Agricultural land sale outside capital gains tax where facts establish the land was agricultural in nature.

Sale proceeds from land were treated as outside capital gains tax because the land was found, on the facts, to be agricultural land. On that basis, the transfer did not attract section 45 of the Income-tax Act, 1961, and the exclusion of the amount from total income was considered lawful and proper.

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Issues: Whether the gain arising from sale of the assessee's land was chargeable to capital gains tax under section 45 of the Income-tax Act, 1961, or was exempt because the land was agricultural land.

Analysis: The land sold by the assessee was found to be agricultural land on the facts and for the reasons adopted from the connected taxation cases. Once the land was held to be agricultural land, the transfer did not attract capital gains tax under the statutory provision invoked in the reference.

Conclusion: The exclusion of the sum of Rs. 33,750 from the assessee's total income was held to be legal and proper, and the question was answered in favour of the assessee and against the Revenue.

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