2023 (1) TMI 718 - AT - Income Tax
Deduction u/s 54B - Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases - basis of situation of the disputed land outside the municipal limits the land has not been considered to be capital land for the purpose of Section 2(14) - assessee as primarily submitted that only on the basis of high stamp duty levied by the registration authority, AO has concluded the land is a capital asset being non-agricultural land - Whether land falling in the share of assessee which was sold by the impugned sale deed was not converted to non-agricultural purposes? - HELD THAT:- Primarily it is on the basis of the fact that in the sale deed, land was mentioned to be sold for residential purpose and that it has been assessed to stamp duty as a non-agricultural land, the land was considered to be of capital in nature - matter of fact is that in the revenue record copies filed before AO it was mentioned that land is under use for agricultural purposes. It has standing crops and irrigated by tubewell. There is report of the concerned revenue officer Lekhpal that Khasra no. 175 of which the land sold is part is situated at distance of 9 kilometer away from Nagar Palika.
However, the matter of fact is that there is a copy of revenue record in the form of Kisan bahi and Khatauni for the Falsi year 1414 to 1422 i.e. assessment year 2008-09 to 2012-13. There it is mentioned that in proceedings u/s 143 of the UP Jamindar abolition of Land Reforms Act, 1950 which authorizes Sub Divisional Magistrate / Assistant Collector to change the type and nature of any land from agricultural land to residential proceedings was initiated under a petition title Vinay and Kedar vs. State and by order dated 05.11.2004 land forming part of Khasra no. 175/ 0.619 Hectare stood converted for non-agricultural purposes. Ld. AO has specifically taken note of it in the assessment order. Thus, there was the change of land use before it was sold by the assessee.
AO has not taken any inquiry to ensure that when there were various co-sharers holding different title in a survey number to which assessee was also a co-sharer, then if the whole land in the survey number was converted to non-agricultural purpose or land falling in the share of assessee was not converted to non-agriculture purpose. Ld. AO seems to have fallen in error in reading the revenue records without seeking its due clarification from the assessee. At the stage of appeal, Ld. CIT(A) has fallen in error in not allowing assessee to produce further evidences to show that of land falling in the share of assessee of which he was also co-sharer was not converted, before its transfer by the assessee.
The crucial point of controversy thus, needs to be restored to the files of Ld. CIT(A) to allow the additional evidences of the assessee and to let the assessee establish that the land falling in the share of assessee which was sold by the impugned sale deed was not converted to non-agricultural purposes by any order of revenue authorities. If that stands establish the mere fact that it was sold for the purpose of residence of the vendor or that it was valued for the purpose of stamp papers by the registered authority as a non-agricultural land would not be material and assessee will be entitled to benefit of Section 54 - Appeal of assessee is allowed for statistical purposes.