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2022 (4) TMI 674 - AT - Income TaxLong-term capital gain - Nature or land sold - Whether the assessee has transferred the agricultural land within the meaning of the provisions of section 2(14) of the Act and therefore the same is not subject to the capital gain? - HELD THAT:- Merely showing the land as agricultural land in the revenue records and furthermore the use of the land in the remote past is not decision factor to hold the land as agricultural land after considering the future use of the land which is for non-agricultural operations. As such the future use of the land will change the character of the land from agricultural to non-agricultural at the time of sale. In fact purpose of providing exemption to the agricultural land from the capital gain was to encourage cultivation of land and agricultural operations. Accordingly, a restricted meaning has to be given to the expression agricultural land as contemplated under section 2(14)(iiib) of the Act. Coming to the facts of the case, there is no ambiguity that the land at the time of transfer was not the agricultural land and the same was transferred for the purpose of residential project. Thus there was no use of the impugned land in the future for the purpose of agricultural activities. Therefore, to our mind the assessee is not entitled for claiming the land as agricultural land so as to get out of the purview of the provisions of capital gain. Thus we reject the contention of the learned AR for the assessee. Determining the cost of acquisition of the impugned land which was acquired by way of inheritance - Whether the assessee is entitled for the deduction of cost of acquisition based on the valuation report as on 1 April 1981 for the property acquired by way of inheritance? - Assessee is very much entitled against the full value of consideration from the transfer of capital asset, the deduction for the cost of acquisition of the capital asset. In other words, the same cannot be made nil merely on the reasoning that the assessee has not furnished any detail for the same. Admittedly, the primary onus lies upon the assessee to furnish the necessary details but in the event, the assessee fails to discharge the onus, it does not mean that the revenue can determine the income in arbitrarily manner. It is incumbent upon the revenue to calculate the income chargeable to tax in the manner provided under the statute. If the assessee failed to furnish the cost of acquisition, then the revenue was empowered to find out the same by exercising the authority provided under the statute under the provisions of section 131/133 (6) of the Act. But we find that the revenue has not exercised such powers. Assessee should also be entitled to adopt the value of the property, in a situation when the asset became the property of the previous owner before April 1, 1981, in terms of section 55(2)(b)(ii) of the Act. As such the assessee has the option to take actual cost or the fair market value of the asset (other than a depreciable asset), as on April 1, 1981 as the cost of acquisition. In such a situation, the period of holding shall be determined under section 2(42A) of the Act by including period for which such an asset was held by the previous owner. Accordingly, we hold that the assessee is entitled for the deduction towards the cost of acquisition of the impugned property against the full value of consideration for the amount shown in the valuation report as on 1 April 1981 as per the provisions of law. Hence, the ground of appeal of the assessee is partly allowed.
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