Law:

Section:

Section 45 read with section 2(14) of the Income-tax Act, 1961 (Corresponding to Section 12B, read with section 2(4A), of the Indian Income-tax Act, 1922) - Capital gains - Chargeable as - Assessment year 1960-61 - Assessee owned certain lands which it used for agricultural purposes and derived agricultural income therefrom at time of their requisition by State Government in 1949 - After requisition those lands were being used by landless people for agricultural purposes who also derived agricultural income therefrom - In year 1959, assessee was paid compensation for acquisition of those lands - ITO assessed sum being difference between compensation paid to assessee and cost of those lands, as capital gains under section 12B of 1922 Act - AAC as well as Tribunal, however, deleted said addition - Whether, on facts, it could be concluded that at all material times, lands in question remained agricultural lands and they were held by assessee as their owner although assessee lost their physical possession in year 1949 by requisition - Held, yes - Whether, consequently, amount of compensation received by assessee was exempt from tax - Held, yes FACTS The assessee was the owner of lands which was used for agricultural purposes. In 1949, those lands were requisitioned by the State Government and assessee was paid compensation for such requisition. Those lands were allotted to the landless people in 1949 and since then those people used those lands for agricultural purposes. In 1959, the assessee was paid compensation for the acquisition of those lands. The ITO assessed the sum being difference between the compensation paid to the assessee and the cost of those lands, as capital gains under section 12B of the 1922 Act. On appeal, the AAC held that those lands were agricultural lands and were not capital assets and deleted the addition. On revenue's appeal, the Tribunal sustained the deletion. On reference : HELD The words "held by an assessee" in section 2(4A) of 1922 Act include physical, actual, constructive and also symbolic possession of a property of any kind. A land is an agricultural land if it is used for agricultural purposes and, an income derived from such…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492