Law:

Section:

JUDGMENT G.M. Akbar Ali, J. - The appellants/assessees, who are mother and daughter, sold their agricultural lands situated at Mahabalipuram Village, Thirukkalikundram Taluk, Kancheepuram District vide document Nos.7970/2007 and 519/2008 for a sale consideration of Rs.25,20,000/- and 64,80,000/- respectively. They claimed exemption from tax on capital gain on the ground that they were agricultural lands. However, the Assessing Officer observed that though the lands were claimed to have been agricultural lands, the assessees have not furnished any evidence in support of their claim. Hence, he deputed one Inspector to examine the lands, who, in turn, reported that the lands were dry lands and no agricultural activities were undertaken by the assessees. Hence, the Assessing Officer rejected their claim holding that the lands sold were not agricultural lands and brought the entire sale consideration to tax under the head "Long Term Capital Gains". The Assessing Officer also invoked the provisions of Section 50C of the Income Tax Act and adopted the guideline value for such assessment. Aggrieved by the order of the Assessing Officer, the assessees preferred appeals before the Commissioner of Income Tax (Appeals). 2. Before the Commissioner of Income Tax (Appeals), the assessees furnished a copy of the Adangal extract and also claimed that there were casuarina crops grown in those lands as shown in the chitta adangal, which indicates that the lands were agricultural lands. Since there was an additional evidence filed, the same was forwarded to the Assessing Officer for his verification with a request to submit a remand report. The Commissioner of Income Tax (Appeals) found that in the remand report dated 18.5.2012 the Assessing Officer confirmed that the lands were agricultural lands, as casuarina crops were grown as certified by the Tahsildar . 3. On going through the various provisions of the Act, the Commissioner of Income Tax (Appeals) also found that once the lands were classified as agricultural lands as per the revenue records, namely, Chitta and Adangal, and the lands, which were not falling within the territorial limits of any Municipality or cantonment or…

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