https://www.taxtmi.com/caselaws?id=775149 The ITAT Ahmedabad dismissed the Revenue's appeal regarding capital gains taxation on land transactions. The assessee purchased eight pieces of agricultural land within a short span and sold them shortly thereafter. The AO treated the land as non-agricultural for industrial purposes, resulting in short-term capital gains. However, CIT(A) held the land remained agricultural at the time of sale, exempting it from capital gains tax. The ITAT upheld CIT(A)'s decision, noting that land records confirmed agricultural status at purchase and sale. The sale deeds contained conditional clauses under section 63(AA) requiring purchasers to convert land to non-agricultural use within 90 days, with automatic cancellation upon failure. Since conversion responsibility lay with purchasers after sale completion, the assessee sold agricultural land that was subsequently converted by buyers. This subsequent conversion did not retroactively change the agricultural nature of land sold by the assessee, maintaining the capital gains exemption. en-us Thu, 29 May 2025 00:00:00 +0530 Fri, 18 Jul 2025 15:43:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=775149 The ITAT Ahmedabad dismissed the Revenue's appeal regarding capital gains taxation on land transactions. The assessee purchased eight pieces of agricultural land within a short span and sold them shortly thereafter. The AO treated the land as non-agricultural for industrial purposes, resulting in short-term capital gains. However, CIT(A) held the land remained agricultural at the time of sale, exempting it from capital gains tax. The ITAT upheld CIT(A)'s decision, noting that land records confirmed agricultural status at purchase and sale. The sale deeds contained conditional clauses under section 63(AA) requiring purchasers to convert land to non-agricultural use within 90 days, with automatic cancellation upon failure. Since conversion responsibility lay with purchasers after sale completion, the assessee sold agricultural land that was subsequently converted by buyers. This subsequent conversion did not retroactively change the agricultural nature of land sold by the assessee, maintaining the capital gains exemption. Case-Laws Income Tax Thu, 29 May 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=775149