The Commissioner Of Income Tax 63 Race Course Road Coimabtore v. Shri.k.r.n.prabhakaran (Huf) Old

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMARandTHE HONOURABLE MR.JUSTICE D.KRISHNA KUMAR The Commissioner of Income Tax63 Race Course RoadCoimabtore ... AppellantVs Shri.K.R.N.Prabhakaran (HUF)Old No.291 New No.55/1Avarampalayam RoadNew SiddhapudurCoimbatore 641 044.... Respondent Prayer: Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Madras 'A' Bench, made in I.T.A.No.2716/Mds/2014,dated 22/6/2015, preferred against the order of the Commissionerof Income Tax (Appeals) - I, Coimbatore, order dated 13.08.2014made in ITA.No.192/13-14 and against the order of the AssistantCommissioner of Income Tax, Circle - II, Coimbatore, order dated31.03.2013, made in PAN/GIR.No. for the AssessmentYear 2008 - 2009. Challenge in this Tax Case Appeal, is to an order made bythe Income Tax Appellate Tribunal in I.T.A.No.2716/Mds/2014,dated 22/6/2015, by which, the Tribunal has dismissed the appealpreferred by the revenue. https://hcservices.ecourts.gov.in/hcservices/ 2.Brief facts of the case are as follows:-The assessee is a HUF, filed its original return ofincome, on 14/3/2011, for the assessment year 2008 – 09,admitting income under the head “income from other sources” ofRs.8,72,770/- and NIL income under the head “long term capitalgain”. In the return of income, the assessee further disclosedthat the sale of its agricultural land at Keeantham village forRs.9,25,47,000/- and the capital gain arising from the sale ofthe land, as exempt, because the assets sold was agriculturalland situated beyond 8 Kms of municipal limit. Since theAssessing Officer reasoned to believe that the land was situatedwithin 8 Kms of municipal limit, a notice under Section 148 wasissued. The Assessing Officer, vide letter, dated 07.03.2013,requested the Inspector of Survey and Land Records(Maintenance), Coimbatore, to furnish the distance, as perrecord (measured at shortest route) with respect to S.Nos.574/2,575/2, 577, 578/1, 579/1 & 578/1 located at Keeranam Pudupalayamvillage to the nearest Coimbatore Corporation limits. Respondingto the query, the Inspector of Survey and Land Records(Maintenance), Coimbatore, has answered as follows:- “I have measured the distance from the CoimbatoreCorporation limit at Sathy road, Coimbatore beingexact starting point (Land mark: beyond Ramakrishnamills at LGB Nagar, Piriru-Gowtham tower, Aiswaryabakery and Jayam medical) to measure the distance asrequired to the said land as per the CoimbatoreCorporation limit plan as was in the year 007 – 08.From that point as mentioned above by the distanceroad route to the said agricultural land the distancemeasures at 9.13 Kms.” 3. However, the Assessing officer, relied on the report ofthe investigation wing, which reported that the land is locatedwithin 8 Kms from City bakery, which according to them is notmore than 100 meters from the Corporation limits of Coimbatore.Finally, assessment was made on 31.03.2013 under Section 143 (3)r/w. Section 147 of the Act, wherein, the Assessing Officer heldthat the land was situated within 8 Kms of the municipal limitand the assessee was liable to capital gain tax and accordingly,assessed the long term capital gain as Rs.9,25,19,770/-. 4. On appeal, the Commissioner of Income Tax (A), decidedthe matter in favour of the assessee. The AssistantCommissioner of Income Tax, Circle II, Coimbatore, filed appealin ITA No.2716/Mds/2014, before the Income Tax AppellateTribunal. https://hcservices.ecourts.gov.in/hcservices/ 4. On appeal, the Commissioner of Income Tax (A), decidedthe matter in favour of the assessee. The AssistantCommissioner of Income Tax, Circle II, Coimbatore, filed appealin ITA No.2716/Mds/2014, before the Income Tax AppellateTribunal. https://hcservices.ecourts.gov.in/hcservices/ 5. Before the Income Tax Tribunal, the learned D.R appearedon behalf of the revenue, submitted that the investigation wingof the revenue had forwarded a report, wherein, it is clearlystated that the land is located within 8 Kms from City Bakery,which is not more than 100 meters from the Corporation limits ofCoimbatore. He submitted that the finding of the Revenue, willsupersede the certificates given by the State governmentdepartments and that therefore, the issue has to be decided onthat basis. 6. The Tribunal, while dismissing the appeal filed by therevenue, held that the Survey Department of the Stategovernment and the Tahsildar of the relevant zone, haveconsistently certified that the land is situated beyond 8 Kmsfrom the Corporation limits of Coimbatore. The Tribunal furtherheld that the land sold by the assessee is an agricultural landand situated beyond 8 Kms from the Corporation municipal limit,therefore, the capital gain arising from the sale of theaforesaid land is exempt from capital gain tax, as per theprovisions of the Income Tax Act, 1961. 7. Aggrieved by the aforesaid order, instant Tax CaseAppeal has been filed, on the following substantial questions oflaw:-“1. Whether on the facts and circumstances of thecase, the Appellate Tribunal was correct in holdingthat the sale land is agricultural land and eligibleto claim of exemption under Section 2 (14) of theIncome Tax Act?2. Whether on the facts and circumstances of thecase, the Appellate Tribunal is correct in ignoringthe evidences gathered by the department forascertaining the correct distance for the purpose ofSection 2 (14) of the Income Tax Act?” 8.Praying for an answer on the substantial questions oflaw, in favour of the appellant, Mr.T.R.Senthil Kumar, learnedSenior Standing Counsel for the Income Tax Department, assailedthe correctness of the order of the Income-Tax AppellateTribunal, “A” Bench, Chennai, dated 22.06.2015, inter alia that,(i) There are two possible routes to the propertyof the assessee in question and the authorities insupport of the assessee's claim adopted a longer route(via Saravanampatti) whereas the shorter route (viaChinnavedampatti) on which the Department relied hasbeen totally ignored. (ii) The evidences collected by the ITO (Inv.)clearly indicate that from the Corporation limits, the https://hcservices.ecourts.gov.in/hcservices/ lands sold by the assessee is situated within 8 Kmsonly. (iii) The land in question was not put to use forany agricultural purpose during the two years' periodimmediately preceding the date of transfer, as laiddown in Section 10 (37) (ii) of the Income Tax Act. (iv) No agricultural income was returned by theassessee for the earlier assessment years. (v) The Tribunal had failed to appreciate thatthe assessee had sold the lands to the real estatedeveloper,namelyM/s.CeeDeeYesHousingandInfrastructure Ltd., to develop the same into multipleresidential villas. This fact establishes that theoperations are not agricultural. (vi) Between the three concerned State Governmentauthorities relied upon by the CIT (A), there isdifference in the distance, as tabulated hereunder:NAME OF THE AUTHORITY DISTANCE OF THE ASSESSEE'SPROPERTY FROM THE CORPORATIONLIMITSInspector of Survey & Land9.13 KmsRecords Maintenance,Coimbatore NorthSub-Inspector of Surveys,9.10 Kms.Coimbatore Corporation-NorthZone, CoimbatoreTahsildar (North Coimbatore)8.40 Kms (v) The Tribunal had failed to appreciate thatthe assessee had sold the lands to the real estatedeveloper,namelyM/s.CeeDeeYesHousingandInfrastructure Ltd., to develop the same into multipleresidential villas. This fact establishes that theoperations are not agricultural. (vi) Between the three concerned State Governmentauthorities relied upon by the CIT (A), there isdifference in the distance, as tabulated hereunder:NAME OF THE AUTHORITY DISTANCE OF THE ASSESSEE'SPROPERTY FROM THE CORPORATIONLIMITSInspector of Survey & Land9.13 KmsRecords Maintenance,Coimbatore NorthSub-Inspector of Surveys,9.10 Kms.Coimbatore Corporation-NorthZone, CoimbatoreTahsildar (North Coimbatore)8.40 Kms 9. According to the learned Standing Counsel, being a fact,there can be only one fixed distance, between the Corporationlimits and the assessee's property. The point of reckoning forthe above authorities was the limits on the Coimbatore-Sathyroad, and the route taken was, via Saravanampatty. 10. By way of written submissions, Mr.K.R.N.Prabhakaran,party-in-person, submitted that he has submitted all the validproof issued by the government authorities, who are competent tomeasure and certify the distance and maintain relevant landrecords of Tamil Nadu, to the Income Tax Department. They havecertified that the agricultural land is situated, at a distanceof above 8 Kms from the corporation limit. The Income TaxInspector is not technically qualified or an authorised personto measure distance. The Income Tax Inspector has stated thatthe distance, as 7.9 Kms (only 100 metres less of 8 Kms),whereas, the reports of the revenue and survey departments haveto be accepted. He also submitted that the evidence consideredby the appellate authority and the Tribunal are relevant, for https://hcservices.ecourts.gov.in/hcservices/ the purpose of rendering a decision and thus, rightly taken noteof, by the appellate authority and the Tribunal. 11. He further submitted that agricultural lands inquestion are situated in Keeranam Puduppalayam Village, locatedin Keeranatham Village Panchayat, which is not under the controlof any Municipality. He further added that as per Section 2(14) (iii) of the Income Tax Act, the sale value of above landsare exempted from tax and not to be included as a capital asset,as per the decision reported in 1970-75 ITR – St.90) 12. The certificates, considered by the appellate authorityand Tribunal, are issued by the following authorities:- 1. Tahsildar (Coimbatore North) dated 30/4/2008. 2. Inspector of Survey & Land Records Maintenance, Collectorate Compound, Coimbatore, dated 20.12.2010. 3.Sub-InspectorofSurvey,CoimbatoreCorporation, North Zone, dated 31/8/2012. 4. Letter from Sub-Inspector of Survey stating theexact place of Corporation limit end to measure thedistance along with a map. 5. Certificate of Inspector of Survey & LandRecords Maintenance dated 15/3/2013 in response toA.O's letter dated 7/3/2013. 6. Letter of Inspector of Survey and Land RecordsMaintenance, dated 25/3/2013, in response to A.O'sletter, dated 15/3/2013, regarding exact place fromwhich distance is measured and7. Patta passbook and certificates fromKeranatham Panchayat.”In the light of the above, he submitted that the well consideredorder of the Tribunal, does not call for any interference andprayed for dismissal of the appeal. 13. Heard the learned counsel appearing for the appellantand perused the materials available on record. 14.On the issue, as to whether, the agricultural land soldby an assessee, is situated more than the distance of 8 Kms fromthe exact place of Corporation limits, and as to whether, thatthe same falls within the definition, “agricultural land”, it isnecessary to have a cursory look at few provisions, referred to,by the appellant. Section 2(14)(iii) of the Income Tax Act,reads as follows: “(iii) agricultural land in India, not being landsituate- 13. Heard the learned counsel appearing for the appellantand perused the materials available on record. 14.On the issue, as to whether, the agricultural land soldby an assessee, is situated more than the distance of 8 Kms fromthe exact place of Corporation limits, and as to whether, thatthe same falls within the definition, “agricultural land”, it isnecessary to have a cursory look at few provisions, referred to,by the appellant. Section 2(14)(iii) of the Income Tax Act,reads as follows: “(iii) agricultural land in India, not being landsituate- (a) in any area which is comprised within thejurisdiction of a municipality (whether known as amunicipality, municipal corporation, notified area https://hcservices.ecourts.gov.in/hcservices/ committee, town area committee, town committee, or byany other name) or a cantonment board and which has apopulation of not less than ten thousand; or (b) in any area within the distance, measuredaerially.- (I) not being more than two kilometres, from thelocal limits of any municipality or cantonment boardreferred to in item (a) and which has a population ofmore than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from thelocal limits of any municipality or cantonment boardreferred to in item (a) and which has a population ofmore than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, fromthe local limits of any municipality or cantonmentboard referred to in item (a) and which has apopulation of more than ten lakh.” 15.Section 11 of the General Clause Act, 1897, deals withmeasurement of distance and the same is extracted hereunder:“In the measurement of any distance, for thepurpose of any Central Act or Regulation, made afterthe commencement of this Act, that distance shall,unless a different intention appears, be measured in astraight line on a horizontal plane.” 16. In Commissioner of Income-Tax v. Lal Singh reported in325 ITR 588 (P & H), the Punjab and Haryana High Court, heldthat the measurement of distance made by the Tahsildar, fordetermining the distance between the agricultural land and thenearest municipality, cannot be ignored and there was nojustification for the Assessing Officer to reject the report. 17.In CIT v. Satinder Pal Singh reported in 229 CTR 82,the Tribunal therein, while considering the question ofmeasuring distance between the agricultural land and themunicipal limits of city, decided the issue, holding that thedistance of 2 kms., from the municipal limits of city, has to bereckoned for the purposes of Section 2(14)(iii) of the Act, bymeasuring the same, as per the road distance and not as perstraight line distance on a horizontal plane or as per crow’sflight. When the said decision was challenged, the Punjab andHaryana High Court, held as follows: “A perusal of the aforesaid provision shows that‘capital asset’ would not include any agriculturalland which is not situated in any area within suchdistance as may be specified in this behalf by anotification in the official gazette which may beissued by the Central Government. The maximum distance https://hcservices.ecourts.gov.in/hcservices/ “A perusal of the aforesaid provision shows that‘capital asset’ would not include any agriculturalland which is not situated in any area within suchdistance as may be specified in this behalf by anotification in the official gazette which may beissued by the Central Government. The maximum distance https://hcservices.ecourts.gov.in/hcservices/ prescribed by Section 2(14)(iii)(b) of the Act whichmay be incorporated in the notification could not bemore than 8 Kms. from the local limits of municipalcommittee or cantonment board etc. The notificationhas to take into account the extent of, and scope forurbanization of that area and other relevantconsiderations. The reckoning of urbanization as afactor for prescribing the distance is of significantwhich would yield to the principle of measuringdistance in terms of approach road rather than bystraight line on horizontal plane. If principle ofmeasurement of distance is considered straight linedistance on horizontal plane or as per crow’s flightthen it would have no relationship with the statutoryrequirement of keeping in view the extent ofurbanization. Such a course would be illusory. It isin pursuance of the aforesaid provision thatnotification No.9447, dated 6.1.1994 has been issuedby the Central Government. In respect of the State ofPunjab, at item No.18 the sub division Khanna has beenlisted at serial No.19. It has inter-alia beenspecified that area upto 2 kms., from the municipallimits in all directions has to be regarded other thanagricultural land. Once the statutory guidance oftaking into account the extent and scope ofurbanization of the area has to be reckoned whileissuing any such notification then it would beincongruous to the argument of the Revenue that thedistance of land should be measured by the method ofstraight line on horizontal plane or as per crow’sflight because any measurement by crow’s flight isbound to ignore the urbanization which has takenplace. Moreover, the judgement of the Mumbai Benchappears to have attained finality. Keeping in view theprinciple of consistency as laid down in Radha SoawamiSatsang v. CIT, (1992)193 ITR 321, we are of the viewthat the opinion expressed by the Tribunal does notsuffer from any legal infirmity warrantinginterference of this Court.” 18.In Commissioner of Income Tax v. Shabbir HussainPithawala reported in 2014 (226) Taxman 174, the Madhya PradeshHigh Court held that, “the distance of the agricultural land belongingto the assessee within the meaning of Section 2(14)(iii)(b) has to be measured in terms of the approachroad and not by the straight line distance onhorizontal plane or as per crow's flight. 19.In Commissioner of Income Tax v. Nitish RameshchandraChordia reported in (2015) 57 Taxman 394 (Bom.), the BombayHigh Court held that, "The distance between municipal limits andassessed property/asset is to be measured having regardto the shortest road distance and not as per the crowflies i.e. straight line distance as canvassed by theRevenue." 20.In Commissioner of Income Tax v. Sri Vijay Singh Kadan[I.T.A.No.714 of 2015, dated 14.09.2015], the Delhi High Court,held that for the purpose of Section 2(14)(iii)(b) of the Act,the distance has to be measured from the agricultural land inquestion to the outer limit of the municipality by road and notby the straight line or the aerial route. The distance has to bemeasured from the land in question itself and not from thevillage in which the land is situated. "The distance between municipal limits andassessed property/asset is to be measured having regardto the shortest road distance and not as per the crowflies i.e. straight line distance as canvassed by theRevenue." 20.In Commissioner of Income Tax v. Sri Vijay Singh Kadan[I.T.A.No.714 of 2015, dated 14.09.2015], the Delhi High Court,held that for the purpose of Section 2(14)(iii)(b) of the Act,the distance has to be measured from the agricultural land inquestion to the outer limit of the municipality by road and notby the straight line or the aerial route. The distance has to bemeasured from the land in question itself and not from thevillage in which the land is situated. 21.In Kunhunarayanan v. Aravindakshan reported in 1974 KLT300, in the case of shifting of Kudikidappu under the KeralaLand Reforms Act, 1964 and dealing with Section 78(2)(e)(ii) ofthe Act, directing that the new site should be "within adistance of one mile from the existing Kudikidappu, the KeralaHigh Court held that the distance has to be calculated by someroad or pathway over the which a person will have a right toapproach the alternative site when proceeding thereto from thesite of the existing Kudikidappu". This is to certify that Coimbatore North Taluk,in Keeranatham Village, the agricultural lands havingthe below mentioned SF Numbers, containing a totalarea of 4.02 Hectare are situated at a distance of 8.4KM from the Coimbatore corporation limits. S.F. NumberArea577 0.66.5 Hectare578/1 0.62.5 Hectare 579/1 1.57.0 Hectare582/10.51.0 HectareTotal4.02.0 Hectare Signed TEHSILDAR Dt.30.4.08Coimbatore – (North)Round Seal of Tehsildar/ TalukJudge.CoimbatoreRecipientMr. K. Prabakaran,291, Avaram Palayam Road,Sidha pudur, Post,Coimbatore 641 044. [TRANSLATED FROM TAMIL TO ENGLISH]INSPECTOR OF SURVEY ANDLAND RECORDS MAINTANCE,Coimbatore (North)Collectorate Compound,Coimbatore 641 018.Dated : 20.12.2010.C/ office ref: L. Dis.1189/10.CERTIFICATEThis is to certified that the agricultural landin Keeranathan panchayat, Coimbatore district bearingsurvey numbers 574/2,575/ 2,576/2, 577, 578/1, 579/1and 582/1 at Keeranam puduppalayam village is situatedat a distance of 9.15 kms measured as shortestdistance from the near by Coimbatore corporation limitends on sathy road (land mark when visited: nearGowtham complex, Aishwarya bakery, and Jayam medicals)taken by the approachable shortest road route fromboundary of Coimbatore corporation limits at Sathyroad via Sivananda puram, Saravanampatty, Keeranathamvillage to Keeranatham puduppalayam village till theland is situated and 16 km from Coimbatore railwaystation as per Coimbatore corporation limit plan. https://hcservices.ecourts.gov.in/hcservices/ Inspector of Survey and Land Records maintenance Coimbatore (North)Collectorate compoundCoimbatore. To Mr. K. Prabakaran,291, Avaram Palayam Road,Sidhapudur, Post,Coimbatore 641 044. SUB INSPECTOR OF SURVEYS,Coimbatore Corporation – North Zone,Coimbatore. C/office ref: Your letter dated 06.07.2012Sub: Issue of distance certificate – Reg. CERTIFICATE I have been requested to certify the distance byroad from the limit of Coimbatore corporation (asexisted in the year 2007-2008) till the location ofagricultural land in SF Nos.574-579 and 582 atkeeranatham puduppalayam village by Mr. K. Prabakaranresiding at 291, Avarampalayam road, Sidhapudur,Coimbatore 641 044. https://hcservices.ecourts.gov.in/hcservices/ Inspector of Survey and Land Records maintenance Coimbatore (North)Collectorate compoundCoimbatore. To Mr. K. Prabakaran,291, Avaram Palayam Road,Sidhapudur, Post,Coimbatore 641 044. SUB INSPECTOR OF SURVEYS,Coimbatore Corporation – North Zone,Coimbatore. C/office ref: Your letter dated 06.07.2012Sub: Issue of distance certificate – Reg. CERTIFICATE I have been requested to certify the distance byroad from the limit of Coimbatore corporation (asexisted in the year 2007-2008) till the location ofagricultural land in SF Nos.574-579 and 582 atkeeranatham puduppalayam village by Mr. K. Prabakaranresiding at 291, Avarampalayam road, Sidhapudur,Coimbatore 641 044. In this regard, I hereby certify that I havepersonally visited and found the shortest distancefrom the near by Coimbatore corporation limits (as wasin the year 2008) at Sathy road (land mark whenvisited: near Gowtham compleX, Aishwarya bakery, andJayam medicals) to the agricultural land in SF numbers574/2,575/ 2, 576/2, 577, 578/1, 579/1 and 582/1 atKeeranatham puduppalayam village is 9.1 kms measuredby the shortest approachable road route taken fromboundary of Coimbatore Corporation limit via.Sivananda puram, Saravanampatty, Keeranatham Villge toKeeranathan puduppalayam village till the land issituated. Surveys Sub Inspector of Coimbatore CorporationNorth Zone To Mr. K. Prabakaran,291, Avaram Palayam Road,Sidhapudur, Post,Coimbatore 641 044. Compound, INSPECTOR OF SURVEY ANDLAND RECORDS MAINTANCE,Coimbatore (North), Collectorate Coimbatore 641 018. Dated 15.03.2013. Sub: Request the distance to land in SF Nos. 574-579 and 582 in Keeranatham Village – Reg. Ref: Your letter F. No.AAIHK 0748M/ CIRII/CBE /12-13Our off. Ref. C. No.112/13, Dated11.03.2013. CERTIFICATE With reference to the above cited letters, alsoas required by your end, I have visited theagricultural land with survey numbers 574/2,575/2,576/2, 577, 578/1, 579 and 582/1 in KeeranathamPanchayat, Keeranam Puduppalayam Village, Coimbatoredistrict to measure the shortest distance to the saidland from the Coimbatore corporation limit (2007-2008). For this purpose, I have measured the distancefrom the Coimbatore corporation limit at Sathy road,Coimbatore, being the exact starting point (land mark:beyond Ramakrishna Mills at LGB Nagar Pirivu- Gowthamtower, Aiswarya bakery and Jayam medical) to measurethe distance as required to the said land as per theCoimbatore Corporation Limit plan as was in the year2007-2008. From that point as mentioned above by theshortest road route to the said agricultural land thedistance measures at 9.13 km. Coimbatore. Inspector of Survey and LandRecords. (Maintenance) To Assistant Commissioner of Income Tax,Circle II, Coimbatore. 23.Though the assessee has submitted that the abovesaiddocuments to prove that the distance between agricultural landand municipal limit was more than 8 Kms, the assessing officerhas only relied on the report of the Inspector of Income-Tax.Though the assessing officer has sought for clarifications fromthe Inspector of Survey and Land Records Maintenance,Coimbatore, regarding the place, where the Corporation limitsends, as to whether, Gopalkrishna Mills/city bakery or beyondRamakrishna Mills at LGB Nagar Pirivu - Gowtham tower orAishwarya bakery or Jayam medicals, which has also beenresponded, stating that the distance between the municipallimits and the agricultural lands, is 9.13 Kms., the assessingofficer has totally ignored the report of the Inspector ofSurvey and Land Records Maintenance, Coimbatore and recorded as: "While considering the assessee's reply, theInspector of this Office was deputed to ascertain theGovernment Department from which both the city limitand the distance to measure between the limit and theland which was sold. She was went to Coimbatore LocalTown Planning Office from where she was directed toInspector of Survey and Land Record Maintenance,Collectorate Compound, Coimbatore, to get the detailsfor this purpose. Based on this letter, dated07.03.2013, was sent to the Inspector of Survey andLand Record Maintenance, Coimbatore, asked "to furnishthe distance (measured at shortest route) with respectto Survey Nos.574/2, 575/2, 577, 578/1, 579/1 & 578/1located at Keeranam Pudupalayam village to the nearestCoimbatore Corporation limit as per the records forthe F.Y.2007 – 08. In response to the letter,Inspector of Survey and Land Records (Maintenance)gave certificate that, “I have measured the distancefrom the Coimbatore Corporation limit at Sathy road,Coimbatore being exact starting point (Land mark:beyond Ramakrishna mills at LGB Nagar, Piriru-Gowthamtower, Aiswarya bakery and Jayam medical) to measurethe distance as required to the said land as per theCoimbatore Corporation limit plan as was in the year007 – 08. From that point as mentioned above by thedistance road route to the said agricultural land thedistance measures at 9.13 Kms". Another letter, dated 15.03.2013, was sent to theInspector of Survey and Land Record Maintenance,Coimbatore, asked, "With reference to the certificate issued, you have mentioned the exact starting point tomeasure the distance for the survey numbers 574/2,575/2,576/2, 577, 578/1, 579 and 582/1 has beenmentioned as land mark: beyond Ramakrishna Mills atLGB Nagar Pirivu- Gowtham tower, Aiswarya bakery andJayam medical), as per the Coimbatore CorporationLimit plan as was in the year 2007-2008. However, fromtheInspectorofIncome-TaxenquiryatChinnavedampatti Panchayat, we have been informed thatthe Corporation limit ends at Gopala KrishnaMills/City Bakery. Hence, we require the exact placefrom which the distance to be measured." The Inspectorof Survey and land records in his certificatementioned that, " for measuring the distance fromcorporation limit, to the agricultural lands withSurvey Nos.574/2, 575/2, 577, 578/1, 579/1 & 578/1located at Keeranam Pudupalayam village, Coimbatoredistrict, the exact place of starting point will beonly at (Land mark: beyond Ramakrishna Mills at LGBNagar Pirivu- Gowtham tower, Aiswarya bakery and Jayammedical) and not from Gopalkrishna Mills/city bakerynor any other place as per Coimbatore CorporationPlan, as was in the year 2007-08. Meanwhile, the investigation wing forwarded areport with respect to Mr.K.R.N.Prabakaran case inwhich it was mentioned that the said land is locatedwithin the 8 kilometers from city bakery whichaccording to them is not more than 100mts from thecorporation limit of Coimbatore." 24.On the appeal preferred by the assessee, consideringthe grounds of challenge, submissions and evidence, theCommissioner of Income Tax (Appeals), at Paragraphs 9 to 16,held as follows: Meanwhile, the investigation wing forwarded areport with respect to Mr.K.R.N.Prabakaran case inwhich it was mentioned that the said land is locatedwithin the 8 kilometers from city bakery whichaccording to them is not more than 100mts from thecorporation limit of Coimbatore." 24.On the appeal preferred by the assessee, consideringthe grounds of challenge, submissions and evidence, theCommissioner of Income Tax (Appeals), at Paragraphs 9 to 16,held as follows: "9. I have gone through the grounds of appeal andalso the order of the Assessing Officer. As seen fromthe facts available on record, the predominantactivity of the appellant was agriculture and the saidproperty sold by the appellant was an ancestralproperty. In the year 2008, the entire land was sold.The income tax return for the HUF was filed mentioningthat the said land is an agricultural land and theincome on sale of the same will be out of the purviewof capital asset as per Section 2(14)(iii) of theIncome Tax Act, 1961. The claim of exemption was madein the return based on the certificate of distanceissued by the Tahsildar (North Coimbatore) in April2008. The appellant filed a copy of the letterobtained from the Tahsildar (North Coimbatore) certifying that the SF Nos.574/2, 575/2, 576/2, 577,578/1, 579/1, and 582/1 are lands clearly situatedbeyond 8.4 KMs from the Coimbatore Corporation Limits.The land measuring 4.02 Hectares is situated at adistance of 8.4 KMs from the Coimbatore Corporationlimits. This certificate was issued by the Tahsildar(North Coimbatore) being the Revenue Authority of thevillage and is competent to issue such a certificate.This certificate was issued on 30.04.2008. 10. The notice- u/s 148 was issued by theAssessing Officer indicating the reasons to theappellant stating that the claim of exemption cannotbe allowed since the Inspector of the Department hasreported that the said land is situated at a distanceof 7.5 KMs from the Coimbatore Corporation Limits. Adetailed reply was filed on 15.02.2013 with theAssessing Officer objecting to the re-opening. Theappellant also filed the relevant evidence to confirmthat the location of the land is more than 8 KMs fromthe Coimbatore Corporation Limits. The appellant filedthe details of Patta passbook and also the adangal andchitta register copies' to prove that the land isagricultural land. The appellant also filed a copy ofthe starting point and the Corporation Limits ofCoimbatore Municipal Corporation certified by the SubInspector of Survey, North Zone, CoimbatoreCorporation dated 08.02.2013. A certificate issued bythe Inspector of Survey and Land Records Maintenance,Coimbatore North, Collectorate Compound dated20.12.2010 was filed before the Assessing Officer. Inthis certificate it was clearly mentioned that theagricultural land in Keeranatham Panchayat, CoimbatoreDistrict bearing Survey Nos. 574/2, 575/2, 576/2, 577,578/1, 579/1 and 582/1 at Keeranam PuduppalayamVillage is situated at a distance of 9.15 KMs measuredas shortest distance from the nearby CoimbatoreCorporation limit which ends on Sathy Road (landmarkwhen visited : Near Gowtham Complex, Aishwarya Bakery,and Jayam Medicals). Taken by the approachableshortest road route from boundary of CoimbatoreCorporation limits at Sa thy Road via Sivanandapuram,Saravanampatty, Keeranatham Village to KeeranathamPuduppalayam Village where the land is situated at 16KM from Coimbatore Railway Station as per CoimbatoreCorporation limit plan. The appellant also filed acertificate from the Tahsildar [North Coimbatore]dated 30.04.2008 which states that the said landbearing Survey Nos. 574/2, 575/2, 576/2, 577, 578/1,579/1 and 582/1 is situated at 8.4 KMsfrom the Coimbatore Corporation Limits. The learned AuthorizedRepresentative submitted that this certificate wasobtained before the appellant filed the return ofincome in order to be clear whether the income on thesale of agricultural land was taxable or not. 11. The appellant also filed a certificate dated31.08.2012 issued by the Sub Inspector of Surveys,Coimbatore Corporation - North Zone, Coimbatore. Inthis Certificate it was mentioned that the distance byroad from the limit of Coimbatore Corporation (asexisted in the year 2007-2008) till the location ofagricultural land in SF Nos.574-579 and 582 atKeeranatham Puduppalayam Village is 9.1 KMs. The landmark when visited was shown as near Gowtham Complex,Aishwarya Bakery and Jayam Medicals. The Sub Inspectorof Surveys, Coimbatore Corporation - North Zone in hisCertificate dated 08.02.2013 [which was submitted tothe Assessing Officer] included a map showing theplace of Corporation Limit end. It was mentioned inthe Certificate that the place of Corporation Limitwould be only from L.G.B. Nagar Pirivu, GowthamComplex, Aishwarya Bakery and Jayam Medicals [NearRamakrishna Mills] at Sathy Road, Ganapathy Village.The Inspector of Income Tax, % ACIT, Circle-II,Coimbatore, in her report dated 08.02.2013 submittedthat as per the details gathered it was ascertainedthat the limit for the Coimbatore Corporation endsnear a bakery called the "CITY BAKERY" on theCoimbatore - Keeranatham Road during the FinancialYear 2007-08. Keeping this as the starting point formeasuring the distance to the site it was found to be7.9 KMs. The Assessing Officer after examining thedetails wrote'a letter to the Inspector or Survey andLandRecordsMaintenance,Coimbatore(North)Collectorate Compound, Coimbatore on 07.03.2013 askingthe Inspector of Survey to furnish the distancemeasured at shortest route with respect to Survey Nos.574/2, 575/2, 576/2, 577, 578/1, 579/1 and 582/1located at Keeranam Puduppalayam Village to thenearest Coimbatore Corporation limit as per therecords for the Financial Year 2007-08. 12. As seen from the records on 08.03.2013, aletter was addressed by the ACIT, Circle-II,Coimbatore to the ITa (Investigation), Coimbatorereferring to the letter of the letter of the ITa(Inv.) dated 05.03.2013 wherein it was stated that theland seems to be located within 8 KMs from themunicipal limits of Coimbatore. The ITa (Inv.) in hisletter dated 13.03.2013 stated that the distance was measured from the "City Bakery" which is situated inthe corner of Athipalayam Road which leads toKeeranatham Puduppalayam Village [bearing Survey Nos.574/2, 575/2, 576/2, 577, 578/1, 579/1 and 582/1] viaChinnavedampatti (where property of Sri Prabhakaran issituated) and Rabindranath Tagore Road. The letteralso states that the Rabindranath Tagore Road is theCorporation Limit during the period in which ShriPrabhakaran had disposed off his HUF property.Therefore, "City Bakery" was taken as the startingpoint for measuring the distance of Shri Prabhakaran'sHUF property from the Coimbatore Corporation Limit.The ITa (Inv.) also stated that the distance of ShriPrabhakaran's HUF property was 7.5 KMs from theCoimbatore Corporation limit. One side of RabindranathTagore Road is Corporation Limit and the other side isnot coming under Corporation Limit earlier. The widthof the road is only 10 meter. At present both thesides are within the Corporation Limit. A photocopy ofthe Municipal Passbook and property tax receiptsissued by the Coimbatore Corporation for the periodfrom 2001-02 to 2011-12 to a property belonging toShri P.G. Mahalingam and Shri P. Mani which issituated on Rabindranath Tagore Road, adjacentlyopposite to the "City Bakery" is enclosed asproof/evidence of Corporation" Limit. The distancebetween these "City Bakery" and the property of ShriP.G. Mahalingam and" Shri P. Mani is less than 100Meters. Therefore, the ITO (Inv.) submitted that thecapital gains exemption claimed by the assessee isineligible.13. On an examination of the ITO (Inv.) letter tothe Assessing Officer, it is very clear that the ITO(Inv.) did not specify the basis / evidence on whichhe came to the conclusion that Rabindranath TagoreRoad is the Corporation Limit during the period inwhich Shri Prabhakaran had disposed-off the property.Hence taking "City Bakery" as the starting point formeasuring the distance is not on sound reasoning ofany evidence from Corporation Authorities. Themunicipal tax passbook and property tax receipt didnot indicate the Corporation Limit to measure thedistance from the Corporation Limit to the lands ofthe appellant. The Assessing Officer again wrote aletter dated 15.03.2013, to the Inspector of Surveyafter receiving a Certificate from the Inspector ofSurvey and Land Records Maintenance. In theCertificate dated 15.03.2013, the Inspector of Surveyand Land Records (Maintenance), Coimbatore submitted that "as required by your end, I have visited theagricultural land with Survey Nos. 574/2, 575/2,576/2, 577, 578/1, 579/1 and 582/1 in KeerananthamPanchayat, Keeranam Puduppalayam Village, CoimbatoreDistrict to measure the shortest distance to the saidland from the Coimbatore Corporation Limit (2007-2008). For this purpose, I have measured the distancefrom the Coimbatore Corporation Limit at Sathy Road,Coimbatore, being the exact starting point (landmark :beyond Ramakrishna Mills at LGB Nagar Pirivu - GowthamTowers, Aishwarya Bakery and Jayam Medicals) tomeasure the distance as required to the said land asper the Coimbatore Corporation Limit plan as was inthe year 2007-2008. From that point as mentioned aboveby the shortest road route to the said agriculturalland the distance measures at 9.13 KMs". 14. Basing on the certificate issued by theInspector of Survey and Land Records (Maintenance),Coimbatore (North), Collectorate Compound, Coimbatore,the Assessing Officer issued a letter dated 15.03.2013asking him to clarify the exact place from which thedistance is to be measured. In this letter addressedto the Inspector of Survey and Land Records(Maintenance), Coimbatore (North), it was alsomentioned that the Inspector of Income Tax madeenquiry at Chinnavedampatti Panchayat and theCorporation Limit ends at Gopalakrishna Mills / CityBakery. In reply to the letter of the AssessingOfficer, the Inspector of Survey and Land Records(Maintenance), Coimbatore (North), clarified that theexact point will be only at (landmark) beyondRamakrishna Mills, at LGB Nagar Pirivu - GowthamTowers, Aishwarya Bakery and Jayam Medicals) and notfrom Gopalakrishna Mills / City Bakery or any otherplace as per the Coimbatore Corporation Limit plan aswas in the year 2007-2008. 15. As seen from the assessment order, theAssessing Officer has considered the report of theInvestigation Wing as also the report of the Inspectorof Survey and Land Records (Maintenance), Coimbatore(North) and also the certificate issued by theTahsildar, Coimbatore (North) and has taken a decisionto bring to tax the consideration received on sale ofagricultural land based on the Departmental report.The Assessing Officer in the order stated that "so thedecision was taken in favour of revenue based on theDepartmental Report and the consideration received onsale of agricultural land by the assessee attractscapital gains and the assessment is completed accordingly". As seen from the ITO (Inv.) report andthe Inspector's report, the outer limit of MunicipalCorporation was considered as "City Bakery" from whichthe distance was measured. The ITO (Inv.) letter doesnot specify the basis on which Rabindranath TagoreRoad was taken as the Corporation Limit by him formeasuring the distance of Municipal Limits. It is notclear how the Municipal Tax Passbook and Property TaxReceipts issued by Coimbatore Corporation to aproperty belonging to Shri P. G. Mahalingam and ShriP. Mani (situated at Rabindranath Tagore Road) can beconsidered as the proof/ evidence of CorporationLimits. accordingly". As seen from the ITO (Inv.) report andthe Inspector's report, the outer limit of MunicipalCorporation was considered as "City Bakery" from whichthe distance was measured. The ITO (Inv.) letter doesnot specify the basis on which Rabindranath TagoreRoad was taken as the Corporation Limit by him formeasuring the distance of Municipal Limits. It is notclear how the Municipal Tax Passbook and Property TaxReceipts issued by Coimbatore Corporation to aproperty belonging to Shri P. G. Mahalingam and ShriP. Mani (situated at Rabindranath Tagore Road) can beconsidered as the proof/ evidence of CorporationLimits. 16. As seen from the records, the AssessingOfficer has written to the Inspector of Survey andLand Records (Maintenance) regarding clarification onthe enquiries made by the Inspector of Income Tax atChinnavedampatti Panchayat to be informed that theCorporation Limit ends at Gopalakrishna Mills / CityBakery. The Inspector of Survey and Land Records(Maintenance) who is the authority has clarified thatthe exact starting point will be only at LGB NagarPirivu - Gowtham Towers, Aishwarya. Bakery and JayamMedicals and not from City Bakery or any other place,as per Coimbatore Corporation City Limits in the year2007-2008. Since it is the information received by theAssessing Office-r from the concerned Department, theAssessing Officer cannot brush aside the informationreceived from the Inspector of Survey and Land Records(Maintenance). The Inspector of Income Tax has onlymade enquiry with the Chinnaveqampatti Panchayat andhas come to the conclusion that the Corporation Limitends at Gopalakrishna Mill / City Bakery. There is noauthenticated map or information to this extent. Thereport of the ITO (Inv.) as discussed earlier cannotbe considered without proper authentication from theconcernedAuthorityregardingtheMunicipalCorporation out limit. In my opinion the AssessingOfficer erred in taking a decision in favour of theRevenue based on the Departmental Report which is notproperly authenticated. The Inspector of Income Taxreport against the clarification by various StateGovernment Authorities, (that too, independentlyverified by the Assessing Officer) cannot be acceptedrelying on the case of CIT Vs Lalsingh and Other(reported in 325 ITR 588) - Punjab & Haryana HighCourt. Since it is very clearly proved that the landsare agricultural land situated beyond 8 KMs from theCorporation Municipal Limits, the income on sale of the agricultural land is exempt from taxation. TheAssessing Officer is directed to delete the addition.The grounds of appeal are ALLOWED." 25.When the matter was taken on appeal by the revenue,before the Income-Tax Appellate Tribunal, after considering thesubmission of the departmental representative that theinvestigation wing of the revenue has forwarded a report, inwhich, they have clearly stated that the said land is locatedwithin 8 Kilometers from city bakery, which is not more than 100Mts., from the corporation limits of Coimbatore and the furthercontention that the finding of the Revenue would supersede thecertificates given by the state government departments, theTribunal, vide order in I.T.A.No.2716/Mds/2014, dated22.06.2015, dismissed the same, as follows: the agricultural land is exempt from taxation. TheAssessing Officer is directed to delete the addition.The grounds of appeal are ALLOWED." 25.When the matter was taken on appeal by the revenue,before the Income-Tax Appellate Tribunal, after considering thesubmission of the departmental representative that theinvestigation wing of the revenue has forwarded a report, inwhich, they have clearly stated that the said land is locatedwithin 8 Kilometers from city bakery, which is not more than 100Mts., from the corporation limits of Coimbatore and the furthercontention that the finding of the Revenue would supersede thecertificates given by the state government departments, theTribunal, vide order in I.T.A.No.2716/Mds/2014, dated22.06.2015, dismissed the same, as follows: "6. From the above it is crystal clear that theSurvey department of the state Government and theThasildar of the relevant Zone have consistentlycertified that the land is situated beyond 8 Kms fromthe Corporation limit of Coimbato