Sale of land situated within 8 KM of local municipality limit. Difference in certificate issued by Tahsiladar and internet details remitted back to AO.
ABCAUS Case Law Citation:
ABCAUS 3022 (2019) (06) ITAT
This appeal of the assessee was directed against the order of the Commissioner of Income Tax (Appeals) in rejecting the claim of the assessee with respect to sale of agricultutal land u/s 2(14)(iii) of the Income Tax Act, 1961 (the Act) being situated beyond 9 KMs radius from municipality.
The assessee disposed of an agricultural land, which, as claimed was beyond 8 KMs radius from municipal limit. In support of his contention, the assessee, before the CIT(A) filed a letter issued by the Tahsildar. As per the said certificate, the Tahsildar in categorical terms stated that the subject land was situated beyond 9 KMs radius from municipality.
However, the certificate was rejected by the CIT(Appeals) who confirmed the addition made by the Assessing Officer.
The assessee submitted that the land was classified as “wet land” in the revenue records and the assessee, in fact, was cultivating paddy which was evident from the adangal extract issued by the Village Administrative Officer.
However the Revenue relying upon various inputs obtained from internet found that the subject land was situated within 8 KMs radius from the municipality limit. The public transport system, also mentioned that the distance of the route was only 7 KMs.
On a query from the Bench as to whether other than the internet inputs any other documentary evidence was available? The Revenue admitted that other than the internet inputs, no other material was available on record.
The Tribunal observed that details with regard to distance said to be obtained from the internet was not put to the assessee. Therefore, the assessee had no occasion to explain the distance between the subject land and the municipality.
The Tribunal further observed that the CIT(Appeals) had also not called for any explanation from the Tahsildar on what basis he issued certificate saying that the distance was beyond 9 KMs radius. If the bus route is within 7 KMs radius, then naturally the certificate issued by the Tahsildar was wrong.
The Tribunal opined that before rejecting the certificate issued by the Tahsildar, who happened to be the executive magistrate of that area, had to be given opportunity and report shall be called for after intimating the bus route distance.
The Tribunal also opined that if necessary, the Assessing Officer had to examine the Tahsildar in person after issuing summon under Section 131 of the Act in order to bring on record the real distance between the subject land and the municipality.
In view of the above, the Tribunal set aside both the orders of the lower authorities and the entire issue was remitted back to the file of the Assessing Officer for re-examination of the matter and the basis on which the Tahsildar issued the certificate claiming that the subject land is beyond 9 KMs radius from the municipal limit.
The Tribunal stated that if necessary, it would be open to the Assessing Officer to examine the Tahsildar by issuing summon under Section 131 of the Act. The AO was directed to bring on record the entire material facts including the report, statement if any, obtained from the Tahsildar and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.