THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 30.04.2013
+ ITA 198/2013
THE COMMISSIONER OF INCOME TAX,
DELHI CENTRAL-III ... Appellant
versus
NIRMAL BANSAL ... Respondent
AND
+ ITA 203/2013
THE COMMISSIONER OF INCOME TAX,
DELHI CENTRAL-III ... Appellant
versus
MANJU BANSAL ... Respondent
AND
+ ITA 204/2013
THE COMMISSIONER OF INCOME TAX,
DELHI CENTRAL-III ... Appellant
versus
NIRMAL BANSAL ... Respondent
AND
ITA Nos.198/13,203/13,204/13&205/13 Page 1 of 7
+ ITA 205/2013
THE COMMISSIONER OF INCOME TAX,
DELHI CENTRAL-III ... Appellant
versus
MANJU BANSAL ... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Sanjiv Sabharwal
For the Respondent : None
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM No. 5523/2013 in ITA No. 198/2013
CM No. 5527/2013 in ITA No. 203/2013
CM No. 5528/2013 in ITA No. 205/2013
Exemption is allowed subject to all just exceptions.
ITA Nos. 198/2013, 203/2013, 204/2013 & 205/2013
1. These four appeals seek to raise common issues and are directed
against the common order passed by the Income Tax Appellate Tribunal,
New Delhi, on 31.01.2012 in ITA Nos. 5304-5307/Del/2011 pertaining to
the assessment years 2008-09 and 2009-10. Two appeals are in respect of
the assessee Smt. Manju Bansal and the other two are in respect of the
assessee Smt. Nirmal Bansal.
ITA Nos.198/13,203/13,204/13&205/13 Page 2 of 7
2. Mr Sabharwal, the learned counsel appearing on behalf of the
appellant / revenue submitted that the Tribunal had misdirected itself in law
in not considering the question as to whether the land was agricultural in
nature or not. He submitted that the issue before the Tribunal was with
regard to the addition of Rs. 2,34,70,697/- which had been made by the
assessing officer on account of short term capital gain in respect of sale of
different plots of land at village Hayatpur, district Gurgaon, by the
respondent/assessee. The Commissioner of Income Tax (Appeals), had
deleted the said addition. It may be pointed out that in the assessing
officer's order the only reason as to why the assessing officer had not
granted the exemption to the respondents on account of the provisions of
section 2 (14)(iii) of the Income-tax Act, 1961, was because the assessing
officer had taken the view that the possibility of there being some other
`shortest distance' between the area where the plots of land were situated
and the municipal limits of Gurgaon so as to rule out the possibility that the
lands were situated beyond 8 kms from the municipal limits. The assessing
officer had arrived at the above conclusion in the following manner:-
"3. During the year the assessee has sold land at village
Harsaru / Hayatpur, Distt Gurgaon for a sum of
Rs.2,97,94,502/-. The assessee has claimed that the capital gain
from the sale proceeds of the land is exempt because the land is
situated at a distance of more than 08 kms from the outer
municipal limits of Gurgaon. In support of his contention the
assessee has furnished from Revenue authorities which is
Tehsildar of Gurgaon wherein he has certified that the land
whose particulars are given in the sale deed of the assessee is at
a distance of 09 kms. Further inquiries in this regard was made
from the District Town Planner of Gurgaon wherein he was
asked to specify the distance of the land from the outer limits of
Gurgaon Municipal Committee. The District Town Planner,
ITA Nos.198/13,203/13,204/13&205/13 Page 3 of 7
Gurgaon vide letter memo no.70954 dated 21-12-2010 has
intimated this office that the distance of the land from the outer
limits of the Municipal Committee of Gurgaon was 8.5 kms on
the date of sale. The distance given by District Town Planner,
Gurgaon is very narrow as compared to the distance mentioned
in the Act. In these circumstances the possibility of any other
shortest distance cannot be ruled out and the land sold by the
assessee during the year is taken as "Capital Asset" within the
meaning of 2(14) of Income Tax Act, 1961 and the profit
thereof is treated as short term capital gain. Addition of
Rs.2,97,94,502/- is hereby made as short term capital gain."
3. The Commissioner of Income Tax (Appeals), after considering the
assessment orders and the submissions of the respondent's / assessee's
observed that the assessees, during the course of assessment proceedings
had submitted a certificate issued by the Tehsildar, Gurgaon to the effect
that the plots of land were situated at a distance of about 9 kms from the
outer municipal limits of Gurgaon. The district town planner, Gurgaon by a
letter dated 21.12.2010 had also indicated that the distance of the said plots
of the land was about 8.5 kms from the outer municipal limits of Gurgaon.
The Commissioner of Income Tax (Appeals), thus held that two competent
authorities, namely, the Tehsildar, Gurgaon and the District and Town
Planner, Gurgaon had both, independently certified that the lands in
question were situated beyond 8 kms of the municipal limits of Gurgaon.
Consequently, the Commissioner of Income Tax (Appeals) held that the
observation of the assessing officer that there was a possibility of some
other shorter distance was not based on any hard evidence. It was also
concluded by him that such an apprehension on the part of the assessing
officer could not form the basis of denial of the assessees' claims.
ITA Nos.198/13,203/13,204/13&205/13 Page 4 of 7
Consequently, the Commissioner of Income Tax (Appeals) deleted the
addition of Rs. 2,97,94,502/-.
4. The Income Tax Appellate Tribunal dismissed the appeals filed by
the revenue and upheld the deletion made by the Commissioner of Income
Tax (Appeals). The Tribunal held that the view taken by the CIT (Appeals)
that the lands in question were situated beyond 8 kms from the outer limits
of the municipal corporation of Gurgaon, could not be faulted.
5. The learned counsel for the revenue contended before us that the
departmental representative had also raised the issue that the lands in
question were not agricultural lands at all and that aspect of the matter had
not been gone into by the Tribunal. He submitted that in order that the
profits from sale of land are not subjected to capital gains tax, it has to be
established that the lands in question were agricultural lands and that such
lands were not situated within 8 kms of the municipal limits. He submitted
that question of ascertaining whether the land was situated within 8 kms or
beyond 8 kms was only the second condition. The first condition being that
the land should have been agricultural. Mr Sabharwal submitted that while
the departmental representative had raised the issue with regard to the lands
not being agricultural in nature, the Tribunal had not gone into this aspect
of the matter at all and, therefore, to that extent the twin conditions
stipulated in section 2(14)(iii) had not been satisfied.
6. We have examined the decision of the Tribunal and we find that
while Mr Sabharwal is right that the departmental representatives had
raised the issue about the nature of the land in question, the Tribunal has
ITA Nos.198/13,203/13,204/13&205/13 Page 5 of 7
correctly dealt with this aspect of the matter. The Tribunal noted that the
assessing officer had made the disallowance merely on the ground that
there was the possibility of a shorter distance, which would be less than 8
kms from the outer limits of the municipal corporation. The Tribunal noted
that the assessing officer had not doubted the nature of the land being for
agriculture. It is in these circumstances that the Tribunal rejected the plea
of the departmental representative that the matter be restored to the file of
the CIT (Appeals) for verification of the fact as to whether the lands were
agricultural in nature or not.
7. Mr Sabharwal had also placed reliance on the Supreme Court
decision in the case of National Thermal Power Corporation Limited v.
CIT: 229 ITR 383 (SC). He had relied on the said decision to canvas the
proposition that the Tribunal could very well have examined the question of
nature of the lands even though it had not been in issue before the lower
authority. However, we find that the decision in NTPC Ltd. (supra) would
be of no assistance to the revenue. In the said decision it has been clearly
noted that the Tribunal had jurisdiction to examine a question of law which
"arose from the facts as found by the Income Tax Authorities" and which
had a bearing on the tax liability of the assessee. The point to be noted is
that the question of law which could be raised before the Tribunal would
have to arise from the facts as found by the income-tax authorities. In other
words, there must be some factual basis on which the question of law is
raised before the Tribunal. The relevant facts must be on record. In the
present case the assessing officer had not doubted the fact that the lands in
question were agricultural in nature. There is no foundational fact that the
ITA Nos.198/13,203/13,204/13&205/13 Page 6 of 7
lands were not agricultural in nature. As such the plea raised by the
departmental representative before the Tribunal could not be gone into by
the Tribunal as there was no foundational basis for the same. Clearly, the
decision in NTPC Ltd. (supra) would be of no avail to the revenue in the
facts of the present case.
8. In view of the foregoing, no interference is called for with the
impugned order of the Tribunal. In any event no substantial question of
law arises for the consideration of this court.
9. The appeals are dismissed.
BADAR DURREZ AHMED, J
VIBHU BAKHRU, J
April 30, 2013
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