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TMI Blog2025 (3) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee had sold lands at Egathur and Navalur Villages for a sum of Rs. 45,70,00,000/- on 10.10.2005 to a third party. Stating that the lands sold by the assessee were agricultural lands at the time of sale, the assessee claimed exemption for the entire consideration from the levy of tax. Similarly, the assessee has invested a sum of Rs. 10 Crores in NABARAD Bonds to claim exemption under Section 54EC of the Act. The Assessing Officer accepted the case of the assessee that the lands sold by the assessee in Egathur and Navalur Villages are agricultural lands. Similarly, the assessee's investment in NABARD bonds was also reduced from total income in favour of the assessee. Challenging the order of the Assessing Officer, the Department preferred a revision before the Commissioner of Income Tax, Chennai-6. The Commissioner of Income Tax held that the land which is capable of being used as 'other purpose', need not be an agricultural property. Relying upon a Government Order issued in 2004, the Commissioner held that the land is urbanizable in the year under consideration. Stating that the land has been sold to construct a township, the Commissioner disallowed deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat the land as a non-agricultural land. The Tribunal also observed that the State Government classifying any village as urbanizable is only in contemplation of developmental activities and scheme and that has nothing to do with the administration of Income Tax law. (f) On the question of exemption under Section 54EC of the Act, the Tribunal found that the assessee was having sufficient funds in hands to subscribe to NABARD bonds even without sale of shares and that the day-to-day comparison of available funds on the basis of cash book to verify whether the investments was made on exactly out of sale proceeds of the land or not is an extreme view opposed to the spirit of law. The Tribunal was of the view that once the funds available from different sources are summarised in the hands of assessee, then it is not possible to identify the source of income. Therefore, on both counts, the appeal filed by the assessee before the Tribunal was allowed and order of the Commissioner was set aside. Aggrieved by the same, the Commissioner of Income Tax, has preferred the above Tax Case Appeal. (3) This Court, while admitting the Tax Case Appeal, framed the following substantial questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); [(c) any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof,]but does not include- (i)any stock-in-trade [other than the securities referred to in sub-clause (b)], consumable stores or raw materials held for the purposes of his business or profession ; (ii)personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes- (a) jewellery;(b)archaeological collections;(c)drawings;(d)paintings;(e)sculptures; or(f)any work of art. Explanation 1.-For the purposes of this subclause, "jewellery" includes-(a)ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semiprecious stone, and whether or not worked or sewn into any wearing appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) Section 10 deals with incomes which shall not be included in total income. Section 10[37] of the Act reads as follows:- ''10[37]:- In the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head "Capital gains" arising from the transfer of agricultural land, where- (i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2; (ii) such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his; (iii) such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India; (iv) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004.Explanation.-For the purposes of this clause, the expression "compensation or consideration" includes the compensation or consideration enhanced or further enhanced by any court, Tribunal or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees.] [Inserted by Act 22 of 2007, Section 18 (w.e.f. 1.4.2007).] (2) Where the long-term specified asset is transferred or converted (otherwise than by transfer) into money at any time within a period of three years from the date of its acquisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long-term specified asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head "Capital gains" relating to long-term capital asset of the previous year in which the long-term specified asset is transferred or converted (otherwise than by transfer) into money. Provided that in case of long-term specified asset referred to in sub-clause(ii) of clause (ba) of the Explanation occurring after sub-section (3), this subsection shall have effect as if for the words "three years", the words "five years" had been substituted.] [Inserted by Act 10 of 2000, Section 27 (w.e.f. 1.4.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely before their amendment by the Finance Act, 2007, such bond shall be deemed to be a bond notified under this clause;] [ Inserted by Act 22 of 2007, Section 18 (w.r.e.f. 1.4.2006).] (ba)["long-term specified asset" for making any investment under this section, - [Substituted by Finance Act, 2018 (Act No. 13 of 2018), dated 29.3.2018.] (i) on or after the 1st day of April, 2007 but before the 1st day of April, 2018, means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 but before the 1st day of April, 2018; (ii) on or after the 1st day of April, 2018, means any bond, redeemable after five years and issued on or after the 1st day of April, 2018,by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 or any other bond notified in the Official Gazette by the Central Government in this behalf.] [Inserted by Act 10 of 2000, Section 27 (w.e.f. 1.4.2001).]] [ Substituted by Act 18 of 2005, Section 17, for sub-Section (3) (w.e.f. 1.4.2006).] (10) From the plai ..... 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