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2016 (10) TMI 1231 - AT - Income TaxGains from sale of land - Gain being taxed under the head "Income from business" and also treating one such sale as not of an agricultural land - Held that:- Nature of use of adjacent land was not relevant in deciding the nature of land sold by an assessee. Their lordship had also held that a presumption could never be taken regarding the purpose for which the buyer purchased the land. Lordship also observed that nature of classification of land by the Revenue authorities in the revenue record was of prime importance in determining the nature of land sold by the assessee. Considering the facts and circumstances of the case and also applying the law laid down by Hon’ble Jurisdictional High Court in the case of Sakunthala Vedachalam vs. Vanitha Manickavasagam (2014 (9) TMI 3 - MADRAS HIGH COURT), we are of the opinion that lower authorities fell in error in considering the land measuring 4.34 acres at Othakalmandapam sold by the assessee to M/s. Hindustan Educational and Charitable Trust as non agricultural in nature and exigible to capital gains. The said land could not be considered as capital asset by virtue of Sec. 2(14)(iii) of the Act. Assessee was justified in claiming that surplus arising out of sale of land as not exigible to capital gains tax. - Decided in favour of assessee.
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