SHRI SANDEEP THANWARE,NAGPUR vs. INCOME TAX OFFICER WARD -2(2), NAGPUR

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ITA 72/NAG/2020Status: DisposedITAT Nagpur12 October 2022AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the AO's consideration of aerial distance was not relevant for the assessment year in question. It also noted that the CIT(A) relied on an un-confronted letter from NIT without proper details.

What were the facts?

The assessee sold land claimed as agricultural land, arguing it was outside the definition of 'capital asset'. The AO considered the stamp value and computed capital gains, while the CIT(A) relied on a letter from NIT stating the land was within 8 kms of municipal limits.

What were the issues?

Whether the land sold was an agricultural land and thus not a capital asset. Whether the CIT(A) properly considered the evidence presented by the assessee and the basis for his decision.

Which sections of the Income-tax Act were involved?

Section 2(14)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, NAGPUR

Before: SHRI R.S. SYAL

For Appellant: Ms Veena Agrawal
For Respondent: Shri G.J. Ninawe

आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee is directed against the order dated 20-01-2020 passed by the ld. CIT(A)-2, Nagpur, in relation to the assessment year 2009-10. 2. The only issue raised in this appeal is against the taxability of capital gain on the transfer of certain land claimed by the assessee as `agricultural land’ and hence beyond the scope of `capital asset’. 3. Briefly stated, the facts of the case are that the assessee along with one Shri Dilip Moon sold an agricultural land situated at Mauza Vedahari, P.H. No.38, Tah. Nagpur (Rural), Dist. Nagpur for total consideration of Rs.26 lacs on 13.06.2008. The Assessing Officer (AO) took cognizance of the stamp value of the property. By taking purchase consideration at Rs.1.60 lacs, he proceeded to compute the amount of capital gain. On being called upon to explain as to why the capital gain was not offered for taxation, the assessee submitted that the land in question was situated at a distance of 10 kms. from the municipal limits of Nagpur and hence out of purview of the term `capital asset’. In support of the contention, the assessee submitted a certificate from the Secretary of Gram Panchayat. The AO observed that the distance certified by the authority was only taken by road and it was not an aerial distance. He, therefore, computed the long term capital gain and made the addition. The assessee again reiterated before the ld. CIT(A) that the land in question was outside the municipal limits at a distance of 10 kms. In support of this, the assessee furnished the certificate issued by the Secretary, Gram Panchayat of the village. The ld. CIT(A) emphasized on furnishing a certificate to be issued either by Nagpur Municipal Corporation (NMC) or Nagpur Improvement Trust (NIT). In para 5.1.8, he took note of some letter originally issued by the competent authority i.e. NIT, stating that the distance of the impugned land from municipal limits of Nagpur was well within 8 kms. He, therefore, confirmed the decision of the AO.

4.

Having heard the rival contentions and perused the relevant material on record, it is seen that the view point of the AO for considering the aerial distance is not relevant for year under consideration, namely, A.Y. 2009-10. The amendment in this regard has been carried out by altering the definition of the term ‘capital asset’ w.e.f. A.Y. 2014-15. The CBDT has issued a circular dated 06.10.2015 instructing the Officers to consider the amendment prospectively from A.Y. 2014-15. In that view of the matter, the view of the AO for taking aerial distance is not tenable, which has rightly not been proceeded with by the ld. CIT(A).

5.

Coming to the impugned order, it is seen that the ld. CIT(A) has referred to certain letter issued by the Nagpur Improvement Trust stating that the distance between the impugned land and municipal limits was well within 8 kms of the municipal limits. However, there is no mention in the impugned order either of the date or any reference number of such letter. The ld. AR submitted that the ld. CIT(A) did not confront the assessee with such alleged letter, contrary to the certificate of the Secretary, Gram Panchayat of the village, nor was it discussed in the assessment order as well. On the contrary, she relied on certificate issued by the Secretary, Gram Panchayat to highlight that the land in question was at a distance of 10 kms from the municipal limits of Nagpur. On a specific query, the ld. DR also could not throw any light on the letter referred to by the ld. CIT(A) in para 5.1.8 of the impugned order which has been taken cognizance for rejecting the assessee’s contention. Under such circumstances, I am of the considered opinion that it would be in the fitness of things, if the impugned order is set aside and the matter is remitted to the file of the ld. CIT(A). I order accordingly and direct him to confront the assessee with such letter referred to in para 5.1.8 of his order and then decide the issue accordingly.

6.

In the result, appeal is allowed for statistical purposes. Order pronounced in the Open Court on 12th October, 2022.

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