ITO, JAIPUR vs. POOJA AGARWAL, JAIPUR

ITA 84/JPR/2013Status: DisposedITAT Jaipur28 April 2025AY 2008-09Bench: DR. S. SEETHALAKSHMI (Judicial Member)1 pages

AI SummaryAllowed

Facts

The case involves a dispute over whether a piece of land sold by the assessee was agricultural land, which would make the capital gains exempt from tax. The crucial factor is the distance of the land from the municipal limits of Jaipur as of January 6, 1994.

Held

The Tribunal held that based on the evidence and the reports from revenue authorities, the land in question was beyond 8 KMs from the municipal limits of Jaipur. Therefore, it was considered agricultural land and not subject to capital gains tax.

Key Issues

Whether the land sold by the assessee qualifies as agricultural land for exemption from capital gains tax, based on its distance from the municipal limits of Jaipur on January 6, 1994.

Sections Cited

2(14)(iii), 45, 143(1), 143(3), 143(2), 271(1)(c), 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 927/JP/2012

For Appellant: CA jktLo dh vksj ls@

Pronounced: 28/04/2025

& 84/JP/2013 Pooja Agarwal vs. ACIT lquokbZ dh rkjh[k@ Dates of Hearing : Various finally on 11/03/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Brief as to why this order:

Before this tribunal revenue as well as the assessee-appellant challenged the order of the learned Commissioner of Income Tax, (Appeals-I), Jaipur dated 07.11.2012. The dispute relates to the assessment year 2008-09. That cross appeal were disposed off by a common order dated 31.01.2014 thereby the appeal of the revenue was dismissed and that of the assessee was allowed.

Revenue challenged that order this tribunal before our Jurisdictional Hon’ble Rajasthan High Court wherein the Hon’ble High Court held that ; “ 3. Taking into consideration the evidence which has come on record, it seems that there are subsequent development which is required to be reconsidered by the Tribunal.

4. In that view of the matter, with a view to verify whether the distance of the land in question is more than 8 kilometer on the outskirts of Jaipur city is required to be re-verified by the Tribunal taking into consideration, the notification dt. 6th January, 1994 issued by the Income Tax Department and judgment of this Court in Tax Appeal No. 75/2014. The Tribunal will consider both the notification and judgment and if required make a request to Revenue Authority not below Deputy Collector to verify the distance from the outskirts of Jaipur to the land in question.

& 84/JP/2013 Pooja Agarwal vs. ACIT 5. With the above direction, the matter is remitted back to the Tribunal only with a view to verify the distance. 6. It is made clear that we have not expressed any opinion on merits and it will be open for the Tribunal to reconsider the same and take an independent view after taking into account the new facts after verification and it will not being influenced by the decision of this Court.”

It is mandatory for claiming that the asset is falling within the provisions of Section 2(14)(iii) that such claim fulfills certain conditions. The land sold by the assessee during the previous year is situated in Village Kukas, PatwarHalka, Nangal Susawatan, Revenue Village & Tehsil - Amer, Distt. Jaipur. The map of Jaipur municipal limits prepared by Jaipur Nagar Nigam indicates that the land in dispute and sold by the assessee is situated within 8 KMs of Municipal Limits of Jaipur Nagar Nigam and the distance of it from the last point of the limit is not more than 3 to 4 KMs. Apart from the location of land within 8 KMs of Municipal limit of Jaipur Nagar Nigam, it is also within 8 KMs from Amer, a town having the population of more than 10,000 as per census of the year 2001. Further the assessee had not filed any of the certificate issued by the Tehsildar or the Jaipur Municipal Commissioner to establish her contention as to location of disputed land outside the limit of 8 KMs. The copies of certificate and that also on plain paper cannot be considered as the proper evidence in establishing the claim of the assessee. It is therefore established that the land so sold by the assessee was outside the purview of provisions of section 2(14)(iii) of the Act. When this was brought to the notice of the assessee, then it was claimed that the agriculture activity was carried out on the land and the same is an agricultural land. The issues and the contention raised by the assessee also found not acceptable in view of the ruling of the Apex Court in the case of CIT Vs. Gemini Pictures CircutPvt. Ltd. (1995) 270 ITR 63. Therefore the benefit claimed by the assessee was found to be wrong and the entire income of Rs.6,38,40,000/- & 84/JP/2013 Pooja Agarwal vs. ACIT derived from the sale of land to Quality Resorts & Hospitality Ltd., Mumbai is taken as an income chargeable to tax. The land was purchased by the assessee on 20.11.2007 from Shri Pradeep Bhati, Shri HP Choudhary and Shri G.C. Agarwal for Rs.54,72,000/- and was sold to Quality Resorts & Hospitality Ltd., Mumbai on 22.12.2007 for Rs.6,93,12,000/- resulting into a Short Term Capital Gain of Rs.6,38,40,000/- which is treated as income for the year and added to the income of the assessee for the year.

In this context following Case Laws submitted with gist of the Whether land is agricultural land or pronouncemen ts: -Rasiklal not cannot depend on the Chimanlal Nagri v. CWT [1965] 56 fluctuating or ambulatory intention ITR 608 (Guj.) of the owner of the land. The criterion must be something more definite, something more objective, something related to the nature or character of the land and not varying with the intention of the owner as to the use to which he wants to put the land at a particular point of time. Of course, this must not be understood to mean that the intention as to user is altogether an irrelevant consideration; it is certainly a factor which would bear on the nature or character , of the land but it does not afford a sole or exclusive criterion for determining whether a land is agricultural land or not. Where are the land is actually put to use, there is usually not much difficulty in ascertaining the nature or character of the land. If the land is used for agricultural purposes, ordinarily it would be correct to say that the land is agricultural land and vice versa. But even this test may not always furnish a correct answer, for, there may be cases where land admittedly non-agricultural (such as a building site) may be used temporarily for agricultural purposes. In such cases it would not be correct to say that merely because the land is in fact being used for agricultural purposes, it is agricultural land. But as a general proposition it may be stated without any fear of contradiction that ordinarily the actual user to which the land is being put would furnish prima facie evidence of the true nature or character of the land and, therefore, whenever a question arises whether a particular land is agricultural land or not, primarily regard must be had to the purpose for which the land is being actually used at or about the relevant time and that would ordinarily provide a satisfactory answer to the problem. Tea Estates India (P.) Ltd. v. Agricultural land should CWT [1966] 59 ITR 428 (Cal.) comprise the following characteristics a. It must be a land; b. it must pertain to or be connected with cultivation; c. It must involve expenditure of human labour and skill for the purpose of cultivation or for keeping it in a cultivable state

“3.4 We have heard the rival submissions and have carefully perused the entire record. Before us, both the parties have reiterated their earlier stands. The assessee has sold a piece of agricultural land. The AO has not disputed the fact. Rather, he has accepted that the nature of the land sold is agricultural only. Section 45 of the Act prescribes that any profit or gain arising from the transfer of capital asset effected in the previous year shall, save as otherwise provided in the sections 54,54B, 54D etc. shall be deemed to be the income of the previous year in which the transfer took place. The definition of a ‘Capital Asset’ is supplied by the sub-section 14 of Section 2 of the Act. Section 2 (14) of the Act reads as under:- (iii) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATE – (a) IN ANY ARE AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY …BEFORE THE FIRST DAY OF THE PREVIOUS YEAR. (b) IN ANY AREA WITHIN SUCH DISTANCE, NOT BEING MORE THAN EIGHT KILOMETERS FROM THE LOCAL LIMITS OFANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (a), AS THE CENTRAL GOVERNMENT MAY, HAVING REGAD TO THE EXTENT OF, AND SCOPE FOR, URBANISATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE.’’ & 84/JP/2013 Pooja Agarwal vs. ACIT Thus, it becomes clear from the very plain reading of the above provision of Section 2(14)(iii) that even agricultural land can be treated as a ‘capital asset’ and consequently ‘ capital gain’ can be charged on the net consideration arising from the sale of that land if the land sold falls within 8KM from the local limit of any Municipality or Cantonment Board etc. as mentioned therein. Now, the only question which we are required to decide as to whether this agricultural piece of land sold by the assessee falls within the purview of Section 2(14)(iii)(b) of the Act or not. If it does then ‘capital gain’ is chargeable otherwise not. The AO put the assessee to the task of proving that the agricultural land sold is not falling within the above stated 8KM. The assessee produced the following proof in support of her claim:- (1) A cop of the certificate dated 18-07-2008 issued by the Sarpanch of the Gram Panchayat, Kukas; a copy of this certificate is enclosed at PB-1. This certificate has been issued by the Sarpanch of the same village wherein the Revenue estate of the sold land is situated. ( 2) A letter from the Halka Patwari of the same village.

3.2 The firsts statement recorded on 02/12/2011 was not in presence of assessee’s counsel. In that statement in Answer No. 3 Shri Dinesh Kumar Pareek has admitted that certificate dated 06/07/2011 was issued with his signature. Further in Answer No. 5 he has stated that Nagar Nigam, Amer Zone was constituted in April, 2008. The map of 2009 was also given by showing wards 74, 75,76 & 77 of Jaipur Nagar Nigam. But in Answer No. 6 he has stated thatj physical verification of land was not made by him and certificate was given on basis of evidences on record, such as Sarpanch and Patwari certificates. Now I will do physical verification with Patwari also. 3.3 In second statement dated 21/02/2012 he was again bitterly confused and narrated twisted and incorrect facts without any evidence on record. a) In Answer No.3 Mr. Pareek has stated that physical verification has been done on 07/02/2012 with appointed inspectors of Income-tax Department Mr. Purshottam Sharma & Ramji Lal Meena. This observation is base-less as they have verified the so called land physically from the alleged Purani Chungi Chowki, Kunda Amer and the distance, according to above limits comes 6i.2 & 7 KM respectively, while they should had taken the distance from the limits of Jaipur Nagar Nigam, prevailing at the time of sale of land. It seems that limits of Japir Nagar Nigam is not clear to them. b) The Inspector appointed, Shri Purshottam Sharma had earlier given report to AO on 24/12/2010 (APB-24) in which he had mentioned that from Amer Chungi Naka distance of land is 3.50 KM and on the basis of this report, AO has made huge addition and said Shri Purshottam Sharma, Inspector and Revenue Officer of Nagar Nigam without identifying the limits of Jaipur Nagar Nigam and land in question has taken the above distance. The conclusion of report is:- After measurement, the actual distance between Delhi Road, Jaipur (land of Mrs. Pooja Agarwa) from Purani Chungi is found as 6.2 KM and accoriding to new jurisdiction of Jaipur Municipal Corporation, its distance found as 7 KM. The Inspection report given by Shri Purshottam Sharma dated 07/02/2012 again has no evidential value and lacks reliability. The same cannot be used against the assessee. As per Revenue Officer, Jaipur’s Municipal Corporation limits ends before 8 KM from Purani Chungi, Amer, Jaipur.

Thus both these reports are contradictory and having no evidential value, because it seems that Inspector Shri Purshottam Sharma still was not aware about the correct limits of Jaipur Municipal Corporation and location of the land of assessee. c) In Answer No.4 Revenue Officer has narated the story of land within 8 KM of Jaipur Municipal Corporation from Purani Chungi, Chowki without knowing location of the land of assessee. The earlier certificates were based on the certificates of other Revenue Authorities. So this averment is not acceptable. d) In cross examination Revenue Officer, Jaipur Nagar Nigam (Amer) has stated in Answer No.1 that area comes in Ward No. 77, but unable to explain full limits from map. e) In Answer No.2 of cross examination according to notification dated 18/04/1992 through which Revenue villages of area of Amer Nagar Palika has been included in Jaipur Nagar Palika has stated that village Nangal Susawatan where land of assessee is situated is not appearing, because this notification is of 1992. This notification is applicable as through this very notification. Amer Nagar Palika and its revenue villages has been included in Jaipur Municipal Corporation, in which village where land of assessee was situated is not appearing. The subsequent notifications i.e. 25/09/1994 is for distribution of wards, where in old Amer Municipal area has come in ward no. 53, subsequently through notification 17/02/2009, this area has been distributed in ward no. 74,75, 76 & 77. Hence that notification was applicable. So village which are within 8 KM of Municipal limits of Jaipur/ Amer are clearly mentioned in this notification and name of village where assessee’s land is situated is not appearing in this notification. Thus land is out of 8 KM from Municipal limits of Jaipur. f) On re-cross examination by your honour in Answer No. 1 Officer has stated vide notification dated 18/04/1992. Thereafter again Revenue Officer was not satisfied with his own statement regarding correct distance of land. So he has taken time up to 28/02/2012. But no cross examination by AR of the assessee was allowed to Inspector. 3.3 In statement dated 11-03-2012 of Revenue Officer (not in presence of assessee’s Counsel) in Ans. No.1 & 2 of the Revenue Officer has admitted that there was no change in outer limits of Jaipur Nagar Nigam through notification dated 25-09/- 1994 and 17/2/2009. Therefore, map (2009) is given final. Further Revenue Officer has stated that land in question in2007-08 & 2008-09 from Purani Chungi Chowki, Kunda, Amer 6.2 KM and from Kunda,Amer is at a distance of 7KM. In answer No. 5 Revenue Office has stated that in 277-08 the land was 6.2KM (it was from Purani Chungi Kunda). Thus in all these 3 transactions the Revenue Officer could not satisfactory explained or pin-point the area from where measurement has to be taken or from where is the correct limit of Municipal Limit or where is the land, because both of them (Revenue Officer and Inspector of Department) are not aware the facts.

77.

The (Annexure-D) is also enclosed for its certification. Thus assessee's land from both the angles is beyond 8 KM of limits of Jaipur Nagar Nigam. An affidavit of assessee is also enclosed for above correct position of land (Annexure-E) 5.3 It also seems that Revenue Officer of Nagar Nigam and Inspectors concerned have not followed the measurement procedure i.e. as per the road distance and not as per straight line distance on a horizontal plain or otherwise as held in (2010) 229 CTR 32 (Punj. & Haryana H.C.) in case of CIT vs. 13 Satinderpal Singh followed Lankik Developers vs. DCIT, 105 ITD 657, Mumbai. 5.4 A certificate from Shri Mangal Chand Kumawat, Architect is also enclosed which certifies the above distance (Annexure –F). An attested map from him taken from Google Earth Work GPS system is also enclosed which also certifies above distance (Annexure –G) So claim of assessee is correct as the facts emerges from above evidences on record. Hence, addition made on this score may kindly be deleted.’’ Admittedly, the assessee was not allowed opportunity to cross examine. This is against principles of natural justice. This statement cannot be relied on. The ld. CIT(A) has mentioned that he has not relied on the statement of Shri Dinesh Pareek dated 02-02-2011. However, his version has really impressed his decision making faculty in one way or the other. It is noticed that alleged physical verifications which are not based on any scientific manner and not done by an expert in the field give divergent opinion. Therefore, these verifications cannot be relied upon. The best evidence in the form of reports of the Sarpanch, the Halka Patwari and even the Municipal Corporation, Jaipur (in the first instance) are emphatic and are reliable. Therefore, we are left with no option but to accept them as correct when these are pitted against the variant statements which in our considered opinion do not seem to be devoid of fearlessness or fairlessness. The overwhelming effect of the following evidence speaks in the favour of the assessee. These pieces of evidence are as under:-