Law:

Section:

Section 2(4A)(iii) of the Income-tax Act, 1961 - Capital asset - Agricultural land - Land sold by assessee used by purchaser to construct residential buildings - Prior to sale, land was being used for growing jovar crop and for purposes of the court fee act was treated as agricultural land - Till sale, permission for conversion of impugned land to non-agricultural use had not been granted by collector under section 65 of the bombay land revenue code - Whether impugned land was agricultural land and profits arising to assessee from its sale not liable to capital gains - Held, on facts, yes FACTS The assessee had 15 per cent share in certain lands which were sold during the months of May and July, 1969, and he received his share to the extent of 15 per cent of the consideration after the sale of the said lands. During the assessment for the assessment year 1970-71, the ITO concluded, after calling upon the assessee to show necessary evidence to prove that said lands were agricultural lands and after examining the actual facts, that the impugned lands were not agricultural and hence the assessee was liable to pay capital gains in respect of the profits made by him on his 15 per cent share in the impugned lands. The AAC, on appeal, upheld the contention of the assessee that the impugned lands were agricultural lands. On appeal by the revenue, the Tribunal found (i) that the impugned lands were meant for putting up houses for residential purposes by the co-operative societies which had purchased them: (ii) that up to 1963-64 the land was shown for three years in the assessee's wealth-tax returns and as such was treated to be non-agricultural land, though, thereafter, the assessee had filed a revised return claiming the land to be agricultural; (iii) that the permission of the Collector under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained on 18-2-1969 for non-agricultural use of the impugned lands by the intending purchasers and, therefore, when the lands came to be sold in May-July, 1969 they were non-agricultural lands; and (iv) that the impugned lands were covered by a Town Planning Scheme of 15-4-1966 and were within the municipal limits…

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