TMI Blog2013 (9) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue and confirming the order passed by the CIT(A) deleting addition on account of long term capital gain and on account of short term gain. - Tax Appeal No. 589 of 2013 - - - Dated:- 17-9-2013 - M.R. Shah AND MS. SONIA GOKANI, JJ. For the Petitioner : Pranav G. Desai JUDGMENT M.R. Shah, J. Present Tax Appeal has been preferred by the revenue challenging the impugned judgment and order dtd. 11/1/2013 passed by the learned Income Tax Appellate Tribunal, Rajkot in ITA No.1024/Rjt/2010 with respect to A.Y. 2006-07 with the following substantial question of law : (A) Whether in the circumstances and the facts of the case and in law, the Tribunal erred in holding that the deposits made in the bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income was assessed at ₹ 4,98,41,760/- for making various disallowance/addition. That while passing assessment order, the AO made addition of ₹ 22,68,510/- on account of undisclosed sources and also made addition of ₹ 18,70,749/- on account of long term capital gain, addition of ₹ 4,56,83,750/- on account of short term capital gain. It appears that the AO made addition of ₹ 18,70,749/- on account of long term capital gain and addition of ₹ 4,56 83,750/- on account of short term capital gain, on the ground that the lands which was sold during the Assessment Year, more particularly in favour of M/s. Sahara India Commercial Corporation Ltd., was in favour of a non-agriculturist and as per the existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort term gain. 2.3 Being aggrieved by and dissatisfied with the impugned judgment and order passed by the ITAT in ITA No. 1024/Rjt/2010 dtd. 11/1/2013, revenue has preferred present Tax Appeal with the following proposed question of law : (A) Whether in the circumstances and the facts of the case and in law, the Tribunal erred in holding that the deposits made in the bank accounts of assessee was fully explained and thereby deleting the addition of ₹ 22,68,510/-made by the AO on account of income from undisclosed sources? (B) Whether in the circumstances, and the facts of the case and in law, the Tribunal erred in reversing the action of the AO in adopting sale consideration of the land in question at ₹ 5,03,51,250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of short term capital gain. 2.6 Mr. Desai, learned counsel appearing on behalf of the revenue has submitted that the learned tribunal has not properly appreciated the definition of Section 2(14) of the Act. It is submitted that in the present case, the assessee sold the land in favour of a non-agriculturist - M/s. Sahara India Commercial Corporation Ltd. It is submitted that as per the existing State law, there is ban to sell/transfer the agricultural land in favour of a non-agriculturist and therefore, the AO rightly treated the said land which was sold, as capital asset and rightly made addition of addition of ₹ 18,70,749/-on account of long term capital gain, and also addition of ₹ 4,56,83,750/- on account of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute that what was sold by the assessee was an agricultural lands which were situated beyond 8 Kms of local limits of the Municipality. As rightly observed by the tribunal, merely because the land came to be sold during the year under consideration to non-agriculturist, the same will not change the characteristics of the land in the hands of the seller - assessee. It is not in dispute that at the relevant time, the lands were held/used by the assessee as agricultural land. Merely because the said land came to be sold to a non-agriculturist, may be in breach of law prevailing in the State, character of the land would not be changed and the land still would continue as an agricultural land. At the most the sale in favour of non-agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e record in Form No. 7/12 which reveals that the land under consideration were being used for agricultural purpose. The Assessing Authority himself has accepted assessee's claim of deriving agricultural income therefrom and has made assessment accordingly. Merely because the State Law do not permit transfer of agricultural land to non-agriculturist that fact by itself cannot make the said land a Capital Asset within the meaning of section 2(14) of the Act. The assessee has laid on record a certificate from revenue department that the land is situated beyond 8 Km from the Municipal Limits. This certificate was available before the Assessing Authority in remand proceedings. The Assessing Authority brought no material to show that the ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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