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TMI Blog2011 (6) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 14-7-2009. 2. The assessee is an individual. He has been filing returns of income on a regular basis. The assessee earns income from business, long and short term capital gains and from other sources. He has filed a return of income for Rs. 3,20,12,651/- for the assessment year under appeal. The assessment was completed under section 143(3) on a total income of Rs. 4,25,24,315/-. 3. The assessee had sold land at Egathur and Navalur Villages for a sum of Rs. 45,70,00,000/- on 10-10-2005 and 15-10-2005 to Hiranandani group. As the lands were agricultural lands at the time of sale, the assessee claimed exemption for the entire consideration from the levy of tax. 4. On a perusal of the assessment records, the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Navalur villages was certainly agricultural land and those villages were not notified by any competent authority for the purpose of levy of capital gains tax. The assessee explained that those areas are beyond the specified limit of any municipal area or town municipality or cantonment area or any such other urbanized area. The land situated in villages alone. Those villages were not notified under any of the provisions, which could be invoked by the Commissioner of Income-tax against the assessee. Therefore the agricultural lands sold by the assessee did not take the character of capital asset and, therefore, the Assessing Officer was justified in accepting the claim of the assessee that the entire sale consideration was exempt from levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural in nature. The assessee has furnished the details about the agricultural lands, stating the distance from the nearest municipality, the population of the place and supporting certificates issued by the Village Administrative Officer. The Assessing Officer has examined all these papers placed before him. It is after examining all these evidences placed before him that the Assessing Officer has come to the conclusion that the lands sold by the assessee were agricultural in nature and, therefore, the entire consideration of Rs. 45,70,00,000/- was exempt from taxation. Therefore, it is not possible to hold that there was laxity on the part of the Assessing Officer in examining the issue of capital gains with reference to the sale of land a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring Egathur and Navalur villages as urban area. The State Government has not issued any such notification making its intention absolute. The earlier notification issued by the State Government clarifying the villages to be urbanisable was in contemplation of its developmental activities and schemes. That has nothing to do with the administration of Income-tax law. The Central Board of Direct Taxes has not issued any notification declaring Egathur and Navalur villages as notified areas for the purpose of section 2(14) of the Income-tax Act, 1961. Therefore, only in the light that the villages might be declared as urban areas in future, it is not possible to hold that the land sold was not agricultural land. 14. This position is further for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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