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Mahendra L. Shah (HUF) Income Tax Officer - 21(1)-3 A-11, 4th Floor, Majithia Apts Room No. 605, Pratyakshakar Above Irla Nursing Home, Irla Vs. Bhavan, B.K.C., Bandra (E)Vile Parle (W), Mumbai 400056 Mumbai 400051
September, 20th 2012
                         "B" Bench, Mumbai

                Before Shri D. Manmohan, Vice President
                 and Shri Rajendra, Accountant Member

                         ITA No. 5308/Mum/2011
                         (Assessment Year: 2007-08)

Mahendra L. Shah (HUF)                   Income Tax Officer - 21(1)-3
A-11, 4th Floor, Majithia Apts       Vs. Room No. 605, Pratyakshakar
Above Irla Nursing Home, Irla            Bhavan, B.K.C., Bandra (E)
Vile Parle (W), Mumbai 400056            Mumbai 400051
PAN - AAAHM 6182 K
             Appellant                                Respondent

                   Appellant by:      None
                   Respondent by:     Shri Sandeep Goel

                   Date of Hearing:       18.09.2012
                   Date of Pronouncement: 18.09.2012


Per D. Manmohan, V.P.

     This appeal is filed at the instance of the assessee HUF and it is
directed against the order dated 27.04.2011 passed by the CIT(A)-32,

2.    Assessment of profit of `28,85,820/- on sale of land is the subject matter
of dispute before us. None appeared on behalf of the assessee. However,
written submissions dated 17th September, 2012 were filed with a request to
decide the matter in accordance with law. Therefore we have carefully gone
through the written submissions and also heard the learned D.R.

3.    The facts in short are that the assessee HUF declared long term
capital gains on sale of agricultural land at kila Pardi. According to the
assessee the agricultural land was sold for a consideration of `30,00,000/-
and hence it was exempt from capital gain tax. In support of its contention
                                         2                  ITA No. 5308/Mum/2011
                                                             Mahendra L. Shah (HUF)

that it was an agricultural land, the representative of the assessee vide letter
dated 21.11.2009, submitted that as per 7/12 extract it was agricultural
land since the land was used for agricultural purposes. In other words it
satisfies the conditions prescribed in section 2(1A) r.w.s. 2(14)(iii)(a).

4.    It may be noticed here that as per the above mentioned provisions
mere agricultural operations alone will not satisfy the test of it be considered
as agricultural land since the primary condition is that it should be beyond
8 kms from the municipal limits. In this regard the assessee submitted a
certificate form the City Survey Office of Pardi Municipality certifying that
the agricultural property is outside the city limits of Municipality.

5.    The AO deputed the Ward Inspector to collect necessary documents
from the Land Authority at Pardi. The Talathi of Pardi provided a map to
identify the location of the land and also confirmed in writing that the
aforesaid land was situated around 2 kms from the municipal limits of
Pardi. When the same was put to the assessee it was stated that the Karta of
the HUF is not staying in Pardi since he has gone for employment in Dubai,
hence other than relying upon the certificate from the City Surveyor he has
nothing more to add.

6.    The AO observed that in the light of the certificate issued by the
Talathi the land is within 8 kms from the nearest Municipality and hence
the income earned on sale of the said land is not exempt from tax. He
accordingly brought to tax `28,85,820/- under the Head "Long Term Capital

7.    Aggrieved assessee contended before the CIT(A) that the clarification
given by the Talathi vide letter dated 29.12.2009 was accepted by the AO in
hurry by passing an order on 31st December, 2009 since the assessment
was getting barred by limitation and hence the assessee was not given
reasonable opportunity of being heard. The certificate issued by the City
Survey Superintendent was again placed before the CIT(A) to contend that
the impugned land is outside the municipal limits.
                                       3                  ITA No. 5308/Mum/2011
                                                           Mahendra L. Shah (HUF)

8.    The learned CIT(A) observed that the AO has put to the assessee the
information gathered by him by specifically pointing out that in the wake of
the certificate from the Talathi of Pardi the assessee has to prove that the
said land was outside the municipal limits of Pardi but the assessee could
not furnish any document. He further noted that the letter issued by the
Surveyor merely says that the land is outside the municipal limits but does
not speak of the distance from the municipal limits, i.e. whether it is beyond
8 kms or less than 8 kms, hence it cannot be taken as an evidence to prove
that it is an agricultural land within the meaning of the I.T. Act. Having
regard to the circumstance of the case the learned CIT(A) confirmed the
order passed by the AO.

9.    Further aggrieved, assessee is in appeal before us. It is stated that in
the light of the letter issued by the City Survey Office, Vapi having its office
at Pardi, the impugned land has to be treated as an agricultural land and if
the AO or the CIT(A) have any doubt as to the distance from the municipal
limit, fresh information could have been called for or the CIT(A) could have
called for remand report.

10.   On the other hand, the learned D.R. strongly relied upon the orders
passed by the tax authorities.

11.   We have carefully perused the record. It is well settled that in order to
claim exemption from tax the assessee has to prove that the land sold by the
assessee is an agricultural land beyond 8 kms from the municipal limits. In
the instant case no such evidence was furnished by the assessee either
before the AO or before the CIT(A) except merely submitting that the
agricultural land falls outside the municipal limits. Agricultural land falling
outside the municipal limits is not automatically exempt unless it is beyond
8 kms from the boundaries of the nearest municipality. The certificate
issued by the Talathi of Pardi categorically states that it is within 2 kms
from the municipal limits and in the absence of any information
contradicting the contents of the aforementioned certificate we are of the
view that the order passed by the CIT(A) does not call for any intervention.
                                       4                 ITA No. 5308/Mum/2011
                                                          Mahendra L. Shah (HUF)

Under the circumstances, as pronounced in the open court, the appeal filed
by the assessee is dismissed.

Order pronounced in the open court on 18th September 2012.

                  Sd/-                                   Sd/-
               (Rajendra)                           (D. Manmohan)
           Accountant Member                        Vice President

Mumbai, Dated: 18th September 2012

Copy to:

   1.   The   Appellant
   2.   The   Respondent
   3.   The   CIT(A) ­ 32, Mumbai
   4.   The   CIT­ 21, Mumbai City
   5.   The   DR, "B" Bench, ITAT, Mumbai
                                                      By Order

//True Copy//
                                                   Assistant Registrar
                                           ITAT, Mumbai Benches, Mumbai
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