1396/Mds./2013 dated 15.05.2015. 6. We have heard both the parties and perused the material on record. The issue for our consideration is with regard to the year in which the capital gains arise for assessment on transfer of land by the assessee along with other person. We have carefully gone through JDA dated 09.07.2005. The following clauses are reproduced for reference:- Clause 1. The Owner have authorized the Devloper to construct at its own c .....

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land described in the-Schedule A hereunder to the Developer or to their Nominiees. If the Developer are able to put up construction more than 2 FSI, the land Owner shall be entitled to get proportionate extra constructed area at 27% for themselves, while the remaining 73% shall be retained by the Developer. 2. The Developer shall allot the Owner s builtup punt area in construction with the Owners and the same will be marked in the plan relating to the project as per the specification prdvided in .....

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e sale proceeds over and above at ₹ 2,350/- per sq.ft. That is, if for example, the Developer sells out of their 73% builtup plint area to any prospective buyer at the rate of ₹ 2500/- per sq.ft. then the Developer shall share (2500-2350= 150/2) ₹ 75/- per sq.ft. 4. The owners agree to execute and register necessary Power of Attorney Jointly in favour of the Nominee of the Developer and the Nominee of the Owner for selling 73% of the Undivided share of the land. morefully descr .....

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ning of a building plan from the municipal and other authorities, STPI, Chennai metropolitan The development authority and corporation of Chennai on such terms and conditions has may be agreed to the developer. The developer may in consultation with the owners, decide on the nature of the building to be constructed. 6. The developer shall commence construction of the new building within 30 days of obtaining sanctions from authorities concerned or from the date on which vacant possession of the s .....

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ivery of the building. In the event of any unavoidable delay in the completion of the building due to any ca use or causes beyond the developer s control the parties hereto shall by mutual consent in writing extend the period of performance. 7. It is agreed that the developer will meet and pay all expenses including the expenses incurred for obtaining the sanctioned building plans, approvals, fee to be paid to various authorities and to apply and obtain service connections for use in the buildin .....

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ontractors and subcontractors, for the purpose of executing the work and development of the schedule A mentioned property. 9. The developer has the right to enter into the necessary agreements and deal with and sell its portion allotted under this agreement as an undivided or divided share of land or as land and building or in any other manner deemed fit by the developer, Subject only to the condition that the developer shall construct and deliver to the owner the 27% share in the built up area. .....

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on from the authorities concerned regarding the plans, sanctions, approvals or permits for construction of any building on the said property or for the provision of any amenities or facilities thereto. 21. The Developer shall be entitled to pay such fees, charges or levies and to furnish securities/ in money or otherwise as and when required by the authorities concerned for any demolition or construction activity to be carried out on the said property or for the provision of amenities or facilit .....

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opment of the same. 27. The Developer is entitled to get the construction work done either by themselves or through / other well known constructors or sub-contractors or agents and shall be entitled to give such constructors whole of the construction or any part or parts of the work or constructions, provided that the same shall not relieve the Developer for their liability under this Agreement or from active supervision work during its progress. The developer may if it chooses, assigns this agr .....

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e B mentioned property or register a Power of Attorney in favour of the Developer for the same subject to clause 4 above. 37. The Owner and the Developer agrees not to change the common name for the project as may be given by the Developer. The Developer agrees to consider the suggestion of the Owners in this regard. 40. The Owners agree to refund the security deposit of 120 lakh to the Developer within two weeks of the Owner being intimated about completion and that the respective space allotte .....

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n by the assessee vide this JDA dated 09.07.2005 and also authorized the developer to get necessary approvals for the purpose of construction. The assessee also received substantial amount of ₹ 120 lakhs as refundable deposit. The time is essence of the contract within 30 days from the date of giving vacant position of the property. The Developer has to get the permission for construction of the property. After getting permission for construction in the said property, the developer has to .....

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ssee. 6.1 We have gone through the provisions of the section 2(47) of the Act which defines transfer . Under the common law, Transfer of immovable property valuing more than 100 rupees would be made only by executing registered sale deed. However, under Income Tax Act, Sec.2(47) defines Transfer in relation to capital asset. For the purpose of convenience we are extracting Sec.2(47) of the Act. S. 2(47) transfer , in relation to a capital asset, includes,- (i) the sale, exchange or relinquishmen .....

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of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property : Explanation 1.- For the purposes of sub-clauses (v) and (vi), immo .....

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rwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India ; 6.1 It is an admitted fact that in this case for assessment year 2006-07, assessee disclosed the transactions as a Note in her return of income stating as follows:- Note: The assessee has entered into a joint development agreement with Allied Magistic Promoters during the assessment .....

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that assessment year i.e.2006-07, it is said to be accepted by the Department that as there was no transfer of capital asset as an agricultural land. It is not the case of the Department that it was subject to any rectification or revision subsequently. Unless the Department disturbed the assessment for assessment year 2006- 07, the Department has precluded from treating the transfer of same land as a transfer in terms of Sec.2(47)(v) of the Act in the assessment year 2009- 10 for whatever reas .....

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sessee in the form of refundable deposit and he has shown willingness to perform his part of duty to the assessee and there is no question of going back from his consent to act as builder. This view of ours is fortified by the order of Tribunal in the case of ITO Vs. Shri Bakthavatsalam Gowtham in ITA No.1614/Mds./2010 dated 04.05.2012. Thus, we do not find any error in the findings of the Ld.CIT(A) wherein he has observed that there is no transfer in the assessment year 2009-10 and the same is .....

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ctivity was carried out during the period from the date of agreement to the execution of sale of the property by the assessee. He relied on the order of ld. Assessing Officer. On the other hand, ld.A.R relied on the order of Ld.CIT(A). 6.4 We have heard both the parties and perused the material on record. Regarding nature of land whether it is agricultural land or not. It is always depend upon the facts of the case. In the present case, originally the asset was acquired by the trust consisting o .....

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on a consideration of all of them, a process of evaluation and the inference has to be drawn on a cumulative consideration of all the relevant facts. It may be stated here that not all the factors or tests would be present or absent in any case and that in each case one or more of the factors may make appearance and that ultimate decision will have to be reached on a balanced consideration of the totality of the circumstances. The expression agricultural land is not defined in the Act, and now, .....

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which, the question whether the land is an agricultural land or not has got to be decided or answered. We reproduce the said 13 tests as follows: 1. Whether the land was classified in the Revenue records as agricultural and whether it was subject to the payment of land revenue? 2. Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? 3. Whether such user of the land was for a long period or whether it was of a temporary character or by any of .....

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nd if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser and/ or alternative user was of a permanent or temporary nature? 7. Whether the land, though entered in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the .....

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of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a nonITA agriculturist? If so, whether the sale or intended sale to such non-agriculturists was for non-agricultural or agricultural user? 12. Whether the land was sold on yardage or on acreage basis? 13. Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing .....

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that the term agriculture is thus understood as comprising within its scope the basic as well as subsequent operations in the process of agriculture and raising on the land all products which have some utility either for someone or for trade and commerce. It will be seen that the term agriculture receives a wider interpretation both in regard to its operation as well as the result of the same. Nevertheless there is present all throughout the basic idea that there must be at the bottom of its cul .....

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Bench of the Hon ble Supreme Court in the aforesaid case observed that the entries in Revenue records were considered good prima facie evidence. 6.7 The Hon ble Gujarat High Court in the case of Dr. Motibhai D. Patel vs. CIT (1982) 27 CTR (Guj) 238 : (1981) 127 ITR 671 (Guj) referring to the Constitution Bench of the Hon ble Supreme Court had stated that if agricultural operations are being carried on in the land in question at the time when the land is sold and further if the entries in the Re .....

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presumption arising from the entries of the Revenue records are rebutted. 6.8 The Hon ble Bombay High Court in the case of CWT vs. H. V. Mungale (1983) 32 CTR (Bom) 301 : (1984) 145 ITR 208 (Bom) held that the Hon ble Supreme Court had pointed out that the entries raised only a rebuttable presumption and some evidence would, therefore, have to be led before taxing authorities on the question of intended user of the land under consideration before the presumption could be rebutted. TheCourt furt .....

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he Revenue records, but also it was subjected to the payment of land revenue and that it was actually and ordinarily used for agricultural purpose at the relevant time. 6.9 We may also refer to the case of CIT vs. ManilalSomnath (1977) 106 ITR 917 (Guj), wherein the Division Bench of the Hon ble Gujarat High Court observed that the potential non- agricultural value of the land for which a purchaser may be prepared to pay a large price would not detract from its character as agricultural land on .....

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nsaction amounted to an adventure in the nature of trade. In other words, the price paid is not decisive to say whether the land is agricultural or not. 7.1 We may refer to a judgment of the Hon ble Madras High Court in the case of CWT vs. E. Udayakumar (2006) 284 ITR511 (Mad) where the Hon ble Madras High Court has referred to the decision of the Hon ble Punjab & Haryana High Court in the case of CIT vs. Smt. Savita Rani (2004) 186 CTR (P&H) 240 : (2004) 270 ITR 40 (P&H) and has obs .....

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sold 15 karnals, 18 marlas of land out of her share in 23 karnals, 17 marlas land during the financial year 1990-91, relevant to the asst. yr. 1991-92, the sale was effected by three registered sale deeds. While filing her return of income, she claimed exemption from levy of capital gains under s. 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land within two years. The AO rejected the claim of the .....

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claim. Even the records of the IT Department showed that the assessee had declared agricultural income from this land in her returns for the preceding two years. The land being located in commercial area or the land having been partially utilised for non-agricultural purposes or that the vendees had also purchased it for nonagricultural purposes, were totally irrelevant consideration for the purposes of application of s. 54B. 10. It is seen from the aforesaid decision that the agricultural land .....

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ly irrelevant." 7.2 Adverting to the facts of the present case, the land in question is classified in the Revenue records as agricultural land and there is no dispute regarding this issue and actual cultivation has been carried on this land and income was declared from this land in the return of income filed by the assessee for the earlier years as agricultural income. It is also an admitted fact that the assessee has not applied for conversion of this agricultural land for non-agricultural .....

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e converted in accordance with the provisions of State Government. If by a Government Notification, the nature and character of land changes from agriculture into non-agriculture then there is no question of conversion of this land for non- agricultural purposes by the Revenue authorities concerned. The land owners are required to apply to the concerned Revenue authorities for the purpose of conversion of the agricultural land into nonagricultural land and there is no automatic conversion in thi .....

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to put the land into use for non-agricultural purposes would not change the character of the agricultural land into non-agricultural land at the relevant point of time when the land was sold by the assessee. It is also an admitted position that the assessee had not applied for conversion of the land in question into nonagricultural purposes and no such permissions were obtained from the concerned authority. In the Revenue records, the land is classified as agricultural land and has not been chan .....

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ce in support of the fact that the assessees have put the land in use for non- agricultural purposes has been brought on record. The nature of the crop and the person who cultivated the land are duly mentioned in the assessment order shows that at the relevant point of time the land was used for agricultural purposes only and nothing is brought on record to show that the land was put in use for non-agricultural purposes by the assessees. In view of the decision of the Hon ble High Court in the c .....

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nough to conclude that the user of the same had been altered with passage of time. Thus, the fact that the land in question in the instant case is bought by Developer cannot be a determining factor by itself to say that the land was converted into use for non-agricultural purposes. 7.5 Recently the Karnataka High Court in the case of CIT vs. Madhukumar N. (HUF) (2012) 78 DTR (Kar) 391 held as follows: "9. An agricultural land in India is not a capital asset but becomes a capital asset if it .....

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its, which is covered by Clause (a) to section 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this Clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a Capital Asset. 11. In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, Clause (a) to section 2(14][iii] of the A .....

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his very reason, we find the conclusion arrived at by the Tribunal is nevertheless the correct conclusion." 7.7 Further the Kolkata Bench of the Tribunal in the case ofDCIT vs. ArijitMitra (48 SOT 544) (Kol) held as follows: "7. From the above, it is clear that agricultural land situated in areas lying within a distance not exceeding 8 km from the local limits of such Municipalities or Cantonment Boards are covered by the amended definitions of capital asset , if such areas are, having .....

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ntral Government from local limits i.e. the outer limits of any such municipality or cantonment board etc., still continues to be excluded from the definition of capital asset . Accordingly, in view of sub-clause (b) of section 2(14)(iii) of the Act even under the amended definition of expression capital asset , the agricultural land situated in rural areas continues to be excluded from that definition. And as in the present case, admittedly, the agricultural land of the assessee is outside the .....

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on very jurisdiction of the issue is quashed. The cross objection of the assessee is allowed." 7.8 It was held in the case of CIT vs. Manilal Somnath (106ITR 917) as follows: Under the Income-tax Act of 1961, agricultural lend situated in India was excluded from the definition of " capital asset" and any gain from the sale thereof was not to be included in the total income of an assessee tinder the head "capital gains". In order to determine whether a particular land is .....

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e question would, therefore, depend on the facts of each case. The assessee, Hindu, undivided family, had obtained some land on a partition in 1939. From that time, up to the time of its sale, agricultural operations were carried on in the land. There was no regular road to the land and it was with the aid of a tractor that agricultural operations were being carried on.The land was included within a draft town planning scheme. The assessee got permission of the Collector to sell the land for res .....

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he land had been used for agricultural purposes for a long time and nothing had happened till the date of the sale to change that character of the land. The potential nonagricultural value of the land for which a purchaser may be prepared to pay a large price would not detract from its character as agricultural land at the date of the sale. The land in question was, therefore, agricultural land. 7.9 Further the word "Capital Asset is defined in Section 2(14) to mean property of any kind hel .....

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h the relevant figures have been published before the first day of the previous year; or (b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette; 8. It is very clear from the above that the g .....

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ined under clause (b) wherein it has been clearly provided that the authority referred to in clause (a) was only municipality. 8.1 We also perused the meaning of the term local authority as referred in section 10(20) of the Act. (20) the income of a local authority which is chargeable under the head "Income from house property", "Capital gains" or "Income from other sources" or from a trade or business carried on by it which accrues or arises from the supply of a co .....

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entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or (iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924); 8.2 It is also evident from the Memorandum explaining the provisions of Finance Act, 1970, whereby s. 2(14) was amended so as to include the agricultural lands located within the jurisdiction of a municipality in the definition of the expression 'Capital Asset'. The relevant portion of the sai .....

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jurisdiction of a municipality or cantonment board and which has a population of not less than ten thousand persons according to the last preceding census for which the relevant figures have been published before the first day of the previous year. The Central Government has been authorised to notify in the Official Gazette any area outside the limits of any municipality or cantonment board having a population of not less than ten thousand up to a maximum distance of 8 kilometres from such limi .....

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so beyond the distance notified by the Central Government from the limits of any such municipality or cantonment board, will continue to be excluded from the term "capital asset". 8.3 Further it is nobody's case that the property falls within any area which is comprised within the jurisdiction of a municipality or cantonment board or which has a population of not less than 10,000 according to the last preceding Census of which the relevant figures have been published before the fir .....

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may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette. 8.4 We have carefully gone through the notification issued by the Central Government u/s. 2(1A)(c) proviso (ii)(B) and 2(14)(3b) vide No. 9447 (F. No. 164/(3)/87/ITA-I) dated 6th January, 1994 as amended by notification No. 11186 dated 28th December, 1999. In the schedule annexed to the notification dated 6.1.1994, entry .....

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clearly clarifies that agricultural land situation in rural areas, areas outside the Municipality or cantonment board etc., having a population of not less than 10,000 and also beyond the distance notified by Central Government from local limits i.e. the outer limits of any such municipality or cantonment board etc., still continues to be excluded from the definition of 'capital asset'. Accordingly, in view of sub-clause (b) of section 2(14)(iii) of the Act even under the amended definit .....

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within the meaning of this section. Hence, no capital gain tax can be charged on the sale transaction of this land entered by the assessee. This is supported by the order of Kolkata Bench of this Tribunal in the case of ArijitMitra (cited supra), Harish V. Milani (supra) and M.S. SrinivasNaicker vs. ITO (292 ITR 481) (Mad). By borrowing the meaning from the above section, we are not able to appreciate that the land falls within the territorial limit of any municipality without notification of Ce .....

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the nature of trade. Though intention subsequently formed may be taken into account, it is the intention at the inception is crucial. One of the essential elements in an adventure of the trade is the intention to trade; that intention must be present at the time of purchase. The mere circumstances, that a property is purchased in the hope that when sold later on it would leave a margin of profit, would not be sufficient to show, an intention to trade at the inception. In a case where the purcha .....

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