TMI Blog2021 (9) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 2(14)(iii) of the Act. As stated on behalf of assessee, the development authority i. e. GUDA is a creation of statute. It cannot be equated with Municipal Corporation in the light of the ratio of decisions of Hon ble Kerala High Court in the case of Murali Ldge [ 1991 (6) TMI 38 - KERALA HIGH COURT] and Smt. T. Urmila [ 2012 (12) TMI 610 - ITAT HYDERABAD] as rightly pointed out on behalf of the assessee. Hence the impugned land falls outside the ambit of definition of capital asset provided in Section 2(14) of the Act. Consequently, the capital gains arising on sale of agricultural land which is not a capital asset cannot be brought to charge under s. 45 of the Act. We thus find merit in the plea of the assessee for exemption of capital receipt from ambit of taxation.Once, it is found that the capital gains arising from sale of agricultural land itself is not susceptible to chargeability, the claim of deduction under s.54B becomes infructuous and therefore not adjudicated upon. - Decided in favour of assessee. - I.T.A. No. 1356/Ahd/2017 - - - Dated:- 31-8-2021 - Shri Pradip Kumar Kedia, Accountant Member And Smt. Madhumita Roy, Judicial Member For the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO accordingly held that capital gains arising on sale of agricultural land situated within the Municipal limits are not excluded from the definition of capital asset and is thus chargeable to tax. Further, the exemption claimed by the assessee under s. 54B of the Act to the tune of ₹ 2,11, 00, 000/- was restricted to ₹ 20 Lakhs on the basis of actual payments made by the assessee against the agreed consideration. 4. Aggrieved, the assessee preferred appeal before the CIT(A). 5. The CIT(A), however, did not find merit in the plea raised on behalf of the assessee for exclusion of the agricultural land from the definition of capital asset . The CIT(A) also endorsed the action of the AO in restricting the exemption to the extent of ₹ 20 Lakhs stated to be invested by the assessee for purchase of another agricultural land. 6. Further aggrieved, the assessee preferred appeal before the Tribunal. 7. In the course of hearing, the learned counsel for the assessee made extensive arguments to support its plea that the agricultural land parcel situated at Adalaj did not fall within 8 kilometers of the Municipal limits in the peculiar fact situation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Authority (GUDA) was created on 12. 03. 1996 under The Gujarat Town Planning Urban Development Act, 1976 with a view to carry out sustained planned development of the area falling outside the periphery of Gandhinagar Notified Area. A Municipality or Municipal Corporation is Constitutional body, while a Development Authority is a creation of statute. The role of Municipality or Municipal Corporation is all- together different from Development Authority. GUDA does not have elected representatives but only nominated representatives by the Government further it does not provide civic amenities etc. Moreover, it does not have power to levy taxes. Later, on 16. 03. 2010 consequent to the judgment delivered by the Hon'ble Gujarat High Court in 2009, an elected body administrating Gandhinagar was set up as Gandhinagar Municipal Corporation . Similarly, Ahmedabad Urban Development Authority (AUDA) is also not termed as ' municipality' or ' municipality corporation'. It is held by Hon'ble Kerala High Court in the case of CIT v/ s Murali Lodge 194 ITR 125 (Ker) that only those local authorities, township, etc. can be treated as municipality within m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Appellant. The brief facts of present case are that Appellant alongwith co- owners had sold land at Adalaj, Dist. Gandhinagar for ₹ 4, 12, 50, 000/- and claimed that such land is agricultural land situated beyond 4 kms from Gandhinagar Municipal Corporation (CMC). The AO has taxed gain arising on sale of above land as income from long term capital gain and agricultural land exigible to capital gains tax mainly on the reason that land sold was transferred from category of ' new condition' to ' only agriculture purpose and eligible for premium' and also gathered that the population of village Adalaj was 11, 957 people as was gathered from Taiati-Cum-Mantri, u/ s 133 (6) of the Act. On this basis, the AO concluded that land sold by Appellant is not a capital asset Thus, the AO has taxed income from long term capital gain of ₹ 1, 33, 33, 645/-. On the other hand, the Appellant has referred to provisions of Section 2 (14)(iii) of the Act and stated that CBDT has issued Notification No. 9447 dated 6th January, 1994 specifying the limit of 4 kms of Gandhinagar Municipal Corporation. The case of the Appellant is squarely covered by the decision of Hyderabad T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon'ble Ahmedabad Tribunal in case of Akash Deep Farm Pvt Ltd vide ITA No: 2138/Ahd/ 2012 dated 11/ 08/ 2015 as under: 10. Next objection of the AO was that the State Government has enhanced the municipal limit in 2006 and the distance is to be measured from new boundary of the Ahmedabad Municipal Corporation Limit, AMC limit was extended upto Sarkhej since 2006. The ld. CIT(A) has examined this aspect, and has observed that perusal of sub- clause (b) of section 2(13)(iii) would indicate that the municipal limit is to be taken from the area which has been notified by the Central Government in its gazette notification. Central Government has notified the area on 6. 1. 1993, and from that notification, the agriculture land of the ITA No. 2564 and 2138/Ahd/ 2012 assessee was situated beyond a distance of 8KMs. This aspect has been lucidly considered by the ld. CIT(A) in the finding extracted supra. We do not see any reason to interfere in this finding. In view of the above discussion, we do not find any merit in the appeal of the Revenue. It is dismissed. The AO has contended that the land was situated within 100 mtrs from Zundal Circle of AMC limit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monstrated that the land parcels situated as Adalaj does not fall within the meaning of expression Municipality or Municipal Corporation and therefore falls in exception provided in sub-clause (a) to Section 2(14)(iii) of the Act. As stated on behalf of assessee, the development authority i. e. GUDA is a creation of statute. It cannot be equated with Municipal Corporation in the light of the ratio of decisions of Hon ble Kerala High Court in the case of Murali Ldge (supra) and Smt. T. Urmila (supra) as rightly pointed out on behalf of the assessee. The provisions regarding aerial measurement of distance is applicable prospectively after the amendment by way of Finance Act, 2013. We also take affirmative note of the significant plea on behalf of the assessee that distance of 8 kms. from the Municipality has to be seen from the date of notification dated 06. 11. 1994 in the light of judicial pronouncements quoted above. 13. Hence, on objective analysis of the facts and law enunciated by the judicial pronouncements, we find that impugned land falls outside the ambit of definition of capital asset provided in Section 2(14) of the Act. Consequently, the capital gains arising on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
