2025 (9) TMI 292

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....addition of Rs. 2,13,85,066/- on account of disallowed exemption claimed u/s. 2(14) (iii) of the Income Tax Act, 1961, without considering the fact of the case that the land sold by the assessee was treated as non-agricultural land as per provisions of Section 63(AA) of the Land Revenue Code." (ii) "In the facts and on the circumstances of the case and in law, the Ld CIT(A) has erred in ignoring the fact that it has clearly been mentioned in the sale deed that the underlying land is to be used for industrial purposes and the same is being transferred as per provisions of Section 63(AA) of the Land Revenue Code." (iii) "In the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fa....

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....of section 63(AA) of Land Revenue Code. The Assessing Officer further observed that the assessee claimed exemption of Rs. 2,13,85,066/- u/s. 2(14)(iii) on account of profit of sale of agricultural land. Since the land sold by the assessee is treated as non-agricultural land, the A.O. issued notice u/s. 148 dated 30-03-2021. In response, the assessee filed return of income on 04-02-2012. The assessee also filed reply dated 10-03-2022. Final show cause notice issued on 22-03-2022 along with draft assessment order but the assessee did not file any reply and therefore the A.O. disallowed the exemption u/s. 2(14)(iii) of the Act thereby making addition of Rs. 2,13,85,066/-. 4. Being aggrieved by the assessment order, the assessee filed appeal....

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....orically held that the land in question is not in municipal area and is used for agricultural purposes only and the assessee had sold the land as agricultural land. Thereafter, the land has been converted into non-agricultural purposes by the buyer of the land. In such circumstances, the assessee cannot be held to pay long term capital gain as held in the case of PCIT vs. Hinaben Bhadresh Mehta (2018) 96 taxman.com 164 (Guj). The decision in the case of Vedprakash Devkinandan Chiripal also categorically gave the finding hereinbelow: "We find that transfer u/s 63(AA) is conditional and has to be converted into non-agricultural land within 90 days and if not converted, the sale deed automatically gets cancelled. Ld. CIT(A) held that ....