"Gair mumkin" land qualifies for agricultural exemption under section 10(37) - Tribunal upholds decision.

The Tribunal affirmed the CIT(A)'s decision, holding that the "gair mumkin" land qualified for exemption under section 10(37) as agricultural land, based on the presence of cultivation facilities and enhanced compensation received post-01.04.2004. The Revenue's appeal was dismissed, with the order issued on 31st January 2018.

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Issues:
1. Deletion of addition of Long Term Capital Gains under section 10(37)
2. Classification of "gair mumkin" land as agricultural land

Analysis:

Issue 1: Deletion of addition of Long Term Capital Gains under section 10(37)

The appellant contested the deletion of an addition of Rs. 1,61,63,406 made by the AO under Long Term Capital Gains by disallowing exemption claimed under section 10(37) by the assessee. The AO denied the exemption on the grounds that the "gair mumkin" land could not be used for agricultural or housing purposes and that the original compensation was received before 01.04.2004, rendering section 10(37) inapplicable. The CIT(A), relying on a certificate issued by the Patwari, classified the land as agricultural due to the presence of wells, water channels, and cultivation nearby. It was held that the enhanced compensation received after 01.04.2004 qualified for the exemption under section 10(37). The Tribunal upheld the CIT(A)'s decision, citing a Co-ordinate Bench ruling that supported the applicability of section 10(37) to "gair mumkin" lands certified as agricultural. The appeal of the Revenue was dismissed, affirming the CIT(A)'s order.

Issue 2: Classification of "gair mumkin" land as agricultural land

The Revenue argued that the "gair mumkin" land was unfit for exemption under section 10(37) due to its classification as such by the Revenue authorities. However, the assessee contended that the presence of irrigation facilities and cultivation activities rendered the land agricultural. The CIT(A) found in favor of the assessee, noting that the land was contiguous to agricultural land with necessary facilities, making it eligible for the section 10(37) benefit. The Tribunal, in line with a previous decision, upheld the CIT(A)'s reasoning and dismissed the Revenue's appeal.

In conclusion, the Tribunal affirmed the CIT(A)'s decision, emphasizing the eligibility of the "gair mumkin" land for exemption under section 10(37) based on its classification as agricultural and the enhanced compensation received after 01.04.2004. The appeal of the Revenue was dismissed, and the order was pronounced on 31st January 2018.

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