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TMI Blog2022 (5) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in confirming erroneous action of ld AO by classifying the agricultural land as non agricultural land and consequently, charging capital gain of Rs. 7,23,742/- arising on sale of such agricultural land as an taxable capital gain though fact of the matter is that the said land is situated outside limit of municipality. 1.02 Your appellant prays Your Honour to hold so now and treat the classification of land as an agricultural land and as a result, delete the addition holding it to be exempt from tax. 2.00 ADDITION U/S 44AD OF THE ACT. 2.01 On the facts and circumstances of appellant's case as well as in law, the ld AO has erred in taxing appellant at 12% of gross receipt as against 8% as prescribed u/s 44AD of the Act. 2.02 Your appellant prays Your Honour to hold so now direct Id AO to treat income at 8% as prescribed u/s 44AD of the Act. 2.00 YOUR APPELLANT CRAVES LEAVE TO ADD, AMEND AND / OR DELETE ALL OR ANY GROUND(S) TAKE HEREINABOVE. ITA No. 459/Ahd/2019 A.Y. 2013-14 "1.00 ADDITION ON ACCOUNT OF CAPITAL GAIN ARISING ON SALE OF LAND BY EVALUATING IT AS AN NON AGRICULTURAL LAND. 1.01 On the facts and circumstances of appellant's case as well as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural land and applied the provisions of section 50C of the Act. Accordingly, the AO made an addition of Rs. 7,23,742/- as a LTCG and Rs. 6,88,065/- as STCG in respect of 2 properties applying the provisions of section 50C of the Act. In appeal, Ld. CIT(A) gave part relief to the assessee and after taking into consideration the submissions of the assessee with regard to distance of the 2 properties in question from the municipal limits, he deleted the STCG with respect to land sold in village Bhavpura by holding that this land falls outside the VMC municipal limits, as can be seen from Google Maps. However, Ld. CIT(A) confirmed the addition of Rs. 7,23,742/- as LTCG in respect of land sold in village Bhaniyara on the ground that as per Google Maps, the land was situated within 8 km from VMC limit. The Ld. CIT(A), by granting the relief made the following observations: "2.3.1 I have considered the facts of the case and gone through the assessment order, remand report of the A.O. and submission of the appellant. The A.O. has made addition of Rs. 7,23,742/- as Long Term Capital Gain and made addition of Rs. 6,88,065/- as Short Term Capital Gain u/s 2(14) on account of sale of agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) in his order. 5. We have heard the rival contentions and perusal the material on record. In our view, whether the land sold in village Bhaniayara is beyond the prescribed limit of 8 km is a question of fact, to be decided by the competent authority. Now the Income Tax Act does not specify as to who is the competent authority to decide/adjudicate upon the issue of distance of agricultural land and the municipality. In the case of Rita Rajkumar Kochhar v. ITO [2017] 81 taxmann.com 47 (Mumbai)[08-03-2017], the tribunal accepted the assessee's contention that Divisional Engineer, PWD, Panvel is the competent authority to determine the distance of the land from the municipal limits. In the case of Commissioner of Income Tax, Faridabad v. Lal Singh [2010] 8 taxmann.com 114 (Punjab & Haryana), the Punjab and Haryana High Court accepted the contention that the village Tehsildar working under the State Government, is competent to measure the distance of the land from the municipal limits. In the case of CIT v. Smt. Sakunthala Rangarajan [2016] 74 taxmann.com 94 (Madras), the High Court held that for the purpose of Section 2(14)(iii)(b) of the Income Tax Act, certificates of the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against him. Also, the Ld. CIT(A) should also consider the evidence placed by the assessee on record i.e. report of "Talati cum Mantri" regarding certificate of distance of impugned land from VMS and give his observations as to why the report placed by the assessee in support of his contention cannot be relied upon or whether there is any factual inaccuracy in such report. It may be important to point out, that for the impugned assessment year, it has been clarified by the CBDT vide Circular No.17/2015 [f.no.279/misc./140/2015- itj] dated 6-10-2015 that that the distance between the municipal limit (VMC in this case) and the agricultural land is to be measured having regard to the shortest road distance. The relevant extracts of the Circular are reproduced for ready reference: 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 measuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in relation to this ground of appeal are that during the year under consideration, there was a cash deposit of Rs. 58,89,000/- in the assessee's bank account held with Cosmos Bank. Before the AO, the assessee submitted that the above receipts were on account of contract receipts for construction of temple and the assessee has offered 8% of such receipts as his income u/s 44AD of the Act. The assessee submitted that he has not maintained any books of accounts. However, the AO held that looking into the frequency and depth of the transactions made by the assessee, AR has agreed for an addition of 12% of the receipts offered amounting to Rs. 7,06,680/-. The assessee did not file an appeal against this addition before Ld. CIT(A). However, in the subsequent assessment year that is AY 2013-14, on similar facts, the Ld. CIT(A) has accepted assessee's appeal and restricted the addition to 8% of receipts under section 44AD of the Act. The assessee has accordingly filed an appeal before us in respect of the addition of 12% under section 44AD of the Act, seeking us to direct the AO to treat income at the rate of 8% as prescribed under section 44AD of the Act. 8. We note that on similar se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2 addition of Rs. 1,06,913/- by disallowing 10% of total agricultural expenditure claimed: 13. The brief facts of this ground are that during the year, the assessee had shown gross agricultural income of Rs. 16,96,493/- and claimed expenditure on account of agricultural expenses amounting to Rs. 10,69,130/- and declared net agricultural income of Rs. 6,27,363/-. The assessing officer observed that expenses claimed by the assessee to the extent of 60% of gross agricultural receipts are excessive and asked the assessee to submit bills/vouchers and other supporting in respect of claim of agricultural expenses. The assessee submitted copy of extract of 7/12 in respect of proof of agricultural lands and also submitted bills of sale of agricultural produce, but has not submitted bills and supporting of expenses. Therefore, in absence of any bills and other supporting evidence in respect of agricultural expenses, the AO made disallowance of 20% of agricultural expenses amounting to Rs. 2,13,826/-. In appeal, the Ld. CIT(A) restricted the addition only to the extent of 10% of agricultural expenditure of Rs. 10,69,493/- and directed the balance to be deleted i.e. Rs. 1,06,949/- was dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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