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2019 (11) TMI 919 - AT - Income TaxSale of agriculture land in rural area - income from other sources - capital asset u/s 2(14) - HELD THAT:- We note that assessee’s claim is that assessee’s agricultural land which was sold for a consideration of ₹ 26,96,250/- cannot be taxed as a Capital Asset as per the definition given under sec. 2(14) of the Act. According to the assessee the land he sold was agricultural land which was about 3 kms (aerially) away from the Municipal boundaries of Dankuni Municipality. And since the population of Dankuni Municipality as per the latest Census of Year 2011 was only 94,936, which is below one lakh population which was a condition precedent to qualify as a Capital Asset, the assessee’s agricultural land sold in the A.Y cannot be treated as Capital Asset and the sale consideration cannot be taxed. We are satisfied with the claim of the assessee that the sale consideration received from sale of agricultural land in the facts narrated above if found factually correct should not be taxed. Since the AO/CIT(A) has not examined the veracity of the documents filed we remand this issue back to the file of AO for the limited purpose of verification of documents and if found correct, then the claim that ₹ 26,96,250/- to be allowed as not taxable. If the assessee fails in the verification of the facts discussed [supra], the consideration the assessee received for sale of agricultural land in any way cannot be taxed under the head ‘income from other sources’ and then only capital gain to be levied in accordance to law after hearing the assessee. Appeal of the assessee is allowed for statistical purposes.
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