TMI Blog2016 (6) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Coordinate Bench was upheld by the Hon'ble Hyderabad High Court when on an appeal by the Revenue in T. Urmila s case was dismissed. That in the instant case, the land sold by the assessee is within the HADA and therefore, the character of the land is agricultural land - Decided against revenue. - ITA No. 1838/Hyd/2013 - - - Dated:- 29-6-2016 - Shri B. Ramakotaiah, Accountant Member And Shri Partha Sarathi Chaudhuri, Judicial Member For the Revenue: Shri M. Sitaram, DR. For the Assessee : Shri S. Rama Rao. ORDER Per Shri Partha Sarathi Chaudhuri, J.M. This appeal is preferred by the Revenue against the order of the learned CIT (A)-V Hyderabad dated 25.09.2013 for the relevant A.Y 2009-10. Additional grounds raised by the Revenue read as under: 1. The learned CIT (A) ought to have appreciated meaning of agricultural land in terms of the decision rendered by the Apex Court in the case of Raja Benoy Kumar Sahas Roy 32 ITR 466 (dt. 23.05.1957) and in the case of Sarifabibi Mohd Ibrahim 204 ITR 631 (1993). 2. The learned CIT(A) ought to have called for the inputs to claim to examine whether there are any agricultural activities we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the return of income and details furnished by the assessee, the assessee has sold the following agriculture lands situated at Mamidapally village, Saroornagar Mandal, RR Dist. The details of the purchase cost and sale consideration are furnished hereunder: Document No Total consideration Cost of purchase Profit 4767/2008-15 Guntas 20,62,500 7,50,000 13,12,500 4197/2008-1.2 Acre 82,50,000 30,00,000 52,50,000 4766/2008-12 Guntas 16,50,000 6,00,000 10,50,000 The Agricultural lands sold by the assessee during the previous year are purchased in the year 2006 i.e. within the three years period. Therefore, the transactions attract short term capital gains. Whereas, in the ROI filed by the assessee for the A.Y 2009-10, the assessee has not admitted the Short Term Capital Gain on the sale of above mentioned agricultural lands. When the issue is confronted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds situated at Mamidipally Village under Saroornagar Mandai fall under the GHMC limits. The said GO pertains to a Notification on the list of Industries that are prohibited in certain villages falling in the downstream of Osman Sagar and Himayatsagar lakes. Hence it is respectfully submitted that the inference drawn by the Assessing Officer that the Village Mamidipalli falls under the Muncipal limits is incorrect. The said Village Mamidipalli under Saroornagar Mandai still continues to be a Grampanchayath and does not fall under any municipality nor falls within 8 Kms radius of any Muncipality. In support of this contention the Assessee is enclosing herewith a Copy of Memo issued by the Deputy Collector MRO, Saroornagar Mandai for your kind perusal. The Assessee further humbly submits the following facts for your kind consideration - (a) The Learned Assessing Officer has not disputed the nature of land as 'Non Agriculture lands. (b) The Learned Assessing Officer has referred and relied on a GO which tot relevant to bring the lands sold by the Assessee into the ambit of the definition of Capital Asset . (c) The learned AO further refused to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the limit of HADA and therefore, was a capital asset as per Sec. 2(14) of the Act, liable to capital gains tax u/s 45 thereof. The Government notification regarding constitution of Local Authority by the name HADA and inclusion of Vii/age Mamidaplly in the limit thereof, the status of the land was that of a capital asset. It can be seen that by way of the said notification, the area had been declared as a special Development Area' in and around the Samshabad International Airport, for which is Special Planning control, high level of infrastructural and managerial inputs, status of Special Investment Zone etc. had been specified. As per the definition of the term 'Capital Asset' as given in the Sec.2 (14) of the Act, the undersigned feel that in the appellant's case, the land was very much with the limits of the HADA, which is a Local Authority, comprising of 89 Villages from 7 Mandals, surrounding the International Airport and having a population of 1.54 Lakh as per Census, 2001. Further HADA is a Governmenl notffied Local Authority and is a Municipality within the meaning of Section 2 (14) (iii) (a). It is pertinent to mention here that in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SB as members. As per the GO Ms. No 352 the population census of HADA is stated to be as follows which reveals the fact that the population of the Village Mamidipalli is only 3494 which is far less than the prescribed limit of 10,000 as mentioned u/s 2(14) of the Act. S. No Village Population census year-wise 1981 1991 2001 1 Raviral 2219 2921 3232 2 Nadergul 4935 6089 5534 3 Narkhuda 2520 3234 2616 4 Pedda Shapur 2466 3144 2616 5 Jukal 1709 2043 1355 6 Palmakole 3351 4757 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he residents of the area coming within the jurisdiction of the municipality. The chairman and vice-chairman of the municipality are elected by the members of the council. The commissioner is appointed by the Government in consultation with the council. It is the duty of the commissioner to carry into effect the resolutions of the council unless it be that the said resolution is suspended or cancelled by the Government. The municipality contemplated under section 2(14)(iii) (a) must be one which satisfies the above requirements. Hence all the local authorities must satisfy the above requirements to be known as a 'Municipality'. HADA is basically and essentially a creation of the Act of State Legislature consisting of persons appointed by the State Government on salary basis of Andhra Pradesh Urban Areas (Development) Act, 1975. The Board Members are not elected by the people and there is no element of people choice being represented in any manner in the constitution of the Board. The Board functions strictly under the supervision and control of the State Government and does not hold or possess a local fund . Being so, HADA cannot be called as a local authority. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical approval for constructions development of layouts. The Agriculture Land at Mamidpalli does not fall 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 since as per the latest Census as per the GO the population of the Village is only 3494 which have been duly published in the GO referred above. Hence the land does not fall in sub-clause (a) of section 2(14)(iii) of the Act as me land is outside of any municipality including GHMG. The Land sold by Assessee also does not fall under clause (b) of section 214)(iii) which prescribes that any area within such distance, not being more than 8 km from the local limit of any municipality or cantonment board as referred to in the said sub-clause as the lands covered under HADA are more than 21 Kms from the Municipal areas i.e.GHMC of Hyderabad. The learned Assessing Officer has nowhere disputed the fact that the lands sold by the AO are not Agriculture Lands except for the fact that the Assessee has sold the Lands to a Company M/s Padmaja Developers Pvt Ltd. It is humbly submitted that the Assessee has not converted the into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad Bench A in the case of Smt. T. Urmila vs. Income Tax Officer Ward 6(2) in appeal No.398/Hyd/2012 for the A.Y 2008-09, dated 12th December, 2012 which has held that lands falling within the HADA cannot be construed as land within the Municipal Limits. Accordingly the learned CIT (A) allowed relief to the assessee declaring the said land as agricultural land and that they do not fall within the capital asset as defined u/s 2(14)(iii) of the Act. Being aggrieved, the Revenue has brought out this appeal before us. The learned DR relied on the order of the AO, whereas the learned AR submitted various submissions as done before the first appellate authority and relied on the order of the CIT (A). The learned AR further pointed out before us the decision of the Hyderabad Bench A in the case of Smt. T. Urmila vs. Income Tax Officer Ward 6(2) in appeal No.398/Hyd/2012 for the A.Y 2008-09, dated 12th December, 2012. 8. We have heard the contentions of the parties herein, perused the case records and on the facts and circumstances arrive at our considered view that in this case the AO has considered HADA as a govt. notified local authority and concluded that it is a Municipality wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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