2013 (7) TMI 165 - AT - Income Tax

Tribunal remits exemption claim for agricultural lands, confirms addition under section 50C(1)

The Tribunal remitted the issue of the exemption claim for capital gains on agricultural lands within municipal limits back to the Assessing Officer for ... Agricultural land - whether assessee provide any evidence to show that the land in question was situated beyond 8 kms of the municipal limits - Held that:- CIT(A) while confirming the addition made by the AO noted that the assessee did not provide any evidence to show that the land in question was situated beyond 8 kms of the municipal limits. Even now the assessee did not establish that the land in question was situated beyond 8 kms of the municipal limits. Therefore, remit the issue back to the file of the AO with a direction to decide the issue following the said decision of Smt. Gousia Begum and Others (2011 (11) TMI 475 - ITAT HYDERABAD) wherein held assessee submitted that cultivation is carried on said land, offered inspection of land, produced certificate issued by the VRO Certificate same has to be relied upon and it is not possible to reject the same without examining the deponent. Thus, agricultural income declared by the assessee is to be accepted as agricultural income only - in favour of assessee statistical purposes. Addition on account of difference in sale consideration u/s 50C(1) - Held that:- Sale consideration as per the sale deed with respect to the house property in question is Rs. 17,50,000/- whereas the value arrived at by the Jt. Sub-Registrar is Rs. 17,78,000/-. Since the value arrived at by the Jt. Sub-Registrar is authenticated, the addition of Rs. 14,000/- on account of assessee's share made on account of difference in sale consideration is made by the AO and CIT(A) is hereby confirmed. Against assessee. Issues:1. Exemption claim for capital gains on the sale of agricultural lands within municipal limits.2. Addition on account of difference in sale consideration under section 50C(1) of the Act.Issue 1: Exemption claim for capital gains on the sale of agricultural lands within municipal limitsThe appellant sold agricultural lands at Chengicherala Village and Narsingi Village, claiming exemption on the capital gains. However, the Assessing Officer (AO) disagreed, adding back the amount of Rs. 72,04,540/- and Rs. 1,04,950/- for the respective sales. The CIT(A) upheld the AO's decision, stating that the lands were within 8 kms of the municipal limits, making them ineligible for agricultural land exemption under section 2(14) of the Income-tax Act. The appellant contended that the lands were not capital assets and challenged the additions. The Tribunal referred to a similar case and held that the lands, despite being used for agricultural purposes, fell within the definition of 'capital asset' due to their location within the urban limits. The Tribunal directed the AO to verify if the lands were situated beyond 8 kms of the municipal limits, instructing the appellant to provide evidence supporting this claim.Issue 2: Addition on account of difference in sale consideration under section 50C(1) of the ActThe CIT(A) confirmed the addition of Rs. 14,000/- by the AO due to a variance in the sale consideration as per the sale deed and the value determined by the Jt. Sub-Registrar under section 50C(1) of the Act. The Tribunal upheld this decision, citing the authenticated value determined by the Jt. Sub-Registrar. As a result, the addition of Rs. 14,000/- on account of the difference in sale consideration was confirmed. The appeal of the assessee was partly allowed for statistical purposes.In conclusion, the Tribunal addressed the appellant's contentions regarding the exemption claim for capital gains on agricultural lands within municipal limits and the addition related to differences in sale consideration. The Tribunal remitted the issue of the exemption claim back to the AO for further verification based on the evidence to be provided by the appellant. The addition on account of the difference in sale consideration was confirmed, and the appeal was partly allowed for statistical purposes.