2023 (1) TMI 968 - AT - Income Tax
Gain on sale of land - Agricultural land - Whether a piece of land is agricultural land or not? - exemption u/s. 54B - HELD THAT:- A capital asset, had never been used for agricultural purposes, except, perhaps, sometime in the distant past, of which, again, there is nothing on record to suggest, even as it is not relevant inasmuch as the time of such user prior to the transfer stands clearly defined by law. It would, given its nature, not even fetch the price applicable to an agricultural land. And, further, stands sold as an, urban, vacant piece of land, with, rather, no agriculture potential, which normally a piece of land, unless the soil quality is very poor, has.
That is, was not an agricultural land in the recent past nor sold as such. The matter, as continually emphasized herein, is essentially factual and, accordingly, stands decided on the basis of the material on record, taking the entirety of the facts and circumstances thereof into account, as indeed the Tribunal is obliged to, and toward which we may refer to some case law, viz. CIT v. Radha Kishan Nandlal [1975 (3) TMI 2 - SUPREME COURT], Daulat Ram Rawatmull [1972 (9) TMI 9 - SUPREME COURT]; Omar Salay Mohamed Sait [1959 (3) TMI 2 - SUPREME COURT]; Dhiraj Lal Girdharilal [1954 (10) TMI 8 - SUPREME COURT]
In view of the foregoing, we, setting aside the impugned order, uphold the assessment of capital gains at rs. 248.17 lacs, disallowing the benefit u/s. 54B.
The agriculture income returned by the assessee, quantum of which is not available on record, could be, as afore-stated, in respect of his balance agricultural land of 41.74 acres. There is thus no reason to disallow the same, as done by the AO, treating it as nil, even if, as found by him – and with which we wholly agree, no agricultural activity has been carried out by the assessee on the land sold during the relevant year. This disallowance has not been disturbed by the ld. CIT(A) even as he finds to the contrary. In fact, the AO’s order is also inchoate inasmuch as the income being admitted, if not agricultural income, as returned, the same is liable to be assessed under any other, including the residuary head, i.e., as income from other sources, or even as income from an unexplained source/s.