Agricultural Land is Not Capital Asset u/s 2(14)(iii)(b) of Income Tax Act, No Capital Gain: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Jaipur Bench, has recently, in an appeal filed before it, held that there is no capital gain in case of agricultural land as the same is not a capital asset u/s 2(14)(iii)(b) of Income Tax Act.

The aforesaid observation was made by the Jaipur ITAT when cross appeals were filed before it, as against the order of the CIT(A)-Kota, dated 13-03-2019, for the assessment year 2014-15,by the Department as well as by the Assessee.

The ground of the assessee’s appeal being that on the facts and in the circumstances of the case, the A.O. as well as the CIT(A), have erred both in law and facts in taxing capital gain Rs. 2,42,38,984/- from Ag. Land as income from capital gain whereas Ag. Land sold is not a capital asset as per section 2(14) (iii)(b) of the Act and therefore not liable for capital gain under section 45 of the Income Tax Act, the CIT(A) had partly granted the ground of the assessee by observing that since the same was an agricultural land within the definition given u/s 2(14)(iii)(b) of the Income Tax Act, the gains should not have been separately taxed u/s 45 and subjected to provisions of Section 50C.

With Shri S.L. Jain, Adv & Shri Ashok Gupta, Adv, the counsels appearing on behalf of the assessee having placed their submissions, the Bench noted that the AR could not controvert the findings of the CIT(A) and no contrary material has been advanced.

On the other hand, Shri Sanjay Dhariwal, the CIT-DR, supported the order of the CIT(A).

Hearing the contentions of either sides and thereby perusing the materials available on record, the ITAT Bench consisting of Rathod Kamlesh Jayantbhai , the Accountant Member, along with Dr. S. Seethalashmi, the Judicial Member, held:

“After hearing both the parties and perusing the materials available on record, the Bench finds that for want of no contrary material by the assessee, the Bench has no option except to confirm the order of the ld. CIT(A) on the issue in question. Hence, the Ground No. 3 of the assessee is dismissed.  In the result, the appeal of the Revenue as well as assessee are dismissed.”

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