Appeal allowed: Long term capital gain on sale of agricultural land deleted. Tribunal cites evidence supporting agricultural nature. The appeal was allowed, and the addition of long term capital gain on the sale of rural agricultural land was directed to be deleted. The Tribunal found ...
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Appeal allowed: Long term capital gain on sale of agricultural land deleted. Tribunal cites evidence supporting agricultural nature.
The appeal was allowed, and the addition of long term capital gain on the sale of rural agricultural land was directed to be deleted. The Tribunal found evidence from sale and revenue records supporting the land's agricultural nature, contrary to the assessing officer's view. Referring to a Delhi High Court case, the Tribunal emphasized the agricultural activities on the land, concluding it qualified as agricultural land. The misapplication of relevant sections was noted, leading to the deletion of the long term capital gain addition.
Issues involved: Appeal against order of ld CIT(A) regarding addition of long term capital gain on sale of rural agricultural land u/s 2(14) of the Income Tax Act, differentiation between rural and urban agricultural land u/s 2(14) and 54B of the Act.
Summary: 1. The appeal was filed against the order of ld CIT(A) for the Assessment Year 2014-15. The main contention was the addition of long term capital gain on the sale of rural agricultural land u/s 2(14) of the Act.
2. The assessee argued that the land sold was rural agricultural land supported by revenue records, and the ld CIT(A) erred in doubting the agricultural activity on the land. The differentiation between rural and urban agricultural land was also highlighted.
3. The AO's assessment considered the land as a capital asset attracting long term capital gain. However, the counsel presented evidence from the sale deed and revenue records proving agricultural activity on the land, contradicting the ld CIT(A)'s doubts.
4. The Sr. DR supported the AO's decision, stating that no agricultural activity was performed on the land. The land's location on a national highway was cited as a reason for it being a capital asset.
5. The Tribunal noted details from the purchase and sale deeds, confirming the land as agricultural. The revenue records showed agricultural activities in the preceding years, supporting the assessee's claim.
6. Referring to a Delhi High Court case, the Tribunal concluded that the land qualified as agricultural land based on the agricultural activities conducted there. The misapplication of section 54B of the Act was highlighted, and the addition of long term capital gain was directed to be deleted.
7. The appeal was allowed, and the addition on account of long term capital gain was ordered to be deleted.
Judgment: The appeal was allowed, and the addition on account of long term capital gain was directed to be deleted.
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