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2019 (10) TMI 1166 - AT - Income TaxNature of land sold - agricultural land - unexplained investment u/s.69 - HELD THAT:- Land was an agricultural land as agricultural operations were duly carried on by assessee on the said land at the time of transfer/sale . It is already stated on oath by learned VAO based on government records as well evidenced through various government records produced by assessee that agricultural operations were carried on in that land when the transfer/sales took place. VAO also confirmed based on government records that there was standing crops of sugarcane, ground nut and paddy and ₹ 500/- was collected as land Revenue. VAO stated that there were three submersible pump sets for irrigating the lands. This contention of the assessee also stood accepted on the touchstone of preponderance of probabilities that the consideration received over and above the sale consideration of ₹ 1.91 crores mentioned in agreement to sale dated 07.01.2008 was towards standing crops. So far as whether the assessee is entitled for exemption on sale of aforesaid agricultural land within the provisions of Section 10(37) read with Section 2(14)(iii) we are of the considered view that this issue requires re-consideration by AO who shall adjudicate this issue afresh after making proper enquiries and verifications with local authorities and of the area where the said property was situated and such enquiries/verifications as the AO may consider necessary so as to arrive at conclusion whether said land is capital asset as defined u/s 2(14) exigible to tax or is entitled for exemption from tax u/s 10(37) We remit this issue back to the file of the AO for fresh determination after making necessary enquiries and verifications so as to determine whether or not the said land is eligible for exemption from capital gains under the provisions of the 1961 Act or is exigible to capital gains tax. The assessee is directed to produce all relevant evidences /material in support of its contention that capital gains earned from sale of said land are exempt from income-tax within four corners of provisions of the 1961 Act, which evidences/material shall be admitted by the AO in the interest of justice and thereafter adjudicated on merits in accordance with law. Needless to say that the AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law in the denovo assessment proceedings.
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