Income from Agricultural Land can’t be added under Capital Gain: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench comprising Shri Waseem Ahmed, Accountant Member and Shri Siddhartha Nautiyal, Judicial Member held that Income from agricultural land can’t be added under capital gain.

The appeal was filed against the order of the Commissioner of Income Tax passed on 22/01/2019 & 28-01-2019. It was alleged that the assessee gained 10,30,200/- on the sale of sold agricultural lands situated at village- Kotambi, Bhaniyara and Bhavpura, Taluka and claimed as not taxable in the return of income under the head “Exempt Income”

 The appellant contended that the lands are situated beyond the prescribed limit of 8 km and amount as not capital assets within the meaning of section 2(14) of the Act. The AO rejected the submission and made an addition of 7,23,742/- as an LTCG and 6,88,065/- as STCG in respect of 2 properties applying the provisions of section 50C of the Act. It was viewed that the assessing officer erred in invoking section 50C of the Act light of direction issued vide CBDT Circular No.17/2015 dated 6-10-2015.

The Coram directed the AO to consider the documents of the appellant by providing an opportunity to examine the same/ rebut the same. In the matter of the addition of 12% under section 44AD of the Act, the Tribunal viewed the restriction made by CIT on the disallowance of 10%in the absence of corroborative evidence as correct. The appeal was partly allowed for statistical purposes.

The appellant was represented by Shri P B Parmar and the respondent was represented by Shri Umesh Agarwal.

To Read the full text of the Order CLICK HERE

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