Mahabir Vs ITO (ITAT Delhi)
Assessee sold land in Village Dhunela, Sohna, Gurgaon. AO reopened the case and taxed the gain, holding that the land was within 1.5 km of Gurgaon municipality and therefore not agricultural land. Assessee argued that the AO applied the wrong municipality. As per CBDT Notification dated 06.01.1994, only land within 5 km of Sohna municipality is taxable. Assessee produced a Tehsildar, Sohna certificate showing that as on 06.01.1994, the land was 6 km away—i.e. outside taxable limit. Tribunal held that 1994 Notification still applies, and municipal expansion after 1994 is irrelevant unless a new notification is issued. The sale deed also described the property as agricultural land outside municipal limits. Therefore, the land was not a capital asset, and no capital gains tax could be levied. Since the quantum addition was deleted, the penalty u/s 271(1)(c) was also cancelled.
FULL TEXT OF THE ORDER OF ITAT DELHI
These are appeals preferred by the assessee against the orders dated 10.12.2018 and 31.01.2019 of the Commissioner of Income-tax (Appeals)-1, Gurgaon (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeals No.47/17-18, A.Y. 2013-14 and 48/17-18, A.Y. 2013-14 arising out of the appeals before it against the orders dated 26.02.2016 and 29.08.2016 passed u/s 144 r.w.s. 147 and u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward-2(5), Gurgaon and ITO, Ward 2(4), Gurgaon, (hereinafter referred to as the Ld. AO), respectively.
