TaxTMI 
TaxTMI 
2016 (2) TMI 738
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....rom the fact that surrounding areas were subjected to developmental activities like Engineering Colleges etc., in which event, the land at the time of sale ought to have been brought to tax under the Head "Long Term Capital Gains". Assessee herein is an employee of National Geo Physics Research Institute. In response to the notice issued under section 148 of the Act, assessee declared total income at Rs. 1,97,210. During the course of assessment proceedings, the Assessing Officer noticed that he along with his two brothers sold ancestral agricultural land of 6.7 acres of land at Sy.No.707 and 708 situated at Korremulla (v), Ghatkesar (M), Ranga Reddy District on 04.03.2008 and received total sale consideration of Rs. 1,97,60,000 on which no....
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.... also observed that the land was in his individual capacity and there was no evidence that the land under cultivation in the preceding two years of its sale. He also observed that after sale the land was put to commercial activity. In fact, the land was sold to a non-agriculturist for a non-agricultural purpose i.e., for building an Engineering College. He drew support from the observations of the Hon'ble Supreme Court in the case of Smt. Sarifabibi Md. Ibrahim vs. CIT 204 ITR 631 to conclude that the land sold was not an agricultural land. It should be treated as capital asset and consequently the sale proceeds thereof are liable to long term capital gains. 1/3rd share of the assessee was brought to tax under the Head "Long Term Capital Ga....
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....y evidence that it was put to non-agricultural use. 4.2. The facts against the assessee were:- (a) that the land was situated within the municipal limits i.e., within 1 K.M. from the Surat Railway Station (b) land was not cultivated from 1965-66 until it was sold in 1969 (c) the party entered into an agreement of sale with a Housing Cooperative Society to sell the land for nonagricultural purpose (d) the party applied in June, 1968 and March, 1969 for permission to sell the land for nonagricultural purpose and sale took place thereafter (e) the land was sold @ Rs. 23 per sq. yard and purchaser society commenced construction operations within three days of purchase. 4.3. Under these circumstances, the Hon'ble Supreme Court held that the ci....
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.... 7. We have perused the rival contentions and examined the facts on record. There is no dispute with reference to the fact that the impugned land is situated beyond 8 KM from the Municipal limits, to be precise 9.5 KM from the end of the Municipal limits. Even though, no income was declared by the assessee - who is Director of NGRI, Hyderabad in his individual capacity - the land appears to have been purchased in HUF capacity. As seen from the recitals of the sale deed, it is true that Mr. D. Satyanarayana along with his two other brothers Mr. D. Laxminarayana and Mr. D. Mahender purchased agricultural land vide registered document No.526 of 1985. It is also seen that along with the assessee, assessee's mother, wife and son were also inclu....
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....ture of the land cannot be changed. 7.1. In the case of DCIT, Circle 1(3), Hyderabad vs. M. Kalyan Chakravarthy ITA.No.729/Hyd/2013 dated 24.10.2014 assessee entered into an agreement for development of land and the purchaser used the land for commercial purposes. The Bench observed that the land sold was agricultural land and put to use for agricultural purposes also and therefore the fact that the predecessor utilised the land for commercial purpose cannot be considered as evidence of change of land. Under the circumstances, the purpose for which the purchaser utilised the land cannot be considered as evidence of change of land. 7.2. The Hon'ble Delhi High Court in the case of Hindustan Industrial Resources Ltd., vs. ACIT (141 ITR 806) ....
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.... did not alter the nature and character of the land. In any event, this discussion is not relevant in the backdrop of the clear finding given by the Tribunal that on the date of the purchase and as also on the date of acquisition, the land in question was agricultural land. Having come to such a conclusion, the Tribunal ought not to have gone into question of intention of the assessee and definitely not into the question of intention of the land acquiring authority, the latter being a wholly irrelevant consideration. In these circumstances, the land acquired from the ownership of the assessee was agricultural land". 7.3. Since the facts in the present case indicate that assessee has sold away the agricultural land and there is no intentio....