The Commissioner Of Income Tax,Chennai v. Dr.r.rangarajan

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 3/8/2016 C O R A M THE HONOURABLE MR.JUSTICE S.MANIKUMARandTHE HONOURABLE MR.JUSTICE D.KRISHNA KUMAR T.C.A.No.491 of 2016 The Commissioner of Income Tax,Chennai....Appellant Vs Dr.R.Rangarajan... Respondent Prayer: Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961, against the order made in I.T.A.No.410/Mds/2015,dated 9/10/2015. Against the order of the Commissioner of IncomeTax (A)-19 NO.108 Mahatma Gandhi Road Chennai 600 034 dated28.11.2014 in ITA.No.432/13-14. Against the order of the Assistant Commissioner of IncomeTax Central Circle III(3) Chennai-34 dated 13.09.2013 inPA/GI.No.AADPR 7092J. (Judgment of the Court was made by S.MANIKUMAR, J) Challenge in this Tax Case Appeal, is to an order made bythe Income Tax Appellate Tribunal in I.T.A.No.410/Mds/2015,dated 9/10/2015, by which, the Tribunal has dismissed the appealpreferred by the revenue. 2.The assessee is the Founder-Chairman of Veltech Groupof Educational Institutions, Avadi. There was a search, in thepremises of the educational institutions run by the Trust, inwhich, the assessee is one of the Trustees. The assessee'spremises were also searched under Section 132 of the Act on27/8/2008. For the Assessment Year 2009-10, the assessee filed ae-return of income on 31/7/2009, disclosing a total income of https://hcservices.ecourts.gov.in/hcservices/ Rs.3,50,07,409/-. He filed a revised return of income on29/10/2009, disclosing a total income of Rs.4,38,44,341/-.Subsequently, a revised return was filed on 22/12/2010,declaring a total income of Rs.1,29,32,780/-. According to thedepartment, the difference in the income originally returned andthe revised return represented capital gains of Rs.3,09,11,561/-on the sale of land, at Morai Village, Ambattur Taluk originallyoffered, but withdrawn, in the revised return. During the courseof the original assessment proceedings, the assessee contendedthat the land sold by him at Morai village is an agriculturalland and therefore, contended that the profit on sale of suchagricultural land is not liable to tax. 3.According to the assessee, the land is situated at adistance of more than 8 km from Avadi Municipality and the landbeing agricultural land, profit on sale of such land is notliable to tax. The department, on verification, found that theland is not an agricultural land and it was sold to the Trustand the assessment was completed, by bringing the entire capitalgains of Rs.3,09,11,561/-, as originally offered, in the returnof income, and accordingly, determined the income atRs.4,38,44,341/-. On appeal, the Commissioner of Income-Tax(Appeals), vide his order, dated 23/8/2011 in I.T.A.No.336/10-11, confirmed the assessment of capital gains, on the sale ofthe land at Morai village. 4.The assessee further went on appeal in ITANo.1779/Mds/2011 to the Income Tax Appellate Tribunal. He hasfiled a certificate from the Public Transport Department,showing that the land is situated, at a distance of more than 8kms from Avadi limits. The assessee has also filed a certificatefrom the Village Administrative Officer, to the effect that theland was given on lease to M/s.Vel Horticultures Ltd, for doingagricultural operations. As the said evidence produced beforethe Tribunal, was not considered originally by the AssessingOfficer, the Tribunal, set aside the orders of the lowerauthorities and remanded the matter back to the file of theAssessing Officer for re-adjudicating the issue afresh, afterverifying all the documents, and to pass a speaking order. 5.Thereafter, placing reliance on the decision of Hon'bleSupreme Court in Sarifabibi Mohamad Ibrahim v. ClT reported in(204 ITR 631), the Assessing Officer held that the assessee'sland is not an agricultural land, as it does not fulfil thecriteria laid down by the court, in the aforesaid decision. Inthe subject assessment order, he has also stated that the landwas barren, when the Inspector inspected the land, that thebuyer was not an agriculturist, and the land was situated in adeveloped area. Thus, the Assessing Officer completed theassessment under Section 143(3) r/w. Section 254 r/w. Section153A of the Income-Tax Act. Holding that the land is not an agricultural land and by denying the assessee's claim forexemption on the profit, by sale of the land at Morai village,Rs.4,38,44,341/- was brought to tax as capital gains. Aggrievedby the aforesaid order, the respondent has filed an appeal tothe Commissioner of Income Tax (Appeals). 6. On appeal, after going through the earlier appellateorders, submissions of the assessee and evidence on record, inparticular, certificates of the Village Administrative Officer,Deputy Surveyor, Ambattur Taluk and General Manager,Metropolitan Transport Corporation (Chennai) Ltd's, certifyingthat the land is situated, at a distance of more than 8 Kms.,from Avadi Municipality and the lease deed, between theassessee, other family members & M/s.Vel Horticultures, leasingthe land for agricultural operations, accepted in the scrutinyassessment, and also the fact that a source of investment hasbeen made made by the assessee, the appellate authority heldthat the land in question, is an agricultural land, situated ata distance more than 8 Kilometres, from the nearest Municipality(Avadi). The appellate authority has further observed that it isevident from the letter No.5729/2013/A1, dated 3/8/2013, fromthe Tahsildar, Ambattur that she had made independent enquirieswith regard to the distance of the land in question, from thenearest Municipality (Avadi), result of which, clearly provedthat the land in question is not situated within a distance of 8Kms from the nearest Municipality. The appellate authority hasfurther held that no reason has been assigned by the AssessingOfficer, in the assessment order, as to why, he has not acceptedthe report of the Tahsildar. With regard to the report of theInspector that the land in question is situated at a distance of5.5 Kms submitted before the Assessing Officer, the Commissionerof Income Tax (Appeals) held that the route used by theinspector to reach the land is a private road laid andmaintained by CRPF and on the facts and circumstances of thecase, evidence adduced by both parties, the Commissioner ofIncome Tax (Appeals) observed that public have no free access tothe said road, as it is not under the control of localadministration. 7.On the question, as to whether the subject land is anagricultural land or not, the Commissioner of Income Tax(Appeals) has categorically held that the issue is squarelycovered by the judgment of this Court in Mrs.ShakunthalaVedachalam v. Mrs.Vanitha Manickavasagam reported in (2014) 369ITR 558 and following the aforesaid decision, the Commissionerof Income-Tax (Appeals) held that the assessee’s land inquestion is an agricultural land situated at a distance of morethan 8 Kms from the nearest Municipality and as the profit onsale of such land is not liable to tax, the Commissioner ofIncome Tax (Appeals) has deleted the addition, on account of https://hcservices.ecourts.gov.in/hcservices/ capital gains, in the hands of the assessee, on account oftransfer of the said land. 8.Being aggrieved by the said order, Revenue haspreferred an appeal before the Income-Tax Appellate Tribunal,Chennai, on the following grounds, https://hcservices.ecourts.gov.in/hcservices/ capital gains, in the hands of the assessee, on account oftransfer of the said land. 8.Being aggrieved by the said order, Revenue haspreferred an appeal before the Income-Tax Appellate Tribunal,Chennai, on the following grounds, “2.1. The CIT(A) erred in directing the AO todelete the addition on account of capital gains in thehands of the assessee on account of transfer of theland. 2.2 The learned CIT(A) erred in, the land sold wasan agricultural land and situated at a distance ofmore than 8 km from the nearest Avadi Municipality andtherefore the profit on the sale of such land is notliable to tax. 2.3 The CIT(A) erred in the land sold was situatedat a distance of 10Kms from the nearest AvadiMunicipality based on the VAO's certificate withoutany evidence with respect to Village administrativerecords. 2.4 The CIT(A) erred in the land sold was situatedat a distance of 10Kms from the nearest AvadiMunicipality based on the Metropolitan TransportCorporation (Chennai) Ltd's letter dated 20.12.2010wherein it was stated that the bus routeNo.61B,61K,61D and 61E playing between Avadi and MoraiVillage is 10 KMs. From the letter itself it wasestablished that various route are available to reachMorai village and hence it will not be treated asconcrete evidence for measuring distance between Avadiand Morai village. 2.5 The CIT(A) has failed to note that theAssessing Officer had clearly established that theland was very much within 8 Kms from the AvadiMunicipality. He deputed three Income-tax Inspector toascertain actual distance and as per their report, thedistance between Avadi Municipality and Morai Villageis 5.5 Kms only. 2.6 The CIT(A) has failed to note that theAssessing Officer had followed the direction of theHon'ble ITAT and by examining all evidences placedbefore them and passed the order in accordance withlaw.” 9.Upon considering the evidence adduced by the assesseeand the Department and following the decision of the Punjab andHaryana High Court in CIT v. Satinder Pal Singh reported in 229CTR 82, the Income Tax Appellate Tribunal, Chennai, dismissedthe appeal filed by the revenue. Against which, the instant Tax Case Appeal has been filed, on the following substantialquestions of law, “(i) Whether on the facts and in the circumstancesof the case the tribunal was right in holding that thedistance between the land sold by the assessee situatedat Morai and the end of the Avadi Municipality isbeyond 8 Kms by ignoring the evidences collected by thedepartment through the inspector of the department asper which the distance is 5.5 Kms as measured persection 11 of the General Clauses Act and therebyholding that the gain on sale of the land cannot beassessed to capital gains. (ii) Whether on the facts and in the circumstancesof the case the tribunal was right in holding that landis agricultural land merely because the Tribunal hadconcluded that the land was situated beyond 8 Kms fromthe end of the Municipality without enquiring into theuse of the land and thereby holding that the gain onsale of the land cannot be assessed to capital gains. (iii) Whether on the facts and in thecircumstances of the case the tribunal was right inholding that since the straight line measurement wasmandated as per the amendment to section 2(14)(iii)(b)as on 1.4.2014, the same cannot be applied to theearlier assessment without appreciating that theamendment was clarificatory and is applicable forearlier assessment years.” (ii) Whether on the facts and in the circumstancesof the case the tribunal was right in holding that landis agricultural land merely because the Tribunal hadconcluded that the land was situated beyond 8 Kms fromthe end of the Municipality without enquiring into theuse of the land and thereby holding that the gain onsale of the land cannot be assessed to capital gains. (iii) Whether on the facts and in thecircumstances of the case the tribunal was right inholding that since the straight line measurement wasmandated as per the amendment to section 2(14)(iii)(b)as on 1.4.2014, the same cannot be applied to theearlier assessment without appreciating that theamendment was clarificatory and is applicable forearlier assessment years.” 10.Praying for an answer on the substantial questions oflaw, in favour of the appellant, Mr.S.Rajesh, learned counselappearing for the revenue assailed the correctness of the orderof the Income-Tax Appellate Tribunal, “A” Bench, Chennai, dated9/10/2015, on the grounds, inter alia that the land is situatedat a distance of 5.5 Kms, from the end of Avadi municipality, asper the report of the departmental inspector, who had made afield visit and therefore, the land cannot be treated as anagricultural land, as per section 2(14)(iii) of the Income TaxAct. 11.He further submitted that as the Income Tax Act, 1961,does not define, as to how, the land has to be measured and insuch circumstances, as per Section 11 of the General ClausesAct, 1897, measurement of any distance, for the purpose of anyCentral Act or Regulation, made after the commencement of theGeneral Clauses Act, 1897, that distance shall, unless adifferent intention appears, should be measured in a straightline on a horizontal plane and therefore, submitted that theaerial distances should be taken. He further submitted that straight line measurement is mandated, as per the amendment toSection 2(14)(iii)(b) of the Income Tax Act, from 1/4/2014,without appreciating the fact that the amendment is onlyclarificatory in nature, the Tribunal erred in accepting thecase of the respondent. According to him, the amendment isapplicable to the earlier year also. 12.Mr.S.Rajesh, learned counsel for the appellant furthersubmitted that if the distance is measured between the end ofAvadi Municipality and the assessee’s land, in straight line, onhorizontal plane, the distance is less than 8 Kms and therefore,the land cannot be treated as an agricultural land. He alsosubmitted that measuring the distance via CRPF Road, ispermissible and that the same cannot be rejected, on the groundthat it is not a public road. 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 the assessee, is situated more than the distance of 8 Kmsfrom Avadi Municipality and as to whether, that the same fallswithin the definition, “agricultural land”, it is necessary tohave a cursory look at few provisions, referred to, by theappellant. Section 2(14)(iii) of the Income Tax Act, reads asfollows:“(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 areacommittee, 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.- 14.On the issue, as to whether, the agricultural land soldby the assessee, is situated more than the distance of 8 Kmsfrom Avadi Municipality and as to whether, that the same fallswithin the definition, “agricultural land”, it is necessary tohave a cursory look at few provisions, referred to, by theappellant. Section 2(14)(iii) of the Income Tax Act, reads asfollows:“(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 areacommittee, 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.”local 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 the case on hand, the assessing officer sent his owndepartmental inspector to measure the distance from AvadiMunicipality, to the plot and found that the distance is 5.5 Kmsand on that basis, treated the sale of the agricultural land, aslong time capital gains, and added an amount of Rs.3,06,74,615/-to the total income of the assessee, and imposed penalty underSection 271(1)(c) of the Income-Tax Act. While assailing thecorrectness of the order, the respondent filed an appeal inI.T.A.No.432/13-14, before the Commissioner of Income-Tax(Appeals) and contended that the assessing officer has erred inselecting a private road, to measure the distance to the land,from the nearest municipality and the assessing officer oughtnot to have disagreed with the certificates issued by thecompetent authorities, who have considered the access to theland, through public road and the same alone should beconsidered for determining the distance. 17.On the above aspect, after considering the certificatesof the Village Administrative Officer, Deputy Surveyor, AmbatturTaluk and General Manager, Metropolitan Transport Corporation(Chennai) Ltd's, certifying that the land is situated more than8 Kms, from Avadi Municipality, the appellate authority, atParagraph 7 of the order in I.T.A.No.432/13-14, dated28/11/2014, categorically held that the land in question, is anagricultural land situated, at a distance of more than 8 Kms,from Avadi Municipality. The appellate authority has furtherheld that from the letter No.5729/2013/A1, dated 3/8/2013, ofMrs.M.Bhushna Devi, Tahsildar, Ambattur, it could be seen thatindependent enquiries have been made, regarding the distance ofthe land in question, from the nearest Municipality (Avadi),result of which, clearly shows that the land in question is notsituated, within a distance of 8 Kms from the nearestMunicipality. The appellate authority has also held that noreason has been assigned by the Assessing Officer, in theassessment order, for not accepting the report of the Tahsildar. 18.Adverting to the report of the Departmental Inspectorthat the land in question is situated at a distance of 5.5 Kmsand while observing that the route used by the Inspector toreach the land is a private road, laid and maintained by CRPF,the appellate authority held that public have no free access toCRPF road, as the said road is not under the control of thelocal administration. Thus, holding that the subject land is anagricultural land, situated at a distance of more than 8 Kmsfrom the nearest municipality and that the profit on sale ofsuch land is not liable to tax, the appellate authority, videorder in I.T.A.No.432/13-14, dated 28/11/2014, deleted theaddition on account of capital gains, in the hands of theassessee, on account of transfer of the said land. 19.Being aggrieved by the aforesaid order, the DeputyCommissioner of Income-Tax, Chennai, has filed an appeal inI.T.A.No.410/Mds/2015 before the Income Tax Appellate Tribunal,“A” Bench, Chennai. On the aspect of measurement, afteradverting to the rival submissions, vide order, dated 9/10/2015,the Tribunal, at Paragraphs 5 to 7, has answered the challenge,as hereunder: “5. We have heard both the sides and perused thematerial on record. The main argument of theDepartment is that the land sold by the assessee is acapital asset, as it is situated within the distanceof 8 kms. from the nearest Municipality limit (Avadi).For arriving at a conclusion, the AO disputed thecertificates issued by the Deputy Surveyor AmbatturTaluk and General Manager, Metropolitan TransportCorporation (Chennai) Ltd., as per which the land wassituated at a distance of more than 8 kms. from AvadiMunicipality. The AO has also disputed the lease deedbetween the assessee, other family members and M/s.Vel Horticultures leasing the land for agriculturaloperations, which had been accepted in the scrutinyassessment and as a source of investment made by theassessee. The AO has also made independent enquiriesfrom the Tahsildar, Ambattur with regard to thedistance of the land in question. The result showedthat the land in question is not situated within adistance of 8 kms. From the nearest Municipality. TheAO was not ready to accept this certificate and he hasnot given any reason for the same. However, theInspector reported that the land in question wassituated at a distance of 5.5. kms. from the nearestAvadi Municipality. It was the contention of the ld. AR that to reach the land, there is a private road,which is laid and maintained by the CRPF, in whichpublic has no access. Thus, the contention of the DRthat the nearest route is to be considered to accessthe distance of the property from the nearestMunicipality limit is not acceptable. It is to benoted that the distance to be measured from theaccessible road and not from the road made under thecontrol of the CRPF. 6. In our opinion, Tahsildar is the competentauthority to issue certificate, which is to beaccepted. Further, the distance of agricultural landhas to be measured in terms of the approach by roadand not by a straight-line distance on horizontalplane or as per crow’s flight as held by the Punjab &Haryana High Court in the case of CIT vs. Satinder PalSingh (229 CTR 82). In view of this, the AO has nomaterial to prove the contention of the assessee thatthe distance of the land as on date of sale has to beheld more than 8 kms. From the nearest Municipality,is not correct. Therefore, the assessee has to proveone essential condition that the land owned by him orher is situated at a distance more than 8 kms. fromthe nearest Municipality, which was proved by theassessee. To sum up, in our opinion, the distance hasto be measured in terms of the approach by road andnot by a straight-line distance on horizontal plane oras per crow’s flight. Further, the assessee has alsoproved that the land was situated at a distance morethan 8 kms. from the nearest Avadi Municipality. 7. Measurement of aerially distance came intoforce with effect from 1.4.2014 under sec. 2(14)(iii)(b) of the Act and it cannot be applied to the presentassessment year 2009-10. Regarding carrying out ofagricultural activities in the said land, there is anevidence in the form of lease deed between theassessee (and other family members) and M/s. VelHorticultures leasing the land for agriculturaloperations, the leasing company claimed agriculturalincome which had been accepted in the scrutinyassessment as noted by the CIT(Appeals) in his order,which was not controverted by the ld. DR. As such itcannot be denied that the land in question was anagricultural land situated at a distance more than 8kms., from the nearest Municipality (Avadi). Similarview has been followed by the Tribunal in ITANo.2716/Mds/2014 dated 22.6.2014 in the case of KRN Prabhakaran (HUF). Therefore, there is no merit in theargument of the ld. DR and we are inclined to dismissthe appeals of the Revenue.” 20.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. 21.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: 21.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 provisionshows that ‘capital asset’ would not includeany agricultural land which is not situatedin any area within such distance as may bespecified in this behalf by a notification inthe official gazette which may be issued bythe Central Government. The maximum distanceprescribed by Section 2(14)(iii)(b) of theAct which may be incorporated in thenotification could not be more than 8 Kms.from the local limits of municipal committeeor cantonment board etc. The notification hasto take into account the extent of, and scopefor urbanization of that area and otherrelevant considerations. The reckoning ofurbanization as a factor for prescribing thedistance is of significant which would yieldto the principle of measuring distance interms of approach road rather than bystraight line on horizontal plane. Ifprinciple of measurement of distance isconsidered straight line distance onhorizontal plane or as per crow’s flight thenit would have no relationship with thestatutory requirement of keeping in view theextent of urbanization. Such a course wouldbe illusory. It is in pursuance of theaforesaidprovisionthatnotification No.9447, dated 6.1.1994 has been issued bythe Central Government. In respect of theState of Punjab, at item No.18 the subdivision Khanna has been listed at serialNo.19. It has inter-alia been specified thatarea upto 2 kms., from the municipal limitsin all directions has to be regarded otherthan agricultural land. Once the statutoryguidance of taking into account the extentand scope of urbanization of the area has tobe reckoned while issuing any suchnotification then it would be incongruous tothe argument of the Revenue that the distanceof land should be measured by the method ofstraight line on horizontal plane or as percrow’s flight because any measurement bycrow’s flight is bound to ignore theurbanization which has taken place. Moreover,the judgement of the Mumbai Bench appears tohave attained finality. Keeping in view theprinciple of consistency as laid down inRadha Soawami Satsang v. CIT, (1992)193 ITR321, we are of the view that the opinionexpressed by the Tribunal does not sufferfromanylegalinfirmitywarrantinginterference of this Court.” 22.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. 23.In Commissioner of Income Tax v. Nitish RameshchandraChordia reported in (2015) 57 Taxman 394 (Bom.), the BombayHigh Court held that "The distance between municipal limitsand assessed property/asset is to bemeasured having regard to the shortest roaddistance and not as per the crow flies i.e.straight line distance as canvassed by theRevenue." 24.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 in https://hcservices.ecourts.gov.in/hcservices/ 23.In Commissioner of Income Tax v. Nitish RameshchandraChordia reported in (2015) 57 Taxman 394 (Bom.), the BombayHigh Court held that "The distance between municipal limitsand assessed property/asset is to bemeasured having regard to the shortest roaddistance and not as per the crow flies i.e.straight line distance as canvassed by theRevenue." 24.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 in https://hcservices.ecourts.gov.in/hcservices/ question 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. 25.While considering the rival contentions, the questionto be decided in this appeal is, as to how, the distance betweenan agricultural land and the nearest municipality, should bemeasured whether it has to be measured, by the approach road, orby straight line distance on horizontal plane? When a personcannot approach the land by the distance on horizontal plane orstraight line, should the measurement be taken, by approach road? 26.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". 27.In a given case, the agricultural land is located in avillage X and if there is a lake, measuring 4 Kms x 6 Kms, bylength and breadth and if on the banks of the lake, the outerlimits of the nearest municipality starts, one has to visualisedistance which a person has to travel, through an approach road,generally used by public. It cannot be contended that thedistance between the land and the nearest municipality has to bemeasured in straight line or horizontal plane or by any crowflight/aerial distance. 28.For illustration, A person may have a shop in FortRoad, on the eastern side. If he has to got to a shop or officeor any place located in NSC Bose Road, he has to go round theHigh Court and reach the place of destination. He has no rightto use the High Court premises, which is not a publicpathway/road and therefore, the distance has to be measured,only by taking the approach road, and not through a place, whichis restricted to public. 29.While carving the section, legislature has also made itclear that for the purpose of any Act, that distance, shallunless a different, intention appears, be measured in a straightline or a horizontal plane. Thus while enacting the section,legislature has also foreseen that measurement of distance,would be on the context of the purpose to be achieved in anyenactment and it is not a straight jacket formula that in allcases, under all circumstances, notwithstanding the purpose for https://hcservices.ecourts.gov.in/hcservices/ which an act is made, measurement of the distance should be madeon horizontal plane. 29.While carving the section, legislature has also made itclear that for the purpose of any Act, that distance, shallunless a different, intention appears, be measured in a straightline or a horizontal plane. Thus while enacting the section,legislature has also foreseen that measurement of distance,would be on the context of the purpose to be achieved in anyenactment and it is not a straight jacket formula that in allcases, under all circumstances, notwithstanding the purpose for https://hcservices.ecourts.gov.in/hcservices/ which an act is made, measurement of the distance should be madeon horizontal plane. 30.Reverting to the case on hand, and in the light of thedecisions of the Courts, considered in the foregoing paragraphsand the question called upon to decide, as to whether, both thefact finding authorities, are right in accepting the reports ofthe Tahsildar and on the aspect, as to how, the distance betweenthe agricultural land and nearest Municipality has to bemeasured, vis-a-vis, the report of the departmental inspector,we are of the view that the decision of the fact findingauthorities that there cannot be any justifiable reason toreject the certificates of the Village Administrative Officer,Deputy Surveyor, Ambattur Taluk and General Manager,Metropolitan Transport Corporation (Chennai) Ltd's, is correct.Our view is also fortified by the decision of the Punjab andHaryana High Court in Commissioner of Income-Tax v. Lal Singhreported in 325 ITR 588 (P & H). 31.On the facts and circumstances of this case, we alsowish to state that in the matter giving weightage to theevidence, report of the departmental inspection vis-a-viscertificates of the Village Administrative Officer, DeputySurveyor, Ambattur Taluk and General Manager, MetropolitanTransport Corporation (Chennai) Ltd's, for the purpose ofSection 2(14)(iii)(b) of the Income Tax Act, certificates of theRevenue Authorities and Public Transport Corporation Ltd., onthe measurement of distance, by the approach road, should begiven weightage and accepted, unless the contrary is proved. 32.Therefore, it is not open to the revenue to contendthat as per Section 11 of the General Clauses Act, 1857, thedistance between the agricultural land and the nearestmunicipality, has to be measured, only in a straight line or ahorizontal plane. In between agricultural land and the nearestmunicipality, if there is a mountain, or lake or private landsor government properties, and in such other cases, where thepublic has no access to reach the municipality, the distance hasto be measured only through the access road and not in astraight line or horizontal plane. 33.There are no valid grounds to reverse the abovesaidorders, stated supra. Question of law raised is answered againstthe revenue and in favour of the assessee. 34.In the result, the Tax Case Appeal is dismissed. Nocosts.-s/d- Assistant Registrar True Copy Sub-Assistant Registrar To1.The Income Tax Appellate Tribunal,“A” Bench, Chennai-342.The Commissioner of Incoem tax(A)-19No.108 Mahatma Gandhi RoadChennai-600 034 3.The Assistant Commissioner of Income taxCentral III(3)NO.108 Mahatma Gandhi Road,Chennai-34+1 cc to Mr.Rajesh Advocate sr 44001 T.C.A.No.491 of 2016aa02/09/2016 https://hcservices.ecourts.gov.in/hcservices/