VINAYA SHARMA,KOTA vs. ACIT CENTRAL CIRCLE, KOTA

per provision of section 153A of the Act considered the capital gain sale of

this land as exempt which the assessee in the original return has not

considered for A. Y. 2015-16. Thus, the dispute survives for assessment

year 2015-16 and that fact is not disputed by the revenue.

is sold is capital assets or not. For that we refer to the provision of section

2(14) which defines the term capital assets which reads as under :

40 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT (14) "capital asset" means— (a) property of any kind held by an assessee, whether or not connected with his business or profession; (b) any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); (c) any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof, but does not include— (i) any stock-in-trade [other than the securities referred to in sub-clause (b)], consumable stores or raw materials held for the purposes of his business or profession ; (ii) personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes— (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. Explanation.—For the purposes of this sub-clause, "jewellery" includes— (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel; (b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel; (iii) agricultural land in India, not being land situate— (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand; or (b) in any area within the distance, measured aerially,— (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and

41 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.—For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year; (iv) 6½ per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, or National Defence Gold Bonds, 1980, issued by the Central Government; (v) Special Bearer Bonds, 1991, issued by the Central Government ; (vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government. Explanation 1.—For the removal of doubts, it is hereby clarified that "property" includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever. Explanation 2.—For the purposes of this clause— (a) the expression "Foreign Institutional Investor" shall have the meaning assigned to it in clause (a) of the Explanation to section 115AD; (b) the expression "securities" shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

Before us in support of the contention that the land is not capital assets we

note that (i) subjected land is a rural agricultural land, (ii) Revenue records

shows the land as agricultural land, (iii) the use of the land was agricultural

land and land was not dry land. As regards the distance of the land first it

has to be factually ascertained that whether the land is falling within the

42 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT jurisdiction of Kota Nagar Nigam or in the Gram Panchayat. We note from

the page 36 of the order of the ld. CIT(A) wherein he has extracted the

certificate Tahsildar, Ladpura, District Kota dated 24.03.2023. That

certificate makes two thing clear that the land is away of about 8 to 10 KM

from the relevant nagar nigam. It falls in the Gram Panchayat.

capital assets we note from the provision of Section 2(14) that there are

certain exclusions made from the definition of capital asset and one of them

is enumerated in clause (iii), is an agricultural land in India. The said

exemption is not for any or every agricultural land but only an agricultural

land which is not situated in an area, which comprises within the jurisdiction

of a municipality or cantonment board, gram panchayat etc. and which has

a population more than 10,000. In other words, the land must fall within the

jurisdiction of some municipality, municipal corporation or town area

committee etc, and secondly must have a population more than 10,000.

Both the conditions must be satisfied cumulatively to hold any agriculture

land as a Capital Asset. Now applying these provision of law in the facts of

the present case that the land in the instant case admittedly did not fall

within the jurisdiction of Kota Nagar Nigam but it falls within the jurisdiction

43 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT of Brijeshpura (Gram Panchayat being Tather) which had a census of 382

persons only, based on the last census (PB 09-10). Thus, the present land

is not a capital asset within the meaning of Section 2(14) of the Act.

(iii)(b)(i), one has to see the jurisdiction within which the subjected land falls

and one has to measure 2 kilometres from the local limit of such a

municipality or town area committee. In the present case, land was situated

within the jurisdiction of Brijeshpura’s Gram Panchayat as aforesaid and

was within 2 kilometres. Another condition was that such area must have a

population of more than 10,000 but not exceeding 1 Lakh. However, in this

case as per the last census 2011 by Government of India, there was

population of 382 only which is much below 10,000. In the light of this fact

even on this condition there appears reason as to why the ld. CIT(A)

referred 2(14) (iii)(b) and to consider the issue w.r.t Kota Nagar Nigam only,

once the land does not admittedly fall within the jurisdiction of Kota Nagar

Nigam as per the certificate placed on record. We get strength of our view

as taken from the decision of the Delhi High Court in the case of CIT Vs.

Sheo Ram [ 117 Taxman 347 ] wherein the high court has confirmed the

following finding of the tribunal

44 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT "The net result is that at best it can be said that the agricultural land in question was situated in an area which is comprised within the jurisdiction of municipality of Delhi, known as Delhi Municipal Corporation as also within the jurisdiction of municipality of Nangal Dewat known as Gaon Sabha Nangal Dewat. Whereas the population of the area comprised within the jurisdiction of Gaon Sabha Nangal Dewat is less than 10,000 the population of the area comprised within the jurisdiction of DMC is over 10,000. Obviously, such a situation could not be said to have been provided for in section 2(14)(iii)(a), otherwise the Parliament would have enacted some guideline for making appropriate choice for including or not including in the definition of 'capital asset' such an agricultural land. We, accordingly, refuse to interfere with the finding of the Commissioner (Appeals)." In view of the aforesaid finding of facts, the Tribunal's conclusions could not be faulted. Accordingly, it was to be held that the Tribunal was right in law in holding that the land in question was not agricultural land within the meaning of section 2(14)(iii).”

Thus, we are of the view that ld. CIT(A) has not cited as why he has

ignored the fact that the said land falls in Gram panchayat and not in nagar

nigam and thereby we do not sustain that finding of the ld. CIT(A). Thus,

what was intended was that capital gains arising from transfer of agriculture

lands situated in rural areas will continue to be outside scope of capital

asset except agriculture land in urban areas and municipality /cantonment

board up to prescribed limit. In the light of the discussion so recorded

herein above ground no. 2 and additional ground raised by the assessee

stands allowed.

the ld. AO and sustained by the ld. CIT(A) being the agricultural income of

Rs. 1,50,000/- treated as other income, while doing so ld. AO contended

45 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT that assessee could not justify the income with cogent evidence and even

the assets was not considered as agricultural land, said income was

considered as other income of the assessee.

the assessing officer. These documents are document wherein entries are

made by the Girdhavar and shows the agricultural operations carried out in

a particular cycle of Kharif, Ravi etc. In the present case the Khasra

Girdhavri (PB-7-8) for the relevant period the assessee cultivated dhaniya,

mehti and soya crop in the irrigated and unirrigated land both. Thus,

Girdhavri is the conclusive evidence to show the fact of the owner or the

farmer having cultivated the land, in absence of any contrary evidence

brought on record, if any and cannot be ignored. Moreover, the claim of

assessee is further supported by independent and credible evidence being

Parcha Lagan by Land Management Department of Government of

Rajasthan (PB 13) showing her right, title and possession in the said

property as per Revenue records. Therefore, the fact of carrying out of

agriculture operation on the subjected land has been wrongly denied.The

law is well settled that where assessee is not maintaining day-to-day books

of accounts, or accounts maintained are rejected, then only course left is

46 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT the estimation of agricultural income. In the cases of agricultural income,

more so the legislature itself do not statutorily require the assessee to

maintain regular books accounts, which may be a case u/s 44 AA r.w. Rule

6F of the Income Tax Rules, 1962 and therefore, a fair estimation is

required. Keeping in mind of no statutory requirement, the assessee do not

keep each and every receipt and vouchers etc. in a systematic manner.

Therefore, the Hon’ble Courts have taken a view that in such cases, a fair

estimation should be made. Accordingly, in this case where total area of

land was irrigated and cultivated with the crops of Mehti, Dhaniya and

Soya. Keeping in mind the fertility and expected crop, one could reasonably

considered the income from that activity at Rs. 1,50,000/-. In the light of

these observations the we direct the ld. AO delete the addition of 1,50,000/-

made in the case of the assessee under the income from other sources.

Thus, Ground no. 3 raised by the assessee is allowed.

interest u/s. 234A/B&C of the Act which consequential in nature and does

not require our adjudication.

47 ITA No. 628/JP/2023 Vinaya Sharma vs. ACIT 22. Ground no. 5 raised by the assessee being general in nature does not

require our adjudication.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 17/10//2024. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 17/10/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Vinaya Sharma, Kota 2. izR;FkhZ@ The Respondent- ACIT, Central Circle, Kota 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 628/JP/2023) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत