TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Supreme Court clarifies tax treatment of agricultural land sales</h1> <h3>Union of India and Others Versus S. Muthyam Reddy</h3> Union of India and Others Versus S. Muthyam Reddy - [1999] 240 ITR 341 (SC) Issues Involved:Interpretation of sections 2(1A) and 2(14) of the Income-tax Act, 1961 regarding agricultural income and capital gains from land used for agricultural purposes.Analysis:The Supreme Court heard an appeal against a High Court order regarding the taxation of capital gains from the sale of land used for agricultural purposes. The High Court had held that such gains would be considered 'agricultural income' and could not be taxed by Parliament. The Court considered various arguments challenging the High Court order and noted conflicting decisions on the matter. An amicus curiae was appointed to assist in the case.The Court highlighted that the Finance Act, 1989, introduced an Explanation to section 2(1A) with retrospective effect, clarifying that income derived from the sale of certain agricultural lands cannot be treated as 'agricultural income.' This clarification contradicted the basis of the High Court's decision, leading the Supreme Court to set aside the order.The amicus curiae emphasized that the artificial definition introduced into the Act regarding agricultural income must be adhered to. He also discussed the constitutional provisions related to agricultural income, supporting the position that the income from the sale of agricultural lands should not be considered as agricultural income.The appellants' counsel argued that the divergence of opinions among High Courts regarding the interpretation of section 2(14)(iii) led to the introduction of the Explanation in the Finance Act, 1989. This Explanation aimed to resolve conflicts and align with the views of certain High Courts, thereby validating the provision.The Supreme Court, noting the absence of a challenge to the validity of the Explanation introduced by the Finance Act, 1989, refrained from examining its correctness. The Court concluded by allowing the appeal, setting aside the High Court's order, and not awarding any costs in the matter.
TaxTMI 