Income Tax Appellate Tribunal - Delhi
Amar Singh, Rewari vs Ito, Ward-1, Rewari on 25 April, 2023
THE INCOME TAX APPELLATE TRIBUNAL
DELHIBENCH 'A', NEW DELHI
Before Sh. C. M. Garg, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 115/Del/2019 : Asstt. Year: 2013-14
Amar Singh, Vs. Income Tax Officer,
248, Garhi Alwalpur, Dharuhera, Ward-1,Rewari,
Plot No. 1313, Sector-4, Haryana-123401
Rewari, Haryana-123401
(APPELLANT) (RESPONDENT)
PAN No. CWNPS5973H
Assessee by : Sh. Rajeev Saxena, Adv. &
Sh. Shyam Sunder, Adv.
Revenue by : Sh. Kanv Bali, Sr. DR
Date of Hearing: 14.02.2023 Date of Pronouncement: 25.04.2023
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order of the ld. CIT(A), Rohtak dated 05.10.2018.
2. Following grounds have been raised by the assessee:
"1. That the learned Assessing Authority/CIT(A) grossly erred by addition on account of disallowance of deduction u/s 54B by making re-investment by assessee in his wife and son name by following the judgment of decision of Punjab & Haryana High Court, which is jurisdictional High Court in the case of CIT Vs. Dinesh Verma, the contention of the assessee regarding claim of exemption u/s 54B is rejected.
2. That the learned Assessing Authority/CIT(A) further erred by framing assessment by not giving the benefit deduction u/s 54F on account of construction expenses 2 ITA No. 115/Del/2019 Amar Singh made by assessee in his house where the framer assessee did not maintained records of bills but he produced the copy of valuation report from registered valuer which is on records.
3. That the learned Assessing Authority/CIT(A) further erred by framing assessment on basis of conjectures & surmises.
4. That the learned Assessing Authority/CIT(A) further erred by charging interest wrongly u/s 234A, 234B, 234C & 234D of the Income Tax Act, 1961.
5. That the learned Assessing Authority/CIT(A) further erred by initiating penalty proceedings u/s 271(1)(b) & 271(1)(c) of the Income Tax Act, 1961."
3. Notice u/s 148 was issued by ITO, Ward-3, Rewari on 26.3.2014 after recording reasons that the assessee has sold immovable property valued at Rs.5,96,62,500/- on 11.02.2013. In response to the query letter dated 07.07.2015, the assessee has furnished his reply alongwith copy of sale deed. The sale deed reveal that the assessee has sold land for Rs.7,18,03,125/- vide sale deed No.2137 dated 21.03.2013 situated at Garhi Alawalpur, Teh- Dharuhera, Rewari wherein the assessee has ½ share. The share of sale consideration of the assessee works out to Rs.3,59,01,592/-.
4. As the land is situated within 5 KMs from the municipality limits of Dharuhera Municipality, the Assessing Officer treated it is a capital asset chargeable to tax u/s 2(14) of the IT Act, 1961. The A.O completed the assessment u/s 143(3) of the IT Act, 1961 determining income of Rs.3,59,20,152/- on account of Long Term Capital Gain. The AO has also denied exemption claimed u/s 54B & 54F of the IT Act, 1961 as the assessee had 3 ITA No. 115/Del/2019 Amar Singh not been able to substantiate the purchase of agricultural land subsequent to the said sale.
5. During the appellate proceedings, the appellant has filed an application u/r 46A of the IT Rules, 1962 for admission of additional evidence with stating that:
"( 1) Th e la n d so ld b y t h e A s s es s e e c o m e s u n d e r t h e l oc al m u n ic ip a lit y o f D h a ru h e ra an d D h aru h e r a h avin g p o p u lat i on 3 0 ,3 4 4 acc o rd in g to l as t p r e c ed in g c en su s 2 0 1 1 . H en c e , d i st an c e o f lan d wil l b e cal cu la t ed w it h in 2 K M f r om t h e l o cal m u n ici p ali t y i . e. D h a r u h e ra .
( 2) D ed u ct i on s u / s 5 4 B & 5 4 F w. r .t . r e - in v e st m en t in A g ri cu lt u r e lan d an d c on s t ru c t i on o f r e si d en t ial h ou s e ou t of sal e p r o c eed fr o m ag r icu lt u r e l an d . Th e sa m e were n ot g i v en before the A.O. d u rin g the a ss e s sm en t p r o c e ed in g s ."
6. Thereafter, considering that assessee is an agriculturist and in view of principles & natural justice, the evidence given by the assessee was sent to the assessing officer and the AO was asked for give comments.
7. The A.O. in the remand report submitted that, "( 1) Th e q u e st i on of c en su s o r si t u at i on o f lan d wi t h in t h e m u n i cip a l li m it s o r d is t an c e wit h in 2 K M s i s w r on g an d m is t ak en . P e rh ap s t h e p l ead in g s o f the a ss e s s e e are b a s ed u p on the am en d e d p r o vi si on s of s ec t i on 2 ( 1 4) ( iii) ( b ) a c c or d in g t o wh i ch t h e l an d s it u at e d b ey on d a d i st an c e of m u n i cip a l lim it s of a t o wn h avin g p o p u l at i on u p t o on e lak h is n ot a c ap it al as s et . Th is am en d e d s e ct i on h a s c om e in t o e ff e ct f rom 0 1 . 0 4 .2 0 1 4 i . e. f ro m A . Y . 2 0 1 4 - 1 5 . Th is ca s e o f t h e a s se s s e e r e lat es t o F .Y . 2 0 1 2 - 1 3 i. e . A .Y . 2 0 1 3 - 1 4 an d t h is am en d e d s ec t i on is n ot ap p li cab l e in t h e c as e of t h e as s e ss e e .
( 2) A s p e r t h e p r o v isi on of s ect i on 5 4 B an d 5 4 F , am ou n t n ot u t iliz ed f or t h e p u rch a s e of n e w as s et u p t o t h e d at e o f f ilin g o f r et u rn u / s 1 3 9 , sh ou ld 4 ITA No. 115/Del/2019 Amar Singh h av e b e en , d ep os it e d in b an k in c ap it al g ain a cc ou n t s ch em e . Th e a s s es s e e h as n ot fil ed r et u rn o f in c o m e wi t h in t h e t i m e p r es c rib e d u / s 1 3 9 o f I T A ct . R et u rn w as fil e d on ly on 1 1 . 0 7 .2 0 1 6 i n r e sp on s e t o n ot ic e u / s 1 4 8 o f I T A ct . Th u s, t h e a s s e s s e e i s n ot en t it l e d f o r d e d u c t i on cla im e d u / s 5 4 B & 5 4 F b e y on d the amount li m it of Rs. 6 6, 3 9 ,4 5 0/ - ( R s. 1 5 ,00 ,0 0 0 + R s .5 1 ,3 9, 4 5 0) . "
8. The assessee further submitted before the ld. CIT(A) that the assessee sold agricultural land at Vill.- Alawalpur, Teh- Dharuhera, Rewari dated 10.02.2013 (FY 12-13) and the AO has wrongly treated it as urban land and further the assessee has re-invested the sale proceeds in his wife and son's name and hence no taxability arises. The ld. CIT(A) concluded that the land was situated within 5 KMs from Dharuhera notified area and the assessee's contention that Dharuhera became Municipality in the year 2007 holds no ground. The ld. CIT(A) also held that the assessee failed to furnish documents of ownership of houses claimed to have been constructed by him nor proved that the amount of capital gains was invested in construction of house, hence no deduction u/s 54F of the Income Tax Act, 1961 is allowable. The ld. CIT(A) also held that the new agricultural land purportedly purchased from the sale proceeds of the agricultural land in question was in the name of assessee's wife and sons who had no source of income. Thus, it appears to be a case of benami transaction. The ld. CIT(A) held that the land should be in the name of the assessee who has sold the property to make it eligible for deduction u/s 54B.
9. Aggrieved, the assessee filed appeal before us.
10. The ld. AR argued about the constitutional provisions relating to tax laws with specific reference to Article 245 5 ITA No. 115/Del/2019 Amar Singh dealing with extent of laws made by Parliament and by the Legislatures of States, Article 246 dealing with the subject matter of laws made by Parliament and by the Legislatures of States and Article 265 wherein it was declared that no tax shall be levied or collected except by authority of law. The ld. AR argued on the prior recommendation of the President required to bills effecting taxation in which States are interested as per the Article 274 and hence the income from sale of land cannot be taxed by the Union in the absence of specific provisions. The ld. AR also filed application under Rule 29 of ITAT Rules for admitting additional evidences wherein it was plead that the land is situated more than 22 KMs from the Municipality Rewari and there was no mention of Dharehera Municipality of District Rewari in the notification issued by the CBDT dated 06.01.1994. The arguments in writing of the ld. AR are as under:
"2 .4 Th e ag ri cu lt u ra l la n d b e in g s t at e su b j e ct w as alw ay s ou t sid e t h e p u r vi e w o f an y t a x b y c en t r al g ov e rn m en t an d s o t h e le g i sla t u r e b r ou g h t n ot i fi ca t i on on l y t o in c lu d e su ch lan d wh i ch h a v e ch an g e d t h e n at u r e o f ag r icu lt u r e on a c c ou n t of p r o xim it y wit h t h e u r b an d e v el op m en t . Th e n ot i fi ca t i on wa s b r ou g h t f i rs t t i m e i n 1 9 7 3 an d t h er ea f t e r in 1 9 9 4 on ac c ou n t o f d ev el op m en t o f v a ri ou s cit i e s an d a lm o st ag ai n ab ou t a ft e r 2 0 y ea r s n o t if ic at i on wa s b r ou g h t in 2 0 1 4 . S in c e t h e l an d was s old in t h e p e ri o d 2 0 1 2 - 1 3 t h e n ot ifi c at i on d at ed 0 6 . 0 1 .1 9 9 4 wa s a p p lic ab l e wh i ch is en cl o s ed as A n n e xu r e 2 . F r om t h e p e ru sal of t h e n ot if ic at i on t h e r el e van t c on t en t s r el at in g t o H ar yan a a r e p la c ed at S N o . 9 in w h ic h in t e rn al S N o. at 1 2 n am e o f Mu n i cip al C om m it t e e of D ar u h er a D i st ri ct M oh in d er g a rh wa s m en t i on ed an d ap a r t f r om t h i s a t S N o . 4 9 d i st ri ct R e wad i wa s m en t i on e d an d ag ain st b ot h m u n i cip a lit i e s "A r e a s u p t o d is t an c e o f 5 K m fr om t h e m u n i cip a l c om m it t e e in all d i r e ct i on " wa s m en t i on ed . Th e L d . A O wh i l e r e op en in g the as s e ss m en t in 2016 h as m e r el y l o ok ed in t o the w o rd "D a ru h e ra " an d i g n o r ed D is t r ic t M oh in d e rg a rh an d issu e d n ot i c e u / s 1 4 8 of t h e I T A ct . Th i s D aru h e r a Mu n i ci p al Co m m it t e e w as sit u at ed in d i st ri ct 6 ITA No. 115/Del/2019 Amar Singh Mo h in d e rg a rh an d n ot in R ew ad i . Th e Lan d si t u at e d of t h e a s s es s e e in T eh s il "D h a ru h e ra " b u t n ot " D a ru h e ra " wh i ch i s sit ua t ed in d ist r ic t R ew ad i b u t n ot in D i st ri ct M oh in d er g a rh a s p r o v id e d in t h e n ot i fi ca t i on .
2 .5 It is n e c e ss a ry to su b m it that as per p r e s en t s it u at i on al so D h a ru h e ra i s ab ou t 2 0 K m s f r o m D i st ri ct R e wa ri . Wh il e D h a r u h e ra i s on t h e ot h e r si d e of d i st ri c t R ew a ri a s c o m p a r ed t o Moh in d e rg a rh wh i ch i s on t h e ot h e r sid e . Wh i l e D h aru h e r a i s a b ou t 7 5 K m s f r om D i st ri c t M oh in d e rg a rh . Co p y of G o og l e M a p s a r e e n cl o s ed a s A n n e xu r e A , B an d C wh i ch w e r e ea rl i e r al s o en cl os ed wit h the ap p l i cat io n d at e d 1 9 .1 0 .2 0 2 2 fil ed on 2 0 . 1 0 .2 0 2 2 an d f o r t h e sak e of c on v en i en c e ag a in en cl o s ed .
2 .6 It i s t h e r e f or e h u m b ly su b m it t e d t h at t h e L an d s old b y t h e as s e s s e e in villa g e Ga rh i A la walp u r , T eh sil D h a r u h e ra , D i st ri ct R ew ari wa s ou t si d e t h e s c op e o f ag ri cu l t u r al l an d in c lu d ed i n t h e n ot i fi ca t i on b e cau s e t h e sam e wa s m o r e t h an 2 2 K m s f r om t h e Mu n i cip alit y R e wad i a s p r o vid ed in t h e N ot i fi cat i on d at ed 0 6 .0 1 . 1 9 9 4 ap p li c ab l e in t h e p r es en t ca s e .
2 .7 It is h u m b l y su b m it t ed t h at t h e Ld . A O h a s n ot a p p r e c iat ed t h e n ot i fi ca t i on p r op e rl y an d a d a m an t t o t r eat D h a ru h e ra o f D ist ri ct R e wa ri in the n o t if ic at i on w h ich wa s never m en t i on e d an ywh e r e due to wh ich as s e ss e e wa s u n ab l e t o su b m it an y e v id e n c e o r g o og l e lo cat io n . Th e Ld . CI T( A ) al s o ig n o r ed t h at D h a ru h e ra wa s n ot a Mu n ic ip a lit y in 1 9 9 4 a s it b e ca m e Mu n i ci p ali t y in 2 0 0 7 d u e t o wh ich a s s es s e e co u ld n ot su b m it an y c e rt i fi cat e o r ev id e n c e b e f or e t h e L o w e r A u t h o ri t i es . On t h e l a st d at e o f h ea r in g i . e ., on 2 0 .1 0 .2 0 2 2 al on g wit h t h e ad d it i on al g r ou n d s o f ap p ea l g o og l e l o cat io n wa s su b m i t t ed in t h e e n cl o s ed A n n e xu r es A , B , C an d m ap s cl ea rl y sh ow n t h at D h a ru h e ra wa s p ar t o f D i st ri ct R ewa r i an d n ot i fi cat i on r ela t es t o D a ru h e ra of D i st ri ct M oh in d e rg a rh w h il e D h a ru h e ra i s p a rt of D ist ri ct R ew ad i an d more t h an 20 kms f r om m u n i ci p alit y of R ew ad i p r o vid ed in t h e n ot i fi cat i on . Th e L d . D R s ou g h t t i m e t o ex a m in e t h is a sp e ct an d r eq u i r e d t i m e. D u rin g t h e c ou r s e o f a rg u m en t it wa s a ls o st at ed t h at c e rt i fi cat e h a s al r e a d y b e en o b t ai n e d b u t c ou l d n ot r ea ch t od ay t h o u g h t h e g o og l e l o cat io n cl ea rl y cl a rif y t h at t h e l an d in q u est i on is f ar fr o m t h e lim it p r o vid ed in the n ot i fi ca t i on . Th e H on 'b l e B en ch a ls o p r ov id ed us op p o rt u n it y to su b m it the ce r t if ic at e . Th e m at t e r wa s ad j ou rn ed for 1 0 . 1 1 .2 0 2 2 b u t o n t h at d at e B en ch wa s n ot fu n ct i on in g a n d t h e m at t e r i s 7 ITA No. 115/Del/2019 Amar Singh n o w fi x ed f o r h ea rin g f o r t od a y. It i s h u m b ly su b m it t e d t h at t h is c e rt i fi cat e wa s r eq u i r ed b y t h e H on ' b l e IT A T d u e t o su b s t an t i al c au s e an d b ot h t h e L ow e r au t h o rit i e s A O an d CI T( A ) w e r e ad am an t t o in t er p r e t t h e n ot ifi c at i on in t h e w ro n g d i r e ct i on d u e t o wh ich t h e H on ' b l e I TA T a sk ed t h e r ev en u e on t h e la st d at e of h e ari n g wh o s ou g h t a d j ou rn m en t on 2 0 .1 0 .2 0 2 2 an d al s o t o t h e a s s es s e e a p p ell an t f o r su b m it t in g t h is ev id en c e f r o m T eh sild a r d u e t o wh i ch it is h u m b ly su b m it t ed su ch e vid e n c e m ay kin d ly b e ad m i t t ed u n d e r R u l e 2 9 o f ITA T R u l e s 1 9 6 3 . Co p y of C e rt i fi cat e ob t ain e d fr o m T eh s ild ar is en cl o s e d as A n n exu r e 3 f o r you r k in d p e ru sa l as a n ad d it i on al e vid en c e ob t ain ed on 1 8 .1 0 .2 0 2 2 a s it i s b rin g in g th e fa ct u a l a sp e ct r el e van t t o t h e g r ou n d s o f ap p e al t h ou g h g o og l e lo cat ion w as al r e ad y su b m it t ed an d wa s ap p r e ciat e d b y t h e H on 'b l e B en ch a n d t h e L d . D R s ou g h t t im e t o e x am in e t h is as p ec t . It i s t h e r ef o r e p ra y ed t h at this c e rt i fi cat e f r o m T e h sild a r m a y k in d l y b e ad m it t ed . In t h e lig h t o f t h e n ot i fi ca t i on an d G o og l e l o cat i on t h i s asp e ct of d i st an c e is v er y m u ch e vid en t in t h e p r e s e n t d ay s .
S u b m i s si on s
3. It is h u m b l y su b m it t ed t h at A g ri cu lt u ral L an d wa s a lwa y s ou t sid e t h e p u r vi ew o f c en t ra l le g i slat io n wh i c h in clu d e s In c om e Ta x A ct a n d s o ag r icu lt u ral in c om e wa s n e v e r in clu d e d as t a xa b l e un d er I n c om e T ax A ct . C en t ral G ov e rn m en t on a c c ou n t of u rb an iz a t i on f ou n d t h at n at u r e of ag r icu lt u ral l an d h as b e en ch an g ed due to u r b an iz ati o n or in d u s t r ial d e v el op m en t o r a n y ot h e r si m il a r r ea s o n b y t h e n ot i fi cat i o n in c lu d e s su ch lan d u n d e r t h e s c op e o f In c om e Ta x A c t f r om t i m e t o t im e . Th u s t h e s c op e of In c om e Ta x is e xt en d ed on l y w it h in the li m it s p rov id ed in the n ot i fi ca t i on but n ot b e y on d the n ot i fi cat i on . In the p r e s en t ca s e n ot i fi ca t i on d a t ed 0 6 .0 1 . 1 9 9 4 ap p li cab l e b e cau s e t h e lan d wa s s o ld b e f o r e t h e su b s eq u en t n ot i fi cat i on b r ou g h t b y t h e l eg i sl atu r e . In t h is n ot i fi cat i on on l y ar e a i n a ll d i r e ct i on s o f d is t an c e o f 5 K m s f ro m t h e m u n i cip alit y o f R e wad i c ou ld b e u n d e r t h e s c op e of In c om e Ta x A ct bu t n ot b ey on d 5 K m s.
4. It m a y b e ap p r e ci a t ed t h at t h e l an d in q u e st i on i s m o r e t h an 2 2 K m s f ro m t h e m u n i cip ali t y o f R ew ad i a s p r ov id ed in t h e n o t if i cat io n an d s o i s ou t sid e t h e p u rv i ew o f t h e In c om e T ax A ct . It is n ec e s sa r y t o s t at e t h at as s e ss in g o ff ic e r w h ile r e c or d in g r e a s on s n ot ic e d th at n o t ifi ca t i on i s su ed 8 ITA No. 115/Del/2019 Amar Singh b y C BD T on 0 6 . 0 1 . 1 9 9 4 is r e l ev an t an d lan d in q u e sti on i s c ov e r ed in t h e d e fin i t i on o f cap i t al as s et b u t ig n o r ed t h at D h a ru h e ra o f D ist ri ct R ew ad i wa s n ev e r in clu d ed in the n ot i fi c at i on but D a ru h e ra of D i st ri ct Mo h in d e rg a rh w a s o n ly i n cl u d ed an d in t h e n ot i fi ca ti on wh e r ev e r r eq u i r ed n am e of D i st ri ct a g ain st ea ch m u n i ci p al c o m m i t t e e wa s m en t i on ed an d t h e r e i s n o m en t i on in g o f D h a ru h e ra w h ich w a s sin c e b eg i n n in g wa s in t h e d ist ri ct R e wad i . Th u s, it i s h u m b l y s u b m it t e d t h at t h e Ld . A O is n ot em p ow e r ed t o b rin g on it s own an y la n d u n d e r t h e p u rv ie w of In c om e Ta x A ct wh ic h wa s n ev e r b r ou g h t b y t h e l e g isl at u r e. Th e A g ri c u lt u r al lan d o f t h e as s e s s ee is ou t sid e t h e d ef in it i on of c ap it al a s s et a s p r ov id ed u / s 2 ( 1 4) of IT A ct .
5. It i s h u m b ly su b m i t t e d t h at r e op en in g o f t h e a ss es s m en t m ad e b y t h e Ld . A O i s b a d in law a s t h e lan d in q u e st i on wa s ou t s id e t h e d ef in it i on o f c ap it al as s et an d s o as s e s sm en t m ad e i s r eq u i r ed t o b e q u a sh ed . Th e as s e ss e e b ein g ag r icu lt u r ali st wa s n ot aw a r e o f t ax la w s an d wa s n o t g et t in g p r op e r p r o f e ss i on al ad v ic e d u ri n g as s e s sm ent p r o c e ed in g s t h ou g h t h e r et u rn of in c o m e wa s fil e d b y h i m as p e r ad vi c e d u e t o wh i ch t h i s g r ou n d wa s n e v e r rai s ed b e fo r e t h e as s e ss in g o ffi c er . D u rin g t h e fi r st ap p ell at e st a g e al s o t h e r e w as a d i sc u s si on t h e n oti fi cat ion o f 2 0 1 4 b y wh i ch t h e l an d in q u e st i on wa s ou t sid e t h e p u rvi e w of In c om e t a x a ct on ac c ou n t o f l o w e r p op u l at i on b u t p l ea on t h e n ot i fi cat i on d at ed 0 6 .0 1 .9 4 wa s al s o ra is e d an d t h e Ld . CI T( A ) a t p a ra 3 .2 .1 h a s d i sp o s e d of t h e p l e a.
It i s t h e r e fo r e h u m b ly r e q u es t ed t h at t h e re l ev an t p a ra 3 .2 .1 m ay k in d ly b e b r ou g h t in t o y ou r k in d n ot i c e wh e r e t h e L d . CI T( A ) d e sp i t e n ot i ci n g t h a t D h aru h e r a b e ca m e Mu n i ci p ali t y in 2 0 0 7 on l y d id n ot ac c ep t t h e a rg u m en t m e r el y b e c au s e C BD T n ot i fi cat i on d at ed 0 6 .0 1 . 1 9 9 4 . Th e Ld . C I T( A ) ig n o r ed t h at t h e l eg i sl a t u r e h a s n ot i n c lu d ed D h a ru h e ra of D ist ri ct R ew ad i b u t in clu d ed on l y D a ru h e ra o f D i st ri ct M oh i n d e rg a rh wh ich h as n o * ' r el ev an c e wit h t h e lan d of t h e as s e s s e e sit u a t ed i n d i st ri ct R e wa ri T eh s il D h a ru h e r a w h ich w a s n ot a m u n i cip alit y in 1 99 4 d u e t o wh i ch it wa s n ot in clu d e d i n t h e n ot i fi ca t i on .
6. It i s h u m b l y su b m it t ed t h at t h at t h e ad d it i on a l g r ou n d s 7 an d 8 rai s ed are p u r el y leg al by wh i ch both r eo p en in g of a s se s sm en t and ad d it i on m ad e a r e ch al l en g ed b ein g b ad in la w. It i s n e c es s a ry t o b rin g 9 ITA No. 115/Del/2019 Amar Singh fa ct u a l a sp e ct s in t o y ou r k in d n ot i c e b y wh i ch l an d in q u e st i on i s ou t sid e t h e s c op e o f In co m e Ta x A ct a s t h e s am e wa s n ot c apit al a s s et as p e r n ot i fi ca t i on d a t ed 0 6 . 0 1 .1 9 9 4 w h ic h wa s u n d e r st o od in c o r r ec t ly b y b ot h the l ow e r au t h o rit ie s due to wh i ch g r ou n d N o. 7 c h all en g in g the r ea s s e ss m en t p r o c e ed i n g i s rai s ed an d s o r ea s s es s m en t p r o c e ed in g m a y k in d l y b e h el d t o b e b a d in l aw b y ad m i t t in g t h i s g r ou n d .
7. Th at t h e g r ou n d n o . 8 is ag ain h ig h li g h t in g t h e l eg al g r ou n d t h at ad d it i on m ad e i s b a d in l aw a s t h e lan d in q u e st i on i s n ot a cap it al a s s et as e xp l ain ed a b ov e t h e fa ct u a l a sp e ct wh ic h is cl e a rly e vid en t f r om t h e g o og l e l o cat i on as wel l as c e rt i fi cat e f r o m T eh sild a r t h at t h e lan d in q u e st i on is m o r e t h an 2 2 K m s f r om t h e Mu n i cip alit y R e wad i as m en t i on ed at S no. 49.
8. It is n e c e s sa r y to b r in g in t o your k in d n ot i c e d e ci si on of J u ri sd ic t i on al Hi g h Co u r t i. e . , H on ' b l e Hig h C ou rt of P & H i n t h e ca s e o f C IT V s . L ai S in g h r ep o rt ed in 1 9 5 t ax m an n 4 2 0 ( 2 0 1 0) in wh i ch it wa s h eld t h at c e rt i fi cat e f r om T e h sild a r c o rr e ct ly r el ied u p on b y t h e L d . C IT ( A ) an d i t can n ot b e d i s ca rd e d . Th i s d e ci si on w as su b s eq u en t ly f ol lo w ed b y D elh i Hig h C ou rt in CI T vs V ij ay S in g h K a d an r ep o rt ed in 6 3 t axm an n .c o m 2 2 (2015). S u b s eq u en t ly H on 'b l e IT A T Ch an d ig a rh B en ch in the ca s e of Bh u p en d e r S in g h an d Ot h e r s a ls o h eld s im ila r ly an d h eld t h at c e rt i fi cat e o f lan d r e v en u e au t h o rit i e s i s v e ry m u ch r e l eva n t an d d el et ed t h e ad d it i on . S im il a r vi ew h a s b e en exp r e s s ed b y H o n 'b l e I TA T K ol k at a b en ch re p o rt ed in 1 0 6 t a xm an n . c o m 1 9 1 ( 2 0 1 9) in t h e c a s e o f N aiy e r S u lt an V s . IT O K olk at a in w h i ch a s se s sm en t u / s 1 4 7 wa s ch al l en g ed a n d t h e H on 'b l e Be n ch h eld t h at su ch a ss e s sm en t a r e liab l e t o b e ca n c el l ed b ein g b ad in law . Co p y o f all t h e s e d e ci si on s in t h e s ep a r at e PB fil e d o n 2 0 .1 0 .2 0 2 2 at Pag e s 1 t o 7 , 8 - 1 4 , 1 5 - 2 0 a n d 2 1 - 3 3 r e sp e ct i v ely . "
11. The ld. DR submitted that the Village-Ghari, Alawalpur is to 2.3 KM from the Municipal limit of Dharuhera and hence it should be considered as a capital asset. He has submitted the google map depicting the distance. Further, he relied on the orders of the ld. CIT(A) in support of his arguments.10 ITA No. 115/Del/2019
Amar Singh
12. Heard the arguments of both the parties and perused the material available on record.
13. The issue before us is twofold, a. Whether the land sold is a capital asset as per the provisions of the Act applicable to the A.Y. 2013-14?
b. (1) If so, whether the assessee is eligible for deduction u/s 54F or not?
(2) If so, whether the assessee is eligible for deduction u/s 54B or not?
14. The provisions relating to taxability of the receipts on agriculture land are as under:
Section 2 (14) "( 1 4 ) "c ap it al a ss et " m ean s p r op e rt y of an y k in d h eld b y an a ss e s s e e , wh et h e r or n o t c on n e ct ed wit h h i s b u sin e s s o r p r o f ess i o n , b u t d o e s n ot in clu d e--
( i) an y s t oc k - in - t r ad e, c on s u m a b l e st o r e s o r ra w mat e ri als h el d f o r t h e p u rp o s e s o f h i s b u s i n e s s o r p r of e s si on ;
[ ( ii) p e r s on a l e ff e c t s , t h at is t o s ay , m o va b l e p ro p e rt y ( i n clu d in g w ea rin g ap p a r el an d fu rn it u r e) h el d f o r p e r s on a l u s e b y t h e a s se s s e e o r an y m e m b e r of h i s fa m il y d e p en d en t on h im , b u t e x clu d e s --
( a) j e w ell e ry ;
(b) a r ch a e ol o g ic al c oll e ct i on s;
( c) d raw in g s;
(d) p ain t in g s;
( e) s cu l p t u r e s; o r
( f) an y w o r k o f a rt .
11 ITA No. 115/Del/2019
Amar Singh
E xp l an at i on . --F o r t h e p u rp o s e s o f t h i s s u b - cl au s e, "j ew ell e r y" in clu d e s --
( a) or n am en t s m ad e o f g o ld , sil v e r, p l at in u m o r a ny o t h e r p r ec io u s m et al o r an y al lo y c on t ai n in g on e o r m o r e o f su ch p r e ci ou s m et als , wh et h e r o r n ot c on t ain in g an y p r e ci ou s o r s em i - p r e ci ou s st on e , an d wh et h e r o r n ot wo r k ed o r s ewn in t o an y w ea rin g ap p a r e l;
(b) p r ec io u s o r s e m i- p r e ci ou s s t on e s , wh et h e r o r n ot s et in an y fu rn it u r e , u t en sil o r o t h e r a rt i cl e o r wo r k ed o r s e wn i n t o an y w e a rin g ap p a r el; ] [ ( iii) ag ri cu lt u r al la n d in In d ia , n o t b ei n g la n d si t u at e --
( a) in an y a r ea wh i ch i s c o m p ri s ed wit h in t h e j u r is d i ct i on o f a m u n ici p al it y ( wh et h e r k n o wn a s a m u n ici p al it y , m u n ici p al c o rp o ra t i on , n ot i fi ed a r ea c om m it t e e , t own a r ea c o m m it t e e , t o wn c om m it t e e , o r b y a n y ot h e r n a m e) o r a can t on m en t b oa rd an d wh i ch h as a p o p u la t i on o f n o t l e ss t h an t en t h ou san d a c c or d in g t o t h e la st p r e c e d in g c en su s o f wh i ch t h e r el e van t fig u r e s h av e b e en p u b lis h ed b ef o r e t h e fi rs t d a y o f t h e p r e v iou s y e ar ; o r (b ) i n a n y a re a w it h in s uc h d i st a nc e, n ot b ei n g m o r e th a n e ig ht k i lo m et er s , f ro m t he lo c a l l i m i t s of a ny m u n ic i p al i ty or c a nt o nm en t bo a rd r e fe r r ed to in it em ( a ), a s th e Ce nt r a l G ov er n m e nt m a y, h av i ng re g a rd t o th e ex t e nt o f, a n d sc o pe f o r, u r b a n iz at io n o f th a t a re a a nd o th e r r el e v an t co ns i d er a ti on s , sp ec i fy in th i s be h a lf by not i f ic at i on i n th e O ff ic i a l G az e tt e4 7; ]"
15. In accordance with the provisions of Section 2(14), the notification dated 06.01.1994 has been issued wherein the Municipalities and Cantonment Boards have been notified. The said notification is reproduced as under:
IN C O M E - T A X A C T , 1 9 6 1 : N O T I F IC A T IO N U N D E R S E C T IO N 2 ( 1 A ) ( C ) , P R O V I S O , C L A U S E ( I I ) ( B ) A N D S E C T IO N 2 ( 1 4 ) ( I I I) ( B ) : U R B A N IS A T IO N O F A R E A S N o t i f i c a t i o n N o . [ S O 9 4 4 7 ] ( F i l e N o . 1 6 4 / 3 / 8 7 - I T A . I) ] , d a t e d 6 - 1 - 1 9 9 4 12 ITA No. 115/Del/2019 Amar Singh Wh e r ea s a d ra ft n o t i fi cat i on w a s p u b l i sh ed b y t h e C en t r al G o v e rn m en t i n e x e rci s e o f t h e p o w er s c on f e r re d b y it e m (B ) of c l a us e ( i i) o f th e pr ov i s o to s u b-c l a us e ( c) o f c l au s e (1 A ), a nd i te m ( b ) of su b- cl a u s e (i i i ) of c l a u se (1 4 ), o f s ec ti o n 2 o f th e I nc om e- t ax A c t, 1 96 1 ( 43 o f 19 61 ), i n t h e Gaz et t e of In d i a, Ex t r ao rd i n a r y, Pa rt II, se ct i on 3 , su b -
s ec t i on (ii), d at e d F eb ru a r y 13, 1991, under the n ot i fi cat i on of the G o v ern m en t o f In d i a i n t h e Mi n i st ry o f F i n an c e ( D ep ar t m e n t o f R ev en u e) N o. S . O . 9 1 ( E ) , d at ed F e b ru a r y 8 , 1 9 9 1 , fo r sp e ci f yi n g c e rt ai n a r ea s f or t h e p u r p os e s o f t h e sai d cl au s e s an d ob j e ct i on s a n d su g g e st i on s w e r e i n vi t ed fr o m t h e p u b l i c wi t h i n a p e ri o d o f 4 5 d ay s f r om t h e d at e t h e c op i e s o f t h e G az et t e o f In d i a con t ai n i n g su ch n ot i fi ca t i on b e cam e avai l ab l e t o t h e p u b l i c;
A n d wh e r e as c o p i es o f t h e sai d Ga z et t e w e r e m ad e a vai l ab l e t o t h e p u b l i c on F eb ru a r y 1 3 , 1 9 9 1 ;
A n d wh e r ea s t h e o b j e ct i on s an d su g g e st i on s r e c ei v ed f r o m t h e p u b l i c on the sai d d ra ft n ot i fi cat i on h a ve b e en co n si d e r ed by the C en t ral G o v ern m en t ;
N ow , t h e r ef o r e , i n e x e rci s e o f t h e p ow e r s c on f e r r ed b y i t e m ( B) of cl au s e ( i i ) of t h e p r ovi s o t o su b - cl au s e ( c) o f cl au s e ( 1 A) an d i t e m ( b ) of su b - cl au s e ( i i i ) of cl au s e ( 1 4 ) of s e ct i on 2 o f t h e In com e- t ax A ct , 1 9 6 1 ( 4 3 o f 1 9 6 1 ) , an d i n su p e r s es si on of t h e n ot i f i cat i on o f th e G o v e rn m en t of In d i a in the e r st w h i l e Mi n i st r y of F i n an c e ( D e p a rt m en t of R e v en u e an d In su r an c e ) No. S.O. 7 7 ( E) , d a t ed F eb ru a ry 6, 1973, the C en t ral G o v ern m en t h avi n g r eg ar d t o t h e e xt e n t o f, an d s c op e f or u rb an i z at i on of t h e a r ea s c on c e rn e d an d ot h e r r el e v a n t c on si d e rat i on s , h e r eb y sp e ci fi e s t h e a r e as sh own i n c ol u m n ( 4 ) o f t h e s ch ed u l e h e r et o an n e x ed an d fal l i n g ou t si d e t h e l o cal l im i t s of m u n i ci p al i t y o r c an t on m en t b oa rd , a s t h e ca s e m ay b e , s h o wn i n t h e c o r r e sp on d i n g en t ry i n c ol u m n ( 3 ) t h er e o f an d ag ai n st t h e S t at e o r U n i on T er ri t o ry s h o wn i n c ol u mn ( 2 ) t h e r e o f f or t h e p u rp o s e s of t h e ab o v e m en t i on ed p r o vi si on o f t h e In c om e- t ax A ct , 1 9 6 1 (43 of 1961).
...... ...... ...... ...... ...... ...... ... ...... ...... ...... ...... ...... . .
13 ITA No. 115/Del/2019Amar Singh
1.Ambala Cantonment Areas up to a distance of 8 kms from the outer
9. Haryana Board/Municipal limits in all directions. Committee.
Areas up So a distance of 8 kms from the
2. Ambala City municipal limns in all directions.
3. Assandh Areas up to a distance of 2 kms from the (Distt. Karnal) municipal limits in till directions.
4. Bahadurgarh Areas up to a distance of 8 kms. from the (Distt. Rohtak) municipal limits in all directions.
5. Ballabhgarli Areas up to a distance of 8 kms. from the (Distt.
municipal limits in all directions.
Faridabad)
6. Banvala Areas up to a distance of 2 kms. from the (Distt. Hissar) municipal limits in all directions.
7. Bawani Khera Areas up to a distance of 5 kms. from the (Distt. Bhiwani) municipal limits in all directions.
Areas up to a distance of 5 kms. from the
8. Bhiwani
municipal limits in all directions.
9. Charkhi Dadri Areas up to a distance of 2 kms. from the
(Distt. Bhiwani) municipal limits in all directions
10. Chika Areas up to a distance of 2 Kms. from the (Gulla) (Distt.
municipal limits in all directions.
Kurukshetra)
11. Debawali Areas up to a distance of 5 kms. from the (Distt.
municipal limits in all directions Mohindergarh)
12. Daruhera Areas up to a distance of 5 kms. from the (Distt.
municipal committee in all directions Mohindergarh)
13. Ellanbad Areas up to a distance of 2 kms. from the (Distt. Sirsa) municipal limits in all directions.
Areas up to a distance of 8 kms. from the
14. Faridabad
municipal limits in all directions.
15. Fatehabad Areas up to a distance of 5 kms. from the
(Distt. Hissar) municipal limits in all directions.
16. Ferozepur Areas up to a distance of 2 kms, from the Jhirka (Distt. municipal limits in all directions. Gurgaon
17. Ganaur Areas up to a distance of 2 from the municipal (Distt. Sonepat) limits in all directions.
18. Gharaunda Areas up so a distance of 2 kms. from the (Distt. Karnal) municipal limits in all directions.
19. Gohana Areas up to a distance of 2 kms. from the (Distt. Sonepat) municipal limits in all directions.
Areas up to a distance of 8 kms. from the
20. Gurgaon
municipal limits in all directions.
14 ITA No. 115/Del/2019
Amar Singh
21. Hansi Areas up to a distance of 8 kms. from the
(Distt. Hissar) municipal limits in all directions.
Areas up to a distance of 8 kms. from the
22. Hissar
municipal limits in all directions.
23. Hodal
Areas up to a distance of 5 kms. from the
(Distt.
municipal limits in all directions.
Faridabad)
2 4 . In d r i ( D i s U . A r e a s u p t o a d i s t a n c e o f 2 k m s . from the Karnal) municipal limits in all directions.
25. Jhajjar Areas up to a distance of 2 kms. from the (Distt. Rohtak) municipal limits in all directions.
Areas up to a distance of 5 kms. from the
26. Jind
municipal limits in all directions.
27. Julala Areas up to a distance of 2 kms. from the
(Distt. Jind) municipal limits in all directions
28. Kaithal
Areas up to a distance of 5 kms. from the
(Distt.
municipal limits in all directions.
Kurukshetra)
29. Kalanaur Areas up to a distance of 2 kms. from the
(Distt. Rohtak) municipal limits in all directions.
30. Kalka Areas up to a distance of 5 kms. from the (Distt. Ambala) municipal limits in all directions.
31. Kallanwali Areas up to a distance of 2 kms. from the (Distt. Sirsa) municipal limits in all directions.
Areas up to a distance of 8 kms. from the
32. Karnal
municipal limits in all directions.
33.
Areas up to a distance of 2 kms. from the
Kharkhauoda
municipal limits in all directions.
(Distt. Sonepat)
34. Thanesar
Areas up to a distance of 5 kms. from the
(Distt.
municipal limits in all directions.
Kurukshetra)
35. Ladwa Areas up to a distance of 2 kms. from the
(Distt. municipal limits in all directions.
Kurukshetra)
36. Meham Areas up to a distance of 2 kms. from the
(Distt. Rohtak) municipal limits in all directions. 37 Areas up to a distance of 2 kms. from the Mohindergarh municipal limits in all directions.
38. Naraingarh Areas up to a distance of 2 kms. from the (Distt. Ambala) municipal limits in all directions.
15 ITA No. 115/Del/2019Amar Singh
39. Narnaul Areas upto a distance of 2 kms. from the (Distt.
municipal limits in all directions.
Mohindergarh)
40. N a r na u n d Areas up to a distance of 2 kms. from the (Distt. Hissar) municipal limits in all directions.
41. N a r v a n a A r e a s u p t o a d i s t a n c e o f 2 . km s from the (Distt. Jind) municipal limits in all directions.
42. Nilokheri Areas up to a distance of 2 kms. from the (Distt. Karnal) municipal limits in all directions.
43. Palwal Areas up to a distance of 5 kms. from the (Distt.
municipal limits in all directions.
Faridabad) Areas up to a distance of 5 kms. (Distt. Ambala)
44. Panchkula from the municipal limits in all directions.
45. Panjpal Areas up to a distance of 8 kms. from the (Distt. Karnal) municipal limits in all directions.
46. Pataudi Areas up to a distance of 2 kms. from the (Distt. Gurgaon) municipal limits in all directions.
47. Pehowa Areas up to a distance of 2 kms. from the (Distt.
municipal limits in all directions.
Kurukshetra)
48. Padaur Areas up to a distance of 2 kms. from the (Distt.
municipal limits in all directions.
Yamunanagar)
Areas up to a distance of 5 kms. from the
49. Rewadi
municipal limits in all directions.
Areas up to a distance of 8 kms. From the
50. Rohtak
municipal limits in all directions.
51. Sidhaure Areas tip to a distance of 2 kms. from the
(Distt. Ambala) municipal limit's in all directions.
52. Safidon (a) Areas falling within 2 kms. on either side of (Distt. Jind) Safidon Jind Road up to a distance of 5 kms.
from the municipal limits on that road.
(b) Areas (other than in (a) above) up to a distance of 2 kms. from the municipal limits in all directions.
53. Samalkha Areas up to a distance of 5 kms from the (Distt. Karnal) municipal limits in all directions.
54. Shahabad Markanda Areas up to a distance of 2 kms. from the (Distt. municipal limits in all directions.
Kurukshetra)
16 ITA No. 115/Del/2019
Amar Singh
Areas up to a distance of 5 kms. from the
55. Sirsa
municipal limits in nil directions.
56. Sohana Areas up to a distance of 5 kms. from the
(Distt. Gurgaon) municipal limits in all directions.
Areas up to a distance of 8 kms. from the
57. Sonepat
municipal limits in all directions.
58. Taraori Areas up to a distance of 2 kms. from the
(Distt. Karnal) municipal limits in directions.
59. Tauru Areas up to a distance of 2 kms. from the (Distt. Gurgaon) municipal limits in all directions.
60. Tohana Areas up to a distance of 2 kms. from the (Distt. Hissar) municipal limits in all directions.
61. Areas up to a distance of 8 kms. from the Yamunanagar municipal limits in all directions.
62. Jagadhari Areas tip to a distance of 8 kms. from the (Distt.
municipal limits in all directions.
Yamunanagar) ...............................................
2. T h is no ti f ic at i on s h a ll h av e e ff ec t o n a n d f ro m th e d at e o f i ts pu b l ic at i on i n th e O ff ic i a l G az ett e.
E xp l an at i on 1 . ( 1) I n t h is n ot ifi c at i on , "Mu n ici p al it y " sh all m e an an y a r e as wh i ch is co m p ri s ed wit h in t h e j u r is d i ct i on of a m u n ic ip alit y, ( wh et h e r k n o wn a s a m u n i cip alit y, m u n ic ip al c o rp o rat i on , n ot ifi e d a r ea s c om m it t e e , t ow n a r ea s c o m m it t e e , t o wn c om m it t e e or b y an y ot h e r n a m e) wh i c h h as a p op u l ati on o f n ot l e s s t h an t en t h ou san d a c c o r d in g t o t h e la st p r e c ed in g c en s u s of w h ich t h e r el e van t fig u r e s h av e b e en p u b lis h ed b ef o r e t h e fi rs t d a y o f t h e p r e v iou s y e ar .
( 2) T h e r ef e r en c e t o m u n i cip a l li m it s o r t h e lim i t of Can t o n m e n t B o a rd in t h e sch e d u l e t o t h i s n ot i fi cat i on i s t o t h e lim it s as ex is t in g on t h e d at e on wh i ch t h e li m it s a s ex is t in g on t h e d at e on w h ic h th e n ot i fi ca t i on i s p u b li sh ed in t h e O f fi cia l G az et t e ."
16. On going through the notification, we find that in the State of Haryana mentioned at Serial No. 9 in the Column 1, the 17 ITA No. 115/Del/2019 Amar Singh Municipality of "Daruhera" of District Mohindergarh has been mentioned at Serial No. 12 in Column 3.
17. The land in question is undisputedly situated in the village "Garhi Alawalpur" situated in the District Rewari which is within 5 KMs of the present Municipality "Dharuhera". We find that this Municipality has not been mentioned in the said notification. The Revenue could not bring to our notice any other notification issued wherein the Municipality "Dharuhera" situated in District Rewari is mentioned for the purpose of provisions of Section 2(14) of the Income Tax Act, 1961.
18. Further, we have also gone through the details from the Government of Haryana with regard to Municipalities situated in the District Rewari and we find that the District Rewari has three Municipalities namely, Dharuhera, Bawal and Rewari as notified Municipalities as on today (Annexure-A). We have also gone through the Municipalities situated in District "Mahendragarh" (which was typed as "Mohindergarh" in the said notification) (Annexure-B). The Municipalities are Ateli, Kanina, Nangal Choudhary, Narnaul and Mahendragarh. We have also gone through the entire list of Municipal Committees/Municipal Counsel in the State of Haryana and we could not find "Daruhera" as notified Municipal Committee in the District Mahendragarh (Annexure-C). We have gone further to verify whether there is any village/municipality by name "Daruhera" in the entire district of Mahendragarh from the Government of Haryana public document (Annexure-D). We could find none. We have also gone through the list of PIOs as per the Directorate of Urban Local Bodies to verify whether any local body in the name of "Daruhera" (Annexure-E). We could find none. Hence, we 18 ITA No. 115/Del/2019 Amar Singh apprehend that an error might have crept in the notification dated 06.01.1994. The concerned authorities may look into this issue. Since, the Tribunal cannot venture to alter/modify the notification, the issue is being adjudicated as per the notification in force.
19. On going through the entire facts, it can be held that "Dharuhera" of District Rewari do not find place in the notification issued consequence to the provisions of Section 2(14) of the Income Tax Act, 1961. Hence, the land which is situated at Garhi Alawalpur cannot be treated as the capital asset, ergo the proceeds are not liable to tax under the head "Long Term Capital Gains".
20. We are conscious of the fact that the amendment in the said Section has been brought w.e.f. 01.04.2014 and the land in question before us was sold on 21.03.2013 pertaining to A.Y. 2013-14. Hence, the provisions applicable to that period has been taken into consideration. Since, the proceeds cannot be treated as taxable in the hands of assessee any adjudication on the issue of deduction u/s 54F and u/s 54B becomes only academic in nature and hence not resorted to.
21. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 25/04/2023.
Sd/- Sd/-
(C. M. Garg) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 25/04/2023
*Subodh Kumar, Sr. PS*