| The Tax Publishers2020 TaxPub(DT) 3929 (Mad-HC) : (2021) 276 TAXMAN 0224 INCOME TAX ACT, 1961
Section 2(14) Section 45
Where Tribunal found that agricultural activities were carried out in the land, there were standing banana crops as well as coconut trees etc., and from the revenue records, Tribunal held that lands, which was sold were indeed agricultural lands, furthermore, Village Administrative Officer had certified prior to execution of sale deed that assessee and their family members were using the land for agricultural purposes, therefore, Tribunal had correctly concluded in favour of assessee and appeal of Revenue was dismissed.
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Capital gains - Gain arising on sale of land - Nature of land sold - Capital asset or agricultural land
Assessee along with their family members had sold land. AO stated that they have received information that assessee along with their co-owners had obtained approval from the Joint Director and Country Planning for conversion of the land for nonagricultural purpose. AO opined that on the date of sale, land was no longer agricultural land and not eligible for claiming exemption for capitalized tax. Assessee submitted a detailed reply supported by the relevant documents. AO, however, did not accept the stand taken by assessee and completed the assessment under section 143(3) read with section 147 and held that on the date of sale, lands sold were not agricultural lands, thereby falling within division of 'capital assets' under section 2(14) and therefore, sale consideration received by assessee was liable for capital gains tax under section 2(14) read with section 45. Held: When correctness of the order of CIT(A) was tested before Tribunal, once again, Tribunal made a factual exercise and found that agricultural activities were carried out in the land, there were standing banana crops as well as coconut trees, etc., Furthermore, from the revenue records, Tribunal had recorded a finding of fact that the lands, which was sold were indeed agricultural lands. It was relevant to note that lands, which were subject matter of consideration were situated 40 Kms and 30 Kms away from Municipality. Furthermore, Village Administrative Officer had certified prior to execution of sale deed that assessee and their family members were using the land for agricultural purposes. Statements of neighbouring land owners were also available before AO. Therefore, Tribunal had correctly concluded in favour of the assessee.
Applied:Smt. Sarifabibi Mohmed Ibrahim ((1993) 70 Taxman 301 (SC) : 1993 TaxPub(DT) 1509 (SC))Followed:CIT, Chennai v. A. Lalichan (T.C.A. No. 504 of 2018, dated 11-10-2018) : 2018 TaxPub(DT) 7813 (Mad-HC)Relied:Ranchhodbhai Bhaijibhai Patel v. CIT reported in (1971) 81 ITR 446 (Guj.) : 1971 TaxPub(DT) 0218 (Guj-HC) Mahaveer Enterprises v. Union of India reported in (1997) 95 Taxman 220 (Raj.) : 2000 TaxPub(DT) 0045 (Raj-HC) Sri Ranganatha Enterprises v. CIT (1998) 100 Taxman 552 (Karnataka) : 1998 TaxPub(DT) 1146 (Karn-HC).
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2009-10
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