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Income Tax Appellate Tribunal, ‘ D’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER
Four appeals are filed by the different assessees against the consolidated order of the Commissioner of Income-tax (Appeals)- to 78/Chny/2018 :- 3 -:
10, Chennai in appeal No.16/12-13 & 39,127 & 129/2016-17/CIT(A)- 10 dated 29.09.2017 for the assessment year 2009-10.
Shri Y.Sridhar represented on behalf of the Assessee and Shri VaruVuuru Sridhar represented on behalf of the Revenue.
It was a submission by ld.A.R that assessee had owned certain agricultural lands at Kolappakkam Village Block No.1, Sriperumbudur Taluk. It was a submission that the said lands were acquired by the Government of Tamilnadu for the purpose of second runway of Chennai airport extension. It was a submission that when filing the returns, the assessee had erroneously made a claim of exemption from Capital Gains u/s.10(37) of the Income Tax Act. It was a submission that the claim of exemption u/s.2(14) had already been made before the ld. Assessing Officer. It was a submission that the ld. Assessing Officer did not accept the contention of the assessee and proceeded to determine the long term capital gains. It was a submission that the issue was now squarely covered by the decision of Co-ordinate Bench of this Tribunal in the case of I.T.O Vs. Smt.Geetha Venugopal in ITA No.636/Mds./2013 for assessment year 2009-10 vide order dated 19.06.2015. It was a submission that Smt.Geetha Venugopal was one of the co-owners in respect of the same Survye No. 272, 271/1 situated at No.75, Kolapakkam Village, Block No.1, Sriperumbudur to 78/Chny/2018 :- 4 -:
taluk, and also the sister of the three of the assessees here and daughter of assessee, Smt.D.Dhanammal. It was submitted that the Tribunal had accepted the contention of the assessee and had allowed the claim of assessee. It was a submission that the assessee’s land does not come within the purview of Section 2(14) of the Act and consequently cannot be considered as capital asset within a meaning of sec.2(14) of the Act and no capital gains was liable to be levied in respect of the compulsory acquisition of the said land by Government of Tamilnadu.
3. In reply, the ld.D.R vehemently supported the order of the Ld.CIT(A).
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the issue is squarely covered by the decision of Co-ordinate Bench of this Tribunal in the case of I.T.O Vs. Smt.Geetha Venugopal referred to supra wherein it has been held in para No.3 of the said Order of Tribunal as follows:-
“3. We have heard both the parties and perused the material on record. In this case, the land with survey Nos.272, 271/1 are situated at No.75, Kolapakkam village, Block No.1,Sriperumbudur
Taluk. The nearest municipality is Pallavaram and the Kolapakam is 14.4 kms and from Mennambakkam/Chennai it is 14.6 kms.
The assessee received a consideration of �2,14,25,603/- on to 78/Chny/2018 :- 5 -: acquisition by Government of Tamil Nadu. According to the assessee, it is non capital asset so as to bring it to Capital Gain
Tax as the property falls beyond an area which is comprised within the jurisdiction of a municipality or a cantonment board which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of previous year. In other words, land does not fall under such-clause (a) to sec 2(14) (iii) of the Act as land is outside the notified municipality. Now, we have to see whether the land fall in clause (b) to sec 2(14)(iii) of the Act, as Central Government may, having regard to the extend to the scope of urbanization that area and other relevant consideration specified in this behalf by notification in the official gazette. The notification issued by the Central Government u/s.2(1A) (c) proviso (ii)(B) and 2(14) (3b) vide No.9447,
(F.No.164/(3)/87/ITA-I, dated 06.01.1994, as amended by notification No.11186 dated 28th December, 1999 provided that agricultural land situated in area lying within the distance not exceeding 8 km from the local limits of municipality, it covered by amended definition ‘’Capital Assets”. The Central Government in exercise of such powers as issued before notification as amended by notification 11186, dated 28.12.1999, clearly clarifying that agriculture land situated in local area, outside municipality or contentment board etc. having population of less to 78/Chny/2018 :- 6 -: than ten thousand and also beyond distance notified by Central
Government from local limits i.e. outside limits of other such municipality or contentment board etc. still continues to be excluded from the definition ‘’Capital Asset”. Accordingly, land situated in local areas continues to be excluded from the definition. In the present case, admittedly the impugned land is outside municipal limit of Chennai and also 8kms away from outer limit of this municipality and also any other municipality. The assessee land does not come within the preview of section 2(14)(iii) of the Act either under sub-clause u/s.(a) or (b) of the Act. Hence, it cannot be considered as Capital Asset within the meaning of the section and no capital gain can be charged on the transfer of this land by the assessee. Mere inclusion of land within jurisdiction of Airport Development Authority by State government notification does not change the character of land if the land still continues to be agricultural land at the point of acquisition of land by Government. Accordingly, we inclined to confirm the order of the Commissioner of Income Tax (Appeals) in this issue.”
As it is noticed that the lands are the same lands in respect of which the assessees have also been charged with long term capital gains, respectfully following the decision of decision of Co-ordinate Bench of this Tribunal in the case of I.T.O Vs. Smt.Geetha Venugopal referred to to 78/Chny/2018 :- 7 -: supra, the ld. Assessing Officer is directed to delete the capital gains levied in respect of the said land in so far as the said land does not fall within the purview of Section 2(14) of the Act and cannot be considered as a capital asset.
In the result, all the appeals for assessment year 2008-09, in the case of Shri Durairaj Babu, Shri D.Nandakumar, Shri D.Baskar and smt. D.Dhanammal, are allowed.
Order pronounced in the open court after conclusion of hearing on 15th November, 2018, at Chennai.