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Income Tax Officer Ward-15 (3) Chennai Versus Smt. Lalitha

Addition made on account of capital gains on sale of agricultural land - whether the land sold by the assessee is agricultural land or non-agricultural land for the purpose of capital gains? - Held that:- For the elaborate reasons given by the Commissioner of Income Tax (Appeals), we hold that the land sold by the assessee is agricultural land and thus sustained the order of the Commissioner of Income Tax (Appeals) and reject the grounds raised by the Revenue. - I .T.A.No.14/Mds/2015 & C.O.No.15 .....

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missioner of Income Tax (Appeals) erred in directing the Assessing Officer to delete addition made on account of capital gains on sale of agricultural land. In other words, the issue is whether the land sold by the assessee is agricultural land or non-agricultural land for the purpose of capital gains. 2. The assessee filed return of income for the assessment year 2010-11 on 8.4.2011 admitting income of ₹ 1,79,500/- Assessment was completed on 28.3.2013 under section 143(3) of the Act dete .....

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ricultural land and therefore the Assessing Officer is right in disallowing the claims of the assessee under section 54 and 54B and assessing the sale proceeds as long term capital gains. 4. Counsel for the assessee relied on the order of the Commissioner of Income Tax (Appeals) in allowing the claims of the assessee. He further submits that land situated is in a remote area and the surrounding lands are all agricultural lands. The land situated in Cheyyur which is in Kanchipuram district and th .....

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5. Heard both sides. Perused orders of lower authorities. The issue in appeal has been elaborately considered by the Commissioner of Income Tax (Appeals) with reference to the documents furnished and the submissions made before him and the contentions of the Assessing Officer and allowed the claims of the assessee holding as under:- 6.1 I have verified the submissions made by the AR of the appellant. As per the document submitted, Revenue records, Patta, VAO certificate, the land has been classi .....

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the IT Act. The appellant has been carrying on agricultural operations on the said land and no commercial activities have been carried on the above said land. The AR of the appellant has also furnished a 'Google Map' which showed the Distance between the nearest District Headquarters i.e. Chennai Municipal Corporation (CMDA) to the location of the property sold as 30.3 kms and from the VO Certificate issued on 08.05.2013 mentioned clearly that the Cheyyur Village total population is wit .....

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rried out till the date of sale of property along with Municipal records in support of the appellant claims. Similarly, in the case of Sarifabibi Mohamed Ibrahim and Others Vs. CIT in 204 ITE 631, the Hon'ble Supreme Court has held that the agricultural land was sold to a cooperative society, and before the date of sale, application was made to concerned authorities to convert the said land into housing plots, and within 3 days of registration the society commenced its housing activities. Wh .....

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Therefore the Court held that the land cannot be classified as agricultural land. Now in present case, the appellant is not engaged in any commercial activity and the land is situated outside the limits of Municipal Corporation and agricultural operation were carried out and hence the contentions of the Assessing Officer in the above case is also not applicable to the facts of the appellant's case under consideration. 6.3 The AR of the appellant in his submission placed his reliance ratio h .....

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al land both at the time of purchase and sale and the Patta issued also shows the land as an agricultural land. Even in the case of Commissioner of Wealth Tax Vs. H. V. Mungale, 1984(145) ITR, 208 wherein the Hon'ble Supreme Court held that what is to be determined is the character of the land according to the purpose for which it was meant or set apart and can be used. In the case of the appellant the subject land sold was agricultural land which was not only as classified in the revenue re .....

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