MEKA KASI VISESWARUDU,VIZIANAGARAM vs. THE INCOME TAX OFFICER, WARD-1, , VIZIANAGARAM

Brief facts of the case are that the assessee, an individual, filed his return of income on 31.03.2014, admitting total income at Rs.2,48,000/- after claiming Chapter VIA deductions of Rs.1,00,000/-. The case was selected for scrutiny under CASS to examine the cash deposits and capital gains. Accordingly, notice u/s 143(2) dated 05.09.2014 was issued and served on the assessee. The assessee had sold agricultural land at Dwarapudi near Vizianagaram to Sai Balaji Happy Homes for Rs.1,42,08,000/-, which he acquired for Rs.17,31,290/- on 06.01.2007. As the said land is considered by the assessee as an agricultural land which is situated at more than 8 km from Vizianagaram, the assessee has not considered sale of the same in his income tax returns. During the course of assessment proceedings, the Assessing Officer(AO) observed that the said land is hardly 1KM from the municipal limits. However, the AO noted that the assessee voluntarily agreed to pay tax on capital gains. The AO completed the scrutiny on 30.03.2015 and brought to tax the long term capital gains of Rs.1,15,89,382/-. The AO passed the assessment order u/s 143(3) and raised a demand of Rs.36,93,090/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee.

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

The authorities below erred in replying on the report furnished by the Commissioner Municipality, who committed a mistake by referring to unconnected particulars and Who has not mentioned that the Disputed Land covered by S.No.82/1 to 82/3 in Dwarapudi Village which has not been included in Muncipal limits of Vizianagaram even now. The learned Commissioner is not justified in relying on the data obtained from Google without giving an opportunity to the appellant to rebut the claim.

The learned Commissioner is not justified in disposing the appeal without giving adequate opportunity and without fixing another date for hearing the appeal.

The learned Commissioner is not justified in referring to amendment brought to Sec, which requires the, the department to measure the distance from Muncipal limits, which is effective from 1/4/2014 where as the disputed appeal relates to Asst year 2012/13 to which Notification No 9447 dated 6/1/1994 would be applicable. In fact the amendment supports the claim of the Appellant that the distance of the property from Municipal limits should be considered though existing connectivity of the land situated in 1994 when the said provisions and said rules were brought into the statute. The appellant relied on the following decisions in support of the claim. a. ITAT Shabbir Hussain Pithawala Vs A.C.I.T dated 12/07/2017

At the outset, the only contention of the Ld.AR is that the disputed land in S.No.82/1 to 82/3 in Dwarapudi Village does not fall in the municipal limits of Vizianagaram. The Ld.AR further contended that disputed appeal relates to Asst. year 2012-13 to which Notification No. 9447 dated 6/1/1994 would be applicable, since the amendment brought to Sec.2(14)(iii) requires the department to measure the distance from Muncipal limits, prospectively from 1/4/2014 only. The certificate of 5 I.T.A. No.212/Viz/2020, A.Y.2012-13 Meka Kasi Visweswarudu, Vizianagaram

Per contra, Ld.DR relied on the order of the Ld.CIT(A), pleaded to uphold the same and dismiss the appeal of assessee.

We have heard both the parties and perused the material placed on record. The only issued involved in the instant case is to ascertain whether the land sold by the assessee is within municipal limits of Vizianagaram or not. The assessee had sold the disputed land at Dwarapudi near Vzianagaram to Sai Balaji Happy Homes for Rs.1,42,08,000/-, which he acquired for Rs.17,31,290/- on 06.01.2007. Taking our attention to the certificate obtained from Tahsildar, Vizianagaram as filed in page No.14 of the paper book, the Ld.AR submitted that the disputed land is situated more than 8 Kms from 6 I.T.A. No.212/Viz/2020, A.Y.2012-13 Meka Kasi Visweswarudu, Vizianagaram

In the result, appeal of the assessee is allowed for statistical purpose.

The Principal Commissioner of Income Tax-1, Visakhapatnam 4 The Commissioner of Income Tax (Appeals)-1, Visakhapatnam 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 6.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER