The Commissioner Of Income Tax, Faridabad v. M/S Shri Sadhwa (Huf

ITA No. 247 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 247 of 2008 Date of Decision: 10.8.2010 The Commissioner of Income Tax, Faridabad ....Appellant. Versus M/s Shri Sadhwa (HUF) ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.The revenue has filed the present appeal under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 22.11.2006 passed by the Income Tax Appellate Tribunal, DelhiBench “I”, New Delhi (hereinafter referred to as “the Tribunal”) in ITANo. 1281/Del/2005 for the assessment year 1997-98 proposing to raisethe following substantial questions of law:- “(i)Whether, on the facts & circumstances of thecase, the Hon'ble ITAT is right in holding theland in question to be agricultural land notsubject to capital gains tax, even though thedistance of the said land from municipal limitswas not measured in accordance with thecase, the Hon'ble ITAT is right in holding theland in question to be agricultural land notsubject to capital gains tax, even though thedistance of the said land from municipal limitswas not measured in accordance with the General Clauses Act? (ii) Whether, on the facts & circumstances of thecase, the Hon'ble ITAT is right in relying uponthe order of the Hon'ble Punjab & HaryanaHigh Court in the case of Jaswanmt Rai Vs.CWT (107 ITR 477) wherein the facts areentirely different? (iii) Whether, on the facts & circumstances of thecase, the Hon'ble ITAT is right in dismissingthe appeal of the Revenue on the basis of non-filing of appeal by the Department in the caseof the brother of the assessee, even though itis settled law that each proceeding isindependent and the principle of res judicatadoes not apply to the income taxproceedings?” 2. 2.Facts necessary for deciding the present appeal may benoticed. The assessee filed its return on 28.11.1997 declaring anincome of Rs.11,56,630/- as income from other sources. He filed acomputation sheet along with the return submitting that agricultural landof HUF comprised in khasra Nos. 1926, 1927, 1928 and 1932 located inWazirabad, Tehsil and District Gurgaon was sold for Rs.1,92,53,906/-.It was claimed that the said land was situated beyond 8 kms frommunicipal limits of Gurgaon. The assessee along with the return hadsubmitted a certificate dated 27.10.1997 issued by the Tehsildar statingthat the land in question was at a distance of about 8.5 kms from the municipal limit. The assessee had claimed that since the agriculturalland in question was more than 8 kms from municipal limits of Gurgaon,no capital gain arose on the sale of such agricultural land. An exparteassessment was framed under Section 144 of the Act by the JointCommissioner of Income Tax on 28.3.2000 holding the assessee liableto capital gains on the sale of the land. The Assessing Officer held thatthe land sold by the assessee was located within radius of 8 kms ofGurgaon municipality and was a capital asset, the sale proceeds ofwhich were taxable under the head “capital gains”. Accordingly, theAssessing Officer made an addition of Rs.1,87,53,906/- on account ofcapital gains. Feeling aggrieved, the assessee filed an appeal beforethe CIT (A) who vide order dated 20.12.2004 allowed the appeal anddeleted the addition made by the Assessing Officer. On further appealby the revenue, the Tribunal vide order dated 22.11.2006 upheld theorder of the CIT (A). Hence, the present appeal by the revenue. 3.We have heard learned counsel for the revenue. 3.We have heard learned counsel for the revenue. 4.Learned counsel for the revenue submitted that the landwas situated less than 8 kms from the municipal limits of Gurgaon and,therefore, the gain arising on its sale was liable to be taxed as capitalgain. The learned counsel further submitted that the Tribunal was notjustified in adjudicating the issue in favour of the assessee on the basisof an order passed in the case of the brother of the assessee, GurdialSingh, who was a co-sharer. It was argued that the findings recorded inone case are not necessarily to be binding on the department in thecase of other assessee and principles of res judicata are not applicable.Reliance was placed by learned counsel for the revenue on the judgment of the Apex Court in C.K. Gangadharan and another v.Commissioner of Income Tax, [2008] 304 ITR 61 (SC) in support ofher submission. 5.We have thoughtfully considered the submission oflearned counsel for the revenue and do not find any merit. The CIT (A)relying upon certificate dated 24.6.2004 issued by the ExecutiveEngineer held that the distance of the land sold was 8.625 kms frommunicipal limits of Gurgaon. The report of Tehsildar dated 16.3.2004depicting the land in question to be at a distance of 7.5 kms frommunicipal limits of Gurgaon on which reliance had been placed by therevenue was not accepted. He further relied upon the order of the CIT(A) passed in the case of the brother of the assessee, Gurdial Singh,where it was held to be beyond 8 kms from municipal limits. The CIT(A) accordingly held that the land which was sold was agricultural landbeing outside 8 kms of municipal limits and, therefore, no capital gainwas payable thereon. The Tribunal affirmed the finding of the CIT (A). 6.On appreciation of evidence independently by the CIT (A)and the Tribunal, a finding has been recorded that the land was situatedbeyond 8 kms. Additionally, the department in the case of the brother ofthe assessee who was a co-sharer in the same land had accepted it tobe beyond 8 kms of municipal limits of Gurgaon. The said finding offact concurrently recorded by the CIT (A) and the Tribunal has not beenshown to be perverse in any manner. Thus, the pronouncement inC.K. Gangadharan's case (supra) is of no help tothe case of therevenue. ITA No. 247 of 2008 -5- 7.In view of the above, no substantial questions of law as claimed arise in this appeal. 8.The appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE August 10, 2010gbs (ADARSH KUMAR GOEL)JUDGE