TaxTMI 
TaxTMI 
2019 (1) TMI 220
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....of agricultural land as exempt under section 2(14) of the Income tax Act, 1961 the Revenue has preferred the present tax appeal with the following proposed questions of law: "(A) Whether on the facts and in the circumstances of the case the Appellate Tribunal was legally correct in holding the assessee as agriculturist and treating the land sold as agricultural land. Thus, deleting the entire amount of Rs. 1,20,21,138 ? (B) Whether the Appellate Tribunal has erred on facts and in law to appreciate that when the land transaction give rise to huge profit in short period, it cannot be treated as agricultural land ? Also the assets in the hands of the assessee was in real sense of trading assets and the sale thereof had all characteristics ....
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....e., survey No. 108/1 and survey No. 110 are concerned. Thus, the Assessing Officer's action was partly upheld. The total area of land sold was 6.74 hectare for Rs. 1,21,72,438. The rate per hectare comes to Rs. 18,05,599. The sale price of the land of survey No. 107/1 was considered to be Rs. 61,04,278, which was held as exempt and not chargeable to tax by the Commissioner of Income-tax (Appeals). The sale prices of remaining two pieces of lands, which comes to Rs. 60,68,160, was declared as business income, both by the learned Assessing Officer as well as the learned Commissioner of Income-tax (Appeals). 2.3 Feeling aggrieved, the Revenue preferred an appeal before the Appellate Tribunal. The assessee also filed cross appeal. By the ....
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....he case, the learned Tribunal has materially erred in directing the Assessing Officer to treat the profit of Rs. 1,20,21,138 earned by the assessee on sale of agricultural land as exempt under section 2(14) of the Income-tax Act. 4.1 It is vehemently submitted by Mrs. Bhatt, learned counsel appearing on behalf of the Revenue that the learned Tribunal has not properly appreciated the fact that the land was purchased by the purchaser for industrial purpose and therefore, the same could not have been treated as agricultural land and therefore, profit arising out of sale of such land was not required to be exempted under section 2(14) of the Income-tax Act as claimed by the assessee. 4.2 It is further submitted by Mrs. Bhatt, learned counsel ....
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....is required to be noted that the issue in the present appeal is whether the learned Income-tax Appellate Tribunal is right in directing the Assessing Officer to treat the profit of Rs. 1,20,21,138 earned by the assessee on the sale of agricultural land as exempt under section 2(14) of the Income-tax Act ? The Assessing Officer treated the profit earned by the assessee on sale of agricultural lands as business income and not as capital gains on sale of agricultural lands, which is exempt from tax under section 2(14) read with section 45 of the Act. 7. From the order passed by the Assessing Officer, it appears that the Assessing Officer treated the profit of Rs. 1,20,21,138 earned by the assessee from sale of agricultural lands as business i....
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....sand ; (b) in any area within the distance, measured aerially,- (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh ; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh ; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment Board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, 'population' means ....
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....ts and circumstances of the case, the learned Tribunal has not committed any error in directing the Assessing Officer to treat the profit of Rs. 1,20,21,138 earned by the assessee on the sale of agricultural land as exempt under section 2(14) of the Income tax Act. 11. Now, so far as the reliance placed upon the decision of the hon'ble Supreme Court in the case of G. Venkataswami Naidu and Co. (supra) is concerned, considering the facts before the hon'ble Supreme Court, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand. The hon'ble Supreme Court was considering section 2(13) of the Income-tax Act and the definition contained in section 2(13) fell for consideration before the h....