2019 (9) TMI 101

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....error in ignoring the Explanation to second proviso of Section 115JB(2)(ii) of the Act. 3. The relevant facts are that the Assessing Officer brought to tax a sum of Rs.2,43,15,546/-, as income for Assessment Year (AY) 2014-15, as against the return of income filed by the assessee, who had declared loss to the tune of Rs.1,26,493/-. Agricultural income to the tune of Rs.1,40,000/- was claimed by the assessee. The Assessing Officer was of the opinion that sale of agricultural land, and its exclusion, from the MAT provision had resulted in its exclusion from the calculation of the book profit of the assessee which was wrong. The assessee appealed successfully to the CIT(A), who noted the Section 2(14) and Section 10(1), which exclude agr....

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....ural income'. Such income, therefore, is liable to capital gains tax chargeable under section 45 of the 1961 Act." 5. The revenue appealed to the ITAT, which was of the opinion that the Assessing Officer's findings were correct. The ITAT held that agricultural income is undoubtedly exempted under Section 10(1) and deserves exclusion. It proceeded however to analyse whether as a matter of fact rent or profit derived on account of sale of agricultural land, per se amounted to revenue or rent derived from agricultural land and therefore excluded, definitionally, by virtue of Section 10(1). The ITAT relied upon several rulings in addition to dealing with the issue of the real intent of the sale having regard to use of the land. 6. Learned....