TMI Blog2022 (6) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... l by us. Hence, in our considered opinion the matter required to be remanded to the file of the Ld. AO for proper adjudication of the issues. We, therefore, set - aside the order passed by the CIT(A) and restore the issue to the file of the Ld. AO to decide the same afresh upon giving an opportunity of being heard to the assessee and upon considering the additional evidences so adduced by the assessee or any other evidence which the assessee may choose to file at the time of hearing of the matter. We also make it clear that the assessee would also not seek for any unnecessary adjournment before the Ld. AO and would cooperate with best of his abilities to get the issue resolved. Revenue s appeal is, therefore, allowed for statistical purposes. - I.T.A. No. 1969/Ahd/2018 - - - Dated:- 10-6-2022 - Shri Pramod M. Jagtap, Vice President And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Ankit Parikh, A.R. For the Revenue : Shri Vijaykumar Jaiswal, CIT DR ORDER PER MADHUMITA ROY, JM: The instant appeal filed by the Revenue is directed against the order dated 17.07.2018 passed by the Ld. CIT(A)-3, Ahmedabad arising out of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Survey No. Khata No. Admeasuring Date of N.A. TDS(Rs.) 1 N.A. Land at Palodiya 284 240 0-25-26 Hec. Are. Sq. Mtr. Ji. Pan./Jaman/NSR/Vashi/3151 thi 60/08/dated 27/10/2008 88,250/- 2. N.A. Land at Palodiya 287 240 0-36-42 Hec. Are. Sq. Mtr. Ji. Pan./Jaman/NSR/Vashi/3151 thi 60/08/dated 27/10/2008 1,27,470/- 3. N.A. Land at Palodiya 289 241 0-13-15 Hec. Are. Sq. Mtr. Ji. Pan./Jaman/NSR/Vashi/3151 thi 60/08/dated 27/10/2008 NIL As below Rs.50 lakh. 4. N.A. Land at Palodiya 290 240 0-24-28 Hec. Are. Sq. Mtr. Ji. Pan./Jaman/NSR/Vashi/3 151 thi 60/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, you are requested to show cause as to why the amount claimed Rs. 7,60,95,831/- as deduction u/s. 54F of the Act, should not be disallowed. 5. Your compliance to the above show-cause should reach to this office on or before 22/12/2017 failing which assessment will be completed u/s. 143(3) of the Act, making the above disallowance. 3. In response to the show-cause the representative of the assessee attended the hearing before the Ld. AO and submitted the purchase deed of non-agricultural land. It was further submitted by him that the assessee is having only one residential house and neither purchased nor constructed any other property other than the new asset. On 28.12.2017 the assessee filed a copy of unregistered Agreement to sell and claimed that she has made investments in residential property and is entitled to deduction under Section 54F. It appears from the said Agreement to sell that Madhavray Kalabhai Savani, the partner of M/s. Savani Infrastructure has sold the plot of land admeasuring 2700 sq. yards at F.P. No. 114 of T.P.S. No. 3 at Shekpur-Khanpur, Taluka City, District Ahmedabad whereupon a scheme has been planned for construction of 11 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings, the assessee has not made any submission till 22/12/2017 that is upto the last week December, and thereafter part submission made. The submission made rebutted as mentioned in Para-4. Therefore, on the basis of the information available, the Long Term Capital Gain is worked out as under:- Sr. No. Particulars Survey No. Khata No. Admeasuring Sale consideration Assessee's share 1 N.A. Land -Palodiya 284 240 Hec. Are. Sq. Mtr. 0-25-29 Rs.88,52,000/- Rs.88,52,000/- 2 N.A. Land- Palodiya 287 240 Hec. Are. Sq. Mtr. 0-36-42 Rs. 1,27,47,000/- Rs. 1,27,47,000/- 3 N.A. Land- Palodiya 289 241 Hec. Are. Sq. Mtr. 0-13-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alodiya, Taluka-Kadi, Dist.: Gandhinagar. The details of sale consideration received from sale of land which is as under:- Sr. No. Particulars Survey No. Khata No. Admeasuring Sale consideration Assessee's share 1 Agricultural land at Palodiya 285 25 Hec. Are. Sq, Mtr. 0-54-63 Rs.1,17,72,765/- Rs.1,17,72,765/- 2 Agricultural land at Palodiya 280 132 Hec. Are. Sq. Mtr. 1-25-45 paiki 5,300 sq. mtr. Rs.82,42,000/- Rs.82,42,000/- TOTAL SALE CONSIDERATION Rs.2,00,14,765/- 6.1 It is important to note that these two lands are in vicinity with the other 5 non agricultural land sold by the assessee as mentioned in Para 5. The details are as under:- Sr. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-agricultural lands. On verification of copy of Sale-Deed, the Photo of the land shows that the land is barren and crops not appeared. Further, the sale consideration received on the sale of these two agricultural lands is almost in parity with the consideration received on sale of non-agricultural land. The normal understanding is that the non-agricultural land yield more sale consideration as compared to agricultural land, which is not in the case of the assessee. 6.3 Therefore the above two lands cannot be considered as agricultural land. The assessee has not submitted any details in respect of these two lands. The assessee has not wrongly shown these two lands as agricultural land. She has failed to offer the capital gain on these two land in her ITR and has not made any submission during the course of assessment proceedings, therefore the sale consideration of Rs. 2,00,14,765/- is also subject to Long Term Capital Gain and is added to the total income. Penalty u/s. 271(1)(c) of the Act, are being initiated separately for furnishing inaccurate particulars of income/concealment of income to the extent as mentioned above. 6. During the appellate proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-agricultural land for commercial purposes admeasuring 2257.52 Sq. Mtrs. equivalent to 2700 Sq. Yards bearing Final Plot No. 114 (City Survey No. 2125) of TP Scheme No.3. It was also brought to the notice of the Ld. CIT(A) that the said plot of land is lying and situated at Mouje Shaijpur- Khanour, Taluka Ahmedabad within the Office of the District Sub- Registrar, Ahmedabad-3 (Memnagar) falls under the CBD Zone (Central Business District Zone). The assessee sought to justify such a scheme being commercial and residential too with the supporting document being the copy of AUDA DP/Planning Regulations. So far as the fact of noncompletion of the project within three years from the date of sale is concerned the assessee submitted that he did not have any control over such completion made by the developer. 8. Taking into consideration the entire aspect of the matter the Ld. CIT(A) passed the order in favour of the assessee granting full relief of deduction under Section 54F to the assessee with the following observation: 5.4 Decision: I have carefully considered the facts of the case. I have also considered the submissions and arguments of the appellant with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .18 From the above evidences it is very clear that the impugned land sold by the appellant is actually agricultural Land. The agricultural land is outside the definition of Capital Asset as per Section 2(14) of the Income tax Act, 1961. The main contention taken by the appellant was that the rural agricultural land situated at Village Palodiya is not a capital asset as per the provision of section 2(14)(iii) of the Act. The issue has also come up in a recent judgment of ITAT, Ahmedabad. The relevant portion of jurisdictional /TAT decision in the case of /TO vs. Akash Deep Farms P. Ltd. (ITA No.2138/Ahd/2012 dtd.11.08.2015) is as under: 8. We have duly considered rival contentions and gone through the. record carefully. The definition of capital asset has been provided in section 2(14) of the Act. Sub-clause (a) and (b) of Section 2(14)(iii) contemplates that if an agriculture land is in India, and it is situated at a distance of more than 8 KMs. from the local limit of any municipality cantonment board, then, that land would not fall within the ambit of definition capital asset . In other words, if the land which is not forming part of capital asset sold b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision as per section will also fail. It is clear that the sales consideration received on safe of rural agricultural land at Palodiya is exempt as it is not a capital asset. As per perusal of documents on record as discussed above, the google map indicates that Palodiya village is a distance of 9.7 Kilometers via Shilaj Road and 9,2 kilometers via Bopal from the outer limit of AMC. This is independent evidence which cannot be manipulated and is on record. The map placed on record has been examined and it is seen that the impugned land parcel is at the distance of 9.7 KM from the AMC. Even the cursory look at Google map indicates that the aerial distance would also be around 9.0 K.M. from the outer limit of AMC, hence amendment w.e.f. A.Y.2014-15 in section 2(14)(iii) would not jeopardise the case of appellant. In my opinion, it is beyond the AMC limit of 8 KM. I agree with the appellant that the Rural Agricultural Land situated at Village Palodiya is not a capital asset as per provisions of section 2(14)(iii) r.w.s 45 and the sales consideration is exempt. Further, as per the decision of Hon'ble Apex Court in the case of CIT vs. B.C. Srinivasa Setty reported in 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys before the time barring assessment. vi) The mode of payment of purchase of new property has not been provided till date. Even the payment was made from the Joint account, and the assessee and her husband are the joint holder of the account. No bank statement has been provided by the assessee. The assessee has filed ITR-2 and has only shown income from other sources. Therefore there is no regular source of income of the assessee to enable her to buy so many non agricultural land. vii) No where mention the date of commencement and completion of the Scheme. viii) Further on 28th December assessee has submitted a copy of agreement to sell (5 pages). Before the evidences on record are examined it is mentioned that the contents of page No.8 of assessment order has been noticed wherein the AR had filed second copy of agreement to sell by deleting the word commercial . Sanguine it to say the issue has to be decided by adopting holistic approach as per evidences and explanation placed on record vis-a-vis provisions of the Act and ratio laid down by various judicial orders. The CBD has projects of hybrid characteristic including commercial as well as residenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituated at 3 World Centre. This is to confirm that floor No. 10 and 11 of our building is allotted to Smt. Narmadaben Savani having PAN: CXVPS4647D residing at 3 Saundarya Villa, Bopal-Ambli Road. She has made the total investment of Rs.82349000/- till 31.03.2015 whose ledger is attached tn this allotment letter. The balance amount of investment shall be given to her at the time of transfer of property. Place: Ahmedabad Sd/- The appellant has filed with AO copy of agreement to sell and details of payment to M/s. Savani Infrastructure on 20.12.2017. The agreement to sell is on judicial paper and clause B is reproduced as under: The Vendor has thereafter planned to construct a house having total 11 (eleven) floors the built-up area of which is approximately 143498.30 sq. feet and sold out of that 2 (Two) floors to Smt. Narmadaben Savani for a consideration of Rs. 760.96 lacs (Rupees Seven Hundred Sixty lacs Ninety Five Thousand Eight Hundred Thirty One Only). It is further seen that an amount of Rs.8,23,49,000/- has been paid to Savani Infrastructure by the appellant on different dates upto 13.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han one residential house in the year under consideration. It is also worth noting that construction activity in today's world is based on lot of government approvals and clearances and at times it is beyond the control of the appellant. The investment in the new residential asset is more than the LTCG involved, therefore, claim of deduction u/s.54F is fully allowable. It is my considered opinion which is guided by the ratio laid down in different case laws (supra) that the appellant has fulfilled all stipulated conditions to get deduction u/s.54F for A.Y.2015-16. Even if the construction activity is not completed within 3 years from the impugned capital gains then the addition which if decided to be made, should be done in the year when the period of 3 years gets elapsed, i.e. the action can be contemplated in A.Y. 2018-19 instead A.Y. 2015-16. The appellant has submitted evidences and logical explanations to prove both the contention raised as (a) (b) above as correct. Grounds No.1 2 of appeal are accordingly allowed. 6. In the result, the appeal is partly allowed. 9. Therefore, it appears from the above that two controversies revolve around th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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