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2016 (1) TMI 79 - AT - Income TaxGain arising on sale of agricultural land - exemption u/s 2(14) denied - Held that:- In the instant case, it is an admitted fact that the land was an agricultural land. The absence on the part of the assessee to carry on agricultural activities shall not support the case that the assessee intended to hold the same as trading asset. Accordingly, we are of the view that the absence of agricultural activity, per se, will not be useful to determine the intention of the assessee. the intention of the assessee at the time of purchase of lands cannot be held to be holding the same as stock in trade. Accordingly, we agree with the contentions of the Ld A.R that the assessee has held the impugned agricultural lands as investment only and hence they cannot be categorized as “Capital asset” within the meaning of sec. 2(14) of the Act. Hence the gains arising on sale of the same is not liable for taxation under the provisions of the Act. Even though the assessee has initially declared the same as short term capital gain, yet the same is required to be corrected, since there is no estoppels against the law. Accordingly, we set aside the order of Ld CIT(A) and direct the AO to exclude the gains arising on sale of impugned land from the total income of the assessee for the year under consideration. - Decided in favour of assessee
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