2011 (6) TMI 858 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition of Long Term Capital Gain by the ld. CIT(Appeals).

Issue 1: Nature of land sold and applicability of capital gain tax

- The assessee sold two properties claiming them to be agricultural lands not exigible for capital gain tax.
- The A.O. considered the lands as commercial plots based on an opinion obtained from SRO, Thiruporur.
- The A.O. noted the absence of Chitta, Adangal, and VAO certificate regarding the nature of the land.
- Assessee produced Chitta and Adangal certificate to support the claim that the lands were agricultural.
- The A.O. deputed an Inspector for spot enquiry who reported no agricultural operations in the lands for several years.
- Ld. CIT(Appeals) concluded that the lands were agricultural and not subject to capital gain tax.
- The Revenue contended that the lands were non-agricultural as they were later converted into plots by buyers and had a high-rise building.
- The Tribunal found that the lands were outside municipal limits and agricultural operations were carried out, supporting the deletion of the addition.

Decision: The appeal filed by the Revenue was dismissed, upholding the deletion of the addition of Long Term Capital Gain by the ld. CIT(Appeals).