TaxTMI 
TaxTMI 
1981 (7) TMI 129
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....le price of Rs. 39,600 and worked out the capital gain at Rs. 12,090 taking the value of the property as on 1st Jan, 1954 at Rs. 10,000. He also initiated the penalty proceedings. Against charging of capital gain tax on the agricultural land, the assessee went up in appeal, but failed. Penalty was levied on the assessee u/s 271 (1)(c). Against the penalty order, the assessee preferred an appeal to the AAC. Before the AAC, the assessee submitted written arguments dt 28th Feb, 1977. In the written submissions, the assessee stated that agricultural land having been sold for Rs. 21,100 was not a capital assets u/s 2(14) of the Act,1961 and, therefore, no capital gains tax was chargeable. It was argued that the agricultural land did not become c....
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....charged on the sale of agricultural land as that was not the capital asset u/s 2(14). It was also stated that the same fact was conceded by the ITO vide his remand report which was submitted to the AAC during the penalty appeal. The AAC rejected the case of the assessee under the impugned order dt. 5th April, 1980 on the ground that the evidence which was shown during the penalty proceedings was not shown at the assessment stage and therefore, there was no mistake apparent from record either in the order of the ITO or the AAC. 2. This is how the assessee has come up in appeal to the Tribunal against the order dt.5th Nov, 1975 passed u/s 154 of the IT Act,1961. Shri Zalamsingh, the ld. Rep for the assessee submits that u/s 45 of the IT Act,....
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....holly excluded from the definition of capital asset. From the asst. yr. 1970-71, a new sub-cl. (iii) of s. 2 (14) was substituted bringing within the term "Capital asset", agricultural land within sub-cl. (a) or (b) of s 2(14)(iii). Sub-cls. (a)and(b) of s. 2(14)(iii) describe certain circumstances making agricultural land as a capital asset. Capital gain tax on sale of agricultural land, no doubt, could have been levied by the ITO for the year under appeal if he was satisfied that the agricultural land belonging to the assessee became a capital asset under sub-cl.(a)or (b). If the agricultural land does not fall within the description of sub-cl (a)or (b) of s u/s 2(14)(iii), then it will continue to be agricultural land and it will not bec....
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....Gangapur and Sahada. Whereas the former was said to be a Municipality, the latter was within the Panchayat area. It was stated that both the places had the population much less than 10,000. The AAC, vide his letter 2nd March, 1977, requested the ITO to send an immediate report on the facts as stated by the assessee in the written submission dt. 20th August, 1977. From the order of the AAC dt. 17th Feb, 1978 passed in the penalty appeal, it clearly appears that the ITO sent his report stating that on the facts of the case, no capital gains tax is chargeable from the assessee. It shown that the ITO was satisfied that the agricultural land of the assessee did not become a capital asset under the amended provisions of s. 2(14). The penalty was,....
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.... in view of sub-cl (a) or (b) of s.2(14)(iii), the onus squarely lies on the ITO to establish that the agricultural land of the assessee became capital asset under the amended provisions of s. 2(14) and, therefore, that was liable to capital gain tax. From the assessment order of the ITO, it is clear that he made no investigation to satisfy himself whether the agricultural land became a capital asset u/sub-cl (a)or (b)of s.2(14)(iii).he can acquire jurisdiction to charge capital gains tax only when there was a transfer of capital asset. Any order passed against the facts and law as they stand on the date of assessment, can be rectified u/s 154, because such orders suffers from a mistake which is apparent from record. The question is whether....
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....asset on the facts and the law as the stood on the date of the assessment, was subjected to capital gains tax. The evidence which the assessee adduced to show that agricultural land did not become a capital asset under the amended provision of s 2(14) has not come into existence at a subsequent stage, but it was and could have been available to the ITO at the assessment stage also had he enquired in to the question whether the sale of the agricultural land could be subjected to capital gains tax. The revenue strongly argued that the report dt. 12th Jan, 1978 of the ITO could not be considered for determining the mistake apparent from record. We do not agree with this submission of the revenue. The Hon'ble Supreme Court in the case of Mahara....