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TMI Blog2017 (3) TMI 1645X X X X Extracts X X X X X X X X Extracts X X X X ..... turned agricultural income and no expenditure was claimed for agricultural expenses cannot be conclusive proof to hold that subject land was not agricultural land. The assessee’s explanation that the agricultural income is exempted income and due to non-declaration agricultural income no expenditure was claimed appears to be reasonable Explanation. Records are showing that the lands are agricultural land, classified as dry land for which Kisthu has been paid and falls far exclusion from the definition of capital asset u/s.2(14) of Income Tax Act. Thus land in question sold by the assesse was agricultural land and cannot be held as capital asset and no capital gains are chargeable - Decided in favour of assessee - ITA No.1769/Mds/2016 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and having not rejected such evidences, the sustenance of taxing the exempted income/surplus under the head 'capital gains ' was wrong, erroneous, unjustified, incorrect and not sustainable in law. 5. The CIT (Appeals) failed to appreciate that having not disputed the character of the lands transferred as agricultural lands, the sustenance of the taxation of the profit/surplus from sale of such lands based on the subsequent event was wholly unjustified. 2.0 All the grounds of the appeal are related to the capital gains on sale of agricultural lands. During the previous year relevant to the AY 201112, the assessee has sold 2 Acres and 78 cents of agricultural land at Thirutheri village, Kattangalathur Panchayat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gains. The AO relied on the decision of CIT vs. Sarifabibi Mohmed Ibrahim reported in (1982) 136 ITR 621 (Guj) and the Hon ble Supreme Court decision in the case of State of Uttar Pradesh vs. Nand Kumar and Aggarwal Others dated 19.11.1997 and other host of case laws. 4.0 Aggrieved by the order of the AO, the assessee went on appeal before the Learned Commissioner of Income Tax (Appeals) (hereinafter referred to as Ld.CIT(A) ) and relied on the host of case laws. The Ld.CIT(A) confirmed the addition made by the AO holding that the assessee neither reflected agricultural income nor brought any positive evidence in support of its having carried agricultural operations in the land and also relied on the decision of Sarifa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that the use of the buyer of the property after the sale of the land is irrelevant to decide as to whether the land was agricultural or not at the time of sale of the land. The assessee also relied on the decision in the case of Mrs. Sakunthala Veachalam Mrs. Vanitha Manickavasagam Vs. ACIT (2014) 369 ITR 558 (Mad) of the Hon ble jurisdictional High Court. The Ld.AR, further, submitted that the assessee has submitted all the documents from the Revenue authorities as well as the Village Development Officer proving that the land in question was agricultural land and the assessee was carrying out agricultural operations. The AO has not disputed the claim of the assessee and simply rejected the exemption claimed by the assessee. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e records, the mango trees and coconuts trees were grown in the said land. Further, the assessee also submitted a Certificate from VDO certifying that the lands were agricultural lands and distance between the above-mentioned land and Kattamgathul Unit Office is around 9 kms. Another Certificate was submitted by the assessee stating that the population of Satya Nagar Tiruttani village is 630. A copy of Sale Deed was also submitted by the assessee. 7.0 As per the documentary evidences furnished by the assesse, the land in question was agricultural land and the assesse is carrying on agricultural activity in the said land. The land Revenue documents shows that the assesse was harvesting mangoes and coconuts in the said land. The AO rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion agricultural income no expenditure was claimed appears to be reasonable Explanation. Therefore, the ratio of case laws relied upon by the AO as well as Ld.CIT(A) are not applicable in the assessee s case. The Hon ble Jurisdictional High Court in the case of Mrs. Sakunthala Veachalam Mrs. Vanitha Manickavasagam Vs. ACIT (2014) 369 ITR 558 (Mad) held that merely because of the adjacent land divided into Plots for sale not a reason that the land sold by the assesse were for the purpose of development of land. Records are showing that the lands are agricultural land, classified as dry land for which Kisthu has been paid and falls far exclusion from the definition of capital asset u/s.2(14) of Income Tax Act. The case laws relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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