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Income Tax Appellate Tribunal, “B” Bench, Mumbai
Before: Shri Shamim Yahya (AM) & Shri Sandeep Gosain (JM)
This appeal by the assessee is directed against the order of learned CIT(A) dated 26.10.2016 and pertains to A.Y. 2010-11.
The issue raised ins that learned CIT(A) erred in upholding the addition on account of short term capital gain of Rs. 91,98,500/-.
3. Brief facts of the case are that the assessee has sold land at Karjat (Survey No. 26/1) on 26.3.2010. The said land was purchased on 21.8.2008. The Assessing Officer had computed short term capital gain amounting to Rs. 9,40,500/-. Before learned CIT(A) assessee made submissions that the said land was agricultural land and hence the assessee was entitled to exemption from tax there upon. Assessee also filed additional evidences in this regard. Learned CIT(A) obtained remand report from the Assessing Officer also. Learned CIT(A) also noted that assessee’s submission that the said land was 2 Shri Nandkumar Krishnarao Phutane situated 8 km from the city limit of Karjat and observed that the assessee has submitted paper book and additional evidences in this regard. Learned CIT(A) noted that the assessee had submitted 7/12 extracts in support of the claim that the said land was agricultural land. However, learned CIT(A) held that in the 7/12 extract the land was mentioned as barren land. Hence, learned CIT(A) did not find cogency in the assessee’s submission that the said land was agricultural land. Learned CIT(A) also drew adverse inference that the assessee has not shown agricultural income therefrom. He also rejected the contention that the said agricultural land was situated 8 km from the city limit of Karjat as he fond this contention to be irrelevant.
Against this order assessee is in appeal before us. We have heard both the counsel and perused the records. We find that in this case the claim of the assessee that the said land is agricultural land is duly supported by the 7/12 extract submitted by the assessee. No case has been made out that the said land has been put to use for non-agricultural purposes. Just because the assessee has not shown agricultural income, it cannot change the nature of the land. The claim that the said land is situated 8 km from the city limit also supports proposition that the said land being agricultural, the sale is not exigible to income tax. This view is duly supported by the catena of case laws referred by learned Counsel of the assessee as under :-
Sanjay Nagorao Paidlewar Vs. ACIT (ITA No. 112/Nag/2012 and others vide order dated 22.3.2013) CIT Vs. Satinder Pal Singh (33 DTR 281 dt. 7.1.2010) Laukik Developers Vs. DCIT (105 ITD 657 dt. 10.7.2016) CIT Vs. Smt. Debbie Alemao (331 ITR 59 dt. 9.9.2010) CIT Vs. Lal Singh and others (325 ITR 588 dt. 20.11.2009)
In this regard we may refer to the Hon'ble Jurisdictional High Court decision in the case of CIT Vs. P.C. Joshi and others (202 ITR 1017) as under:-
The Tribunal, while considering whether capital gains tax can be levied on the sale of this land by the assessees, has applied the tests laid down by the 3 Shri Nandkumar Krishnarao Phutane
Bombay High Court in an unreported judgment in the case of CWT vs. Poddar Mills Ltd. (WT Ref. No. 5/64 decided on 4th February, 1972). The Tribunal held : (1) Except for the portion of land covered by survey No. 135/1B, other lands were agricultural lands, (2). They have been described as agricultural lands in the sale deed; (3). There is no material on record to suggest that these lands were put to non-agricultural use. The Town Planning Scheme became operative in this area much after the date of the sale deed and only in the year 1971; and (4). The land continued to be assessed under the Land Revenue Code as agricultural land. The Tribunal, therefore, held that the land covered under survey No. 135/6 was agricultural land. It, therefore, directed that only surplus arising on the sale of land covered under survey No. 135/1B should be subject to tax. This was in view of s. 2(14)(iii) of the IT Act which exempted, at the material time, agricultural lands in India, from the definition of capital assets.
4. The factors which have been considered by the Tribunal in deciding whether the land should be considered as agricultural land, are not in any manner inconsistent with the tests laid down by the Supreme Court of India in the case of CWT vs. Officer Incharge (Court of Wards), Paigah. The Supreme Court has also said that entries in the revenue record are good prima facie evidence, though they may not be conclusive. In the present case also, the Tribunal has looked at other surrounding circumstances also in addition to the entries in the revenue record for coming to the conclusion it has come to. We may add that the Tribunal was bound to apply the tests laid down by the Bombay High Court in the case of CWT vs. Poddar Mills (supra) as this decision was binding on the Tribunal. In the premises, the question referred to us is answered in the affirmative and in favour of the assessee.
We find that the above case law is fully applicable on the facts of this present case. We find that it is undisputed that in Revenue records the land is shown as agricultural land. No evidence is on record that the said land has been put to any non-agricultural use. In this view of the matter on the touchstone of the above said Hon'ble Jurisdictional High Court decision the assessee’s claim deserves to succeed. It also remains undisputed that the said land is situated beyond 8 km of Karjat Municipal limit. Hence, the assessee succeeds on this count also that the land being agricultural, the sale thereof is exempt from tax.
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Accordingly, in the background of the aforesaid discussion and precedent we set aside the order of learned CIT(A) on this issue and decide the issue in favour of the assessee. In the result, assessee’s appeal is allowed. Order has been pronounced in the Court on 27.8.2019.