Mahisagar Farms Pvt.Ltd., Ahmedabad vs Department Of Income Tax

सम ी जी.डी.अ वाल, उपा य (अहम. े ) एवं ी कुल भारत, या यक सद य । BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) And SHRI KUL BHARAT, JUDICIAL MEMBER

आयकर अपील सं./I.T.A. No.1831/Ahd/2011 ( नधा रण वष / Assessment Year : 2004-05) Income Tax Officer बनाम/ Mahisagar Farms Pvt.Ltd. Ward-4(4) Vs. 17, Basant Bahar Ahmedabad Shobhan Co.Op.Hou.Soc. Nr.Sterling Club Bopal, Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AABCM 0514 G (अपीलाथ( /Appellant) .. ()*यथ( / Respondent)

अपीलाथ( ओर से / Appellant by : Shri Dinesh Singh, Sr.DR )*यथ( क, ओर से/Respondent by : Shri M.S. Chhajed, AR

ु वाई क, तार/ख / सन Date of Hearing 04/06/2015 घोषणा क, तार/ख /Date of Pronounce ment 11/06/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-VIII, Ahmedabad ('CIT(A)' in short) dated 13/05/2011 pertaining to Assessment Year (AY) 2004-05. The Revenue has raised the following grounds of appeal:-

ITA No.1831/Ahd/2011 ITO vs. Mahisagar Farms Pvt.Ltd.

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1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.15,37,836/- made by the AO on account of long term capital gain on sale of agriculture land.

1.1 The Ld.CIT(A) has erred in law and on facts in not appreciating that the said land was situated within 8 KMs of Sanand Municipality area.

2. On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order of the Assessing Officer.

3. It is, therefore, prayed that the order of the Ld.CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent.

2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 18/12/2009, thereby the Assessing Officer (AO in short) made addition of Rs.15,37,836/- being long term capital gain. Against the said assessment order, the assessee preferred an appeal before the ld.CIT(A), who after considering the submissions deleted the addition made by the AO. Aggrieved by the order of the ld.CIT(A), now the Revenue is in appeal before us.

3. Ground Nos.1 & 1.1 are inter-connected and, therefore, the same are decided together. The ld.Sr.DR Shri Dinesh Singh vehemently argued that the ld.CIT(A) was not justified in deleting the addition. He ITA No.1831/Ahd/2011 ITO vs. Mahisagar Farms Pvt.Ltd.

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submitted that the AO has observed that the land in question was within the municipal limit of the Sanand Nagar Palika.

3.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the ld.CIT(A) has followed the earlier order passed in AY 2005-06. He submitted a copy of the said order dated 27/11/2009 in Appeal No.CIT(A) VIII/ITO/4(4)/235/08-09 of the ld.CIT(A). It is submitted by the ld.counsel for the assessee that the Revenue has not filed any appeal against this order. The ld.counsel for the assessee also placed on record a notification issued u/s.2(1A)(c) by the Central Government, wherein it is notified that areas upto 2 KMs from the municipal limits in all directions, hence the agriculture land in question cannot be subjected to capital gain tax.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this issue as under:-

"3.3. I have carefully considered the facts on record regarding this issue. On the identical facts for the A.Y. 2005-06, the Ld. A.O made an addition and which was deleted by the Ld. CIT(A)vide order No.CIT(A)-VIII/ITO 4(4)/235/2008-09 dated 27/11/2009. The findings of the Ld.CIT(A) are as under:-

" I have considered the facts and submission of the Ld. A.R carefully. It is seen that the A.O has treated the impugned piece of land as capital asset for the purposes of Long Term ITA No.1831/Ahd/2011 ITO vs. Mahisagar Farms Pvt.Ltd.

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capital gains on the basis of a report prepared by his Inspector and the statement recorded by the Inspector of the purchaser of land. On the other hand the appellant has placed reliance on the report received by the AO from the Talati / Mamlatdar of Taluka Sanand regarding the distance of the piece of land under reference from the municipal limits of Sanand. In the given circumstances, the report submitted by the Talati / Mamlatdar is an expert opinion and the same cannot be brushed aside with the report of an Inspector of the Department who is not an expert with regard to ascertaining the distance of a piece of land from the Municipal limits. If the A.O. was not satisfied with the report of Talati / Mamlatdar of Sanand he could have issued summons to him and would have confronted with the report of the Inspector and could have obtained an independent report from another expert in the matter. Since, it has not been done, the report submitted by the mamlatdar / Talati is required to be relied upon being a Government official having expert knowledge in the relevant field. Therefore, in the given circumstances, the A.O's action for treating the piece of land as capital asset in total disregard of the report of Talati / mamlatdar of Taluka Sanand cannot be held justified. Therefore, the addition of Long Term Capital Gain made by him amounting to Rs. 2,17,016/- is deleted."

3.4 Since, the addition during the year under consideration is also on the same set of facts and therefore following the decision of my Ld. Predecessor, the addition during the year under considerations is deleted."

4.1. The Revenue has not placed any material on record suggesting that the distance of the land in question with regard to municipal limits of ITA No.1831/Ahd/2011 ITO vs. Mahisagar Farms Pvt.Ltd.

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Sanand Town is less than 2 KMs. Under these facts, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, ground Nos.1 & 1.1 of Revenue's appeal are rejected.

5. Ground Nos.2 & 3 are general in nature which require no independent adjudication.

6. In the result, Revenue's appeal is dismissed.

Order pronounced in the Court on Thursday, the 11th day of June, 2015 at Ahmedabad.

Sd/- Sd/- (जी.डी.अ वाल) (कुल भारत) उपा य (अहम. े ) या यक सद य ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER Ahmedabad; Dated 11/ 06 /2015 ट/.सी.नायर, व. न.स./T.C. NAIR, Sr. PS

आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ( / The Appellant

2. )*यथ( / The Respondent.

3. संबं8धत आयकर आयु:त / Concerned CIT

4. आयकर आयु:त(अपील) / The CIT(A)-VIII, Ahmedabad

5. ;वभागीय ) त न8ध, आयकर अपील/य अ8धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड= फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स*या;पत ) त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad