AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 312
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....es to whether the agricultural land sold by the assessee is liable for capital gain tax or exempt from taxation. 2. Facts are, in brief, that the assessee along with his wife Mrs. A. Jyothi ha sold 11 acres of land at Survey No. 123/4 and 124/2A in Nindra Mandal, Chithoor District for a sum of Rs..1,98,00,000/- to M/s. Shree Krishna Polystrap Pvt. Ltd., Chennai 600 017 by sale deed dated 07.05.2009. The above sale consideration was paid in the form of allotment of 12,60,000 equity shares of Rs..10 to the assessee and allotment of 7,20,000 shares of Rs..10 to his wife, by the purchaser company, M/s. Shree Krishna Polystrap Pvt. Ltd. Thus, the sale consideration received by the assessee was Rs..1,26,00,000/- and by his wife was Rs..72,00,0....
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....nd 8 kms from the nearby municipality and contended that the land did not fall within the scope of capital asset as per section 2(14) of the Income Tax Act, 1961 ["Act" in short] and the agricultural income earned by the assessee was used for captive consumption. After examining the above explanations, the Assessing Officer has observed that the assessee has not admitted any agricultural income for the assessment years 2008-09 and 2009-10 and therefore, the assessee has not utilized the said lands for carrying out agricultural activities. The Assessing Officer has further observed that so far as agricultural produce used for own consumption, the assessee has not produced any evidence such as expenditure incurred on input cost like seeds, ma....
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....e Assessing Officer calculated the long term capital gains at Rs..1,26,00,000/- and brought to tax. On appeal, the ld. CIT(A), more or less expressed the same view and confirmed the order of the Assessing Officer. 3. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that as per the revenue records, the land is an agricultural land and the assessee was carrying agricultural operation and whatever amount is generated out of agricultural operation were utilized for personal consumption and thee was nothing left over income for offering for taxation. Therefore, on the ground of no agricultural income was offered for taxation cannot be considered the land is not an agricultural l....
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....le consideration in the form of equity shares. It is an undisputed fact that the land is 8 kms away from the nearby municipality. As per the certificate issued by the Village Revenue Officer, the land is an agricultural land and the assessee has also carried agricultural activities. According to the Assessing Officer, the land is not agricultural land, because, for the assessment years 2008-09 and 2009-10, the assessee has not offered any agricultural income and for that the assessee has filed a detailed explanation before the Assessing Officer by stating that the land is a dry land and he has earned Rs..60,000/- and the same is utilized for self consumption and therefore, not offered for taxation. We find that when there is no taxable inco....
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....ral land. 7.1 The Assessing Officer came to a conclusion that the land sold to a company was not carrying agricultural operation and therefore, the case of the assessee does not fall under the exception provided under section 2(14) of the Act. In our considered opinion, the test applied by the Assessing Officer is not correct. It is for the Assessing Officer to ascertain as to whether the land sold by the assessee is an agricultural land as per revenue records, the assessee has carried agricultural operation or not and it is not for the Assessing Officer to see to whom the land was sold. 7.2 One more reason stated in the assessment order that subsequent to the sale, the land was converted into non-agricultural purposes and thereby, th....