2021 (4) TMI 360 - HC - Income Tax

Nature of land sold - whether the land which was sold by the assessee was an agricultural land or not? - Whether tribunal was right in treating the land sold by the assessee as an agricultural land falling outside the purview of the capital asset and consequently holding that no capital gains tax is leviable on the sale of land? - HELD THAT - It is not in dispute that the land belonging to the respondent assessee and her husband, which is the subject matter in 2019 (2) TMI 647 - MADRAS HIGH COURT are adjoining lands and therefore, when the Hon'ble Division Bench finds that the respondent's husband's land is an agricultural land, the very same finding applies to the case of the respondent assessee. In these circumstances, following the judgment the concurrent findings recorded by the Commissioner of Income Tax and the Income Tax Appellate Tribunal does not call for any interference.

Summary

Issues Involved:
Classification of land as agricultural or non-agricultural for tax purposes.

Analysis:
The High Court of Madras addressed the appeal challenging the order passed by the Income Tax Appellate Tribunal regarding the classification of land for the assessment year 2007-08. The substantial questions of law raised in the appeal included whether the land sold by the assessee should be considered agricultural, thereby exempt from capital gains tax. The Revenue argued that the land was non-agricultural, while the assessee contended it was agricultural. Both the Commissioner of Income Tax and the Tribunal had previously classified the land as agricultural, ruling in favor of the assessee.

The respondent's counsel pointed out that a previous case involving the respondent's husband had determined the land in question as agricultural. The Division Bench's judgment in the husband's case emphasized various factors, including the land's location and classification by the Tahsildar as agricultural. As the husband's and the respondent's lands were adjoining, the judgment in the husband's case applied to the respondent's situation.

The Revenue acknowledged that they did not appeal the judgment in the husband's case, which had become final. Consequently, the High Court, following the precedent set by the husband's case, upheld the classification of the land as agricultural. The court found no grounds or substantial questions of law to interfere with the concurrent findings of the Commissioner of Income Tax and the Tribunal, ultimately dismissing the appeal without costs.