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2016 (8) TMI 1458 - AT - Income TaxCharacter of land - gain on sale of land - agricultural land or capital asset - land was compulsorily acquired by NHAI - HELD THAT:- The plot of land was situated in Dongargaon that the assessee had filed copies of registered sale deed along with copy of 7/12 extract, that the land in question was categoriesed as agricultural land in the revenue record. In these circumstances, in our opinion, the FAA was justified in holding that the land in question was agricultural land. It is also a fact that the plot of land was compulsorily acquired by the Government and was purchased as agricultural land. The certificate dated 23-08-2013 of Gram Adhikari Dongargaon states that plot of land was an agricultural land since it was purchased till the date of compulsory acquisition. AO himself has admitted referring to the 7/12 extracts. that land in question was agricultural land in the earlier assessment years. In our opinion, the character of land would not change automatically in subsequent years until and unless the same is used for some other purposes There is nothing on record to show that the land was not used for agricultural purposes. The AO has not brought on record to prove the fact that agricultural land was converted into non agricultural land or that the assessee had applied for such conversion. The AO had referred to the aerial distance to determine the distance of plot of land from the Municipal limits. The Circular No. 7/215 (supra)clearly stipulates that distance between the Municipal limits and agricultural land had to be measured having regard to the shortest road distance. Sale of agricultural land cannot be treated as an advenctur as the land was compulsorily acquired by NHAI. The plot of land, acquired by the assessee was an agricultural land and, therefore, was out of ambit of taxability. It was not liable for charging under the capital gains/business profit. - Decided in favour of assessee
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