TaxTMI 
TaxTMI 
2017 (3) TMI 1645
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....224/CIT(A)-2/2014-15 for the above-mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the action of the Assessing Officer in bringing to tax the surplus/profit on sale of agricultural lands under the head 'capital gains' without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that having not disputed the fact of the applicability of the exceptions carved out in the definition of 'capital asset' in section 2(14) of the Act to the factual matrix of the case, the sustenance of the assessment of the capital gains on such sale was wholly unjustified. 4. The CIT (Appeals) failed to appre....
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....8 kms from municipal limits and the population is less than 10,000. 3.0 The Assessing Officer (in short 'AO') placing reliance on the Hon'ble Supreme Court judgment in the case of Sarifabibi Mohmed Ibrahim & Ors. v.CIT (1993) 204 ITR 631 (SC) disallowed the claim of the assessee and assessed the sale proceeds as Long-term capital gains. The reasoning given by the AO for taxing the LTCG was that the assessee purchased the lands during the year 2005 as agricultural land and the assessee has not declared any agricultural income. The assessee declared only business income in the returns. The AO was of the view that since there was no agricultural income declared by the assessee and no evidence has been produced in respect of expenditure incu....
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....ural income. The land at Tiruttani Village situated at a distance of more than 8 kms from the nearer municipality and the population was less than ten thousand. Agricultural operations were carried out by the assessee by cultivating vegetables, mangoes, coconuts, etc., in the said land. All the details were submitted before the AO as well as Ld.CIT(A), but both the Ld.CIT(A) and the AO disallowed the claim merely because of sale consideration was Rs. 8.00 Crs. and its proximity to Mahendra world City with a presumption that the land was not used for the agricultural purposes. Another reason for disallowing the exemption was buyer of the property has got approval for land for commercial purposes. Such consideration or such presumptions canno....
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....an intention to sell the land as business asset and sold the land for an astronomic figure of Rs. 8.00 Crores with appreciation of five times within the span of six years. The assessee's case is squarely falls in the Hon'ble Supreme Court decision relied upon by the Ld.CIT(A) and argued that the Ld.CIT(A) has rightly dismissed the appeal of the assessee. 6.0 We heard the rival submissions and perused the material placed before us. It is an undisputed fact that the assessee has purchased agricultural land of 2.78 acres at Tiruttani Village, Kattamgalathu in 2005. The lands were purchased for consideration of Rs. 1,68,55,465/- and sold during the previous year for a consideration of Rs. 8,00,01,000/-. The Ld.AR of the assessee sub....
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....d was situated near Mahendra world City or no agricultural income was returned by the assessee does not change the character of the land into capital asset. As per Sec.2(14) the assessee falls within the exceptions to hold the land as agricultural land. When the assesse submitted the evidences to prove that the land in question was agricultural land and the crops were grown in the form of coconuts and mangoes burden shifts on AO to prove with the documentary evidence that the land was not used for the agricultural purpose or no agricultural operations were carried out in the subject land. Agricultural income is exempted income and merely because the assessee has not returned agricultural income and no expenditure was claimed for agricultura....