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2017 (2) TMI 1364 - AT - Income TaxTransfer/sale of agricultural lands - computation of taxable income - nature of land sold - Held that:- The fact that the land in question in the instant case is bought by Developer cannot be a determining factor by itself to say that the land was converted into use for non-agricultural purposes. It is also evident from the Memorandum explaining the provisions of Finance Act, 1970, whereby s. 2(14) was amended so as to include the agricultural land located within the jurisdiction of a municipality in the definition of the expression 'Capital Asset'. We are of the opinion that the land in question cannot be considered as stock in trade in the hands of assessee. It is nothing but agricultural land in terms of Sec.2(14)(iii) r.w.s. 10(1) of the Act and transfer of that land cannot lead to taxable capital gains or income from business. Our above view is also supported by the recent judgment of Jurisdictional High Court in T.C.A.No. 483/2016 dated 1-9-2016 in the case of M/s Mansi Finance Chennai Ltd [2017 (1) TMI 1209 - MADRAS HIGH COURT]. In view of the above, we direct the AO to consider gain on sale of impugned land as exempted from capital gain and to treat as Agricultural income only. - Decided in favour of assessee.
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