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2016 (2) TMI 738 - ITAT HYDERABAD

2016 (2) TMI 738 - ITAT HYDERABAD - TMI - Treatment to land - agricultural v/s non agricultural - selection of assessment year - Held that:- Since the facts in the present case indicate that assessee has sold away the agricultural land and there is no intention or evidence that land was converted to non-agricultural land or put to use for nonagricultural purposes, the contention that purchaser used the land for the purpose of Engineering College cannot be held against the assessee so as to treat .....

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been considered in A.Y. 2008-09 and not in A.Y. 2009-10 in which year there is no such transaction of sale of land. The A.O. in our view, has considered the assessment year wrongly and initiated proceedings in a later year, when the property was sold on 04.03.2008 relevant to A.Y. 2008-09. In view of that the contentions of the Revenue does not require any consideration - Decided in favour of assessee - ITA.No.1825/Hyd/2014 - Dated:- 20-1-2016 - SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMA .....

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ere subjected to developmental activities like Engineering Colleges etc., in which event, the land at the time of sale ought to have been brought to tax under the Head Long Term Capital Gains . Assessee herein is an employee of National Geo Physics Research Institute. In response to the notice issued under section 148 of the Act, assessee declared total income at ₹ 1,97,210. During the course of assessment proceedings, the Assessing Officer noticed that he along with his two brothers sold .....

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as under: 1. The agricultural land sold is an ancestral property and it falls under HUF status. The HUF return was not filed because there was no taxable income under HUF Status. Hence there was no requirement to file HUF Return so the question of disclosing the agricultural Income does not arise. 2. We have submitted pahanies of agricultural land where the crops grown by us was. mentioned. It being the government record, there cannot be better evidence than government record to evidence the ag .....

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planation of the assessee. He observed that the assessee had not admitted any agricultural income either in his individual capacity or HUF capacity and had not produced bills, sale of agricultural produce. He also observed that the land was in his individual capacity and there was no evidence that the land under cultivation in the preceding two years of its sale. He also observed that after sale the land was put to commercial activity. In fact, the land was sold to a non-agriculturist for a non- .....

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, Ld. CIT(A) observed that as per the revenue records and the sale deed, land was described as agricultural land from the pahanies, crops grown were shown as Paddy . Admittedly, the land falls beyond 8 K.M. from urban agglomeration and therefore, did not fall within the definition of capital asset, unless it is shown that it was used for non-agricultural purpose. He has taken into consideration several judicial precedents in this regard and observed that even if agricultural operations are not c .....

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e us. Ld. D.R. relied upon the decision of Hon ble Supreme Court in the case of Smt. Sarifabibi Md. Ibrahim vs. CIT (supra) that in each case the facts have to be gathered to draw an inference, as to whether it was put to agricultural operations or not. 4.1. In the aforecited case, the facts in favour of the assessee were - (a) land registered as agricultural land in revenue records (b) payment of land revenue till the year 1968-69 (c) absence of any evidence that it was put to non-agricultural .....

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the land was sold @ ₹ 23 per sq. yard and purchaser society commenced construction operations within three days of purchase. 4.3. Under these circumstances, the Hon ble Supreme Court held that the circumstances in favour of the Revenue outweigh the circumstances in favour of the assessee and concluded that the land at the time of sale was not an agricultural land. 5. Ld. D.R. adverted our attention to the land records wherein the land was shown as dry land which cannot give good yield and .....

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. On the contrary, Learned Counsel appearing on behalf of the assessee relied upon a certificate issued by the revenue department to highlight that the land is situated beyond 8 K.M. from the Hyderabad municipal limits. Even as per the remand report, the A.O. agrees that the land is situated beyond 8 KM from Municipal limits and this was not disputed by the A.O. in the assessment order itself. It was also submitted that there was a dispute regarding the actual cultivation carried on this land as .....

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e assessee - who is Director of NGRI, Hyderabad in his individual capacity - the land appears to have been purchased in HUF capacity. As seen from the recitals of the sale deed, it is true that Mr. D. Satyanarayana along with his two other brothers Mr. D. Laxminarayana and Mr. D. Mahender purchased agricultural land vide registered document No.526 of 1985. It is also seen that along with the assessee, assessee s mother, wife and son were also included as vendors by the vendee to avoid further co .....

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n record that the land in question is shown as dry agricultural land in the revenue records. There is also no evidence that assessee has intended to convert the land into non-agricultural land, as in the case of Smt. Sarifabibi Md. Ibrahim vs. CIT (supra). Since the facts in the above said case relied on by the Revenue are entirely different from the facts in the impugned case, we see no reason to interfere with the findings given by the Ld. CIT(A). Moreover, whether agricultural operations are .....

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se of DCIT, Circle 1(3), Hyderabad vs. M. Kalyan Chakravarthy ITA.No.729/Hyd/2013 dated 24.10.2014 assessee entered into an agreement for development of land and the purchaser used the land for commercial purposes. The Bench observed that the land sold was agricultural land and put to use for agricultural purposes also and therefore the fact that the predecessor utilised the land for commercial purpose cannot be considered as evidence of change of land. Under the circumstances, the purpose for w .....

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ith regard to this. The Tribunal also noted that the award passed by the District Collector (Land Acquisition), was a document which established beyond doubt that the land in question was agricultural land. Thus, on the date of purchase, the land in question was agricultural land and on the date of acquisition, the character of the land continued to be agricultural. When these two clear findings have been returned, it is apparent that in the transitional period, that is, between purchase and acq .....

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s to lead to an inference that the nature and character of the land had been changed from agricultural to industrial. The mere fact that the assessee did not carry out any agricultural operations did not alter the nature and character of the land. In any event, this discussion is not relevant in the backdrop of the clear finding given by the Tribunal that on the date of the purchase and as also on the date of acquisition, the land in question was agricultural land. Having come to such a conclusi .....

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