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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI SANJAY GARG
PER: SHAMIM YAHYA This appeal above revenue is directed against order of learned CIT-A dated 24/3/2015, and pertains to assessment year 2011– 12. 2. The grounds of appeal read as under;
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 97,66,866/- made Narendra Shantilal Parikh ITA No. 3724/Mum./2015 on account of Long Term Capital Gain ignoring the fact that the Town Planner, Vododara Urban Development Authority has submitted that the land sold by the assessee is failing within the limits of Vadodara Urban Development Authority and it is located around 6 km away from the Vadodara Municipal Limit. It is also submitted by VUDA that as per the second revised development plan of authority, the land is failing under the residential Zone R-2. The appellant rays that the order of the CIT-A be set aside and matter may decided accordingly to law. The appellant craves leave to amend or alter any ground or add new ground which may be necessary.
Brief facts of the case as under; i) The Appellant filed the return of income declaring total income of Rs.6,51,088. Through the AIR report, the AO was informed that the Appellant sold a plot of land at MojeChansad vide sale deed dated 03.03.2011 for a total consideration of Rs.1 crore. The Appellant submitted that it was an agricultural land sold in AY 2012-13 for which advance of Rs.48.50 lacs was received in AY 2011-12. The Appellant also submitted a copy of the agreement with the AO. The AO called for information from Vadodra Urban Development Authority (VUDA) wherein it was mentioned that the land was falling with the limits of VUDA outside the VMSS limit and is located around 6 kms away from Narendra Shantilal Parikh ITA No. 3724/Mum./2015 Vadodra Municipal limits. As per the second revised development plan of the Authority, this land was falling under the residential zone R-2. The AO observed that the certificate of Talathi only referred that the land is approx 16 kms from Vadodra but does not mention the distance from the local limit of Municipality. Further, the Appellant also failed to submit the proof regarding whether the population of 3293 as mentioned in the certificate of Chansad Gram Panchayat was as per the last preceding census. The Appellant has got an appreciation of hundred times within a span of 15 years which only happens in the case of urban land. Thus, relying on these observations, the AO concluded that the land sold in question is not an agricultural land as per section 2(14) (iii) and hence, the long term capital gains arising on the same of Rs.97,66,886 is taxable.
Upon assessee’s appeal Ld. CIT-A deleted the addition holding as under: I have considered the submissions of the Appellant, impugned assessment order and the material available on record and the additional evidences filed by the Appellant which have been admitted as per Rule 46A. As per section 2(14)(iii), an agricultural land is considered to be a land which is not within 8
Narendra Shantilal Parikh ITA No. 3724/Mum./2015 kms from the local limits of municipality or equivalent authority and the population ought to be less than 10000 as per the last preceding census figures which are published before the first day of the previous year. The Appellant has submitted the letter of Talathi of Chansad Gram Panchayat who has certified that the population is only 3293. Further, the Appellant also submitted the letter dated 30.01.2014 from Executive Engineer, City Road, Building Department, Vadodra who has testified that Chansad land is outside the municipal limits. The Appellant also submitted the following in support of his claim that the road distance of Chansad land is more than 8 Kms from boundaries of Vadodara Municipality- a) Certificate dated 28.01.2011 of Talathi, Chansad Gram Panchayat 28.01.2011; b) Letter dated 30.01.2014 of Executive Engineer Office, City road and Building\ Department, Vadodara; c) Certificate dated 05.02.2014 of Senior Department Transport officer, Gujarat State Road Highways Corporation dated 05.02.2014; and d) architect certificate dated 25.02.2015 founded on a map issued by VUDA [9.5 Kms].
Narendra Shantilal Parikh ITA No. 3724/Mum./2015 On a perusal of all these documents which are issued from the various authorities, it can be safely concluded that the Chansad land sold by the Appellant is beyond 8 km from the boundaries of Vadodra municipality. The Appellant has also obtained the clarification from the VUDA vide letter dated 20.01.2014 that road distance is not available on records and 6 km is based on scaling of linear distance. VUDA, in fact, requested the Appellant vide letter dated 25.02.2015 to contact Executive Engineer Office, City Road and Building Department, Vadodra for a certificate authenticating distance measured in terms of approach road form the limits of Baroda Municipality to Charisad land. Thus, the reliance placed by the AO on the VUDA letter cannot be considered. The Appellant further substantiated that the residential zone was created w.e.f. 18.01.2012 prior to which it was a agriculture zone in conformity with the letter. dated 31.01.2015 issued by VUDA. The Appellant had sold the land vide the sale agreement dated 03.03.2011 and full and final consideration was received on 19.10.2011 much before Chansad land was converted into residential zone on 18.01.2012. Considering all the facts and the documents submitted by the Appellant, I am of the view that the Chansad land sold by the Narendra Shantilal Parikh ITA No. 3724/Mum./2015 Appellant is an agricultural land and hence, gains arising on the same is not taxable. Accordingly, I dire5t the AO to delete the additions made of Rs.97,66,886 as long term capital gains.
Against the above order revenue is an appeal before us. We have heard both the counsel and perused the records. Ld. DR, submitted that Ld. CIT-A has admitted additional evidences and granted relief to the assessee on the basis of those additional documents. She submitted that Ld. CIT-A has not granted opportunity to the assessing officer to examine the additional document. Hence she submitted that there is gross violation of Rule 46 A. Hence she pleaded that the matter be restored to file of the AO to examined the additional document/evidences and decided accordingly.
Per contra Ld. Counsel of the assessee submitted that there is no specific grounds raised
by the revenue regarding violation of Rule 46 A. Though he didn’t dispute that additional evidences on the basis of which Ld. CIT-A has granted relief were not before the assessing officer. Ld. Counsel submitted that the Ld. CIT-A has passed a proper order after duly appreciating the necessary evidences.
7. Upon careful consideration we note that the additional documents/evidences on the basis of which Ld. CIT-A has granted relief were all obtained after the date of assessment order. Hence it is Narendra Shantilal Parikh ITA No. 3724/Mum./2015 clear that these document evidences were not before the assessing officer. Ld. CIT-A has not followed the prescription of Rule 46 A of giving the assessing officer an opportunity to examine of comment upon the same. We find that Hon’ble Apex Court in the case of Kapoor Chand Shrimal 131 ITR 451 had expounded that an appellate authority has the jurisdiction as well as duty to correct all errors in the proceedings under appeal and to issue, if necessary appropriate direction to the authority against whose decision the appeal is preferred to dispose off the whole or any part of the matter afresh, unless for bidden from doing so by the statute. In accordance with the above case law we consider it appropriate to remit the issue to the file of the assessing officer. The assessing officer is directed to examine the issue afresh in the light of the additional documents/evidences produce before the Ld. CIT-A. Needless to add assessee should be granted proper opportunity of being heard.
Narendra Shantilal Parikh ITA No. 3724/Mum./2015 In the result this appeal by the revenue stands allowed for statistical purposes.