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2020 (1) TMI 770 - ITAT JAIPURNature of land sold - agricultural land or capital asset u/s 2(14) - whether the land in question sold by the assessee will fall in the definition of Capital Asset u/s 2(14) of the IT Act or it will fall in exclusion clause of section 2(14)? - Conversion of land to Farm House - Subsequently, the JDA has issued Patta in favour of the purchaser - CIT-A confirming the order of Income Tax Officer of treating the sold of agricultural land (as per provision of section 2(14) as capital asset - HELD THAT:- As per the terms and conditions of the said Lease issued by the JDA, the land in question was given only for environmental friendly residence/farm house. Further as per the conditions of conversion of the land to farm house, the activity permitted in the area is only construction of low coverage, low height structure for residential use. In the activities permitted on conversion of the land into farm house is restricted to the environmental friendly residence. Therefore, the land use was changed from agriculture to environmental friendly residence and no more an agricultural land. Once the land in question was no more an agricultural land at the time of transfer, then the same will not be considered as agricultural land for the purposes of section 2(14) of the Act. The sale deed dated 09.12.2009 clearly describes the intention of the parties not for agricultural use. Therefore, the very purpose and object of the incentive for giving the exemption under section 2(14) of the IT Act as per exclusion clause of the said section shall not be available once the actual use of the land is no more an agricultural. after conversion of the land, the land use was restricted was only for construction of environmental friendly residence (farm house). Accordingly, in the facts and circumstances of the case and in view of the order of this Tribunal in case of ACIT vs. Sunil Bansal [2019 (6) TMI 304 - RAJASTHAN HIGH COURT] , we do not find any error or illegality in the impugned order of the ld. CIT (A). - Decided against assessee.
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