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2021 (9) TMI 346 - AT - Income TaxChargeability of capital gains on sale of land - nature of land sold - capital asset within the meaning of Section 2(14) OR agricultural land - whether the agricultural land parcel in question situated at Village Adalaj, Gujarat falls within the definition of ‘capital asset’ under s. 2(14)? - doctrine of consistency - claim of deduction u/s 54B - HELD THAT:- The view taken in the case of other co-owner has attained finality and ought to have been followed as a matter of judicial discipline. The Revenue cannot be permitted to take different stand in two different cases emanating from same set of facts. The case of the assessee for exclusion of agricultural land from the definition of ‘capital asset’ placed in identical factual matrix thus requires to be upheld on this ground alone. As assessee has successfully demonstrated that the land parcels situated as Adalaj does not fall within the meaning of expression ‘Municipality’ or ‘Municipal Corporation’ and therefore falls in exception provided in sub-clause (a) to Section 2(14)(iii) of the Act. As stated on behalf of assessee, the development authority i. e. GUDA is a creation of statute. It cannot be equated with Municipal Corporation in the light of the ratio of decisions of Hon’ble Kerala High Court in the case of Murali Ldge [1991 (6) TMI 38 - KERALA HIGH COURT] and Smt. T. Urmila [2012 (12) TMI 610 - ITAT HYDERABAD] as rightly pointed out on behalf of the assessee. Hence the impugned land falls outside the ambit of definition of capital asset provided in Section 2(14) of the Act. Consequently, the capital gains arising on sale of agricultural land which is not a capital asset cannot be brought to charge under s. 45 of the Act. We thus find merit in the plea of the assessee for exemption of capital receipt from ambit of taxation.Once, it is found that the capital gains arising from sale of agricultural land itself is not susceptible to chargeability, the claim of deduction under s.54B becomes infructuous and therefore not adjudicated upon. - Decided in favour of assessee.
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