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2014 (9) TMI 3 - HC - Income TaxNature of land sold – Agricultural or not – Invocation of section 50C – Exemption of LTCG - Whether the lands sold by the assessees are agricultural lands and whether they are entitled to the benefit of exemption from capital gains tax – Held that:- The lands are classified as agricultural lands in the revenue records and they are dry lands - the assessees have qualified under clause 11(1) since as per the adangal records, these lands were classified as agricultural lands and the assessees have also paid revenue kist, namely, revenue payment - the Tribunal has misconstrued the judgment of the Commissioner Of Income-Tax, Gujarat-II Versus Siddharth J. Desai [1981 (9) TMI 48 - GUJARAT High Court] that all conditions should be satisfied, which is not a correct interpretation - once the Tribunal has accepted that the classification of lands as per the reveue records are agricultural lands, which are evidenced by the adangal and the letter of the Tahsildar and satisfies other conditions of Section 2(14) of the Income Tax Act, the Tribunal has misdirected itself. The plea of the Revenue that there was no agricultural operations prior to the date of sale is of no avail as the definition u/s 2(14) of the Income Tax Act has the answer to a plea raised - the lands are agricultural lands classified as dry lands, for which kist has been paid – relying upon Commissioner of Income-tax V. Raja Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME Court) - There was authority for the proposition that the expression "agricultural land" mentioned in Entry 21 of List II of the Seventh Schedule to the Government of India Act, 1935, should be interpreted in its wider significance as including lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry - the Tribunal was not justified in rejecting the exemption – Decided in favour of Assessee.
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