Law:

Section:

Section 2(14) of the Income-tax Act, 1961 - Capital gains - Capital asset - Assessees had purchased a piece of land for a sum of Rs. 8 lakhs as an agricultural land - Later on, they sold said land to 'V' Ltd. for a sum of Rs. 73 lakhs - Assessees filed separate returns of income wherein capital gain arising out of sale of agricultural land was claimed by each of them to be exempt - Assessing Officer rejected assessees' claim and brought amount of profit to tax as capital gain - Commissioner (Appeals) as well as Tribunal however, allowed assessees' claim - It was apparent from records that land in question was entered in revenue records as an agricultural land and no permission was ever obtained for non-agricultural use by assessees - It was also noted that permission for non-agricultural use was obtained for first time by 'V' Ltd. i.e., purchaser, after it purchased land - Whether on facts, finding recorded by two authorities below that land was used for purpose of agriculture, was based on appreciation of evidence and by application of correct principles of law and, therefore, said finding did not require any interference - Held, yes FACTS The assessees were co-owners of the land. They purchased said land for a sum of Rs. 8 lakhs as an agricultural land. Later on, they sold the said land to 'V' Ltd. for a sum of Rs. 73 lakhs. The assessees filed separate returns of income wherein capital gain arising out of the sale of agricultural land was claimed by each of them to be exempt. The Assessing Officer held that the said land had non-agricultural potential and the fact that it was sold at a price which was nearly 10 times the purchase price within two years from its purchase and, moreover, it was purchased for the purpose of a beach resort showed that the said land was not an agricultural land. Consequently, he held that the profit arising out of the sale of the said land was assessable to the tax as capital gain. On appeal, the Commissioner (Appeals) set aside the assessment order. The Tribunal upheld the order of the Commissioner (Appeals). On revenue's appeal : HELD Under section 260A it is not open to the High Court to interfere in the finding of the fact…

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