AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 634
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....16 declaring an income of Rs.. 8,87,330/-. The assessee also reported agricultural income of Rs.. 1,21,450/-. The case was selected for complete scrutiny. The assessee is a financier and is also derives income from salary, house property and share trading. He is also a partner in a firm called Marudhar Kesai Enterprises, Paras Bullion & Swasthik Industries. During the previous year relevant to AY 2016-17, the assessee along with two of his family members sold 2.74 acres of vacant land at survey No. 1/2B, 2/3 and 1/2C3B of Padarvadi Village, Sriperumbudur Taluk vide three sale deeds registered as document numbers 3826, 3827 & 3828/2015 dated 06.07.2015 with Sub Registrar, Walajabad. The sale consideration received by the assessee is Rs.. 1,99,12,000/-. The assessee claimed the capital gains on the transfer of asset as exempt under section 2(14) of the Income Tax Act, 1961 ["Act" in short]. Before the Assessing Officer, the assessee filed copy of adangal issued by the VAO, Pathervadi Village. According to the Assessing Officer, though the lands are classified as Punja lands in revenue records as per the Adangal register of Patharvedi village, held the impugned lands are Banjar lands ....
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....Agricultural land in India". Further, he submits that in the year 1970, the scope of exclusion of agriculture land from the definition of 'capital asset' was restricted by factoring provisions to exclude all agriculture land situated within the municipal limits or Boards having population of ten thousand or more and agriculture land within eight kilometres from some notified municipality limits. He further submits that there is no definition of "Agriculture" or "Agriculture Land" to be found in the Act. Hence, for the meaning of 'Agriculture' and 'Agriculture Land', reliance will have to be drawn from the judicial interpretations and accordingly, the ld. DR relied on the decision of the Hon'ble Supreme Court in the case of CWT v. Officer-in-Charge (Court of Wards), as reported in [1976] 105 ITR 133 (SC), wherein, it was held as under: • One of the objects of the exemption seemed to be to encourage cultivation or actual utilisation of land for agricultural purposes; • "Agricultural land" must be land which could be said to either actually used or ordinarily used or meant to be used for agricultural purposes; • Mere fact ....
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....not substantiated, the claim of land being an agriculture land excluded within the meaning covered under section 2(14) of come Tax Act, is not admissible. 9. Heard both the parties and perused the material available on record. We note that the assessee placed on the record three sale deeds all dated 06.07.2015 which are at page 40, 52 and 66 of the paper book, wherein, the assessee and two others sold three parcels of land in Survey No. 1/2B measuring an extent of 1 acre and 73 cents for a consideration of Rs.. 3,77,16,000/-, Survey No. 2/3B measuring an extent of 58 cents for Rs.. 1,26,45,000/- and Survey No. 1/2C3B measuring an extent of 43 cents for Rs.. 93,75,000/- totalling to Rs.. 5,97,36,000/- and by allowing indexed cost of acquisition, the Assessing Officer determined the long term capital gains at Rs.. 4,99,21,440/- and 1/3 of assessee's share of Rs.. 1,66,40,480/- was brought to tax being non-agricultural land. 10. We find, on perusal of the section 2(14)(iii)(b) of the Act explains that in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the central govern....
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....lly got changed the nature of the land. The Hon'ble High Court was pleased to dismiss the said question of law by holding that entries made in the certificate issued by the Tashildar is important even there is no cultivation carried on the lands as per the land records. Another decision in the case of Sakunthala Vedachalam reported in (2015) 53 taxman.com 62 (Madras), wherein, it has been held where lands were classified as agricultural land as per Revenue records and satisfy other conditions of section 2(14) of the Act, though the assessee put the lands to commercial use, was irrelevant. In the present case, as discussed above, the subjected lands are agricultural land in pursuance of section 2(14)(iii)(b) of the Act read with Notification issued by the Central Government, fortified by the decisions of the Hon'ble High Court of Madras. 13. Therefore, in pursuance of the provisions under section 2 of the Act read with notification above, the subjected lands are situated 16 kms approximately and in our opinion, are agricultural lands. Further in support of the arguments, the ld. AR placed copy of Google Map at pages 82 to 84 of the paper book showing the distance between Sriperum....