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2015 (12) TMI 1128 - HC - Income TaxSale of part of land - business income or agricultural income - Held that:- Under the provisions of section 2(14)(iii)(a)/ (b), the assessee's land can be held as agricultural land situated beyond 8 kms outside the Gurgaon Municipal limits and that the area population of residents of the village Fazilpur Jharsa being below 10000, the assessee's asset is outside the purview of capital asset. The AO is not justified in rejecting the assessee's alternative claim of exemption under section 54F as it has made investment worth ₹ 7.18 crores more than the sale consideration within a short period of six months by acquiring a residential property at New Delhi. Therefore, the AO was not justified in making addition treating assessee's agricultural income as business income. The same has rightly been deleted by learned CIT(A) and confimed by ITAT As regards treatment of agricultural income as undisclosed income, the assessee had furnished a copy of Girdawri pertaining to the earlier financial years 2005-06 and 2006-07 that crop of sarson was grown and cultivated in the assessee's land holdings and out of the said sarson crops, some crop was retained to be used as sarson seeds in the next years. Ex Sarpanch of Gram Panchayat of Village Fazilpur Jharsa, Form J No.III dated 15.3.2008 duly verified by Shri Jasmeet Singh on 13.12.2010. As per these documentary evidences, the assessee had discharged its onus. These evidences cannot be brushed aside by the AO. The assessee had been using the neighbourer's tube well for water purposes. The statement of original seller for development of land does not hold any significant and evidentiary value against the assessee. Therefore, as per copy of Girdawri and certificate issued by the Sarpanch, the AO was not justified in rejecting assessee's contention with regard to the said agricultural income. In view of the above discussions, we find no infirmity in the order of the learned CIT(A) who has rightly deleted the addition so made by the AO aNd confimed by ITAT. - Deleted against revenue.
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