TMI Blog2016 (9) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ected from the National Stock Exchange. The ld.CIT(A) has made reference to the letter of Additional CIT, Range-I, Ahmedabad dated 27.7.2012. According to the ld.CIT(A), in this letter the Addl.CIT has brought to his notice that Goldstar Finvest P.Ltd. was not registered as member of the Stock exchange. The contract notes are fictitious, SEBI registration of Goldstar Finvest P.Ltd. is IN241146233 and the SEBI has canceled the registration on January, 20, 2005. On the other hand, case of the assessee is that it has made payments through account payee cheque. It has received payment through account payee cheque. Broker has issued contract notes. The assessee has produced copy of the ledger account maintained by him as well by the broker. The assessee has produced all details exhibiting number of shares, date of purchase and date of sale. The AO has not collected any information from the broker. If the AO has made any error in reference of particulars or details about the broker or the assessee, then the NSE will not be in position to give complete details. We find that SEBI registration quoted by the assessee in contract note of the broker is 230932431/23-10777. The PAN of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the municipal limit, and therefore, gain arisen to the assessee on sale of this land is not taxable as per section 2(14) of the Income Tax Act, 1961. 3. Brief facts of the case are that the assessee has filed its return of income electronically on 30.9.2009 declaring total income at ₹ 1,10,350/-. The case of the assessee was selected for scrutiny assessment, and notice under section 143(2) dated 23.8.2010 was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee had earned a profit of ₹ 3,99,63,932/- on sale of land. The ld.AO has noticed the details in tabular form exhibiting name of village where the land was situated and survey no, date of purchase, purchase amount, date of sale, sale consideration and the gain. Such details are produced at page no.3 of the assessment order, which read as under: *transaction at Sr.No. 2 is Offered to tax as Long term capital gains i.e ₹ 79,26,870/- (after indexation) From the above lucid chart it is seen that the assessee has made a total profit of ₹ 3,99,65,826/- from sale of the lands situated at Kaneti and Telav villages of Sanand Taluka of Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural lands, Ahmedabad municipal Corporation limits have already been expanded and therefore from the expanded municipal limit, the agricultural lands situated in Telav Village were within 8 km and therefore the same were capital asset and taxable under section 45. As regards agricultural land situated in Kaneti Village, assessing officer did not object that the same was situated beyond 8 km road distance from Ahmedabad municipal limit. As regards the issue of air distance or road distance from municipal limits, assessing officer could not counter the judicial decisions relied upon by the appellant except mentioning that these decisions were not accepted by the Department. Considering the entire submissions and reports referred earlier, this issue can be divided in two parts-(l) while computing distance from municipal limit, which distance- air distance or road distance to be considered. (2) Which municipal limit should be considered for computing distance from agriculture land- municipal limit on the date of sale or municipal limit on the date of issue of the notification by the government or municipal limit as on date. As regards the first part of the issue, appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TION UNDER SECTION 2(IA)(C), PROVISO. CLAUSE (II)(B) AND SECTION 2(14)(III)(B): URBANISATION OF AREAS Notification No. [SO 9447J (File No. 164/3/87-ITA.I), dated. 6-1- 1994 Whereas a draft notification was published by the Central Government in exercise of the powers conferred by item (B] of clause (ii) of the proviso to sub-clause (c] of clause (1A], and item (b] of sub-clause (iii) of clause (]4j, of section 2 of the Income-tax Act, 196I (43 of 1961J, in the Gazette of India, Extraordinary, Part II, section 3, subsection (ii], dated 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 February 13, 1991; And whereas the objections and suggestions received from the public on the said draft notification have been conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Ahmedabad Municipal Corporation was very restricted and form that limit, both the villages in which agricultural lands were situated are much beyond 8 km distance. Since notifications with regard to Ahmedabad municipal Corporation limits are available from which assessing officer can work out the distance of these agricultural lands. In view of the clear provisions in the notification referred earlier, it is held that the municipal limits relevant for computing distance is the municipal limit existing on the date of issue of this notification i.e. 6-1-1994. Assessing officer is therefore directed to compute the road distance of the agricultural lands from the municipal limits of AMC as on 6-1 -1994. If the distance is within 8 km, appellant is liable for capital gains and if the distance is beyond 8 km, the agricultural lands sold will be outside the purview of capital asset and hence no capital gains can be charged on the same. This ground is accordingly disposed off. 6. Before us, limited dispute is whether the distance for identifying the geographical location of the agriculture land is to be taken by road or by aerial. Second fold of dispute is whether the municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant to take note of the Board Circular bearing No.17/2015. It reads as under: CBDT CIRCULAR NO -17/2015, Dated: October 06, 2015 Subject:- Measurement of the distance for the purpose of section 2(14)(iii)(b) of the Income-tax Act for the period prior to Assessment year 2014-15 Agricultural Land is excluded from the definition of capital asset as per section 2(14)(iii) of the Income-tax Act based, inter-alia, on its proximity to a municipality or cantonment board. The method of measuring the distance of the said land from the municipality, has given rise to considerable litigation. Although, the amendment by the Finance Act, 2013 w.e.f. 1.04.2014 prescribes the measurement of the distance to be taken aerially, ambiguity persists in respect of earlier periods. 2. The matter has been examined in light of judicial decisions on the subject. The Nagpur Bench of the Hon. Bombay High Court Vide order dated 30.03.2015 in ITA 151 of 2013 in the case of Smt. Maltibai R Kadu has held that the amendment prescribing distance to be measured aerially, applies prospectively i.e. in relation to assessment year 2014-15 and subsequent assessment year. For the period prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed the pending work, only then, he immediately got the signature of the directors and forwarded to the office of the authorized representatives. But by that time, the appeal has become time barred by nine days. The ld.DR, on the other hand, contended that there is no plausible explanation at the end of the assessee. 12. We have duly considered rival contentions and gone through the record. Though the appeal was time barred by 9 days, but to our mind, the assessee has explained as to how such delay has happened. There is no deliberate attempt at the end of the assessee to make the appeal time barred, and to our mind, the assessee will not gain anything by adopting any dilatory strategy. The delay of nine days on account of human negligence could have happened. Therefore, we condone the delay and proceed to decide the appeal on merit. 13. Solitary grievance of the assessee in its appeal is that the ld.CIT(A) has erred in confirming the disallowance of loss claimed by the assessee at ₹ 77,64,387/-. 14. Brief facts of the case are that the assessee has claimed loss of ₹ 77,64,387/-. It was contended by the assessee that it has carried out Future Option (F O) tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not registered as member of the exchange and the contract notes issued by it are fictitious because SEBI registration number mentioned on contract notes are different. The said Gold Star Finvest P Ltd was member with interconnected stock exchange and its registration was cancelled by SEBI on January 20, 2005. In the light of these facts it is very clear that Gold Star Finvest P Ltd was not a registered broker during the year and therefore it was not entitled to trade contracts on behalf of the appellant. It was further certified that contract notes issued were fictitious. In the light of these facts, there remains no doubt about the nature of loss claimed by the appellant. When the person issuing contract notes is not even registered member of exchange, there is no question of any transaction done by it on behalf of the appellant. Contract notes issued by the said party are fictitious on the basis of which no loss can be allowed. Appellant's submission in this regard cannot counter the facts emerged from the communication from NSE Ltd. Considering these facts, assessing officer is justified in treating the loss claimed on F O transactions fictitious. The disallowance of such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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