ITO, Ward-7(2), Hyderabad, Hyderabad v. Tingirikar Mahaveerji, Hyderabad, Hyderabad

ITA 1492/HYD/2016 | 2006-2007
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 149222514 RSA 2016
Assessee PAN ACYPT1248F
Bench Hyderabad
Appeal Number ITA 1492/HYD/2016
Duration Of Justice 1 year(s) 23 day(s)
Appellant ITO, Ward-7(2), Hyderabad, Hyderabad
Respondent Tingirikar Mahaveerji, Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-11-2017
Last Hearing Date 26-10-2017
First Hearing Date 26-10-2017
Assessment Year 2006-2007
Appeal Filed On 07-11-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN ACCOUNTANT MEMBER S.NO. ITA NO. AY ASSESSEE RESPONDENT 1 1492/H/16 2006-07 INCOME-TAX OFFICER WARD 7(2) HYD. T. MAHAVEERJI HYD. PAN ACYPT 1248F 2 605/H/13 2006-07 -DO- T. MANIK PRABHU HYD. PAN ACYPT 1245J 3 608/H/13 2006-07 -DO- T. SAIBABA HYD. PAN ACYPT 1246 M` REVENUE BY : SHRI V. SREEKAR ASSESSEE BY : SHRI S. RAMA RAO DATE OF HEARING 03-11-2017 DATE OF PRONOUNCEMENT 30-11-2017 O R D E R PER S. RIFAUR RAHMAN A.M.: THESE APPEALS BY REVENUE ARE ARISE OUT OF IDENTICA L BUT INDEPENDENT ORDERS PASSED BY CIT(A) VI AND CIT(A) 3 HYDERABAD. FOR THE SAKE OF CONVENIENCE THE APPEALS ARE TAKEN UP TOGETHER FOR DISPOSAL. 2. TINGIRIKAR IS A SURNAME OF SHRI SAIBABA SHRI MANIK PRABHU AND MAHAVEERJI. THE LIMITED ISSUE IN THESE APPEALS IS WITH REGARD TO TAXABILITY OF CAPITAL GAINS ON SALE OF DRY AGRICULT URAL LAND. THE ISSUE WHETHER THE LAND IS AGRICULTURAL LAND OR NOT IN D ISPUTE BEFORE US. 2 ITA NO. 608/ /HYD/2013 AND OTHERS SHRI T. SAI BABA AND OTHERS 3. ACCORDING TO THE AO AGRICULTURAL LANDS SOLD ARE WITHIN 8KM FROM THE MUNICIPAL LIMITS AND THEREFORE THEY HAVE TO B E TREATED AS CAPITAL ASSETS WITHIN THE MEANING OF SECTION 2(14) OF THE ACT AND THEREBY THE ASSESSEE IS LIABLE TO PAY CAPITAL GAINS ON SALE OF SUCH AGRICULTURAL LAND. ON THE OTHER HAND THE CASE OF THE ASSESSEES WAS THAT THE LAND SOLD IS NOT A CAPITAL ASSET WITHIN THE MEANING OF S ECTION 2(14) OF THE ACT. 4. IT IS ALSO NOT IN DISPUTE THAT THE SAID LAND WAS WITHIN THE SHAMSHABAD MUNICIPAL LIMITS WHICH IS NOW KNOWN AS HADA (HYDERABAD AIRPORT DEVELOPMENT AUTHORITY). THOUGH T HE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THE CIT(A) A CCEPTED THE ASSESSEES PLEA BY OBSERVING IN THE CASE OF SHRI T . SAIBABA INDIVIDUAL AS UNDER: IT IS ALSO A FACT THAT THE SHAMSHABAD AIRPORT AUTH ORITY IS NOT A NOTIFIED AUTHORITY IN THIS REGARD. UNDER THE CIRCUM STANCES IT IS RELEVANT TO HOLD THAT THE LANDS UNDER REFERENCE DO NOT FALL IN THE AREA NOTIFIED FOR PURPOSE OF TREATING IT AS A CAPIT AL ASSET WITHIN THE MEANING OF SEC. 2(14) OF THE IT ACT. HENCE THE CHARGING OF CAPITAL GAINS ON SALE OF THE LANDS UNDER REFERENCE DO NOT SURVIVE. ACCORDINGLY THE CHARGING OF RS. 32 65 00 0/- TO LONG TERM CAPITAL GAINS ON ACCOUNT OF SALE OF LANDS LOC ATED AT MANKHAL VILLAGE IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER REFERENCE DO NOT SURVIVE. SINCE IT HAS BEEN H ELD THAT THERE IS NO BASIS FOR CAPITAL GAINS ON SALE OF LAND S CONFIRMED AS AGRICULTURAL LANDS THERE IS NO NEED OF TAKING UP T HE ISSUE OF ALLOWING THE COST OF ACQUISITION IN THIS REGARD. TH IS GROUND OF APPEAL IS TREATED AS ALLOWED. CIT(A) OBSERVED THAT SHAMSHABAD AIRPORT AUTHORITY IS NOT A NOTIFIED AUTHORITY IN THIS REGARD. UNDER THESE CIRCUMSTANCES IT IS RELEVANT TO HOLD THAT THE LANDS UNDER REFERENCE DO NOT FALL IN THE AREA NOTIFIED FOR THIS PURPOSE SO AS TO TREAT IT AS A CAPITAL ASSE T WITHIN THE MEANING OF SECTION 2(14) OF THE INCOME-TAX ACT 1961. HENC E CHARGING OF CAPITAL GAINS ON SALE OF LANDS UNDER REFERENCE DO N OT SURVIVE. 5. REVENUE CHALLENGED THE ORDERS PASSED BY CIT(A) O N THE GROUND THAT THE LAND IS LOCATED IN MANKHAL VILLAGE IN MAHE SHWARAM MANDAL 3 ITA NO. 608/ /HYD/2013 AND OTHERS SHRI T. SAI BABA AND OTHERS AND THOUGH IT FORMS PART OF HADA IT IS A GOVERNM ENT NOTIFIED LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 2(14) OF TH E IT ACT. WHEN THE CASE WAS CALLED FOR HEARING LD. COUNSEL FOR THE AS SESSEE RAISED A PRELIMINARY OBJECTION WITH REGARD TO MAINTAINABILIT Y OF APPEALS ON ACCOUNT OF TAX EFFECT. 6. LD. DR ON THE OTHER HAND RELIED ON THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GEMINI DISTIL LERIES C.A. NO. 16815/2017 (SLP (C) NO. 1425/2014) WHEREIN THE HON BLE COURT HELD THAT THE CIRCULAR DTD. 09/02/2011 IS NOT RETROSPEC TIVE IN NATURE AND THEY SHALL NOT GOVERN CASES WHICH HAVE BEEN FILED B EFORE THE ISSUE OF CIRCULAR. IT MAY NOT BE OUT OF PLACE TO MENTION TH AT ON 23 RD NOVEMBER 2017 THE HONBLE SUPREME COURT APPEARS T O HAVE RECONSIDERED THE MATTER TO HOLD THAT THE LATEST CIR CULAR APPLIES TO ALL PENDING MATTERS. HOWEVER SINCE THE MATTER WAS HEA RD ON 03/11/2017 THE JUDGMENT OF THE HONBLE SUPREME CO URT WAS NOT AVAILABLE ON RECORD AND HENCE THE MATTER WAS ARGUED AT LENGTH BY LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. DR. 7. THE LD. DR ADMITTED THAT AS PER THE GOOGLE MAP THE ROAD DISTANCE IS 10.8 KMS WHEREAS AS PER THE AREAL VIEW THE DISTANCE IS ONLY 4.2 KM FROM THE END OF THE MUNICIPAL LIMITS AN D ALSO SUBMITTED THAT HADA IS AN AUTONOMOUS BODY WHICH IS PLACED O N PAR WITH MUNICIPALITY AND THEREFORE ANY LAND WITHIN THE MU NICIPAL LIMITS SHOULD BE TREATED AS CAPITAL ASSET WITHIN THE MEA NING OF SECTION 2(14) OF THE ACT. 8. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. T. URMILA (ITTA NO. 297 OF 2013) (AP HIGH COURT ) WHEREIN THE FINDINGS OF THE ITAT WERE UPHELD. THE ITAT IN TURN OBSERVED THAT AREA COMPRISED IN THE JURISDICTION OF HADA WAS RESI DENTIAL/RURAL IN NATURE AND HADA WAS ENTRUSTED WITH THE JOB OF GRANT ING TECHNICAL 4 ITA NO. 608/ /HYD/2013 AND OTHERS SHRI T. SAI BABA AND OTHERS SANCTION OR APPROVAL FOR ANY PROPOSED CONSTRUCTION OR DEVELOPMENT IN THE AREA IN AND AROUND THE PROPOSED AIRPORT BUT IT DOES NOT HAVE ANY POWER OR ABILITY TO COLLECT TAXES ON PAR WITH T HE MUNICIPAL AUTHORITIES AND HENCE HADA CANNOT BE EQUATED WITH MUNICIPALITY. SINCE THE AGRICULTURAL LAND IS OUTSIDE THE MUNICIPA L LIMITS OF HYDERABAD MUNICIPALITY IT CAN BE CONCLUDED THAT TH E LAND DOES NOT COME WITHIN THE PURVIEW OF SECTION 2(14)(III)(A)(B) OF THE ACT. CONSEQUENTLY NO CAPITAL GAINS TAX CAN BE CHARGED O N THE SALE OF SUCH LAND. 9. LD. COUNSEL FOR THE ASSESSEE RELIED UPON AFORECI TED JUDGMENT. IT WAS ALSO CONTENDED THAT EVEN AS PER THE LD. DR IT IS AROUND 10.8 KMS FROM THE MUNICIPAL LIMITS APART FROM THE FACT THAT HADA CANNOT BE EQUATED WITH MUNICIPALITY. IT WAS ALSO SUBMITTE D THAT THE CONCEPT OF AREAL VIEW WAS INTRODUCED BY THE FINANCE ACT 20 13 WHICH WAS PROSPECTIVE IN NATURE. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT (SUPRA) WE ARE OF THE VIEW THAT THE IMP UGNED LAND CANNOT BE TREATED AS CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT AND CONSEQUENTLY SALE PROCEEDS THEREOF ARE NOT CHARGEABLE TO CAPITAL GAINS TAX. IN THE RESULT APPEALS FILED BY THE REVENUE ARE DISMISSED ON MERITS. PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT A CCOUNTANT MEMBER HYDERABAD DATED: 30 TH NOVEMBER 2017 KV 5 ITA NO. 608/ /HYD/2013 AND OTHERS SHRI T. SAI BABA AND OTHERS COPY TO:- 1) ITO WARD 7(2) 2 ND FLOOR B BLOCK IT TOWERS AC GUARDS MASAB TANK HYDERABAD. 2) SRI T. SAIBABA 3 T. MANIK PRABHU 4) T. MAHAVE ERJI C/O SRI S. RAMA RAO ADVOCATE FLAT NO. 102 SH RIYAS ELEGANCE 3-6-643 STREET NO. 9 HIMAYATNAGAR HYDERABAD 500 029 5) CIT(A) VI HYD. 6) CIT(A) 3 HYD. 7) PR. CIT 3 8) CIT VI HYD. 9) THE DEPARTMENTAL REPRESENTATIVE I.T.A.T. HYDE RABAD. 10) GUARD FILE