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2015 (4) TMI 220 - AT - Income TaxSale of agricultural land - AO disallowed the claim of exemption of surplus on sale of agricultural land and brought the same to tax under the head short term capital gains - CIT (A) observed that as per the certificate given by the Director (Planning) HMDA, the land does not fall within the prescribed municipal limits, therefore, cannot be treated as capital asset u/s.2(14)(iii) and to be considered as as agricultural land, thus the gain on sale of land cannot be brought to tax Held that:- Relevant evidence/documents were not produced during the assessment proceedings with respect to carrying out agricultural activities. Also income from sale of agricultural produce (Jowar) was not substantiated by supporting the claim and furnishing bills and vouchers. The photographs which were taken during the post search clearly depicts that the land was not used for cultivating agriculture crops, as it contains boulders and wild grass appears to be grown on the land. Hence as could be seen from the photographs the land seems to be unploughed and unutilized, whereas according to the assessee, the land has been actually put to use for agricultural purpose. In these circumstances, we are of the opinion that the issue of land being agricultural land has not been proved beyond doubt and hence the issue is set aside to the file of the AO who shall verify all the necessary documents as well as the bills and vouchers for the sale of agricultural produce before concluding whether the land is agricultural land. Further for the exclusion of land from the definition of capital asset, the definition of capital asset is to be as per section 2(14)(iii). Hence, the AO shall verify whether the land is a capital asset as per section 2(14)(iii) - Decided in favour of Revenue for statistical purposes.
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