The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that Tahasildar is not a competent person to decide the distance between the municipal limit and disputed land for the purpose of computing capital gain under the provisions of the Income Tax Act, 1961.
the assessee, a Doctor by profession and working as Professor at Annamalai University, admitted income from salary and profession and further, his income from real estate business and interest income received from his bank accounts. While computing the capital gains under the second category of income, the Assessing Officer noted that the assessee converted land that is stock-in-trade and sold the plots. According to the A.O, the land sold by the assessee attracts the provisions of the capital gains hence capital gains have to be taxed. So far as the distance is concerned, the A.O has deputed the Inspector to ascertain the distance from the municipality limit and accordingly, the A.O has inspected and submitted a report that as per the odometer of the car showed the distance as 6.7 K.M and even according to the Google map also the distance is 6.7 K.M.
The assessee contended that the land which is converted by the assessee is 8.5 K.M away from the Chidambaram Municipality and therefore, he does not come to the ambit of s. 45(2) of the Act. He further submitted that the land is agricultural land. The assessee has not proved any evidence that the land is agricultural land.
The Tribunal bench comprising Accountant Member G Manjunatha and Judicial Member V Durga Rao observed that the Assessing Officer found the claim of the assessee incorrect by considering the report given by the Inspector.
“In so far as the certificate issued by the Tehsildar is concerned which is at page No.1A of the paper book, it does not show that from the Chidambaram how it comes to 8.5 K.M and apart from that in our view the Tehsildar is not a competent person to decide the distance. Therefore, we are of the opinion that the certificate issued by the Tehsildar is not a material to be considered the distance. In view of the above, we are of the opinion that the A.O has rightly taxed the capital gains in the hands of the assessee and the same is confirmed by the Ld. CIT(A). We find no infirmity to interfere with the order passed by the Ld. CIT(A). Hence, the appeal filed by the assessee is dismissed,” the Tribunal said.
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