SANJEEV KUMAR GOYAL ,KOLKATA vs. ITO, WARD - 45(2), KOLKATA , KOLKATA

order : November 29th, 2019 O R D E R Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 13, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 15/01/2018, for the Assessment Year 2011-12.

Assessment Year: 2011-12 Sanjeev Kumar Goyal

Assessment Year: 2011-12 Sanjeev Kumar Goyal

Assessment Year: 2011-12 Sanjeev Kumar Goyal 2.2. In reply, to a showcause notice dt. 14/02/2014, as to why the income from In reply, to a showcause notice dt. 14/02/2014, as to why the income from In reply, to a showcause notice dt. 14/02/2014, as to why the income from sale of land should not be added to the total income of the assessee, the ld. Counsel should not be added to the total income of the assessee, the ld. Counsel should not be added to the total income of the assessee, the ld. Counsel for the assessee, submitted as follows: for the assessee, submitted as follows:- a) The partnership firm M/s. Shree Annapurna Oil Mills, wa The partnership firm M/s. Shree Annapurna Oil Mills, was constituted s constituted between the assessee’s father and the assessee’s father and his two brothers. b) The assessee contributed to the firm a sum of Rs.10 Lakhs/ The assessee contributed to the firm a sum of Rs.10 Lakhs/- c) The partnership firm had purchased agricultural lands in the year 2005 The partnership firm had purchased agricultural lands in the year 2005 The partnership firm had purchased agricultural lands in the year 2005-06, for a consideration of Rs.20,00,000/ for a consideration of Rs.20,00,000/-. d) The land was purchased by the firm as an investment and there was no purchased by the firm as an investment and there was no purchased by the firm as an investment and there was no income of the said firm as there was no business undertaken by the firm in income of the said firm as there was no business undertaken by the firm in income of the said firm as there was no business undertaken by the firm in any of the year except th any of the year except the purchase and sale of this land. A departmental inspector was deputed to make enquiries about the n A departmental inspector was deputed to make enquiries about the n A departmental inspector was deputed to make enquiries about the nature and type of land which was sold. and type of land which was sold. The departmental inspector submitted his report The departmental inspector submitted his report on 05/03/2014. The relevant portion of the report is extracted for ready on 05/03/2014. The relevant portion of the report is extracted for ready on 05/03/2014. The relevant portion of the report is extracted for ready reference:- “Requisition u/s 133(6) was sent to the ADSR, Haripal and the copy of the “Requisition u/s 133(6) was sent to the ADSR, Haripal and the copy of the “Requisition u/s 133(6) was sent to the ADSR, Haripal and the copy of the deeds were obtained. Thereafter, I visited the 010 the Building, Land & obtained. Thereafter, I visited the 010 the Building, Land & obtained. Thereafter, I visited the 010 the Building, Land & Revenue Officer at Haripal, Hooghly on 28.02.2014, which is about 52 km Revenue Officer at Haripal, Hooghly on 28.02.2014, which is about 52 km Revenue Officer at Haripal, Hooghly on 28.02.2014, which is about 52 km away form Kolkata, to enquire about the nature, location & type of the land away form Kolkata, to enquire about the nature, location & type of the land away form Kolkata, to enquire about the nature, location & type of the land which is sold. I met Smt. Indrani Chatterjee, which is sold. I met Smt. Indrani Chatterjee, Revenue Officer and she Revenue Officer and she confirmed that the said land sold in two separate deeds, is of 3 types i.e. Sali confirmed that the said land sold in two separate deeds, is of 3 types i.e. Sali confirmed that the said land sold in two separate deeds, is of 3 types i.e. Sali (less fertile land), Viti (land is used for the purpose of construction of pucca (less fertile land), Viti (land is used for the purpose of construction of pucca (less fertile land), Viti (land is used for the purpose of construction of pucca structure) and Doba (water bodies). She further confirmed that the lan structure) and Doba (water bodies). She further confirmed that the lan structure) and Doba (water bodies). She further confirmed that the land situated in Mouza-Sipaigachi and the proximity of National Highway No.2 Sipaigachi and the proximity of National Highway No.2 Sipaigachi and the proximity of National Highway No.2 had caused in rapid industrialization. The land in question is also converted had caused in rapid industrialization. The land in question is also converted had caused in rapid industrialization. The land in question is also converted into Industrial land by the purchaser i.e. M/s STP Ltd. She stated that she was into Industrial land by the purchaser i.e. M/s STP Ltd. She stated that she was into Industrial land by the purchaser i.e. M/s STP Ltd. She stated that she was not aware of any past ag not aware of any past agricultural activity on the said land. I thanked her ricultural activity on the said land. I thanked her and went to the land as specified in the deed. The land is situated by the side and went to the land as specified in the deed. The land is situated by the side and went to the land as specified in the deed. The land is situated by the side of Haripal-Siyakhala-NH2 road which is also bus route. Concrete structures NH2 road which is also bus route. Concrete structures NH2 road which is also bus route. Concrete structures and iron shades are constructed upon it with a ga and iron shades are constructed upon it with a gate displaying the name of te displaying the name of company. I took few pictures of the land and returned to Kolkata.” company. I took few pictures of the land and returned to Kolkata.” 2.2.1. The Assessing Officer concluded that the land in question is The Assessing Officer concluded that the land in question is The Assessing Officer concluded that the land in question is non- agricultural land. He also took support from the sale deed numbers 4482/10 and land. He also took support from the sale deed numbers 4482/10 and land. He also took support from the sale deed numbers 4482/10 and 4483/10 where at page 19, it is stated as follows: e at page 19, it is stated as follows:- “Total transferred in nine L.R. Dags measuring 425 (Four Hundred twenty “Total transferred in nine L.R. Dags measuring 425 (Four Hundred twenty “Total transferred in nine L.R. Dags measuring 425 (Four Hundred twenty five) satak (more or less) which delineated with ‘Red’ line border in the satak (more or less) which delineated with ‘Red’ line border in the satak (more or less) which delineated with ‘Red’ line border in the annexed plan with a building area measuring 5098 Sq.ft annexed plan with a building area measuring 5098 Sq.ft. with easement . with easement rights of path and passage alongwith with easement right to obtain rights of path and passage alongwith with easement right to obtain rights of path and passage alongwith with easement right to obtain

Assessment Year: 2011-12 Sanjeev Kumar Goyal Electricity line, Water line, Telephone line, Gas Line etc. on path and Electricity line, Water line, Telephone line, Gas Line etc. on path and Electricity line, Water line, Telephone line, Gas Line etc. on path and passages.” In reply to a further showcause notice dt. 07/03/2014, the assessee In reply to a further showcause notice dt. 07/03/2014, the assessee In reply to a further showcause notice dt. 07/03/2014, the assessee submitted as follows:- a) The agricultural lands were purchased by the partnership firms as The agricultural lands were purchased by the partnership firms as The agricultural lands were purchased by the partnership firms as investment and this partnership firm had never applied for a Permanent investment and this partnership firm had never applied for a Permanent investment and this partnership firm had never applied for a Permanent Account No. (PAN). Books of accounts and further documents were Account No. (PAN). Books of accounts and further documents were Account No. (PAN). Books of accounts and further documents were produced. b) The said land was used for agricultural purposes by one, Shri Satish Murmu, The said land was used for agricultural purposes by one, Shri Satish Murmu, The said land was used for agricultural purposes by one, Shri Satish Murmu, who was recorded as who was recorded as Burgadar of the aforesaid land. The said, Satish of the aforesaid land. The said, Satish Murmu, carried out agricultural operations in consideration of undertaking Murmu, carried out agricultural operations in consideration of undertaking Murmu, carried out agricultural operations in consideration of undertaking that he would look after the lands f that he would look after the lands for and on behalf of the partnership firm. or and on behalf of the partnership firm. A copy of the certificate dt. 26/08/2010 issued by “Pantra Gram A copy of the certificate dt. 26/08/2010 issued by “Pantra Gram A copy of the certificate dt. 26/08/2010 issued by “Pantra Gram Panchayat”, was furnished. Panchayat”, was furnished. c) The Assessing Officer concluded that the submissions of the assessee was The Assessing Officer concluded that the submissions of the assessee was The Assessing Officer concluded that the submissions of the assessee was self-contradictory for the reason that, it was st contradictory for the reason that, it was stated that the lands were ated that the lands were purchased as investment and on the other hand it was claimed that certain purchased as investment and on the other hand it was claimed that certain purchased as investment and on the other hand it was claimed that certain person is carrying out agricultural activities for and on behalf of the person is carrying out agricultural activities for and on behalf of the person is carrying out agricultural activities for and on behalf of the partnership firm. Thereafter, the Assessing Officer held that the land in partnership firm. Thereafter, the Assessing Officer held that the land in partnership firm. Thereafter, the Assessing Officer held that the land in question is not agricultural land, by applying the few tests laid down by the not agricultural land, by applying the few tests laid down by the not agricultural land, by applying the few tests laid down by the Hon’ble Courts for determining whether a land is agricultural or not. Hon’ble Courts for determining whether a land is agricultural or not. Hon’ble Courts for determining whether a land is agricultural or not. The tests applied are as under: The tests applied are as under:- i. Whether the land was Whether the land was actually or ordinarily ordinarily used for agricultural purposes agricultural purposes at or about the relevant time; the relevant time; ii. Whether the land, though entered in the Revenue records, Whether the land, though entered in the Revenue records, Whether the land, though entered in the Revenue records, had never been actually used for agriculture; whether the had never been actually used for agriculture; whether the had never been actually used for agriculture; whether the owner mean or intended to use it for agricultural purposes; owner mean or intended to use it for agricultural purposes; owner mean or intended to use it for agricultural purposes; iii. Whether the income derived from the agricultural o Whether the income derived from the agricultural o Whether the income derived from the agricultural operations bear any rational proportion to the investment made in bear any rational proportion to the investment made in bear any rational proportion to the investment made in purchasing the land purchasing the land; 2.3. He held that the land was irrecoverably converted into industrial land and He held that the land was irrecoverably converted into industrial land and He held that the land was irrecoverably converted into industrial land and that the intentions of the owners was definitely not to promote agricultural that the intentions of the owners was definitely not to promote agricultural that the intentions of the owners was definitely not to promote agricultural Assessment Year: 2011-12 Sanjeev Kumar Goyal activity but to gain maximum from the sale of land. The land was industrial land at to gain maximum from the sale of land. The land was industrial land at to gain maximum from the sale of land. The land was industrial land at the time of sale with a constructed industrial shed even at the time of purchase. On the time of sale with a constructed industrial shed even at the time of purchase. On the time of sale with a constructed industrial shed even at the time of purchase. On the contention that the land was sold by the partnership firm M/s. Shree the contention that the land was sold by the partnership firm M/s. Shree the contention that the land was sold by the partnership firm M/s. Shree Annapurna Oil Mills and tha Annapurna Oil Mills and that the capital gains in question cannot be taxed in the t the capital gains in question cannot be taxed in the hands of the assessee, the Assessing Officer held that profits are taxable in the hands of the assessee, the Assessing Officer held that profits are taxable in the hands of the assessee, the Assessing Officer held that profits are taxable in the hands of the assessee for the reason that M/s. Shree Annapurna Oil Mills, does not hands of the assessee for the reason that M/s. Shree Annapurna Oil Mills, does not hands of the assessee for the reason that M/s. Shree Annapurna Oil Mills, does not possess a PAN nor has it filed its possess a PAN nor has it filed its income tax return with the ITO. He concluded that with the ITO. He concluded that the partnership firm, for the purpose of Income Tax, is a non the partnership firm, for the purpose of Income Tax, is a non-entity. He held that entity. He held that the transactions were unreported by the assessee and would not have been the transactions were unreported by the assessee and would not have been the transactions were unreported by the assessee and would not have been disclosed but for the fact that the case was select disclosed but for the fact that the case was selected for scrutiny. Thereafter, he ed for scrutiny. Thereafter, he invoked Section 50C of the Act and after dividing the capital gains invoked Section 50C of the Act and after dividing the capital gains invoked Section 50C of the Act and after dividing the capital gains between the four partners, who were treated as co four partners, who were treated as co-owners, brought to tax, long term capital owners, brought to tax, long term capital gain amounting to Rs.65,16,420/ gain amounting to Rs.65,16,420/- in the hands of the assessee.

3. Aggrieved, the assessee carried the matter in appeal. The ld. First Appellate Aggrieved, the assessee carried the matter in appeal. The ld. First Appellate Aggrieved, the assessee carried the matter in appeal. The ld. First Appellate Authority at page 8 to 10 of his order listed out the tests laid down by the various Authority at page 8 to 10 of his order listed out the tests laid down by the various Authority at page 8 to 10 of his order listed out the tests laid down by the various Courts for determining as to whether a particular land is agricultural land or not for determining as to whether a particular land is agricultural land or not for determining as to whether a particular land is agricultural land or not. These are extracted for ready reference: are extracted for ready reference:- “1. Whether the land was classified in the revenue record as agricultural and 1. Whether the land was classified in the revenue record as agricultural and 1. Whether the land was classified in the revenue record as agricultural and whether it was subject to the payment of land revenue? whether it was subject to the payment of land revenue? 2. Whether the land was actually or ordinarily used for agricultural purposes at 2. Whether the land was actually or ordinarily used for agricultural purposes at 2. Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? ut the relevant time? 3. Whether such user of the land was for a long period or whether it was of a 3. Whether such user of the land was for a long period or whether it was of a 3. Whether such user of the land was for a long period or whether it was of a temporary character or by way of a stop temporary character or by way of a stop-gap arrangement? 4. Whether the income derived from the agricultural operations carried on in the 4. Whether the income derived from the agricultural operations carried on in the 4. Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the inve l proportion to the investment made in purchasing the land? stment made in purchasing the land? 5. Whether the permission under section 65 of the Bombay Land Revenue Code 5. Whether the permission under section 65 of the Bombay Land Revenue Code 5. Whether the permission under section 65 of the Bombay Land Revenue Code was obtained for the non was obtained for the non-agricultural use of the land? If so, when and by whom agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether suc (the vendor or the vendee)? Whether such permission was in respect of the whole h permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land or a portion of the land? If the permission was in respect of a portion of the land or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said and if it was obtained in the past, what was the nature of the user of the said and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to the agricultural r the land, on the relevant date, had ceased to be put to the agricultural r the land, on the relevant date, had ceased to be put to the agricultural use? If so, whether it was put to an alternative use? Whether, such cesser and/or use? If so, whether it was put to an alternative use? Whether, such cesser and/or use? If so, whether it was put to an alternative use? Whether, such cesser and/or alternative user was of a permanent or temporary nature? alternative user was of a permanent or temporary nature?

Assessment Year: 2011-12 Sanjeev Kumar Goyal 7. Whether the land, though entered in rev 7. Whether the land, though entered in revenue record, had never been actually enue record, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the used for agriculture, that is, it had never been ploughed or tilled? Whether the used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? owner meant or intended to use it for agricultural purposes? 8. Whether the land was situate in a developed area? Whether its physical 8. Whether the land was situate in a developed area? Whether its physical 8. Whether the land was situate in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area racteristics, surrounding situation and use of the lands in the adjoining area racteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads and 9. Whether the land itself was developed by plotting and providing roads and 9. Whether the land itself was developed by plotting and providing roads and other facilities? 10. Whether there were 10. Whether there were any previous sales of portions of the land for non any previous sales of portions of the land for non- agricultural use? 11. Whether permission under section 63 of the Bombay Tenancy and Agricultural 11. Whether permission under section 63 of the Bombay Tenancy and Agricultural 11. Whether permission under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intend ed sale was in favour of Lands Act, 1948, was obtained because the sale or intend ed sale was in favour of Lands Act, 1948, was obtained because the sale or intend ed sale was in favour of a non-agriculturist? If s agriculturist? If so, whether the sale or intended sale to such non o, whether the sale or intended sale to such non- agriculturist was for non agriculturist was for non-agricultural or agricultural user.

Aggrieved, the assessee is in appeal before us on the following grounds: Aggrieved, the assessee is in appeal before us on the following grounds:- “1. That, on the facts and in the circumstances of the case, the Ld. Commissioner “1. That, on the facts and in the circumstances of the case, the Ld. Commissioner “1. That, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) of Income Tax (Appeals) - 13, Kolkata erred in holding that the Capital Gains holding that the Capital Gains arising on sale of immoveable property being lands sold by the partnership firm arising on sale of immoveable property being lands sold by the partnership firm arising on sale of immoveable property being lands sold by the partnership firm M/s Shree Annapurna Oil Mills vide two documents bearing No. 4482 of 2010 M/s Shree Annapurna Oil Mills vide two documents bearing No. 4482 of 2010 M/s Shree Annapurna Oil Mills vide two documents bearing No. 4482 of 2010 and 4483 of 2010 registered with the Addl. Dist. Sub Registrar, Haripal and 4483 of 2010 registered with the Addl. Dist. Sub Registrar, Haripal and 4483 of 2010 registered with the Addl. Dist. Sub Registrar, Haripal was not an agricultural land.

2. That, the Learned Commissioner of Income Tax (Appeals) erred in concluding

2. That, the Learned Commissioner of Income Tax (Appeals) erred in concluding

2. That, the Learned Commissioner of Income Tax (Appeals) erred in concluding that the provisions of section 50C of the Act are applicable to this case since the that the provisions of section 50C of the Act are applicable to this case since the that the provisions of section 50C of the Act are applicable to this case since the land sold by the partnership firm M/s Shree Annapurna Oil Mill land sold by the partnership firm M/s Shree Annapurna Oil Mill was not an was not an agricultural land.

3. That the Learned Commissioner of Income Tax (Appeals) erred in drawing

3. That the Learned Commissioner of Income Tax (Appeals) erred in drawing

3. That the Learned Commissioner of Income Tax (Appeals) erred in drawing aforesaid conclusions that the Land sold by the partnership Firm M/s Shree aforesaid conclusions that the Land sold by the partnership Firm M/s Shree aforesaid conclusions that the Land sold by the partnership Firm M/s Shree Annapurna Oil Mills was not agricultural land when the same land was held to Annapurna Oil Mills was not agricultural land when the same land was held to Annapurna Oil Mills was not agricultural land when the same land was held to be the agricultural land by th be the agricultural land by the Income Tax Officer, Ward 43(1), Kolkata in e Income Tax Officer, Ward 43(1), Kolkata in assessment order passed under section 143(3) of the Act in the case of Sri Rajeev assessment order passed under section 143(3) of the Act in the case of Sri Rajeev assessment order passed under section 143(3) of the Act in the case of Sri Rajeev Kumar Goyal another partner of the aforesaid partnership firm. Kumar Goyal another partner of the aforesaid partnership firm.

4. That, various conclusions drawn by Learned Commissioner of Income Tax

4. That, various conclusions drawn by Learned Commissioner of Income Tax

4. That, various conclusions drawn by Learned Commissioner of Income Tax (Appeals) to hold that the land sold by the partnership firm M/s Shree (Appeals) to hold that the land sold by the partnership firm M/s Shree (Appeals) to hold that the land sold by the partnership firm M/s Shree Annapurna Oil Mills are perverse based on some facts which are contrary to Annapurna Oil Mills are perverse based on some facts which are contrary to Annapurna Oil Mills are perverse based on some facts which are contrary to records and wrongly relying on judgem records and wrongly relying on judgements which are distinguishable and not ents which are distinguishable and not applicable to the facts of this case. applicable to the facts of this case.

5. That the Ld. Commissioner of Income Tax (Appeals) erred in holding that the 5. That the Ld. Commissioner of Income Tax (Appeals) erred in holding that the 5. That the Ld. Commissioner of Income Tax (Appeals) erred in holding that the provisions of section 50C are applicable in as much as the land in question was provisions of section 50C are applicable in as much as the land in question was provisions of section 50C are applicable in as much as the land in question was not an agricultural land. land.

6. That without prejudice to Ground No. 5 above, the Ld. Commissioner of 6. That without prejudice to Ground No. 5 above, the Ld. Commissioner of 6. That without prejudice to Ground No. 5 above, the Ld. Commissioner of Income Tax (Appeals) erred in concurring with the Assessing Officer's decision to Income Tax (Appeals) erred in concurring with the Assessing Officer's decision to Income Tax (Appeals) erred in concurring with the Assessing Officer's decision to apply the provisions of section 50C of the Act inspite of the fact that the apply the provisions of section 50C of the Act inspite of the fact that the apply the provisions of section 50C of the Act inspite of the fact that the Assessment Year: 2011-12 Sanjeev Kumar Goyal Assessing Officer refused to refer the matter of valuation to ova although the refused to refer the matter of valuation to ova although the refused to refer the matter of valuation to ova although the Appellant specifically requested for such reference to DVO. Appellant specifically requested for such reference to DVO.

7. That the Learned Commissioner of Income Tax (Appeals) exceeded his 7. That the Learned Commissioner of Income Tax (Appeals) exceeded his 7. That the Learned Commissioner of Income Tax (Appeals) exceeded his jurisdiction to direct the Assessing Officer to initiate the Ass jurisdiction to direct the Assessing Officer to initiate the Assessing Officer to tax essing Officer to tax the said amount in the hands of the partnership firm. the said amount in the hands of the partnership firm.

8. That the appellant craves leave to add, alter or withdraw any ground or 8. That the appellant craves leave to add, alter or withdraw any ground or 8. That the appellant craves leave to add, alter or withdraw any ground or grounds of appeal

at or before the hearing of the appeal.” grounds of appeal at or before the hearing of the appeal.”

6. On Ground Nos. 1 to 4, t Ground Nos. 1 to 4, the ld. Counsel for the assessee submits that submits that, the findings of the Ld. CIT(A) as well as the Ld. AO are perverse in as much as the findings of the Ld. CIT(A) as well as the Ld. AO are perverse in as much as the findings of the Ld. CIT(A) as well as the Ld. AO are perverse in as much as the subject land was agricultural land and therefore the Capital Gains on sale thereof is subject land was agricultural land and therefore the Capital Gains on sale thereof is subject land was agricultural land and therefore the Capital Gains on sale thereof is not liable to be taxed. The ld. Counsel for the assesee ld. Counsel for the assesee refers to the certificate issued ers to the certificate issued by “Gram Pradhan, Pantra Gram Panchayat” placed at Page 62 of the Paper Book by “Gram Pradhan, Pantra Gram Panchayat” placed at Page 62 of the Paper Book by “Gram Pradhan, Pantra Gram Panchayat” placed at Page 62 of the Paper Book, wherein the Gram Pradhan has certified that the subject land was agricultural land has certified that the subject land was agricultural land has certified that the subject land was agricultural land as per the records of Block Land Revenue Officer (BLRO). He also certified that the as per the records of Block Land Revenue Officer (BLRO). He also certified that the as per the records of Block Land Revenue Officer (BLRO). He also certified that the said land was being cultivated by one recorded Bargadar Sri Satish Murmu and his said land was being cultivated by one recorded Bargadar Sri Satish Murmu and his said land was being cultivated by one recorded Bargadar Sri Satish Murmu and his son and that there was no munici son and that there was no municipality or Development and Cantonment Board pality or Development and Cantonment Board within 8 Kms. from the said agricultural land. He also certified that the said land within 8 Kms. from the said agricultural land. He also certified that the said land within 8 Kms. from the said agricultural land. He also certified that the said land was recorded as agricultural land when the same was sold by M/s STP Ltd. was recorded as agricultural land when the same was sold by M/s STP Ltd. was recorded as agricultural land when the same was sold by M/s STP Ltd. He referred to the impugned assessment order wherein the to the impugned assessment order wherein the Ld. AO made enquiry Ld. AO made enquiry through his Inspector who himself visited the office of the Building, Land & through his Inspector who himself visited the office of the Building, Land & through his Inspector who himself visited the office of the Building, Land & Revenue Officer at Haripal, Hooghly on 28.02.2014 to enquire about the nature, Revenue Officer at Haripal, Hooghly on 28.02.2014 to enquire about the nature, Revenue Officer at Haripal, Hooghly on 28.02.2014 to enquire about the nature, location & type of the subject land. The Land & Revenue officer confirmed that location & type of the subject land. The Land & Revenue officer confirmed that location & type of the subject land. The Land & Revenue officer confirmed that the said land was converted into Industrial Land by the purchaser i.e. M/s STP Ltd said land was converted into Industrial Land by the purchaser i.e. M/s STP Ltd said land was converted into Industrial Land by the purchaser i.e. M/s STP Ltd. to whom the land was sold by the assessee by the assessee. He relied on this statement of the Land this statement of the Land Revenue Officer clearly shows that the land was an agricultural land when the Revenue Officer clearly shows that the land was an agricultural land when the Revenue Officer clearly shows that the land was an agricultural land when the same was sold by the firm and that the buyer had got the same converted into an ld by the firm and that the buyer had got the same converted into an ld by the firm and that the buyer had got the same converted into an industrial land only after its purchase from the assessee. after its purchase from the assessee. Reference was made Reference was made to the assessment order for the Assessment Year 2011 the assessment order for the Assessment Year 2011-12 passed by the AO under 12 passed by the AO under section 143(3) of the Act in t section 143(3) of the Act in the case of Sri Rajeev Kumar Goyal, the brother of the he case of Sri Rajeev Kumar Goyal, the brother of the assessee who was also a partner in the firm M/s Shree Annapurna Oil Mills and who was also a partner in the firm M/s Shree Annapurna Oil Mills and who was also a partner in the firm M/s Shree Annapurna Oil Mills and who also signed the sale deed. The copy of the Assessment order is placed at pages who also signed the sale deed. The copy of the Assessment order is placed at pages who also signed the sale deed. The copy of the Assessment order is placed at pages 76 to 77 of the Paper Book. In this case 76 to 77 of the Paper Book. In this case the assessee therein contended that the the assessee therein contended that the property sold by the assessee was an agricultural land and therefore the question property sold by the assessee was an agricultural land and therefore the question property sold by the assessee was an agricultural land and therefore the question Assessment Year: 2011-12 Sanjeev Kumar Goyal of capital gains did not arise. To verify the contentions of the assessee, the Income of capital gains did not arise. To verify the contentions of the assessee, the Income of capital gains did not arise. To verify the contentions of the assessee, the Income Tax Officer on investigation found that the prop Tax Officer on investigation found that the property was an agricultural land which erty was an agricultural land which was beyond the radius of eight kilometres from the municipal area. The Income was beyond the radius of eight kilometres from the municipal area. The Income was beyond the radius of eight kilometres from the municipal area. The Income Tax Officer thereupon held that the capital gain on sale of this land is not taxable. Tax Officer thereupon held that the capital gain on sale of this land is not taxable. Tax Officer thereupon held that the capital gain on sale of this land is not taxable. The said assessment order The said assessment order became final and was not subjected to revision or cted to revision or reassessment. In such circumstances of the case, the Ld. AO as well as the Ld. reassessment. In such circumstances of the case, the Ld. AO as well as the Ld. reassessment. In such circumstances of the case, the Ld. AO as well as the Ld. CIT(A) was wholly unjustified in taking a contrary view in this case. CIT(A) was wholly unjustified in taking a contrary view in this case. CIT(A) was wholly unjustified in taking a contrary view in this case. He relied on the order of the this Bench of the Tribunal this Bench of the Tribunal in the case of ITO vs. Malay K ITO vs. Malay Kumar Mitter in Mitter in ITA No. 307/Kol/2012 wherein on similar facts the case was decided in wherein on similar facts the case was decided in favour of the co-owner of the landed property. In this case the Tribunal held and owner of the landed property. In this case the Tribunal held and owner of the landed property. In this case the Tribunal held and observed as under: “5. At the outset, ld. Counsel for the assessee submitted that the iss “5. At the outset, ld. Counsel for the assessee submitted that the issue is squarely ue is squarely covered in favour of the assessee. He referred to the Tribunal’s decision in the covered in favour of the assessee. He referred to the Tribunal’s decision in the covered in favour of the assessee. He referred to the Tribunal’s decision in the case of co-owner of the property Shri Arijit Mitra as above and contended that in owner of the property Shri Arijit Mitra as above and contended that in owner of the property Shri Arijit Mitra as above and contended that in view of the aforesaid Tribunal decision, no capital gain was eligible in the view of the aforesaid Tribunal decision, no capital gain was eligible in the view of the aforesaid Tribunal decision, no capital gain was eligible in the assessee’s hands.

6. Ld. D.R. could not contradict to this submission of the ld. Counsel of assessee.

6. Ld. D.R. could not contradict to this submission of the ld. Counsel of assessee.

7. We have heard the rival submissions and perused the material available on 7. We have heard the rival submissions and perused the material available on 7. We have heard the rival submissions and perused the material available on record. We find that this issue is squarely covered in favour of the assessee record. We find that this issue is squarely covered in favour of the assessee record. We find that this issue is squarely covered in favour of the assessee. The Tribunal in the hands of the co Tribunal in the hands of the co-owner of the property had held that the lands in owner of the property had held that the lands in question did not constitute ‘capital asset’ under section 2(14) of the Income Tax question did not constitute ‘capital asset’ under section 2(14) of the Income Tax question did not constitute ‘capital asset’ under section 2(14) of the Income Tax Act because Rajarhat Municipality was not one of the notified Municipality as Act because Rajarhat Municipality was not one of the notified Municipality as Act because Rajarhat Municipality was not one of the notified Municipality as per the Central Government’s Notification dated 28.12.1999. Hence, respectfully entral Government’s Notification dated 28.12.1999. Hence, respectfully entral Government’s Notification dated 28.12.1999. Hence, respectfully following the precedent, we hold that the land in question, which was following the precedent, we hold that the land in question, which was following the precedent, we hold that the land in question, which was transferred by the assessee, was an agricultural land and it did not fall within transferred by the assessee, was an agricultural land and it did not fall within transferred by the assessee, was an agricultural land and it did not fall within section 2(14) of the Income Tax Act. the ambit of ‘capital asset’ under the ambit of ‘capital asset’ under section 2(14) of the Income Accordingly we confirm the order of ld. CIT(Appeals). Accordingly we confirm the order of ld. CIT(Appeals).” 6.1. The ld. Counsel of the assessee submitted The ld. Counsel of the assessee submitted that the land purchased by the firm that the land purchased by the firm was registered as agricultural land in the revenue records at the time of purchase and was registered as agricultural land in the revenue records at the time of purchase and was registered as agricultural land in the revenue records at the time of purchase and continued to be same when the land was sold. The land was situated in an area which continued to be same when the land was sold. The land was situated in an area which continued to be same when the land was sold. The land was situated in an area which is beyond 8 Kilometres from any municipality and is beyond 8 Kilometres from any municipality and/or cantonment Board. Thus the said /or cantonment Board. Thus the said land was not a capital asset within the meaning of section 2(14) of the Act. The land was not a capital asset within the meaning of section 2(14) of the Act. The land was not a capital asset within the meaning of section 2(14) of the Act. The conversion of land from agricultural to industrial subsequently by the buyer of the land conversion of land from agricultural to industrial subsequently by the buyer of the land conversion of land from agricultural to industrial subsequently by the buyer of the land will not have any adverse effect on its chargeabil will not have any adverse effect on its chargeability or otherwise in the case of the ity or otherwise in the case of the Assessment Year: 2011-12 Sanjeev Kumar Goyal seller of such land. The area was not notified for urbanisation in the latest Notification seller of such land. The area was not notified for urbanisation in the latest Notification seller of such land. The area was not notified for urbanisation in the latest Notification No. 11186 dated 28.12.1999 issued by the Central Government. Therefore the gain No. 11186 dated 28.12.1999 issued by the Central Government. Therefore the gain No. 11186 dated 28.12.1999 issued by the Central Government. Therefore the gain arising on sale of the same cannot be charged to arising on sale of the same cannot be charged to capital gains. He relied on certain case He relied on certain case- law for this proposition, which we would be referring to as and when required. law for this proposition, which we would be referring to as and when required. law for this proposition, which we would be referring to as and when required. 6.2. On Ground Nos. 5 & 6, the ld. Counsel for the assessee submitted that the On Ground Nos. 5 & 6, the ld. Counsel for the assessee submitted that the On Ground Nos. 5 & 6, the ld. Counsel for the assessee submitted that the assessee has challenged the order of Ld. CIT(A) wherein h has challenged the order of Ld. CIT(A) wherein he held that the provisions of e held that the provisions of section 50C are applicable since the land sold by the assessee was not an agricultural section 50C are applicable since the land sold by the assessee was not an agricultural section 50C are applicable since the land sold by the assessee was not an agricultural land. He submitted that the Ld. CIT(A) was not justified in confirming the action of that the Ld. CIT(A) was not justified in confirming the action of that the Ld. CIT(A) was not justified in confirming the action of the AO when the assessee sold agricultural land and confirming the application of section onfirming the application of section 50C of the Act even when the AO did not refer the valuation to DVO. The when the AO did not refer the valuation to DVO. The when the AO did not refer the valuation to DVO. The ld. Counsel for the assessee relied on the to the judgement of Hon’ble Calcutta High Court in the case to the judgement of Hon’ble Calcutta High Court in the case to the judgement of Hon’ble Calcutta High Court in the case of Sunil Agarwal vs. CIT in ITAT No. 221 of of Sunil Agarwal vs. CIT in ITAT No. 221 of 2013 and GA No. 3686 of 2013 wherein 2013 and GA No. 3686 of 2013 wherein Hon’ble High Court held that Hon’ble High Court held that “For the aforesaid reasons, we are of the opinion that the valuation by the “For the aforesaid reasons, we are of the opinion that the valuation by the “For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to departmental valuation officer, contemplated under Section 50C, is required to departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The avoid miscarriage of justice. The legislature did not intend that the capital gain legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub should be fixed merely on the basis of the valuation to be made by the District Sub should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide Registrar for the purpose of stamp duty. The legislature has taken care to provide Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatm adequate machinery to give a fair treatment to the citizen/taxpayer. There is no ent to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the reason why the machinery provided by the legislature should not be used and the reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by benefit thereof should be refused. Even in a case where no such prayer is made by benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who m the learned advocate representing the assessee, who may not have been properly ay not have been properly instructed in law, the assessing officer, discharging a quasi instructed in law, the assessing officer, discharging a quasi-judicial function, has the judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to bounden duty to act fairly and to give a fair treatment by giving him an option to bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law.” follow the course provided by law.” 6.3. On Ground No. 7, the ld. Counsel for the assessee submitted that the the ld. Counsel for the assessee submitted that the the ld. Counsel for the assessee submitted that the directions issued by Ld. CIT(A) to the the Assessing Officer, to re-open the case of the partnership open the case of the partnership firm M/s. Shree Annapurna Oil Mills, to bring to tax M/s. Shree Annapurna Oil Mills, to bring to tax the Capital Gains in the hands of the Capital Gains in the hands of the partnership firm is without ju without jurisdiction, illegal and invalid. He submitted that risdiction, illegal and invalid. He submitted that the Ld. CIT(A) has no such powers to issue such directions. Ld. CIT(A) has no such powers to issue such directions. He submitted that t He submitted that the powers of the CIT(A) is prescribed in section 251 of the Act of the CIT(A) is prescribed in section 251 of the Act and the Section and the Section authorises the CIT(A) to confirm, reduce, enhance or annul the assessment , reduce, enhance or annul the assessment and that he and that he is not empowered to issue directions which do not germane from the appeal before him. empowered to issue directions which do not germane from the appeal before him. empowered to issue directions which do not germane from the appeal before him. He argued that the Ld. CIT(A) exceeded his jurisdiction the Ld. CIT(A) exceeded his jurisdiction by issuing directions to the AO to directions to the AO to initiate 147 proceedings in the case of the partnership firm who wa initiate 147 proceedings in the case of the partnership firm who was not a party before s not a party before him. He submitted that the action taken by Ld. AO in pursuance to the impugned the action taken by Ld. AO in pursuance to the impugned the action taken by Ld. AO in pursuance to the impugned Assessment Year: 2011-12 Sanjeev Kumar Goyal directions contained in the order passed by Ld. CIT(A) be direct directions contained in the order passed by Ld. CIT(A) be directed to be illegal and void ed to be illegal and void ab initio.

7. The ld. D/R, controverted the submissions of the assessee and controverted the submissions of the assessee and controverted the submissions of the assessee and relied on the order of the Assessing Officer as well as the ld. CIT(A) and order of the Assessing Officer as well as the ld. CIT(A) and argued that the land in ed that the land in question is not agricultural land. He referred to the question is not agricultural land. He referred to the report of the inspector deputed, report of the inspector deputed, the facts narrated therein, the enquiries made by the Assessing Officer and the enquiries made by the Assessing Officer and the enquiries made by the Assessing Officer and the recitals in the sale deeds, which was brought out by the Assessing Officer in his assessment order the sale deeds, which was brought out by the Assessing Officer in his assessment order the sale deeds, which was brought out by the Assessing Officer in his assessment order. He argued that the land in question was nev argued that the land in question was never used for agricultural purposes, nor was er used for agricultural purposes, nor was purchased with an intention for being used for agricultural purposes. He pointed out purchased with an intention for being used for agricultural purposes. He pointed out purchased with an intention for being used for agricultural purposes. He pointed out that all the surrounding areas were industrial plots and the assessee’s land even had an that all the surrounding areas were industrial plots and the assessee’s land even had an that all the surrounding areas were industrial plots and the assessee’s land even had an industrial shed. He took this Bench thr He took this Bench through the order of the Assessing Officer and the ough the order of the Assessing Officer and the ld. CIT(A) and prayed that he order of the Assessing Officer be upheld. The ld. D/R prayed that he order of the Assessing Officer be upheld. The ld. D/R prayed that he order of the Assessing Officer be upheld. The ld. D/R further submitted that the assessee should not have any grievance in this case, as the further submitted that the assessee should not have any grievance in this case, as the further submitted that the assessee should not have any grievance in this case, as the ld. CIT(A) has deleted the addition i addition in his hands. On the directions of the ld. CIT(A) n his hands. On the directions of the ld. CIT(A) given to the Assessing Officer, he submitted that such directions can be given and it is given to the Assessing Officer, he submitted that such directions can be given and it is given to the Assessing Officer, he submitted that such directions can be given and it is for the Assessing Officer to taken guidance from the same and that these directions for the Assessing Officer to taken guidance from the same and that these directions for the Assessing Officer to taken guidance from the same and that these directions of the ld. CIT(A) issued to the As the ld. CIT(A) issued to the Assessing Officer, are not binding.

“(i) Khaitan Lefin Limited vs. CIT Khaitan Lefin Limited vs. CIT – – The issue in this case is The issue in this case is identical to the issue in the instant appeal. Hon’ble Kolkata Tribunal in Para identical to the issue in the instant appeal. Hon’ble Kolkata Tribunal in Para 4 of its order 4 of its order held and observed as under: held and observed as under:

Assessment Year: 2011-12 Sanjeev Kumar Goyal 4. There is no dispute that the assessee had indeed sold its land in question 4. There is no dispute that the assessee had indeed sold its land in question 4. There is no dispute that the assessee had indeed sold its land in question measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district Ranga Reddy in erstwhile Andhra Pradesh during the rel Ranga Reddy in erstwhile Andhra Pradesh during the relevant previous year; The evant previous year; The sole dispute in the instant lis that arises for our apt adjudication is as to whether sole dispute in the instant lis that arises for our apt adjudication is as to whether sole dispute in the instant lis that arises for our apt adjudication is as to whether the assessee’s land sold was a capital asset or not falling within 8 Kms. of the the assessee’s land sold was a capital asset or not falling within 8 Kms. of the the assessee’s land sold was a capital asset or not falling within 8 Kms. of the “GHMC” u/s 2(14)(III)(B) of the Act as applicable in the impugne “GHMC” u/s 2(14)(III)(B) of the Act as applicable in the impugned Assessment d Assessment Year. The taxpayer stand throughout is that its land is not a capital asset since it Year. The taxpayer stand throughout is that its land is not a capital asset since it Year. The taxpayer stand throughout is that its land is not a capital asset since it is situated beyond 8 Kms. distance of any municipality whereas the Revenue’s is situated beyond 8 Kms. distance of any municipality whereas the Revenue’s is situated beyond 8 Kms. distance of any municipality whereas the Revenue’s case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that is happens to be a hub of major economic activity including aviation sector. that is happens to be a hub of major economic activity including aviation sector. that is happens to be a hub of major economic activity including aviation sector. We find no merit in the latters stand based on the lower authority’s respective We find no merit in the latters stand based on the lower authority’s respective We find no merit in the latters stand based on the lower authority’s respective findings. We make it clear first of all that there is no rebuttal coming from We make it clear first of all that there is no rebuttal coming from We make it clear first of all that there is no rebuttal coming from the department t the department that the land in question has ever been converted from hat the land in question has ever been converted from agricultural to non agricultural to non-agricultural use at any point of time before the sale in agricultural use at any point of time before the sale in question. The state government’s revenue records strongly support the question. The state government’s revenue records strongly support the question. The state government’s revenue records strongly support the assessee’s case rather that its lands are very much agr assessee’s case rather that its lands are very much agricultural in nature. icultural in nature. The Assessing Officer tried to apply “performance” test that for The Assessing Officer tried to apply “performance” test that for The Assessing Officer tried to apply “performance” test that for determination of land in issue what is required to be shown is connection determination of land in issue what is required to be shown is connection determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the with the agricultural purpose is the use and not the mere possibility of the with the agricultural purpose is the use and not the mere possibility of the land user by some p land user by some possible future owner for agricultural objects. We see no ossible future owner for agricultural objects. We see no merit in the impugned reasoning. merit in the impugned reasoning. The legislature makes it clear that The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scop Government may, having regard to the extent/scope for urbanisation and other e for urbanisation and other consideration, specifically in the behalf.....” consideration, specifically in the behalf.....” (ii) Naiyer Sultan v. ITO Naiyer Sultan v. ITO [2019] 106 taxmann.com 191 (Kol ITAT) “7. We have considered the rival submissions on this issue and also perused the We have considered the rival submissions on this issue and also perused the We have considered the rival submissions on this issue and also perused the relevant material available on record. relevant material available on record. During the year under consideration, land During the year under consideration, land owned jointly by both the assessees in the present case was sold and the gain owned jointly by both the assessees in the present case was sold and the gain owned jointly by both the assessees in the present case was sold and the gain arising from the sai arising from the said land was claimed to be exempt on the ground that the said d land was claimed to be exempt on the ground that the said land being an agricultural land was not a capital asset within the meaning of land being an agricultural land was not a capital asset within the meaning of land being an agricultural land was not a capital asset within the meaning of section 2(14). As defined in section 2(14), "capital asset" means property of any section 2(14). As defined in section 2(14), "capital asset" means property of any section 2(14). As defined in section 2(14), "capital asset" means property of any kind held by an assessee, whether or kind held by an assessee, whether or not connected with his business or not connected with his business or profession, but does not include, inter alia, as per clause (iii) agricultural land in profession, but does not include, inter alia, as per clause (iii) agricultural land in profession, but does not include, inter alia, as per clause (iii) agricultural land in India not being land situated in any area within the distance, measured aerially, India not being land situated in any area within the distance, measured aerially, India not being land situated in any area within the distance, measured aerially, not being more than 8 Kms. from the local limits of not being more than 8 Kms. from the local limits of any Municipality or any Municipality or Cantonment Board which has a population of more than 10 lakhs. In support of Cantonment Board which has a population of more than 10 lakhs. In support of Cantonment Board which has a population of more than 10 lakhs. In support of this claim, a certificate issued by the concerned Tehsildar of Tirupporur was this claim, a certificate issued by the concerned Tehsildar of Tirupporur was this claim, a certificate issued by the concerned Tehsildar of Tirupporur was submitted by the assessees showing that the land sold by them was located 20 submitted by the assessees showing that the land sold by them was located 20 submitted by the assessees showing that the land sold by them was located 20 Km. away from the limit of Chennai Municipal Corporation. Based on this away from the limit of Chennai Municipal Corporation. Based on this away from the limit of Chennai Municipal Corporation. Based on this certificate as well as the provisions of section 2(14)(iii), the claim of the assessees certificate as well as the provisions of section 2(14)(iii), the claim of the assessees certificate as well as the provisions of section 2(14)(iii), the claim of the assessees for exemption was allowed by the Assessing Officer in the assessments originally for exemption was allowed by the Assessing Officer in the assessments originally for exemption was allowed by the Assessing Officer in the assessments originally completed under se completed under section 143(3)/143(1). The said assessments, however, were The said assessments, however, were subsequently reopened by him after recording the reasons and a perusal of the subsequently reopened by him after recording the reasons and a perusal of the subsequently reopened by him after recording the reasons and a perusal of the reasons so recorded by the Assessing Officer, which are reproduced in the reasons so recorded by the Assessing Officer, which are reproduced in the reasons so recorded by the Assessing Officer, which are reproduced in the foregoing portion of this order, shows that the foregoing portion of this order, shows that the belief about the escapement of belief about the escapement of assessees income from assessments was formed by the Assessing Officer on the assessees income from assessments was formed by the Assessing Officer on the assessees income from assessments was formed by the Assessing Officer on the basis of information received in the form of a communication from DDIT(Inv.), basis of information received in the form of a communication from DDIT(Inv.), basis of information received in the form of a communication from DDIT(Inv.), Chennai, which stated that the area of Chennai Metropolitan region wa Chennai, which stated that the area of Chennai Metropolitan region wa Chennai, which stated that the area of Chennai Metropolitan region was much larger than what was stated by the Tehsildar in his report and the land sold by larger than what was stated by the Tehsildar in his report and the land sold by larger than what was stated by the Tehsildar in his report and the land sold by the assessees was situated at about 3 Kms. from the Chennai Metropolitan area. the assessees was situated at about 3 Kms. from the Chennai Metropolitan area. the assessees was situated at about 3 Kms. from the Chennai Metropolitan area. On the basis of the said information, the Assessing Officer entertained a belief that On the basis of the said information, the Assessing Officer entertained a belief that On the basis of the said information, the Assessing Officer entertained a belief that the gain arising from the sale of the said land was chargeable to tax and the gain arising from the sale of the said land was chargeable to tax and the gain arising from the sale of the said land was chargeable to tax and the income of the assessees in the form of capital gains had escaped assessment. income of the assessees in the form of capital gains had escaped assessment. income of the assessees in the form of capital gains had escaped assessment. As rightly contended by the ld. Counsel for the assessees in this regard, the rightly contended by the ld. Counsel for the assessees in this regard, the rightly contended by the ld. Counsel for the assessees in this regard, the location of the land from t location of the land from the local limits of Chennai Municipal Corporation he local limits of Chennai Municipal Corporation was relevant to decide as to whether the said land was an agricultural land was relevant to decide as to whether the said land was an agricultural land was relevant to decide as to whether the said land was an agricultural land Assessment Year: 2011-12 Sanjeev Kumar Goyal in India within the meaning of clause (iii) of sub in India within the meaning of clause (iii) of sub-section (14) of section 2 section (14) of section 2 and the distance of the land from the Chennai Metropol and the distance of the land from the Chennai Metropolitan area was not itan area was not relevant in this context. relevant in this context. The information received by the Assessing Officer The information received by the Assessing Officer regarding the location of the land being situated at about 3 Kms. from the regarding the location of the land being situated at about 3 Kms. from the regarding the location of the land being situated at about 3 Kms. from the Chennai Metropolitan area thus was vague and irrelevant to decide the issue Chennai Metropolitan area thus was vague and irrelevant to decide the issue Chennai Metropolitan area thus was vague and irrelevant to decide the issue relating to the exemption claimed by the assessees in respect of gain from the sale the exemption claimed by the assessees in respect of gain from the sale the exemption claimed by the assessees in respect of gain from the sale of their land…..” (iii) Pr. CIT vs. P. S. Raghupathy Pr. CIT vs. P. S. Raghupathy [2018] 96 taxmann.com 200 (Mad) – – In this case the assessee sold a piece of land and claimed that the land was an agricultural lan the assessee sold a piece of land and claimed that the land was an agricultural lan the assessee sold a piece of land and claimed that the land was an agricultural land recorded in Revenue records and the same was situated beyond 8 K.M from the nearest recorded in Revenue records and the same was situated beyond 8 K.M from the nearest recorded in Revenue records and the same was situated beyond 8 K.M from the nearest municipality. The Hon’ble Madras High Court held and observed as under: municipality. The Hon’ble Madras High Court held and observed as under: “18. Mr. T.R. Senthil Kumar, Mr. T.R. Senthil Kumar, emphatically argued that the Assessing Officer emphatically argued that the Assessing Officer arrived at his finding based on the fact that the land in question had been arrived at his finding based on the fact that the land in question had been arrived at his finding based on the fact that the land in question had been classified in the records of the Sub Registrar Office as revenue land. However, as classified in the records of the Sub Registrar Office as revenue land. However, as classified in the records of the Sub Registrar Office as revenue land. However, as would appear from the order of the assessment its would appear from the order of the assessment itself, it was classified as elf, it was classified as agricultural land in the revenue records. Even otherwise, the learned Tribunal agricultural land in the revenue records. Even otherwise, the learned Tribunal agricultural land in the revenue records. Even otherwise, the learned Tribunal had looked into the relevant materials including the revenue records, as also had looked into the relevant materials including the revenue records, as also had looked into the relevant materials including the revenue records, as also records which indicate that the respondent assessee ran a Nursery. records which indicate that the respondent assessee ran a Nursery.

(v) Harniks Park (P.) Ltd. vs. ITO Park (P.) Ltd. vs. ITO [2014] 41 taxmann.com 109 (Hyd [2014] 41 taxmann.com 109 (Hyd – ITAT) – In this case the following observations of the Hon’ble Tribunal are relevant to this case. this case the following observations of the Hon’ble Tribunal are relevant to this case. this case the following observations of the Hon’ble Tribunal are relevant to this case. “48. .............And as in the present case, admittedly, the agricultural land And as in the present case, admittedly, the agricultural land And as in the present case, admittedly, the agricultural land of the assessee is o of the assessee is outside the Municipal Limits of Hyderabad Municipality utside the Municipal Limits of Hyderabad Municipality and that also 8 km away from the outer limits of this Municipality, and that also 8 km away from the outer limits of this Municipality, and that also 8 km away from the outer limits of this Municipality, assessee's land does not come within the purview of section 2(14)(iii) either assessee's land does not come within the purview of section 2(14)(iii) either assessee's land does not come within the purview of section 2(14)(iii) either under sub clause (a) or (b) of the Act, hence the same c under sub clause (a) or (b) of the Act, hence the same cannot be considered annot be considered as capital asset within the meaning of this section. as capital asset within the meaning of this section. Hence, no capital gain tax Hence, no capital gain tax can be charged on the sale transaction of this land entered by the assessee. This is can be charged on the sale transaction of this land entered by the assessee. This is can be charged on the sale transaction of this land entered by the assessee. This is supported by the order of Kolkata Bench of this Tribunal in the case of supported by the order of Kolkata Bench of this Tribunal in the case of supported by the order of Kolkata Bench of this Tribunal in the case of Arijit Mitra (cited supra), Haresh V. Milani v. Jt. CIT (cited supra), Haresh V. Milani v. Jt. CIT [2008] 114 ITD 428 (Pune) [2008] 114 ITD 428 (Pune) and M.S. Srinivasa Naicker v. ITO M.S. Srinivasa Naicker v. ITO [2007] 292 ITR 481/[2008] 169 Taxman 255 (Mad) [2007] 292 ITR 481/[2008] 169 Taxman 255 (Mad). By borrowing the meaning from the above section, we are not able to appreciate By borrowing the meaning from the above section, we are not able to appreciate By borrowing the meaning from the above section, we are not able to appreciate

Assessment Year: 2011-12 Sanjeev Kumar Goyal that the land falls within the ter that the land falls within the territorial limit of any municipality without ritorial limit of any municipality without notification of Central Government notification of Central Government as held by the Karnataka High Court in the as held by the Karnataka High Court in the case of Madhukumar N. (HUF) (cited supra) case of Madhukumar N. (HUF) (cited supra) 50. Further, we make it clear that when the land which does not fall under the Further, we make it clear that when the land which does not fall under the Further, we make it clear that when the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in section 2(14)(iii) of the IT Act and an assessee who is engaged in section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural operations in such agricultural land and also being specified as agricultural operations in such agricultural land and also being specified as agricultural operations in such agricultural land and also being specified as agricultural land in Revenue records, agricultural land in Revenue records, the land is not subjected to any the land is not subjected to any conversion as non conversion as non-agricultural land by the assessee or any other concerned he assessee or any other concerned person, transfers such agricultural land as it is and where it is basis, in person, transfers such agricultural land as it is and where it is basis, in person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like the case before us such circumstances, in our opinion, such transfer like the case before us such circumstances, in our opinion, such transfer like the case before us cannot be considered as a transfer of capital asset cannot be considered as a transfer of capital asset or the transaction or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income to sale of land was not an adventure in the nature of trade so as to tax the income to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income.” arising out of this transaction as business income.” (vi) CIT vs. Siddharth J. Desai[1982] 10 Taxman 1 (Guj) = CIT vs. Siddharth J. Desai[1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 [1983] 139 ITR 628 (Guj) Held 1. Several factors are relevant and are weighted against each other Several factors are relevant and are weighted against each other Several factors are relevant and are weighted against each other while determining the true nature and character of the land. The major while determining the true nature and character of the land. The major while determining the true nature and character of the land. The major factors which are considered as having a leaning on the determination of the factors which are considered as having a leaning on the determination of the factors which are considered as having a leaning on the determination of the question are as follows : question are as follows : a. whether, the l whether, the land was classified in the revenue record as agricultural and was classified in the revenue record as agricultural and whether it was subject to the payment of land revenue, but this factor and whether it was subject to the payment of land revenue, but this factor and whether it was subject to the payment of land revenue, but this factor alone will not be conclusive; alone will not be conclusive; b. whether the land was actually or ordinarily used for agricultural whether the land was actually or ordinarily used for agricultural whether the land was actually or ordinarily used for agricultural purposes at or about the purposes at or about the relevant time; c. whether such user of the land was for a long period or whether it was whether such user of the land was for a long period or whether it was whether such user of the land was for a long period or whether it was of a temporary character or by way of stop of a temporary character or by way of stop-gap arrangement; d. whether the income derived from the agricultural operations carried whether the income derived from the agricultural operations carried whether the income derived from the agricultural operations carried on in the land bore any rational pr on in the land bore any rational proportion to the investment made in oportion to the investment made in purchasing the land; purchasing the land; e. whether the permission under section 65 of the Bombay Land whether the permission under section 65 of the Bombay Land whether the permission under section 65 of the Bombay Land Revenue Code, was obtained for the non Revenue Code, was obtained for the non-agricultural use of the lands: if so, agricultural use of the lands: if so, when and by whom; whether such permission was in respect of when and by whom; whether such permission was in respect of the whole or a the whole or a portion of the land; if the permission was in respect of a portion of the land portion of the land; if the permission was in respect of a portion of the land portion of the land; if the permission was in respect of a portion of the land and if it was obtained in past, what was the nature of the user of the said and if it was obtained in past, what was the nature of the user of the said and if it was obtained in past, what was the nature of the user of the said portion of the land on the material date; portion of the land on the material date; f. whether the land, on the relevant date, h whether the land, on the relevant date, had ceased to be put to the ad ceased to be put to the agricultural use: if so, whether, it was put to an alternative use; whether, such agricultural use: if so, whether, it was put to an alternative use; whether, such agricultural use: if so, whether, it was put to an alternative use; whether, such a cess or and or alternative user was of a permanent or temporary nature; a cess or and or alternative user was of a permanent or temporary nature; a cess or and or alternative user was of a permanent or temporary nature; g. whether the land, though entered in revenue record, had never been whether the land, though entered in revenue record, had never been whether the land, though entered in revenue record, had never been actually used for agriculture; whether the owner meant or intended to use it tually used for agriculture; whether the owner meant or intended to use it tually used for agriculture; whether the owner meant or intended to use it for agricultural purposes; for agricultural purposes; h. whether the land was situate in a developed area; whether its whether the land was situate in a developed area; whether its whether the land was situate in a developed area; whether its physical characteristics, surrounding situation and use of the lands in the physical characteristics, surrounding situation and use of the lands in the physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural; a were such as would indicate that the land was agricultural; a were such as would indicate that the land was agricultural; Assessment Year: 2011-12 Sanjeev Kumar Goyal i. whether the land itself was developed by plotting and providing whether the land itself was developed by plotting and providing whether the land itself was developed by plotting and providing roads and other facilities; roads and other facilities; j. whether there were any previous sales of portions of the land for non whether there were any previous sales of portions of the land for non whether there were any previous sales of portions of the land for non- agricultural use; k. whether permission under section 63 of the Bombay Tenancy and hether permission under section 63 of the Bombay Tenancy and hether permission under section 63 of the Bombay Tenancy and Agricultural Lands Act, was obtained because the sale or intended sale was in Agricultural Lands Act, was obtained because the sale or intended sale was in Agricultural Lands Act, was obtained because the sale or intended sale was in favour of a non-agriculturist: if so, whether the sale or intended sale to such agriculturist: if so, whether the sale or intended sale to such agriculturist: if so, whether the sale or intended sale to such non-agriculturist was for non agriculturist was for non-agricultural or agricultural user: l. whether an agriculturist would purchase the land for agricultural whether an agriculturist would purchase the land for agricultural whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner purposes at the price at which the land was sold and whether the owner purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural would have ever sold the land valuing it as a property yielding agricultural would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield; and the basis of its yield; and m. whether the land was sold on yardage or on acreage basis. whether the land was sold on yardage or on acreage basis.

Assessment Year: 2011-12 Sanjeev Kumar Goyal Proposition 2:- That the capital asset would not lose its character of being an That the capital asset would not lose its character of being an That the capital asset would not lose its character of being an agricultural land merely because the cultivation of the said land was done by a agricultural land merely because the cultivation of the said land was done by a agricultural land merely because the cultivation of the said land was done by a person other than the assessee. person other than the assessee. Proposition 3:- That the characteristics of the agricultural land would not be lost the characteristics of the agricultural land would not be lost the characteristics of the agricultural land would not be lost even though the land was not used for agricultural purposes prior to its sale. even though the land was not used for agricultural purposes prior to its sale. even though the land was not used for agricultural purposes prior to its sale. Proposition 4:- That the sale of land to an industrial unit, when the conversion of That the sale of land to an industrial unit, when the conversion of That the sale of land to an industrial unit, when the conversion of land takes place subsequent to land takes place subsequent to the sale by the buyer, cannot lead to a conclusion the sale by the buyer, cannot lead to a conclusion that the land sold is not agricultural land. that the land sold is not agricultural land. “Khaitan Lefin Limited vs. CIT Khaitan Lefin Limited vs. CIT Judgment dated 25.01.2019 (Kol Trib.) ITA No.200/Kol/2016, Judgment dated 25.01.2019 (Kol Trib.) “4. There is no dispute that the assessee had indeed sold its land in question “4. There is no dispute that the assessee had indeed sold its land in question “4. There is no dispute that the assessee had indeed sold its land in question measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district Ranga Reddy in erstwhile Andhra Pradesh during the relevant district Ranga Reddy in erstwhile Andhra Pradesh during the relevant district Ranga Reddy in erstwhile Andhra Pradesh during the relevant previous year; The sole dispute in th previous year; The sole dispute in the instant lis that arises for our apt e instant lis that arises for our apt adjudication is as to whether the assessee's land sold was a capital asset or adjudication is as to whether the assessee's land sold was a capital asset or adjudication is as to whether the assessee's land sold was a capital asset or not falling within 8 Kms. of the "GHMC" u/s 2(14)(III)(B) of not falling within 8 Kms. of the "GHMC" u/s 2(14)(III)(B) of the Act as the Act as applicable in the impugned Assessment Year. The taxpayer stand applicable in the impugned Assessment Year. The taxpayer stand applicable in the impugned Assessment Year. The taxpayer stand throughout is that its land is not a capital asset since it is situated beyond 8 ughout is that its land is not a capital asset since it is situated beyond 8 ughout is that its land is not a capital asset since it is situated beyond 8 Kms. distance of any municipality whereas the Revenue's case is that Kms. distance of any municipality whereas the Revenue's case is that Kms. distance of any municipality whereas the Revenue's case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that is happens to be a hub of major econo is happens to be a hub of major economic activity including aviation sector. mic activity including aviation sector. We find no merit in the latters stand based on the lower authority's We find no merit in the latters stand based on the lower authority's We find no merit in the latters stand based on the lower authority's respective findings. We make it clear first of all that there is no rebuttal respective findings. We make it clear first of all that there is no rebuttal respective findings. We make it clear first of all that there is no rebuttal coming from the department coming from the department that the land in question has ever been that the land in question has ever been converted from agricultural to non verted from agricultural to non-agricultural use at any point of time agricultural use at any point of time before the sale in question. before the sale in question. The state government's revenue records strongly The state government's revenue records strongly support the assessee's case rather that its lands are very much agricultural support the assessee's case rather that its lands are very much agricultural support the assessee's case rather that its lands are very much agricultural in nature. The Assessing Officer The Assessing Officer tried to apply "performance" test that for tried to apply "performance" test that for determination of land in issue what is required to be shown is connection determination of land in issue what is required to be shown is connection determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the with the agricultural purpose is the use and not the mere possibility of the with the agricultural purpose is the use and not the mere possibility of the land user by some possible future owner for agricultural obje land user by some possible future owner for agricultural objects. We see no cts. We see no merit in the impugned reasoning. merit in the impugned reasoning. The legislature makes it clear that The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the agricultural lands beyond 8 Kms. from the local municipality etc.; as the agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scope for Central Government may, having regard to the extent/scope for Central Government may, having regard to the extent/scope for urbanisation and other consideration urbanisation and other consideration, specifically in the behalf. ….”

DCIT v. P. Ashok Kumar DCIT v. P. Ashok Kumar Judgment dated 20.01.2011 (Chennai Trib.) ITA No.1581/Mds/2010, Judgment dated 20.01.2011 (Chennai Trib.) “6. There are good reasons given by the ld.AR for explaining that the land “6. There are good reasons given by the ld.AR for explaining that the land “6. There are good reasons given by the ld.AR for explaining that the land was not recently used for cultivation. was not recently used for cultivation. In our considered opinion, the non In our considered opinion, the non- cultivation of a piece of land does not loose its character of cultivation of a piece of land does not loose its character of cultivation of a piece of land does not loose its character of Assessment Year: 2011-12 Sanjeev Kumar Goyal agricultural land unless the user of the land has been specifically got agricultural land unless the user of the land has been specifically got agricultural land unless the user of the land has been specifically got changed before such sale. Likewise, the future use of this land will not changed before such sale. Likewise, the future use of this land will not changed before such sale. Likewise, the future use of this land will not disentitle the assessee from the benefit as was available to him at the e assessee from the benefit as was available to him at the e assessee from the benefit as was available to him at the time of the sale. Therefore, we reaffirm that the cumulative effect of the Therefore, we reaffirm that the cumulative effect of the Therefore, we reaffirm that the cumulative effect of the above mentioned facts and circumstances is that the land in question was above mentioned facts and circumstances is that the land in question was above mentioned facts and circumstances is that the land in question was ‘agricultural land’ at the time of sale and the a ‘agricultural land’ at the time of sale and the assessee is entitled to Long ssessee is entitled to Long Term Capital Gains thereon. Term Capital Gains thereon.

Assessment Year: 2011-12 Sanjeev Kumar Goyal Gain is attracted. Consequently, we confirm the order appealed against Gain is attracted. Consequently, we confirm the order appealed against Gain is attracted. Consequently, we confirm the order appealed against and dismiss the appeal of the Revenue.” dismiss the appeal of the Revenue.”

Hindustan Industrial Resources Limited vs. ACIT Hindustan Industrial Resources Limited vs. ACIT [2009] 180 Taxman 114 (Del) [2009] 180 Taxman 114 (Del) “9. Having considered the arguments advanced by the counsel for the Having considered the arguments advanced by the counsel for the Having considered the arguments advanced by the counsel for the parties, we are of the view that the assessee's contentions deserve t parties, we are of the view that the assessee's contentions deserve t parties, we are of the view that the assessee's contentions deserve to be upheld and the findings returned by the Income upheld and the findings returned by the Income-tax Appellate Tribunal tax Appellate Tribunal ought to be reversed. We are conscious that we are not merely reversing a ought to be reversed. We are conscious that we are not merely reversing a ought to be reversed. We are conscious that we are not merely reversing a finding of fact, what we are intending to do is to point out that the finding of fact, what we are intending to do is to point out that the finding of fact, what we are intending to do is to point out that the Tribunal's finding of fact is contrar Tribunal's finding of fact is contrary to its own record and, therefore, is in y to its own record and, therefore, is in the realm of perversity. This is so because the Tribunal clearly held that at the realm of perversity. This is so because the Tribunal clearly held that at the realm of perversity. This is so because the Tribunal clearly held that at the point of time when the assessee purchased the said land, it was the point of time when the assessee purchased the said land, it was the point of time when the assessee purchased the said land, it was agricultural land. There is no dispute with regard to this. The Trib agricultural land. There is no dispute with regard to this. The Tribunal also unal also noted that the Award passed on 1 noted that the Award passed on 1-4-1992 by the District Collector (Land 1992 by the District Collector (Land Acquisition), Greater Noida, Bulandshar, was a document which established Acquisition), Greater Noida, Bulandshar, was a document which established Acquisition), Greater Noida, Bulandshar, was a document which established beyond doubt that the land in question was agricultural land. beyond doubt that the land in question was agricultural land. Thus, on the Thus, on the date of purchase, the date of purchase, the land in question was agricultural land and on land in question was agricultural land and on the date of acquisition, the character of the land continued to be the date of acquisition, the character of the land continued to be the date of acquisition, the character of the land continued to be agricultural. When these two clear findings have been returned, it is agricultural. When these two clear findings have been returned, it is agricultural. When these two clear findings have been returned, it is apparent that in the transitional period, that is, between purchase apparent that in the transitional period, that is, between purchase apparent that in the transitional period, that is, between purchase and acquisition, the nature and character of the land did not change. cquisition, the nature and character of the land did not change. cquisition, the nature and character of the land did not change. The fact that the appellant/assessee intended to use the land for The fact that the appellant/assessee intended to use the land for The fact that the appellant/assessee intended to use the land for industrial purposes did not in any way alter the nature and character industrial purposes did not in any way alter the nature and character industrial purposes did not in any way alter the nature and character of the land. The further fact that the appellant/assess of the land. The further fact that the appellant/assessee did not carry ee did not carry out any agricultural operations did not also result in any conversion out any agricultural operations did not also result in any conversion out any agricultural operations did not also result in any conversion of the agricultural land into an industrial land. It is nobody's case that of the agricultural land into an industrial land. It is nobody's case that of the agricultural land into an industrial land. It is nobody's case that the appellant/assessee carried out any operations for setting up any the appellant/assessee carried out any operations for setting up any the appellant/assessee carried out any operations for setting up any plant or machinery or of plant or machinery or of the like nature so as to lead to an inference the like nature so as to lead to an inference that the nature and character of the land had been changed from that the nature and character of the land had been changed from that the nature and character of the land had been changed from agricultural to industrial. The mere fact that the appellant/assessee agricultural to industrial. The mere fact that the appellant/assessee agricultural to industrial. The mere fact that the appellant/assessee did not carry out any agricultural operation did not alter the nature did not carry out any agricultural operation did not alter the nature did not carry out any agricultural operation did not alter the nature and character of the land. In any event, this discussion is not relevant aracter of the land. In any event, this discussion is not relevant aracter of the land. In any event, this discussion is not relevant in the backdrop of the clear finding given by the Tribunal that on the in the backdrop of the clear finding given by the Tribunal that on the in the backdrop of the clear finding given by the Tribunal that on the date of the purchase and as also on the date of acquisition, the land in date of the purchase and as also on the date of acquisition, the land in date of the purchase and as also on the date of acquisition, the land in question was agricultural land. question was agricultural land. Having come to such a conclusion, the o such a conclusion, the Tribunal ought not to have gone into question of intention of the Tribunal ought not to have gone into question of intention of the Tribunal ought not to have gone into question of intention of the appellant/assessee and definitely not into the question of intention of the appellant/assessee and definitely not into the question of intention of the appellant/assessee and definitely not into the question of intention of the land acquiring authority, the latter land acquiring authority, the latter land acquiring authority, the latter being a wholly irrelevant being a wholly irrelevant being a wholly irrelevant consideration.”

PCIT v. Heenaben Bhadresh Mehta eenaben Bhadresh Mehta [2018] 96 taxmann.com 164 (Guj) [2018] 96 taxmann.com 164 (Guj) “9. As observed hereinabove, the land was sold as an agricultural land As observed hereinabove, the land was sold as an agricultural land As observed hereinabove, the land was sold as an agricultural land and in fact, what was sold was agriculture land. What was the and in fact, what was sold was agriculture land. What was the and in fact, what was sold was agriculture land. What was the intention of the purchaser cannot be the determinative factor intention of the purchaser cannot be the determinative factor

Assessment Year: 2011-12 Sanjeev Kumar Goyal to treat the profit earned by the assessee on sale of agriculture land as at the profit earned by the assessee on sale of agriculture land as at the profit earned by the assessee on sale of agriculture land as business income. Similarly, merely because for whatever reason, the Similarly, merely because for whatever reason, the Similarly, merely because for whatever reason, the assessee has earned sufficient huge amount of profit also cannot be a assessee has earned sufficient huge amount of profit also cannot be a assessee has earned sufficient huge amount of profit also cannot be a ground to treat the profit earned by the assessee ground to treat the profit earned by the assessee on sale of agriculture land on sale of agriculture land as business income.”

M. Vijaya v. DCIT [2014] 49 taxmann.com 26 (Hyd [2014] 49 taxmann.com 26 (Hyd-ITAT) 37. Further, we make it clear that when the land which does not fall under Further, we make it clear that when the land which does not fall under Further, we make it clear that when the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is the provisions of section 2(14)(iii) of the IT Act and an assessee who is the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural operations in such agricultural land and also being engaged in agricultural operations in such agricultural land and also being engaged in agricultural operations in such agricultural land and also being specified as agricultural land in R specified as agricultural land in Revenue records, the land is not subjected evenue records, the land is not subjected to any conversion as non to any conversion as non-agricultural land by the assessee or any other agricultural land by the assessee or any other concerned person, transfers such agricultural land as it is and where it is concerned person, transfers such agricultural land as it is and where it is concerned person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like t basis, in such circumstances, in our opinion, such transfer like the case he case before us cannot be considered as a transfer of capital asset or the before us cannot be considered as a transfer of capital asset or the before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of transaction relating to sale of land was not an adventure in the nature of transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business so as to tax the income arising out of this transaction as business so as to tax the income arising out of this transaction as business income.

CIT vs. Rajshibhai Meramanbhai Odedra ramanbhai Odedra [2014] 42 taxmann.com 497 (Guj) [2014] 42 taxmann.com 497 (Guj) “3.2 It is mainly argued on behalf of the revenue that as the agricultural It is mainly argued on behalf of the revenue that as the agricultural It is mainly argued on behalf of the revenue that as the agricultural land was sold in favour of non land was sold in favour of non-agriculturist and as per the law prevailing in agriculturist and as per the law prevailing in the State, there is a ban to transfer/sell agricultur the State, there is a ban to transfer/sell agricultural land in favour of non al land in favour of non- agriculturist without prior permission of appropriate authority and agriculturist without prior permission of appropriate authority and agriculturist without prior permission of appropriate authority and without getting the land converted into non without getting the land converted into non-agriculture and therefore, the agriculture and therefore, the said land is to be considered as capital asset and therefore, liable to be said land is to be considered as capital asset and therefore, liable to be said land is to be considered as capital asset and therefore, liable to be taxed. It is not in dispute that what was sold by the assessee was an not in dispute that what was sold by the assessee was an not in dispute that what was sold by the assessee was an agricultural lands which were situated beyond 8 Kms of local limits of the agricultural lands which were situated beyond 8 Kms of local limits of the agricultural lands which were situated beyond 8 Kms of local limits of the Municipality. As rightly observed by the tribunal, merely because the land Municipality. As rightly observed by the tribunal, merely because the land Municipality. As rightly observed by the tribunal, merely because the land came to be sold during the year under considerati came to be sold during the year under consideration to non-agriculturist, agriculturist, the same will not change the characteristics of the land in the hands of the the same will not change the characteristics of the land in the hands of the the same will not change the characteristics of the land in the hands of the seller - assessee. It is not in dispute that at the relevant time, the lands were assessee. It is not in dispute that at the relevant time, the lands were assessee. It is not in dispute that at the relevant time, the lands were held/used by the assessee as agricultural land. held/used by the assessee as agricultural land. Merely because the said Merely because the said land came to be sold to a non land came to be sold to a non-agriculturist, may be in breach of law agriculturist, may be in breach of law prevailing in the State, character of the land would not be changed prevailing in the State, character of the land would not be changed prevailing in the State, character of the land would not be changed and the land still would continue as an agricultural land. At the most and the land still would continue as an agricultural land. At the most and the land still would continue as an agricultural land. At the most the sale in favour of non the sale in favour of non-agriculturist can be declared as illegal eclared as illegal and/or invalid. There is no provision that if the agricultural land is and/or invalid. There is no provision that if the agricultural land is and/or invalid. There is no provision that if the agricultural land is sold in favour of non- -agriculturist in breach of law prevailing in the agriculturist in breach of law prevailing in the State, it would lose its character as agricultural land and would be State, it would lose its character as agricultural land and would be State, it would lose its character as agricultural land and would be treated as non-agricultura agricultural land.”

Assessment Year: 2011-12 Sanjeev Kumar Goyal CIT vs. Siddharth J. Desai CIT vs. Siddharth J. Desai [1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 (Guj) [1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 (Guj) “2. Having regard to the facts and findings recorded by the Tribunal, it was “2. Having regard to the facts and findings recorded by the Tribunal, it was “2. Having regard to the facts and findings recorded by the Tribunal, it was obvious that not only the physical characteristics of land, in the instant obvious that not only the physical characteristics of land, in the instant obvious that not only the physical characteristics of land, in the instant case, but the user also was agricultural. Even though the land was not case, but the user also was agricultural. Even though the land was not case, but the user also was agricultural. Even though the land was not actually put to agricultural use actually put to agricultural use since about one year prior to the sale, there since about one year prior to the sale, there was no evidence to establish that it was converted to any other use. was no evidence to establish that it was converted to any other use. The fact The fact that permission under section 63 of the Bombay Tenancy and Agricultural that permission under section 63 of the Bombay Tenancy and Agricultural that permission under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained by the assessee to sell the lands to Lands Act was obtained by the assessee to sell the lands to the society for the society for residential purposes would not, militate against the land continuing to be residential purposes would not, militate against the land continuing to be residential purposes would not, militate against the land continuing to be agricultural on the date of its sale, as the permission was obtained only agricultural on the date of its sale, as the permission was obtained only agricultural on the date of its sale, as the permission was obtained only about two and a half months prior to the sale. Therefore, till the land was about two and a half months prior to the sale. Therefore, till the land was about two and a half months prior to the sale. Therefore, till the land was held by the assessee its character as agricultural land was not changed essee its character as agricultural land was not changed essee its character as agricultural land was not changed either as a result of its re either as a result of its re-classificanon in the revenue records or by the classificanon in the revenue records or by the actual alteration of its use. Again, there was no evidence on record to show actual alteration of its use. Again, there was no evidence on record to show actual alteration of its use. Again, there was no evidence on record to show that there was any development in the surround that there was any development in the surrounding area or that the land ing area or that the land itself was developed prior to its sale. The land was located on the outskirts itself was developed prior to its sale. The land was located on the outskirts itself was developed prior to its sale. The land was located on the outskirts of the village but it was not situate in the municipal limit. The land must, of the village but it was not situate in the municipal limit. The land must, of the village but it was not situate in the municipal limit. The land must, therefore, be taken as having been situate in a rural area and it continued therefore, be taken as having been situate in a rural area and it continued therefore, be taken as having been situate in a rural area and it continued to have an agricultural bias right up to the date of its sale. Further, there to have an agricultural bias right up to the date of its sale. Further, there to have an agricultural bias right up to the date of its sale. Further, there was no evidence or material on record to indicate that the price offered for was no evidence or material on record to indicate that the price offered for was no evidence or material on record to indicate that the price offered for the land by the society, even proceeding on the basis that" the intended user the land by the society, even proceeding on the basis that" the intended user the land by the society, even proceeding on the basis that" the intended user of his part was non-ag agricultural, would not have been offered by an ricultural, would not have been offered by an agriculture who wanted to purchase the land for purely agricultural user. agriculture who wanted to purchase the land for purely agricultural user. agriculture who wanted to purchase the land for purely agricultural user. …..” Proposition 5:- When capital gains arising on sale of agricultural land by the co When capital gains arising on sale of agricultural land by the co When capital gains arising on sale of agricultural land by the co- owner thereof was treated as exempt from capital owner thereof was treated as exempt from capital gains tax then the capital gain gains tax then the capital gain arising to other co-owners could not be assessed to tax. owners could not be assessed to tax. “ITO vs. Malay Kumar Mitter ITO vs. Malay Kumar Mitter Judgment dated 23.12.2013 (Kol Trib.) ITA No.307/Kol/2012, Judgment dated 23.12.2013 (Kol Trib.) “7. We have heard the rival submissions and perused the material available on “7. We have heard the rival submissions and perused the material available on “7. We have heard the rival submissions and perused the material available on record. We find that this issue is squarely covered in favour of the assessee. cord. We find that this issue is squarely covered in favour of the assessee. cord. We find that this issue is squarely covered in favour of the assessee. The Tribunal in the hands of the co Tribunal in the hands of the co-owner of the property had held that the lands owner of the property had held that the lands in question did not constitute 'capital asset' under in question did not constitute 'capital asset' under section 2(14) of the Income of the Income Tax Act because Rajarhat M unicipality was not one of the notified Municipality as per the Rajarhat M unicipality was not one of the notified Municipality as per the Rajarhat M unicipality was not one of the notified Municipality as per the Central Government's Notification dated 28.12.1999. Hence, respectfully Central Government's Notification dated 28.12.1999. Hence, respectfully Central Government's Notification dated 28.12.1999. Hence, respectfully following the precedent, we hold that the land in question, which was precedent, we hold that the land in question, which was precedent, we hold that the land in question, which was transferred by the assessee, was an agricultural land and it did not fall within transferred by the assessee, was an agricultural land and it did not fall within transferred by the assessee, was an agricultural land and it did not fall within the ambit of 'capital asset' under the ambit of 'capital asset' under section 2(14) of the Income Tax of the Income Tax Act. Accordingly we confirm the order of l d. CIT(Appeals). Accordingly we confirm the order of l d. CIT(Appeals).

Sita Ram Sharma vs. ITO Sita Ram Sharma vs. ITO

Assessment Year: 2011-12 Sanjeev Kumar Goyal (2015) 58 taxmann.com 180 (Jaipur ITAT) (2015) 58 taxmann.com 180 (Jaipur ITAT) “9. We have heard the rival contentions of both the parties and perused the We have heard the rival contentions of both the parties and perused the We have heard the rival contentions of both the parties and perused the material available on the record. The land sold by all the brothers situated in material available on the record. The land sold by all the brothers situated in material available on the record. The land sold by all the brothers situated in village- Sanjhaia, Tehsil Sanjhaia, Tehsil- Sanganer, district- Jaipur. In case of assessee's In case of assessee's brother namely Shri Ram Sa brother namely Shri Ram Sahay Sharma in A.Y. 2007-08 by the ITO ward 7(2), 08 by the ITO ward 7(2), Jaipur order dated 25/03/2013 had not made any addition on account of long Jaipur order dated 25/03/2013 had not made any addition on account of long Jaipur order dated 25/03/2013 had not made any addition on account of long term capital gain. Further the ld CIT(A) as well as this Bench also allowed the term capital gain. Further the ld CIT(A) as well as this Bench also allowed the term capital gain. Further the ld CIT(A) as well as this Bench also allowed the appeal in case of Smt. Kamla Devi Sharma (supra), wh appeal in case of Smt. Kamla Devi Sharma (supra), who also sold her land at o also sold her land at Sanjharia village to M/s Vatika Ltd. on 16/05/2006 and held that the Sanjharia village to M/s Vatika Ltd. on 16/05/2006 and held that the Sanjharia village to M/s Vatika Ltd. on 16/05/2006 and held that the agricultural land sold by the assessee is not capital assets as envisaged U/s agricultural land sold by the assessee is not capital assets as envisaged U/s agricultural land sold by the assessee is not capital assets as envisaged U/s 2(14) of the Act as same was sold to Vatika Ltd. within a short span of time. 2(14) of the Act as same was sold to Vatika Ltd. within a short span of time. 2(14) of the Act as same was sold to Vatika Ltd. within a short span of time. The other case laws relied by the assessee is also squarely applicable. er case laws relied by the assessee is also squarely applicable. er case laws relied by the assessee is also squarely applicable. Therefore, we hold that the land sold by all the assessees are agricultural land Therefore, we hold that the land sold by all the assessees are agricultural land Therefore, we hold that the land sold by all the assessees are agricultural land and beyond 8 KMs from the municipal limits. and beyond 8 KMs from the municipal limits. Accordingly, we allow this ground Accordingly, we allow this ground of all the appeals.”

WTO vs. Premier Polymers Pvt. Ltd. emier Polymers Pvt. Ltd. WTA No.06/Kol/2012, Judgment dated 31.05.2012 (Kol Trib.) WTA No.06/Kol/2012, Judgment dated 31.05.2012 (Kol Trib.) “4. We are unable to share the perception of the ld. D.R. Even though, there is 4. We are unable to share the perception of the ld. D.R. Even though, there is 4. We are unable to share the perception of the ld. D.R. Even though, there is no res judicata in tax proceedings, the principle of consistency must find its no res judicata in tax proceedings, the principle of consistency must find its no res judicata in tax proceedings, the principle of consistency must find its place. When the revenue authorities accept the position for one he revenue authorities accept the position for one he revenue authorities accept the position for one particular assessment year by not challenging relief granted to assessee particular assessment year by not challenging relief granted to assessee particular assessment year by not challenging relief granted to assessee in appeal, it cannot be open to them to challenge the same relief being in appeal, it cannot be open to them to challenge the same relief being in appeal, it cannot be open to them to challenge the same relief being granted in favour of the assessee by the CIT(A) in other yea granted in favour of the assessee by the CIT(A) in other years, or, for the rs, or, for the purpose, in the case of other assessees as well. Hon'ble Supreme Court, in purpose, in the case of other assessees as well. Hon'ble Supreme Court, in purpose, in the case of other assessees as well. Hon'ble Supreme Court, in the case of Union of India & Others Union of India & Others -vs- Kaumudini Narayan Dalal and Kaumudini Narayan Dalal and Another 249 ITR 219, had an occasion to 249 ITR 219, had an occasion to consider whether it is open to consider whether it is open to revenue to accept a judgment in the case of one assessee, and appeal, revenue to accept a judgment in the case of one assessee, and appeal, revenue to accept a judgment in the case of one assessee, and appeal, against identical judgment, in the case of another assessee. Their against identical judgment, in the case of another assessee. Their against identical judgment, in the case of another assessee. Their Lordships held that such a differential treatment on the same set of facts Lordships held that such a differential treatment on the same set of facts Lordships held that such a differential treatment on the same set of facts was not permissible in law and observed that "it is not open to revenue to ssible in law and observed that "it is not open to revenue to ssible in law and observed that "it is not open to revenue to accept the judgment in the case of one assessee and challenge its accept the judgment in the case of one assessee and challenge its accept the judgment in the case of one assessee and challenge its correctness in the case of another assessee without just cause". correctness in the case of another assessee without just cause". The same The same were views of Hon'ble Supreme Court in the case of Ber were views of Hon'ble Supreme Court in the case of Berger India Ltd. 266 ITR ger India Ltd. 266 ITR 99 and were also followed by the Hon'ble Delhi High Court in the case of 99 and were also followed by the Hon'ble Delhi High Court in the case of 99 and were also followed by the Hon'ble Delhi High Court in the case of CWT- vs- RKKR International Pvt. Ltd RKKR International Pvt. Ltd. 198 CTR 567 and CIT-vs- Neo Poly Pack (P) Neo Poly Pack (P) Ltd. 245 ITR 492.”

Assessment Year: 2011-12 Sanjeev Kumar Goyal 11. Ground No. 5 & 6 are on the issue as to whether the Assessing Officer has rightly 6 are on the issue as to whether the Assessing Officer has rightly 6 are on the issue as to whether the Assessing Officer has rightly invoked Section 50C of the Act. invoked Section 50C of the Act. In view of our decision in allowing Ground Nos. 1 to 4, In view of our decision in allowing Ground Nos. 1 to 4, these grounds need not be adjudicated. Hence we do not adjudicate the same. these grounds need not be adjudicated. Hence we do not adjudicate the same. these grounds need not be adjudicated. Hence we do not adjudicate the same.

12. Ground No. 7, is aga Ground No. 7, is against the directions given by the ld. CIT(A) to the inst the directions given by the ld. CIT(A) to the Assessing Officer to reopen assessment of the firm M/s Shree Annapurna Oil Mills Assessing Officer to reopen assessment of the firm M/s Shree Annapurna Oil Mills Assessing Officer to reopen assessment of the firm M/s Shree Annapurna Oil Mills and bring to tax, the long term capital gains from the sale of land in question. In and bring to tax, the long term capital gains from the sale of land in question. In and bring to tax, the long term capital gains from the sale of land in question. In our view as M/s. Annapurna Oil Mills is as M/s. Annapurna Oil Mills is not a party before the ld. CIT(A), not a party before the ld. CIT(A), such directions cannot be given. directions cannot be given. This Bench of the Tribunal in the case of This Bench of the Tribunal in the case of Shalini Agarwal vs. ITO in Agarwal vs. ITO in ITA No. 957/Kol/2017, order dt. 18/01/2019 held as follows: held as follows:- “8. In Ground No. 3, the assessee has challenged the actio “8. In Ground No. 3, the assessee has challenged the action of the ld. n of the ld. CIT(Appeals) in directing the Assessing Officer to tax the capital gains of CIT(Appeals) in directing the Assessing Officer to tax the capital gains of CIT(Appeals) in directing the Assessing Officer to tax the capital gains of Rs.77,94,104/- for A.Y. 2015 for A.Y. 2015-16 by initiating the proceedings under section 147 16 by initiating the proceedings under section 147 on the ground that the ld. CIT(Appeals) exceeded his jurisdiction while giving on the ground that the ld. CIT(Appeals) exceeded his jurisdiction while giving on the ground that the ld. CIT(Appeals) exceeded his jurisdiction while giving the said direction.

Assessment Year: 2011-12 Sanjeev Kumar Goyal (i) Vijay Kumar Sharda vs. DCIT [2013] 40 taxmann.com 113 (Mum Trib) Vijay Kumar Sharda vs. DCIT [2013] 40 taxmann.com 113 (Mum Trib) Vijay Kumar Sharda vs. DCIT [2013] 40 taxmann.com 113 (Mum Trib) (ii) Mukesh Babulal Rachh vs. ITO in Mukesh Babulal Rachh vs. ITO in ITA No. 6066/Mum/2018 Mukesh Babulal Rachh vs. ITO in ITA No. 6066/Mum/2018 (iii) ITO vs. Biswajit ITO vs. Biswajit Chatterjee ITA No. 565/Kol/2013 13. Consistent with the view taken therein, we quash the directions given by the ld. Consistent with the view taken therein, we quash the directions given by the ld. Consistent with the view taken therein, we quash the directions given by the ld. CIT(A) to the Assessing Officer to reopen the assessment of the partnership firm M/s. CIT(A) to the Assessing Officer to reopen the assessment of the partnership firm M/s. CIT(A) to the Assessing Officer to reopen the assessment of the partnership firm M/s. Shree Annapurna Oil Mills and to tax the long term ca Shree Annapurna Oil Mills and to tax the long term capital gain in question in the hands pital gain in question in the hands of the firm. Hence Ground No. 7 of the assessee is allowed. of the firm. Hence Ground No. 7 of the assessee is allowed.

Kolkata, the Kolkata, the 29th day of October, 2019.

Sd/- Sd/- [S.S. Godara] [J. Sudhakar Reddy J. Sudhakar Reddy] Judicial Member Accountant Accountant Member Dated : 29.11.2019 {SC SPS} Copy of the order forwarded to: opy of the order forwarded to:

1. 1. Sanjeev Kumar Goyal 45-B, Adhya Sradha Ghat Road Adhya Sradha Ghat Road Kolkata – 700 007 2. Income Tax Officer, Ward-45(2), Kolkata 45(2), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.