The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, ruled that rural agricultural land taken via Government for business activity u/s 2 (13) is qualified for Exemption.
The taxpayer, Shri Jitendra Shanabhai Patel secures his income from the salary, capital gain, and income from additional sources. The taxpayer would pay the income tax return showing the total income at Rs 13,21,950. The assessing officer reopened the assessment and specified that towards the acquisition of land claiming that the registered deeds of the lands that have the valuation incurred via the state for the stamp duty and the valuation incurred via the stamp valuation authority in the enrolled sale deed are the market value of the lands under the provision of section 50C of the act.
AO sees that the land in question was within the purchase proceedings, this expenditure does not be treated as a long-period investment and, thus, a surplus of Rs.5,57,11,120/- was treated as income from profits and gains of business or profession.
The Coram of Mr P.M. Jagtap, Vice President, and Ms Suchitra Kamble, Judicial Member sees that the acquisition of the agricultural land which a taxpayer-owned was completed via government hence section 10(37) of the act is drawn. The evidence like bills for the sale of the agricultural production mentioned that the agricultural functions were taken out via Bhagiya and that was not disputed by the Revenue authorities.
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The Tribunal during dismissing the petition ruled that the acknowledgement of the rural agricultural land taken by the Government for the business activity beneath section 2 (13) of the Act, the identical shall not be treated as an adventure in trade. The tribunal moreover ruled that the claim of section 50C of the Act, the sale consideration would be obtained prior to the date 18.04.2011 and the agreement of sale finalized earlier than that date. Therefore, the claim is a real claim and the CIT(A) has rightly deleted this addition.
Mr Vijay Kumar Jaiswal would get appeared for the revenue and Mr Rupesh Mehta appeared for the taxpayer.
