ITO, WARD-3(3)(12), AHMEDABAD vs SHRI KAUSHALKUMAR GANGARAM PATEL, AHMEDABAD

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED

For Appellant: Shri Lalit P. Jain, Sr. D.R

PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-3, Ahmedabad dated 18.05.2017 pertaining to A.Y. 2013-14 and following grounds have been taken:

ITA No. 1794/Ahd/2017 2 . A.Y. 2013-14 A. Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,21,17,140/- made by the AO without appreciating the fact that the AO has thoroughly verified the provisions of section 2( 14) (iii) of the Act. B. Ld. CIT(A) has erred in law considering the assessee's submission in the form of notarized letter issued by GUDA dated 08/02/2016 wherein it is stated that the land in question is at distance of above 5 kms from the outer limits of Gandhinagar Municipal Corporation.

Facts of the case that during the course of assessment proceedings, from the details furnished by the assessee, it has been found that the assessee has sold following property: SI. No. Block No. Total Share of Sale Regd. No. and Date Sale Consideration received by Consideration Assessee

Block No.- 94 Rs.12,18,63,500/- Share-17% Rs.2,07,16,795/- 1539 dated 05.2.2013 2. Block No. -59 Rs.3,19,72,000/- Share-17% Rs.54,35,240/- 1542 dated 05.2.2013 3. Block No. -244 Rs.62,64,000/- Share- 1545 dated Rs. 10,64,8807- 05.2.2013

Block No. -243 Rs.2,86,50,000/- Share -17% Rs.48,70,500/- 7924 dated 14.6.2012 5. Block No. -45 Rs.71,84,750/- Share-17% Rs.12,21,407/- 7926 dated 14.6.2012 Rs. 3,33,08,882/- Total Share Received in Sale Consideration

However, assessee had not offered any capital gain tax on sale of above mentioned immovable property. Therefore, vide Order Sheet Entry dated 18.01.2016, the assessee was requested to furnish the justification for not

ITA No. 1794/Ahd/2017 3 . A.Y. 2013-14 offering any capital on sale of aforesaid land situated at Adalaj. In response to this, the assessee had furnished his reply vide letter dated 14.3.2016, which is as under: "The assessee land is situated at Adalaj which fall under the GUDA i.e. (Gandhingar Urban Development Authority) as per the letter submitted by the GUDA, which is equivalent as municipality. Further, the population of that area should be less than 10,000 as per the last published census on the first day of the previous year. Census data of 2001 was published as on the first day of the previous year on the website of the census, and still today 2011 censusdata is provision data and which is still not published as on first day of the previous year. We are enclosing herewith the copy of 2001 census which is available as on the first day of the previous year is enclosed herewith and the same is marked as annexure... That the assessee land is situated at Adalaj which is outside the limits ofGandhinagar and as per the provision, land should be situated certain kilometer away from the Gandhinagar municipality, and as per the notification no. 9447 dated 06/01/1994 of the department of Revenue had specified area up- to 4 K.M. from the Municipality Limits of Gandhinagar as urban area. Further, any property situated outside the 4 km will be considered as the rural area. That the letter given by the GUDA clearly mention that the land is 5 km away from the Gandhinagar Municipality, hence the above condition is fulfilled that the land is away from the municipality limit and hence qualify the rural agriculture land. Hence, looking to the above facts and circumstance the land in any case qualify for the rural , capital assets and is exempt from the capital gain."

But ld. A.O. was not convinced with the contention of the assessee and held since Adalaj village is situated 0.8 KM from the Ahmedabad Municipal Corporation. Therefore land in question is a capital assets as per Income Tax Act and made addition of Rs. 22117140/- on account of long term capital gain.

Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who allowed the appeal of the assessee by holding that land in question

ITA No. 1794/Ahd/2017 4 . A.Y. 2013-14 is situated at Adalaj and revenue district is Gandhingar and held municipal limit of Gandhinagar to be considered while considering the fact that whether land in question is a capital assets or not u/s. 2(14)(iii) of the Act and hence consideration received by the assessee is exempt as per provisions of the Act and granted relief to the assessee.

Now by way of second appeal, revenue has come before us.

We have gone through the impugned order and heard both the parties. Undisputedly land is situated at village Adalaj Revenue district Gandhinagar and land in question is 5 KM outside the radious of Gandhinagar Municipal Corporation and we draw support from the letter issued by the Gandhinagar Urban Development Authority Junior Town Planning Officer who has specifically mentioned that land in question is situated outside 5Km radious of Gandhinagar Municipal Corporation vide letter No. GUDA/Tech/692/2015 letter dated 08.02.2016.

We have also gone through the Notification No. 9447 dated 06.01.1994 issued by the Govt. of Gujarat wherein it is mentioned that Adalaj (CT) (Guj, population: 9776, Class-V) and municipal limit is area up to a distance of 4 KM from the Municipal limits in all direction whereas land in question is outside the 5 KM radious of Gandhinagar Municipal Corporation and as per Section 2(14)(iii)(a) capital asset means property of any kind hold by an assessee, whether or not connected with his business or profession and agricultural land in Indian, not being land situate (a) in any area which comprised within the jurisdiction of a municipality (whether known as municipality, municipal corporation, notified area committee, town area committee, town committee,

ITA No. 1794/Ahd/2017 5 . A.Y. 2013-14 or by any other name) or a cantonment board and which has a population not less than 10,000.

In this case, agricultural land in question is situated beyond 5Km radious of Gandhinagar Municipal Corporation and in our considered opinion, same is agricultural land which is not a capital asset as per Income Tax Act. Therefore, we are not inclined to interfere in the order passed by the ld. CIT(A). Thus, we dismiss this ground of appeal of the Revenue.

10.

In the result, appeal filed by the Revenue is dismissed. Order pronounced in Open Court on 17 - 06- 2019

Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 17/06/2019 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

ITO, WARD-3(3)(12), AHMEDABAD vs. SHRI KAUSHALKUMAR GANGARAM PATEL, AHMEDABAD