2011 (2) TMI 1391 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A) order directing to levy long term capital gains based on ITAT decision in T.Suresh Gowda case.

Summary:
The Appellate Tribunal ITAT Bangalore heard appeals by the revenue against the CIT(A)-II, Bangalore's orders for the assessment year 2005-06 concerning two assessees. The revenue contested the CIT(A)'s direction to levy long term capital gains as per the assessee's claim, following the ITAT decision in T.Suresh Gowda case. The revenue had not accepted the ITAT decision and had filed an appeal u/s 260A of the Income-tax Act, 1961 with the High Court of Karnataka. The assessees, individuals declaring agricultural income, had sold non-agricultural land without declaring it as capital gains. The AO taxed the land under capital gains during assessment u/s 143(3) r.w.s 147 of the Act. The CIT(A) found that the land was not used for non-agricultural purpose within the stipulated time after conversion, rendering the conversion order null and void. Citing the ITAT decision in T.Suresh Gowda case, the CIT(A) allowed the appeal, leading to the revenue's appeal before the ITAT. The ITAT upheld the CIT(A)'s decision, stating that as long as the ITAT's order was not suspended or stayed by the High Court, there was no reason to interfere. Consequently, the revenue's appeals were dismissed on 28th February 2011.