AO Can’t Reject Valid Distance Certificate from Nayab Tehsildar | ITAT

Case Details: Balbir Singh Saini vs. Income Tax Officer - [2025] 176 taxmann.com 467 (Delhi-Trib.)

Judiciary and Counsel Details

• S. Rifaur Rahman, Accountant Member & Vimal Kumar, Judicial Member
• Jai Bhagwan Saini for the Appellant.
• Om Prakash, Sr. DR for the Respondent.

Facts of the Case

The assessee, an individual, along with his relatives, sold their land to a company for consideration. Out of the sale consideration, the assessee had a 1/3rd share. During the assessment proceedings, the assessee submitted that the land sold was not a capital asset, as it is situated outside 8 km from the nearest municipal limit. Unsatisfied, the Assessing Officer (AO) treated the agricultural land as a capital asset, and capital gains were determined accordingly.

On appeal, CIT(A) upheld the additions made by AO. Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Delhi Tribunal held that the assessee had filed a certificate from the Nayab Tehsildar, Municipal Corporation, Gurgaon, with a certificate of distance, as per which the land was situated 8 km outside the last municipality of the Gurgaon region. It was brought to the notice of the Tribunal that the AO accepted the same certificate of distance, and the assessment was completed in the case of the co-owner of the property, Shri Jitender Saini.

The Tribunal held that there cannot be two reasons to evaluate the same set of facts of the same transaction in the hands of two assessees. The certificate of distance issued by the Nayab Tehsildar, Municipal Corporation, Gurgaon, was submitted before the AO for the reason that it is exempt from the levy of income tax. In the case of Shri Jitender Saini, the same certificate was accepted by the AO while processing the reassessment proceedings in his case.

Therefore, the Tribunal held that the subject agricultural land was not a capital asset, as it was situated more than 8 km away from the last municipal limit of Gurgaon city, Haryana, at the time of its sale.

List of Cases Reviewed

• Ashish Gupta v. ITO [2024] 163 taxmann.com 739 (Delhi – Trib.) [Para 8] – followed

List of Cases Referred to

• Ashish Gupta v. ITO [2024] 163 taxmann.com 739 (Delhi – Trib.) (para 5)
• Amar Singh v. ITO [IT Appeal No. 115 (Delhi) of 2019, dated 25-4-2023] (para 5)
• DCIT v. Khusahl Infraproject Industries India Ltd. [IT Appeal No. 2802 (Delhi) of 2015, dated 30-12-2019] (para 5)
• Buniyad Developers (P.) Ltd. v. ITO [IT Appeal No. 4201 (Delhi) of 2014, dated 10-3-2015] (para 5).