Income Tax Appellate Tribunal – Kolkata
Sanjeev Kumar Goyal , Kolkata vs Ito, Ward – 45(2), Kolkata , … on 29 November, 2019 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA
[Before Shri J. Sudhakar Reddy, Hon’ble Accountant Member & Shri S.S. Godara, Hon’ble Judicial Member] I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal…………………………………………………………………………………………….Appellant 45-B, Adhya Sradha Ghat Road Kolkata – 700 007 [PAN: ADPPG 5953 N] Vs. Income Tax Officer, Ward-45(2), Kolkata…………………………………………………………..Respondent Appearances by: Shri A.K. Tibrewal, FCA, appeared on behalf of the assessee. Smt. Ranu Biswas, Addl. CIT, D/R, appearing on behalf of the Revenue Date of concluding the hearing : September 16th, 2019 Date of pronouncing the order : November 29th, 2019 O R D E R
Per J. Sudhakar Reddy, AM :-

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 13, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 15/01/2018, for the Assessment Year 2011-12.

2. The assessee is an individual. He filed his return for the Assessment Year 2011-12 on 07/02/2019, declaring total income of Rs.4,72,220/-. The Assessing Officer, during the course of hearing, found that as per the AIR information available with the Additional District Sub-Registrar (ADSR), Haripal, P.O. Khamarchandi, Hooghly, W.B. – 712405, the assessee, in his capacity, as the partner of the firm M/s. Shree Annapurna Oil Mills of 56, Kali Krishna Tagore Street, Kolkata, entered into two sale agreements of capital assets being land and building with M/s STP Ltd. of 6, Lyons Range, Kolkata for consideration of Rs.2,32,55,910/- and Rs.56,70,924/-. A requisition u/s 133(6) of the Act, was sent to the ADSR and copy of documents/sale deed of the land was obtained.

2.1. The Assessing Officer at para 5 of his order states as follows:-
2 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal
3 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal
4 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal 2.2. In reply, to a showcause notice dt. 14/02/2014, as to why the income from
sale of land should not be added to the total income of the assessee, the ld. Counsel
for the assessee, submitted as follows:
follows:-

a) The partnership firm M/s. Shree Annapurna Oil Mills, wa wass constituted between the assessee’s father and his two brothers.
b) The assessee contributed to the firm a sum of Rs.10 Lakhs/ Lakhs/-
c) The partnership firm had purchased agricultural lands in the year 2005 2005-06, for a consideration of Rs.20,00,000/ Rs.20,00,000/-.
d) The land was purchased by the firm as an investment and there was no income of the said firm as there was no business undertaken by the firm in any of the year except th the purchase and sale of this land.

A departmental inspector was deputed to make enquiries about the n nature
and type of land which was sold. The departmental inspector submitted his report
on 05/03/2014. The relevant portion of the report is extracted for ready
reference:-

“Requisition u/s 133(6) was sent to the ADSR, Haripal and the copy of the deeds were obtained. Thereafter, I visited the 010 the Building, Land & Revenue Officer at Haripal, Hooghly on 28.02.2014, which is about 52 km away form Kolkata, to enquire about the nature, location & type of the land which is sold. I met Smt. Indrani Chatterjee, Revenue Officer and she confirmed that the said land sold in two separate deeds, is of 3 types i.e. Sali (less fertile land), Viti (land is used for the purpose of construction of pucca structure) and Doba (water bodies). She further confirmed that the lan land situated in Mouza-Sipaigachi Sipaigachi and the proximity of National Highway No.2 had caused in rapid industrialization. The land in question is also converted into Industrial land by the purchaser i.e. M/s STP Ltd. She stated that she was not aware of any past ag agricultural ricultural activity on the said land. I thanked her and went to the land as specified in the deed. The land is situated by the side of Haripal-Siyakhala-NH2 NH2 road which is also bus route. Concrete structures and iron shades are constructed upon it with a ga gate te displaying the name of company. I took few pictures of the land and returned to Kolkata.”
2.2.1. The Assessing Officer concluded that the land in question is non-
agricultural land. He also took support from the sale deed numbers 4482/10 and
4483/10 wheree at page 19, it is stated as follows:
follows:-

“Total transferred in nine L.R. Dags measuring 425 (Four Hundred twenty five) satak (more or less) which delineated with ‘Red’ line border in the annexed plan with a building area measuring 5098 Sq.ft Sq.ft.. with easement rights of path and passage alongwith with easement right to obtain
5 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal Electricity line, Water line, Telephone line, Gas Line etc. on path and passages.”
In reply to a further showcause notice dt. 07/03/2014, the assessee
submitted as follows:-

a) The agricultural lands were purchased by the partnership firms as investment and this partnership firm had never applied for a Permanent Account No. (PAN). Books of accounts and further documents were produced.
b) The said land was used for agricultural purposes by one, Shri Satish Murmu, who was recorded as Burgadar of the aforesaid land. The said, Satish Murmu, carried out agricultural operations in consideration of undertaking that he would look after the lands ffor or and on behalf of the partnership firm.
A copy of the certificate dt. 26/08/2010 issued by “Pantra Gram Panchayat”, was furnished.
c) The Assessing Officer concluded that the submissions of the assessee was self-contradictory contradictory for the reason that, it was st stated ated that the lands were purchased as investment and on the other hand it was claimed that certain person is carrying out agricultural activities for and on behalf of the partnership firm. Thereafter, the Assessing Officer held that the land in question is not agricultural land, by applying the few tests laid down by the Hon’ble Courts for determining whether a land is agricultural or not. The tests applied are as under:
under:-
i. Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time; ii. Whether the land, though entered in the Revenue records, had never been actually used for agriculture; whether the owner mean or intended to use it for agricultural purposes; iii. Whether the income derived from the agricultural o operations bear any rational proportion to the investment made in purchasing the land land;

2.3. He held that the land was irrecoverably converted into industrial land and
that the intentions of the owners was definitely not to promote agricultural
6 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal activity but to gain maximum from the sale of land. The land was industrial land at
the time of sale with a constructed industrial shed even at the time of purchase. On
the contention that the land was sold by the partnership firm M/s. Shree
Annapurna Oil Mills and tha thatt the capital gains in question cannot be taxed in the
hands of the assessee, the Assessing Officer held that profits are taxable in the
hands of the assessee for the reason that M/s. Shree Annapurna Oil Mills, does not
possess a PAN nor has it filed its income tax return with the ITO. He concluded that
the partnership firm, for the purpose of Income Tax, is a non non-entity.
entity. He held that
the transactions were unreported by the assessee and would not have been
disclosed but for the fact that the case was select selected ed for scrutiny. Thereafter, he
invoked Section 50C of the Act and after dividing the capital gains between the
four partners, who were treated as co co-owners, owners, brought to tax, long term capital
gain amounting to Rs.65,16,420/ Rs.65,16,420/- in the hands of the assessee.

3. Aggrieved, the assessee carried the matter in appeal. The ld. First Appellate
Authority at page 8 to 10 of his order listed out the tests laid down by the various
Courts for determining as to whether a particular land is agricultural land or not not.
These are extracted for ready reference:
reference:-

“1.
1. Whether the land was classified in the revenue record as agricultural and whether it was subject to the payment of land revenue?
2. Whether the land was actually or ordinarily used for agricultural purposes at or about ut the relevant time?
3. Whether such user of the land was for a long period or whether it was of a temporary character or by way of a stop stop-gap arrangement?
4. Whether the income derived from the agricultural operations carried on in the land bore any rationall proportion to the inve investment stment made in purchasing the land?
5. Whether the permission under section 65 of the Bombay Land Revenue Code was obtained for the non non-agricultural agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether suc suchh permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date?
6. Whetherr the land, on the relevant date, had ceased to be put to the agricultural use? If so, whether it was put to an alternative use? Whether, such cesser and/or alternative user was of a permanent or temporary nature?
7 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal 7. Whether the land, though entered in rev revenue enue record, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes?
8. Whether the land was situate in a developed area? Whether its physical characteristics, racteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural?
9. Whether the land itself was developed by plotting and providing roads and other facilities?
10. Whether there were any previous sales of portions of the land for non-
non agricultural use?
11. Whether permission under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intend ed sale was in favour of a non-agriculturist?
agriculturist? If sso, o, whether the sale or intended sale to such non-non agriculturist was for non non-agricultural or agricultural user.
12. Whether the land was sold on yardage or on acreage basis?
13. Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield?”
4.1. Thereafter, he examined the facts of the case and held as follows:-
follows:

a) No agricultural ural activity was done since last so many years over the land in question.
b) The purpose of purchase of land was not to do agricultural activity.
c) The buyer also used the land for industrial purposes.
d) The investment was made simply with a profit motive.
e) The intention ntention was not to carry on any business in the name of the firm.
f) Though the land is claimed to be agricultural land, all the surrounding areas are covered by the industrial units and the said plot of land, has already lost its character of being agricult agricultural land and can always be said to be an industrial plot in the light of other industrial plots though the same was not converted by the assessee.

Thus, he concluded that the character of the land is non non-agricultural.
agricultural.

4.2. Thereafter, on the issue as to iin n which assessees hand this capital gain has
to be assessed hee held that the addition in question cannot be made in the name of
the partners of M/s. Shree Annapurna Oil Mi Mills. He deleted the addition in the
8 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal hands of the assessee on this ground and held tha thatt the capital gain is taxable only
in the hands of the partnership firm M/s. Shree Annapurna Oil Mills. He thereafter
directed as follows:-

“Considering the facts narrated above and submission of the appellant and evidences examined during the course of appellate proceedings the additions made in the hands of the partners is here by deleted and the AO is directed to tax the same in the hands ooff the Firm. Keepin in view of the aforesaid observation made in the foregoing paras, the addition made in the hands of the appellant is hereby directed to be deleted and the AO is directed to re re-open open the case and tax the same in the hands of the firm.
As regards the applicability of section 50C is concern it is held that the AO has rightly applied the provisions as its character was not agriculture land as it is held in the decisions of the Hon’ble Rajasthan High Court in the case of Mahaveer Enterprises vvs. UOI [2001] 244 ITR 789/[1997] /[1997] 95 Taxman 220.”

5. Aggrieved, the assessee is in appeal before us on the following grounds:
grounds:-

“1. That, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) – 13, Kolkata erred in holding that the Capital Gains arising on sale of immoveable property being lands sold by the partnership firm M/s Shree Annapurna Oil Mills vide two documents bearing No. 4482 of 2010 and 4483 of 2010 registered with the Addl. Dist. Sub Registrar, Haripal was not an agricultural land.
2. That, the Learned Commissioner of Income Tax (Appeals) erred in concluding that the provisions of section 50C of the Act are applicable to this case since the land sold by the partnership firm M/s Shree Annapurna Oil Mill was not an agricultural land.
3. That the Learned Commissioner of Income Tax (Appeals) erred in drawing aforesaid conclusions that the Land sold by the partnership Firm M/s Shree Annapurna Oil Mills was not agricultural land when the same land was held to be the agricultural land by th thee Income Tax Officer, Ward 43(1), Kolkata in assessment order passed under section 143(3) of the Act in the case of Sri Rajeev Kumar Goyal another partner of the aforesaid partnership firm.
4. That, various conclusions drawn by Learned Commissioner of Income Tax (Appeals) to hold that the land sold by the partnership firm M/s Shree Annapurna Oil Mills are perverse based on some facts which are contrary to records and wrongly relying on judgem judgements ents which are distinguishable and not applicable to the facts of this case.
5. That the Ld. Commissioner of Income Tax (Appeals) erred in holding that the provisions of section 50C are applicable in as much as the land in question was not an agricultural land.
6. That without prejudice to Ground No. 5 above, the Ld. Commissioner of Income Tax (Appeals) erred in concurring with the Assessing Officer’s decision to apply the provisions of section 50C of the Act inspite of the fact that the
9 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal Assessing Officer refused to refer the matter of valuation to ova although the Appellant specifically requested for such reference to DVO.
7. That the Learned Commissioner of Income Tax (Appeals) exceeded his jurisdiction to direct the Assessing Officer to initiate the Ass Assessing essing Officer to tax the said amount in the hands of the partnership firm.
8. That the appellant craves leave to add, alter or withdraw any ground or grounds of appeal at or before the hearing of the appeal.”

6. On Ground Nos. 1 to 4, tthe ld. Counsel for the assessee submits that, that the
findings of the Ld. CIT(A) as well as the Ld. AO are perverse in as much as the
subject land was agricultural land and therefore the Capital Gains on sale thereof is
not liable to be taxed. The ld. Counsel for the assesee refers ers to the certificate issued
by “Gram Pradhan, Pantra Gram Panchayat” placed at Page 62 of the Paper Book Book,
wherein the Gram Pradhan has certified that the subject land was agricultural land
as per the records of Block Land Revenue Officer (BLRO). He also certified that the
said land was being cultivated by one recorded Bargadar Sri Satish Murmu and his
son and that there was no munici municipality pality or Development and Cantonment Board
within 8 Kms. from the said agricultural land. He also certified that the said land
was recorded as agricultural land when the same was sold by M/s STP Ltd. He
referred to the impugned assessment order wherein the Ld. AO made enquiry
through his Inspector who himself visited the office of the Building, Land &
Revenue Officer at Haripal, Hooghly on 28.02.2014 to enquire about the nature,
location & type of the subject land. The Land & Revenue officer confirmed that the
said land was converted into Industrial Land by the purchaser i.e. M/s STP Ltd Ltd. to
whom the land was sold by the assessee assessee. He relied on this statement of the Land
Revenue Officer clearly shows that the land was an agricultural land when the
same was sold ld by the firm and that the buyer had got the same converted into an
industrial land only after its purchase from the assessee. Reference was made to
the assessment order for the Assessment Year 2011 2011-12 12 passed by the AO under
section 143(3) of the Act in tthe he case of Sri Rajeev Kumar Goyal, the brother of the
assessee who was also a partner in the firm M/s Shree Annapurna Oil Mills and
who also signed the sale deed. The copy of the Assessment order is placed at pages
76 to 77 of the Paper Book. In this case the assessee therein contended that the
property sold by the assessee was an agricultural land and therefore the question
10 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal of capital gains did not arise. To verify the contentions of the assessee, the Income
Tax Officer on investigation found that the prop property erty was an agricultural land which
was beyond the radius of eight kilometres from the municipal area. The Income
Tax Officer thereupon held that the capital gain on sale of this land is not taxable.
The said assessment order became final and was not subjected cted to revision or
reassessment. In such circumstances of the case, the Ld. AO as well as the Ld.
CIT(A) was wholly unjustified in taking a contrary view in this case. He relied on
the order of the this Bench of the Tribunal in the case of ITO vs. Malay Kumar K
Mitter in ITA No. 307/Kol/2012 wherein on similar facts the case was decided in
favour of the co-owner owner of the landed property. In this case the Tribunal held and
observed as under:

“5. At the outset, ld. Counsel for the assessee submitted that the iss issue ue is squarely covered in favour of the assessee. He referred to the Tribunal’s decision in the case of co-owner owner of the property Shri Arijit Mitra as above and contended that in view of the aforesaid Tribunal decision, no capital gain was eligible in the assessee’s hands.

6. Ld. D.R. could not contradict to this submission of the ld. Counsel of assessee.

7. We have heard the rival submissions and perused the material available on record. We find that this issue is squarely covered in favour of the assessee assessee. The Tribunal in the hands of the co co-owner owner of the property had held that the lands in question did not constitute ‘capital asset’ under section 2(14) of the Income Tax Act because Rajarhat Municipality was not one of the notified Municipality as per the Central entral Government’s Notification dated 28.12.1999. Hence, respectfully following the precedent, we hold that the land in question, which was transferred by the assessee, was an agricultural land and it did not fall within the ambit of ‘capital asset’ under section 2(14) of the Income Tax Act. Accordingly we confirm the order of ld. CIT(Appeals).
CIT(Appeals).”

6.1. The ld. Counsel of the assessee submitted that the land purchased by the firm
was registered as agricultural land in the revenue records at the time of purchase and
continued to be same when the land was sold. The land was situated in an area which
is beyond 8 Kilometres from any municipality and and/or /or cantonment Board. Thus the said
land was not a capital asset within the meaning of section 2(14) of the Act. The
conversion of land from agricultural to industrial subsequently by the buyer of the land
will not have any adverse effect on its chargeabil chargeability ity or otherwise in the case of the
11 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal seller of such land. The area was not notified for urbanisation in the latest Notification
No. 11186 dated 28.12.1999 issued by the Central Government. Therefore the gain
arising on sale of the same cannot be charged to capital gains. He relied on certain case-
case
law for this proposition, which we would be referring to as and when required.

6.2. On Ground Nos. 5 & 6, the ld. Counsel for the assessee submitted that the
assessee has challenged the order of Ld. CIT(A) wherein h hee held that the provisions of
section 50C are applicable since the land sold by the assessee was not an agricultural
land. He submitted that the Ld. CIT(A) was not justified in confirming the action of the
AO when the assessee sold agricultural land and confirming onfirming the application of section
50C of the Act even when the AO did not refer the valuation to DVO. The ld. Counsel for
the assessee relied on the to the judgement of Hon’ble Calcutta High Court in the case
of Sunil Agarwal vs. CIT in ITAT No. 221 of 2013 and GA No. 3686 of 2013 wherein
Hon’ble High Court held that “For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatm treatment ent to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who m may ay not have been properly instructed in law, the assessing officer, discharging a quasi quasi-judicial judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law.”
6.3. On Ground No. 7, the ld. Counsel for the assessee submitted that the directions
issued by Ld. CIT(A) to the Assessing Officer, to re-open open the case of the partnership
firm M/s. Shree Annapurna Oil Mills, to bring to tax the Capital Gains in the hands of
the partnership firm is without ju jurisdiction, risdiction, illegal and invalid. He submitted that the
Ld. CIT(A) has no such powers to issue such directions. He submitted that the t powers
of the CIT(A) is prescribed in section 251 of the Act and the Section authorises the
CIT(A) to confirm,, reduce, enhance or annul the assessment and that he is not
empowered to issue directions which do not germane from the appeal before him. He
argued that the Ld. CIT(A) exceeded his jurisdiction by issuing directions to the AO to
initiate 147 proceedings in the case of the partnership firm who wa wass not a party before
him. He submitted that the action taken by Ld. AO in pursuance to the impugned
12 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal directions contained in the order passed by Ld. CIT(A) be direct directed ed to be illegal and void
ab initio.

7. The ld. D/R, controverted the submissions of the assessee and relied on the
order of the Assessing Officer as well as the ld. CIT(A) and argued ed that the land in
question is not agricultural land. He referred to the report of the inspector deputed, the
facts narrated therein, the enquiries made by the Assessing Officer and the recitals in
the sale deeds, which was brought out by the Assessing Officer in his assessment order order.
He argued that the land in question was nev never er used for agricultural purposes, nor was
purchased with an intention for being used for agricultural purposes. He pointed out
that all the surrounding areas were industrial plots and the assessee’s land even had an
industrial shed. He took this Bench thr through ough the order of the Assessing Officer and the
ld. CIT(A) and prayed that he order of the Assessing Officer be upheld. The ld. D/R
further submitted that the assessee should not have any grievance in this case, as the
ld. CIT(A) has deleted the addition iin n his hands. On the directions of the ld. CIT(A)
given to the Assessing Officer, he submitted that such directions can be given and it is
for the Assessing Officer to taken guidance from the same and that these directions of
the ld. CIT(A) issued to the As Assessing Officer, are not binding.

8. We have heard rival contentions. On careful consideration of the facts and
circumstances of the case, perusal of the papers on record, orders of the authorities
below as well as case law cited, we hold as follows:
follows:-

9. Ground round No. 1 to 4 are on the issue as to whether the land in question is
agricultural land or not. Several propositions of law were cited and these were
supported by case-law. These are as follows:
follows:-

Proposition 1:- The assessee claims that he land in question is situated beyond 8
Kms. of the local limits from the municipality and hence cannot be held as a
capital asset when the land was recorded as agricultural land in the revenue
records at all times before the sale of such land. For this proposition, he relied on
the following case law:-
“(i) Khaitan Lefin Limited vs. CIT – ITA No. 200/Kol/2016 – The issue in this case is identical to the issue in the instant appeal. Hon’ble Kolkata Tribunal in Para 4 of its order held and observed as under:
13 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal 4. There is no dispute that the assessee had indeed sold its land in question measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district Ranga Reddy in erstwhile Andhra Pradesh during the rel relevant evant previous year; The sole dispute in the instant lis that arises for our apt adjudication is as to whether the assessee’s land sold was a capital asset or not falling within 8 Kms. of the “GHMC” u/s 2(14)(III)(B) of the Act as applicable in the impugneimpugned d Assessment Year. The taxpayer stand throughout is that its land is not a capital asset since it is situated beyond 8 Kms. distance of any municipality whereas the Revenue’s case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that is happens to be a hub of major economic activity including aviation sector. We find no merit in the latters stand based on the lower authority’s respective findings. We make it clear first of all that there is no rebuttal coming from the department tthat hat the land in question has ever been converted from agricultural to non non-agricultural agricultural use at any point of time before the sale in question. The state government’s revenue records strongly support the assessee’s case rather that its lands are very much agr agricultural icultural in nature.
The Assessing Officer tried to apply “performance” test that for determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the land user by some p possible ossible future owner for agricultural objects. We see no merit in the impugned reasoning. The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scop extent/scopee for urbanisation and other consideration, specifically in the behalf…..”

(ii) Naiyer Sultan v. ITO [2019] 106 taxmann.com 191 (Kol ITAT) “7. We have considered the rival submissions on this issue and also perused the relevant material available on record. During the year under consideration, land owned jointly by both the assessees in the present case was sold and the gain arising from the sai said d land was claimed to be exempt on the ground that the said land being an agricultural land was not a capital asset within the meaning of section 2(14). As defined in section 2(14), “capital asset” means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include, inter alia, as per clause (iii) agricultural land in India not being land situated in any area within the distance, measured aerially, not being more than 8 Kms. from the local limits of any Municipality or Cantonment Board which has a population of more than 10 lakhs. In support of this claim, a certificate issued by the concerned Tehsildar of Tirupporur was submitted by the assessees showing that the land sold by them was located 20 Km. away from the limit of Chennai Municipal Corporation. Based on this certificate as well as the provisions of section 2(14)(iii), the claim of the assessees for exemption was allowed by the Assessing Officer in the assessments originally completed under se section 143(3)/143(1). The said assessments, however, were subsequently reopened by him after recording the reasons and a perusal of the reasons so recorded by the Assessing Officer, which are reproduced in the foregoing portion of this order, shows that the belief about the escapement of assessees income from assessments was formed by the Assessing Officer on the basis of information received in the form of a communication from DDIT(Inv.), Chennai, which stated that the area of Chennai Metropolitan region wa was much larger than what was stated by the Tehsildar in his report and the land sold by the assessees was situated at about 3 Kms. from the Chennai Metropolitan area. On the basis of the said information, the Assessing Officer entertained a belief that the gain arising from the sale of the said land was chargeable to tax and the income of the assessees in the form of capital gains had escaped assessment. As rightly contended by the ld. Counsel for the assessees in this regard, the location of the land from tthehe local limits of Chennai Municipal Corporation was relevant to decide as to whether the said land was an agricultural land
14 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal in India within the meaning of clause (iii) of subsub-section section (14) of section 2 and the distance of the land from the Chennai Metropol Metropolitan itan area was not relevant in this context. The information received by the Assessing Officer regarding the location of the land being situated at about 3 Kms. from the Chennai Metropolitan area thus was vague and irrelevant to decide the issue relating to the exemption claimed by the assessees in respect of gain from the sale of their land…..”

(iii) Pr. CIT vs. P. S. Raghupathy [2018] 96 taxmann.com 200 (Mad) – In this case
the assessee sold a piece of land and claimed that the land was an agricultural lan land
recorded in Revenue records and the same was situated beyond 8 K.M from the nearest
municipality. The Hon’ble Madras High Court held and observed as under:

“18. Mr. T.R. Senthil Kumar, emphatically argued that the Assessing Officer arrived at his finding based on the fact that the land in question had been classified in the records of the Sub Registrar Office as revenue land. However, as would appear from the order of the assessment its itself, elf, it was classified as agricultural land in the revenue records. Even otherwise, the learned Tribunal had looked into the relevant materials including the revenue records, as also records which indicate that the respondent assessee ran a Nursery.
19. Thee learned Tribunal was of the view that whether there was agricultural income or not was not relevant. No fault can be found with the reasoning of the learned Tribunal. The fact that there was loss and not income could not have made any difference to the n nature and character of the land.” The SLP filed by Revenue against the aforesaid judgement of Hon’ble Madras High Court was dismissed by Hon’ble Supreme Court [2019] 102 taxmann.com 223 (SC) (iv) M. Vijaya v. DCIT [2014] 49 taxmann.com 26 (Hyd-ITAT) 37. Further, urther, we make it clear that when the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural operations in such agricultural land and also being specified as agricultural land in Re Revenue venue records, the land is not subjected to any conversion as non-agricultural agricultural land by the assessee or any other concerned person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like th thee case before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income.
(v) Harniks Park (P.) Ltd. vs. ITO [2014] 41 taxmann.com 109 (Hyd – ITAT) – In
this case the following observations of the Hon’ble Tribunal are relevant to this case.

“48. ………….And And as in the present case, admittedly, the agricultural land of the assessee is o outside utside the Municipal Limits of Hyderabad Municipality and that also 8 km away from the outer limits of this Municipality, assessee’s land does not come within the purview of section 2(14)(iii) either under sub clause (a) or (b) of the Act, hence the same ccannot annot be considered as capital asset within the meaning of this section. Hence, no capital gain tax can be charged on the sale transaction of this land entered by the assessee. This is supported by the order of Kolkata Bench of this Tribunal in the case of Arijit Mitra (cited supra), Haresh V. Milani v. Jt. CIT [2008] 114 ITD 428 (Pune) and M.S. Srinivasa Naicker v. ITO [2007] 292 ITR 481/[2008] 169 Taxman 255 (Mad).(Mad) By borrowing the meaning from the above section, we are not able to appreciate
15 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal that the land falls within the ter territorial ritorial limit of any municipality without notification of Central Government as held by the Karnataka High Court in the case of Madhukumar N. (HUF) (cited supra) 50. Further, we make it clear that when the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural operations in such agricultural land and also being specified as agricultural land in Revenue records, the land is not subjected to any conversion as nonnon-agricultural land by the he assessee or any other concerned person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like the case before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income.”

(vi) CIT vs. Siddharth J. Desai[1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 (Guj) Held 1. Several factors are relevant and are weighted against each other while determining the true nature and character of the land. The major factors which are considered as having a leaning on the determination of the question are as follows :

a. whether, the lland and was classified in the revenue record as agricultural and whether it was subject to the payment of land revenue, but this factor alone will not be conclusive;

b. whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time;

c. whether such user of the land was for a long period or whether it was of a temporary character or by way of stop stop-gap arrangement;

d. whether the income derived from the agricultural operations carried on in the land bore any rational prproportion oportion to the investment made in purchasing the land;

e. whether the permission under section 65 of the Bombay Land Revenue Code, was obtained for the nonnon-agricultural agricultural use of the lands: if so, when and by whom; whether such permission was in respect of the whole or a portion of the land; if the permission was in respect of a portion of the land and if it was obtained in past, what was the nature of the user of the said portion of the land on the material date;

f. whether the land, on the relevant date, h had ad ceased to be put to the agricultural use: if so, whether, it was put to an alternative use; whether, such a cess or and or alternative user was of a permanent or temporary nature;

g. whether the land, though entered in revenue record, had never been actually tually used for agriculture; whether the owner meant or intended to use it for agricultural purposes;

h. whether the land was situate in a developed area; whether its physical characteristics, surrounding situation and use of the lands in the adjoining area a were such as would indicate that the land was agricultural;
16 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal i. whether the land itself was developed by plotting and providing
roads and other facilities;

j. whether there were any previous sales of portions of the land for non non-
agricultural use;

k. whether hether permission under section 63 of the Bombay Tenancy and
Agricultural Lands Act, was obtained because the sale or intended sale was in
favour of a non-agriculturist:
agriculturist: if so, whether the sale or intended sale to such
non-agriculturist agriculturist was for non non-agricultural or agricultural user:

l. whether an agriculturist would purchase the land for agricultural
purposes at the price at which the land was sold and whether the owner
would have ever sold the land valuing it as a property yielding agricultural
produce on the basis of its yield; and m. whether the land was sold on yardage or on acreage basis.

2. Having regard to the facts and findings recorded by the Tribunal, it was
obvious that not only the physical characteristics of land, in the instant case,
but the user er also was agricultural. Even though the land was not actually put
to agricultural use since about one year prior to the sale, there was no
evidence to establish that it was converted to any other use. The fact that
permission under section 63 of the Bomb Bombay ay Tenancy and Agricultural Lands
Act was obtained by the assessee to sell the lands to the society for residential
purposes would not, militate against the land continuing to be agricultural on
the date of its sale, as the permission was obtained only abo about ut two and a half
months prior to the sale. Therefore, till the land was held by the assessee its
character as agricultural land was not changed either as a result of its re re-
classification on in the revenue records or by the actual alteration of its use.
Again, n, there was no evidence on record to show that there was any
development in the surrounding area or that the land itself was developed
prior to its sale. The land was located on the outskirts of the village but it was
not situate in the municipal limit. T The he land must, therefore, be taken as having
been situate in a rural area and it continued to have an agricultural bias right
up to the date of its sale. Further, there was no evidence or material on record
to indicate that the price offered for the land by the society, even proceeding
on the basis that” the intended user of his part was non non-agricultural, agricultural, would
not have been offered by an agriculture who wanted to purchase the land for
purely agricultural user. There being no evidence on record as regard the
nature of the soil, its fertility, its suitability and adaptability for raising cash
crops, the irrigation facility and such or similar factors which had a great
bearing on the valuation of an agricultural land, it would be hazardous to
come to the conclu conclusion sion that the price offered was such that no agriculturist
would have paid the same if he wanted to purchase the land for purely
agricultural purposes.

3. Accordingly, the land was an agricultural land and the surplus realised on a
sale thereof was not lia liable to be assessed to capital gains tax.
17 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal Proposition 2:- That the capital asset would not lose its character of being an
agricultural land merely because the cultivation of the said land was done by a
person other than the assessee.

Proposition 3:- That the characteristics of the agricultural land would not be lost
even though the land was not used for agricultural purposes prior to its sale.

Proposition 4:- That the sale of land to an industrial unit, when the conversion of
land takes place subsequent to the sale by the buyer, cannot lead to a conclusion
that the land sold is not agricultural land.

“Khaitan Khaitan Lefin Limited vs. CIT ITA No.200/Kol/2016, Judgment dated 25.01.2019 (Kol Trib.) “4. There is no dispute that the assessee had indeed sold its land in question measuring 5.33 acres situated in village Mamidipally Mandal Saroonagar district Ranga Reddy in erstwhile Andhra Pradesh during the relevant previous year; The sole dispute in th thee instant lis that arises for our apt adjudication is as to whether the assessee’s land sold was a capital asset or not falling within 8 Kms. of the “GHMC” u/s 2(14)(III)(B) of the Act as applicable in the impugned Assessment Year. The taxpayer stand throughout ughout is that its land is not a capital asset since it is situated beyond 8 Kms. distance of any municipality whereas the Revenue’s case is that Mamidipally gram panchayat is adjacent to the GHMC limits. And also that is happens to be a hub of major econo economic mic activity including aviation sector.
We find no merit in the latters stand based on the lower authority’s respective findings. We make it clear first of all that there is no rebuttal coming from the department that the land in question has ever been converted verted from agricultural to nonnon-agricultural agricultural use at any point of time before the sale in question. The state government’s revenue records strongly support the assessee’s case rather that its lands are very much agricultural in nature. The Assessing Officer tried to apply “performance” test that for determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the land user by some possible future owner for agricultural obje objects.
cts. We see no merit in the impugned reasoning. The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scope for urbanisation and other consideration consideration, specifically in the behalf. ….”
DCIT v. P. Ashok Kumar ITA No.1581/Mds/2010, Judgment dated 20.01.2011 (Chennai Trib.) “6. There are good reasons given by the ld.AR for explaining that the land was not recently used for cultivation. In our considered opinion, the non-
non cultivation of a piece of land does not loose its character of
18 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal agricultural land unless the user of the land has been specifically got
changed before such sale. Likewise, the future use of this land will not
disentitle thee assessee from the benefit as was available to him at the
time of the sale. Therefore, we reaffirm that the cumulative effect of the
above mentioned facts and circumstances is that the land in question was ‘agricultural land’ at the time of sale and the a assessee ssessee is entitled to Long
Term Capital Gains thereon.
7. We have considered the rival submissions and have perused the entire
records. The assessee had purchased 2.14 acres of agricultural land from
one Shree Harikrishna Brick Works, Chennai, vide sale d deed eed dated 27.9.1994
for a total consideration of ` 8,10,000/ 8,10,000/-.. This land was subsequently sold to
a company by the name Estra IT Park Pvt. Ltd, for a total consideration of
Rs.12,42,00,000/-,, vide sale deed dated 24.1.2007. In the sale deed, it is
mentioned d in para 3 that the assessee is compelled to sell the property as at
present it is not fetching any income. The issue involved before us is as to
whether the land sold is agricultural land or it is to be treated as a capital
asset in the terms of section 2(14) of the Act. It is true that the definition of
agricultural land is not given in the Income Income-taxtax Act, but various factors
contribute to ascertain the correct nature of a particular piece of land. If a
land is situated within 8 kms of the municipal limi limits ts of a city even if it is
recorded as agricultural land in the revenue records, it is to be treated as
non-agricultural agricultural land and for that matter an Asset but in this case, the
admitted fact is that this land falls beyond 8 kms from the notified limit. It is
true that as per revenue records, the land has been recorded as agricultural
land. It is found to be a fact that the assessee has been showing agricultural
income from this very land and the same has been accepted by the Revenue
as such year after year. The land was purchased by the assessee and at that
time it was low lying as some mud was taken from it for making bricks etc.
But admittedly after purchase, no such activity was carried out on this land.
Even if we accept the contention of the Revenue tha thatt no agricultural
production was done by the assessee on this land, this mere fact will
not take out the land out of the nomenclature of ‘agricultural land’.
The assessee grows coconut on this land and the same are sold in the
market and these receipts are treated as agricultural receipts by the
Revenue. The assessee has also paid agricultural land tax and copies of the
same were made available to the authorities. The land in question is
situated in the revenue estate of a Village named Iyyappanthangal
Panchayat hayat which is situated more than 8 kms away from the limits of
Alandur Municipality. We have found that the land has been agricultural
land for the past many years and has been classified as such in the records
of the revenue Department. The assessee has paid kist of ` 400/- each in
respect of land on 30.1.2007 regarding fasli years 1413, 1414, 1415 and
1416. It was brought on record that this land was being cultivated by one
local person, namely Shri Murugan, but for assessment years 2005 2005-06 06 and
2006-07, agricultural operations were carried out by him, he could not get
food returns and that is why he did not admit any agricultural income in
the returns filed. The report of the Tahsildar refers to non non-cultivation cultivation of the
land because an agricultural operatio operation n in a large scale was not carried out
on this land. Hence, we hold that the land sold by the assessee is only
agricultural land and not a capital asset. Therefore, no Long Term Capital
19 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal Gain is attracted. Consequently, we confirm the order appealed against and
dismiss the appeal of the Revenue.”
Hindustan Industrial Resources Limited vs. ACIT
[2009] 180 Taxman 114 (Del) “9. Having considered the arguments advanced by the counsel for the
parties, we are of the view that the assessee’s contentions deserve tto be
upheld and the findings returned by the Income Income-tax tax Appellate Tribunal
ought to be reversed. We are conscious that we are not merely reversing a
finding of fact, what we are intending to do is to point out that the
Tribunal’s finding of fact is contrar contraryy to its own record and, therefore, is in
the realm of perversity. This is so because the Tribunal clearly held that at
the point of time when the assessee purchased the said land, it was
agricultural land. There is no dispute with regard to this. The Trib Tribunal unal also
noted that the Award passed on 1 1-4-1992 1992 by the District Collector (Land
Acquisition), Greater Noida, Bulandshar, was a document which established
beyond doubt that the land in question was agricultural land. Thus, on the
date of purchase, the land in question was agricultural land and on
the date of acquisition, the character of the land continued to be
agricultural. When these two clear findings have been returned, it is
apparent that in the transitional period, that is, between purchase
and acquisition, cquisition, the nature and character of the land did not change.
The fact that the appellant/assessee intended to use the land for
industrial purposes did not in any way alter the nature and character
of the land. The further fact that the appellant/assess appellant/assesseeee did not carry
out any agricultural operations did not also result in any conversion
of the agricultural land into an industrial land. It is nobody’s case that
the appellant/assessee carried out any operations for setting up any
plant or machinery or of the like nature so as to lead to an inference
that the nature and character of the land had been changed from
agricultural to industrial. The mere fact that the appellant/assessee
did not carry out any agricultural operation did not alter the nature
and character aracter of the land. In any event, this discussion is not relevant
in the backdrop of the clear finding given by the Tribunal that on the
date of the purchase and as also on the date of acquisition, the land in
question was agricultural land. Having come to o such a conclusion, the
Tribunal ought not to have gone into question of intention of the
appellant/assessee and definitely not into the question of intention of the
land acquiring authority, the latter being a wholly irrelevant
consideration.”
PCIT v. Heenaben eenaben Bhadresh Mehta
[2018] 96 taxmann.com 164 (Guj) “9. As observed hereinabove, the land was sold as an agricultural land
and in fact, what was sold was agriculture land. What was the
intention of the purchaser cannot be the determinative factor
20 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal to treat at the profit earned by the assessee on sale of agriculture land as
business income. Similarly, merely because for whatever reason, the
assessee has earned sufficient huge amount of profit also cannot be a
ground to treat the profit earned by the assessee on sale of agriculture land
as business income.”
M. Vijaya v. DCIT
[2014] 49 taxmann.com 26 (Hyd (Hyd-ITAT)
37. Further, we make it clear that when the land which does not fall under
the provisions of section 2(14)(iii) of the IT Act and an assessee who is
engaged in agricultural operations in such agricultural land and also being
specified as agricultural land in R Revenue evenue records, the land is not subjected
to any conversion as non non-agricultural agricultural land by the assessee or any other
concerned person, transfers such agricultural land as it is and where it is
basis, in such circumstances, in our opinion, such transfer like tthe he case
before us cannot be considered as a transfer of capital asset or the
transaction relating to sale of land was not an adventure in the nature of
trade so as to tax the income arising out of this transaction as business
income.
CIT vs. Rajshibhai Meramanbhai ramanbhai Odedra
[2014] 42 taxmann.com 497 (Guj) “3.2 It is mainly argued on behalf of the revenue that as the agricultural
land was sold in favour of non non-agriculturist agriculturist and as per the law prevailing in
the State, there is a ban to transfer/sell agricultur agricultural al land in favour of non-
non
agriculturist without prior permission of appropriate authority and
without getting the land converted into non non-agriculture agriculture and therefore, the
said land is to be considered as capital asset and therefore, liable to be
taxed. It is not in dispute that what was sold by the assessee was an
agricultural lands which were situated beyond 8 Kms of local limits of the
Municipality. As rightly observed by the tribunal, merely because the land
came to be sold during the year under considerati consideration to non-agriculturist, agriculturist,
the same will not change the characteristics of the land in the hands of the
seller – assessee. It is not in dispute that at the relevant time, the lands were
held/used by the assessee as agricultural land. Merely because the said
land came to be sold to a non non-agriculturist, agriculturist, may be in breach of law
prevailing in the State, character of the land would not be changed
and the land still would continue as an agricultural land. At the most
the sale in favour of non non-agriculturist can be declared eclared as illegal
and/or invalid. There is no provision that if the agricultural land is
sold in favour of non–agriculturist agriculturist in breach of law prevailing in the
State, it would lose its character as agricultural land and would be
treated as non-agricultura agricultural land.”
21 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal CIT vs. Siddharth J. Desai [1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 (Guj) “2. Having regard to the facts and findings recorded by the Tribunal, it was obvious that not only the physical characteristics of land, in the instant case, but the user also was agricultural. Even though the land was not actually put to agricultural use since about one year prior to the sale, there was no evidence to establish that it was converted to any other use. The fact that permission under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained by the assessee to sell the lands to the society for residential purposes would not, militate against the land continuing to be agricultural on the date of its sale, as the permission was obtained only about two and a half months prior to the sale. Therefore, till the land was held by the assessee essee its character as agricultural land was not changed either as a result of its re re-classificanon classificanon in the revenue records or by the actual alteration of its use. Again, there was no evidence on record to show that there was any development in the surround surrounding ing area or that the land itself was developed prior to its sale. The land was located on the outskirts of the village but it was not situate in the municipal limit. The land must, therefore, be taken as having been situate in a rural area and it continued to have an agricultural bias right up to the date of its sale. Further, there was no evidence or material on record to indicate that the price offered for the land by the society, even proceeding on the basis that” the intended user of his part was non-ag agricultural, ricultural, would not have been offered by an agriculture who wanted to purchase the land for purely agricultural user.
…..”
Proposition 5:- When capital gains arising on sale of agricultural land by the co co-
owner thereof was treated as exempt from capital gains tax then the capital gain
arising to other co-owners owners could not be assessed to tax.

“ITO ITO vs. Malay Kumar Mitter ITA No.307/Kol/2012, Judgment dated 23.12.2013 (Kol Trib.) “7. We have heard the rival submissions and perused the material available on record.
cord. We find that this issue is squarely covered in favour of the assessee. The Tribunal in the hands of the co co-owner owner of the property had held that the lands in question did not constitute ‘capital asset’ under section 2(14) of the Income Tax Act because Rajarhat M unicipality was not one of the notified Municipality as per the Central Government’s Notification dated 28.12.1999. Hence, respectfully following the precedent, we hold that the land in question, which was transferred by the assessee, was an agricultural land and it did not fall within the ambit of ‘capital asset’ under section 2(14) of the Income Tax Act. Accordingly we confirm the order of l d. CIT(Appeals).
Sita Ram Sharma vs. ITO
22 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal (2015) 58 taxmann.com 180 (Jaipur ITAT) “9. We have heard the rival contentions of both the parties and perused the material available on the record. The land sold by all the brothers situated in village- Sanjhaia, Tehsil Tehsil- Sanganer, district- Jaipur. In case of assessee’s brother namely Shri Ram Sa Sahay Sharma in A.Y. 2007-08 08 by the ITO ward 7(2), Jaipur order dated 25/03/2013 had not made any addition on account of long term capital gain. Further the ld CIT(A) as well as this Bench also allowed the appeal in case of Smt. Kamla Devi Sharma (supra), wh whoo also sold her land at Sanjharia village to M/s Vatika Ltd. on 16/05/2006 and held that the agricultural land sold by the assessee is not capital assets as envisaged U/s 2(14) of the Act as same was sold to Vatika Ltd. within a short span of time. The other er case laws relied by the assessee is also squarely applicable. Therefore, we hold that the land sold by all the assessees are agricultural land and beyond 8 KMs from the municipal limits. Accordingly, we allow this ground of all the appeals.”
WTO vs. Premier emier Polymers Pvt. Ltd.
WTA No.06/Kol/2012, Judgment dated 31.05.2012 (Kol Trib.) “4.
4. We are unable to share the perception of the ld. D.R. Even though, there is no res judicata in tax proceedings, the principle of consistency must find its place. When the he revenue authorities accept the position for one particular assessment year by not challenging relief granted to assessee in appeal, it cannot be open to them to challenge the same relief being granted in favour of the assessee by the CIT(A) in other yea years, rs, or, for the purpose, in the case of other assessees as well. Hon’ble Supreme Court, in the case of Union of India & Others -vs- Kaumudini Narayan Dalal and Another 249 ITR 219, had an occasion to consider whether it is open to revenue to accept a judgment in the case of one assessee, and appeal, against identical judgment, in the case of another assessee. Their Lordships held that such a differential treatment on the same set of facts was not permissible ssible in law and observed that “it is not open to revenue to accept the judgment in the case of one assessee and challenge its correctness in the case of another assessee without just cause”. The same were views of Hon’ble Supreme Court in the case of BerBerger ger India Ltd. 266 ITR 99 and were also followed by the Hon’ble Delhi High Court in the case of CWT- vs- RKKR International Pvt. Ltd Ltd. 198 CTR 567 and CIT-vs- Neo Poly Pack (P) Ltd. 245 ITR 492.”
10. Applying these proposition of law to the facts of this case, as the land in
question is beyond 8 Kms from the nearest municipality and as the conversion of the
land for agricultural land to industrial land was done after sale of land, the conclusion
could only be that the asset in question is an agricultural land even if there was no
agricultural activity on the same.
23 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal 11. Ground No. 5 & 6 are on the issue as to whether the Assessing Officer has rightly
invoked Section 50C of the Act. In view of our decision in allowing Ground Nos. 1 to 4,
these grounds need not be adjudicated. Hence we do not adjudicate the same.

12. Ground No. 7, is aga against inst the directions given by the ld. CIT(A) to the
Assessing Officer to reopen assessment of the firm M/s Shree Annapurna Oil Mills
and bring to tax, the long term capital gains from the sale of land in question. In
our view as M/s. Annapurna Oil Mills is not a party before the ld. CIT(A), such
directions cannot be given. This Bench of the Tribunal in the case of Shalini
Agarwal vs. ITO in ITA No. 957/Kol/2017 957/Kol/2017, order dt. 18/01/2019 held as follows:-
follows:

“8. In Ground No. 3, the assessee has challenged the actio action n of the ld.
CIT(Appeals) in directing the Assessing Officer to tax the capital gains of Rs.77,94,104/- for A.Y. 2015 2015-16 16 by initiating the proceedings under section 147 on the ground that the ld. CIT(Appeals) exceeded his jurisdiction while giving the said direction.

9. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. It is observed that the ld. CIT (Appeals) after having allowed the claim of the assessee for deduction under section 54F to the extent of Rs.77,94,104/ Rs.77,94,104/- and after having found that the construction of the house property of the assessee was not completed within the prescribed period, was of the view that the deduction allowed under section 54F was liable to be withdrawn in a assessment year 2015-16 16 in which three years had expired from the date of transfer. He accordingly directed the Assessing Officer to tax the capital gains of Rs.77,94,104/ Rs.77,94,104/- in the hands of the assessee for A.Y. 2015-16 16 by initiating the proceedings under sesection ction 147 of the Act. As submitted by the ld. Counsel for the assessee, the said direction given by the ld. CIT(Appeals) for A.Y. 2015 2015-16, 16, which was not in appeal before him while disposing of the appeal of the assessee for A.Y. 2013 2013-14 14 is beyond his power and jurisdiction. Although the ld. D.R. has sought to justify the direction given by the ld. CIT(Appeals) by relying on subsub-section section (1) of section 150, we find that the said provisions is not relevant in the context of the powers of the ld. CIT(Appeals), since the said powers are governed by section 251 of the Act, which is relevant. In the case of R.S. Davey -vs. – CIT [140 ITR 1035], a similar issue relating to scope of powers of first appellate authority had arisen for the consideration of Hon’ble Calcu Calcutta tta High Court and it was held by the Hon’ble Calcutta High Court that the ld. CIT(Appeals) was not competent to give to the Assessing Officer the direction in respect of an assessment year which was not in appeal before him. Respectfully following the sai said d decision of the Hon’ble jurisdictional High Court, we cancel the direction given by the ld. CIT (Appeals) to the Assessing Officer in respect of the assessment year 2015 2015-16, 16, which was not in appeal before him and allow Ground No. 3 of the assessee’s appe appeal.
al.

12.1. Similar view was taken by the co co-ordinate ordinate Benches of the Tribunal in the
following cases:-
24 I.T.A. No. 981/Kol/2018 Assessment Year: 2011-12 Sanjeev Kumar Goyal (i) Vijay Kumar Sharda vs. DCIT [2013] 40 taxmann.com 113 (Mum Trib)
(ii) Mukesh Babulal Rachh vs. ITO in ITA No. 6066/Mum/2018 (iii) ITO vs. Biswajit Chatterjee ITA No. 565/Kol/2013
13. Consistent with the view taken therein, we quash the directions given by the ld.
CIT(A) to the Assessing Officer to reopen the assessment of the partnership firm M/s.
Shree Annapurna Oil Mills and to tax the long term ca capital pital gain in question in the hands
of the firm. Hence Ground No. 7 of the assessee is allowed.

14. Ground No. 8, in general in nature.

15. In the result, appeal of the assessee is allowed.
Kolkata, the 29th day of October, 2019.
Sd/- Sd/- [S.S. Godara] [J. J. Sudhakar Reddy] Reddy
Judicial Member Accountant Member
Dated : 29.11.2019
{SC SPS} Copy opy of the order forwarded to:
1. Sanjeev Kumar Goyal
45-B, Adhya Sradha Ghat Road
Kolkata – 700 007 2. Income Tax Officer, Ward-45(2), 45(2), Kolkata 3. CIT(A)-
4. CIT- ,
5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches

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