INCOME TAX ACT, 1961

Section 2(14)(iii)

Capital gains - Capital asset - Land classified as DON in revenue records -

Assessee sold certain piece of land and claimed that land was an agricultural land not exigible to capital gains tax. AO held that what was transferred was a residential bungalow surrounded by mango, guava and other gardens and was not an agricultural land and hence a capital asset, transfer of which resulted in capital gain subject to tax. Held: Subject land was measured 11.8 acres and residential bungalow at best was much less than half an acre. All the mango, guava and other gardens were in fact located as agricultural land. The sale deed recorded that land in question was Don land. In the State of Jharkhand cultivable land in the district was divided into classes, viz., Don and Tanr. The Don lands were the terraceded low lands on which mainly rice is grown, and the Tanr are the uplands which produce a course from of rice, millets, pulses and oil-seeds. The land in question was classified as Don in the revenue records and was thus wet land in which paddy was grown. Based on these documentary evidences, it was clear that land in question which was sold, was agricultural land. Assessee had proved that land was more than a distance of 8 km. from the closest municipality and that it was agricultural land as defined under section 2(14)(iii), and accordingly, there could be no taxability of capital gains.

Followed:Sanjeev Kumar Goyal v. ITO [ITA No. 981/Kol/2019 Order, dated 29-11-2019]

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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