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2016 (5) TMI 1517 - AT - Income TaxCapital gain on sale of agricultural land - date of transfer u/s 2(47)(v) - AO has alleged the transfer of the subject land took place only after conversion of the land use u/s 90-B of Land Revenue Act and therefore, the same is taxable as capital asset - HELD THAT:- An application is required to be made to the relevant authorities for land conversion where the appellant holding land for agricultural purposes intend to develop such land for housing, commercial, institutional, semi-commercial, industrial, cinema or petrol pump purposes or for the purposes of multiplex units, infrastructure projects or tourism projects or for such other community facilities or public utilities purposes as may be notified. Therefore, what need to be seen is whether the appellant has moved an application for land conversion as specified under section 90-B(3) of the land Revenue Act for the above specified purposes or not. As per JDA order no. 52/2007 dated 29.5.2007 placed on record, it is stated that the appellant has moved an application under section 90-B(3) in respect of land bearing khasra Nos. 370 situated in village Vimalpura Tehsil Sanganer District Jaipur for converting the said land into farm houses. On perusal of the JDA’s order, it is stated therein that in the village area, constructing farm houses is permissible and there is no need for land conversion and accordingly, the appellant’s application for surrender of agricultural land was accepted by JDA u/s 90-B(6) whereby the land shall vest with JDA with effect from date of passing of such order. Similarly, there is another order of JDA bearing order no. 21/2007 dated 26.04.2007 in respect of land bearing khasra Nos. 371 situated in village Vimalpura Tehsil Sanganer District Jaipur for converting the said land into farm houses. The ld AR has submitted during the course of hearing that JDA has issued similar orders in respect of other parcels of lands whereby the appellant has applied for conversion of agricultural land into farm houses and it was ordered by JDA that there is no need for land conversion for farm houses. The Revenue has not brought any evidence to controvert the above orders of JDA. Appellant has moved an application for land conversion under section 90-B of land Revenue Act for conversion of agricultural land into farm houses and as per the orders of the JDA, constructing farm houses is permissible on agriculture land and there is no need for land conversion. Given that there is no conversion of agriculture land as confirmed by JDA, being the appropriate authority under land Revenue Act, what has been transferred by the appellant continues to be the agriculture land. Undisputedly, the said agricultural land in question is lying in an area beyond 8 Kms. of the municipal limits. Once it is held that the agriculture land has been transferred which is lying in an area beyond 8 Kms. of the municipal limits, it is of no consequence from tax point of view whether the date of transfer should be the date of agreement to sell i.e, 02.04.2007 or the registration of the sale deeds of various parcels of land done on 28.04.2007 and on subsequent dates falling within the same financial year, as the agriculture land will fall outside the definition of capital asset under Sec. 2(14)(iii) of the Act and we are not inclined to examine the same and other related grounds raised by the Revenue as the same have become infructious. Impugned agricultural land, not being a capital asset under Sec. 2(14)(iii) of the Act, provisions of section 45 of the Act are not attracted in the instant case and hence, the sale consideration on transfer of agriculture land cannot be brought to tax. - Decided against revenue
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