Law:

Section:

Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1969-70 - Assessee sold a piece of land which yielded more than ten times of its original value - Assessee claimed that said land was entered in revenue records as agricultural land and was not assessed on that basis, therefore, profit derived from sale of it was not exigible to tax under section 45 - It was however, seen from records that land was sold to a non-agriculturist for purpose of constructing houses at a rate at which no agriculturist would purchase it for bonafide agricultural purposes - Moreover, land in question was situated in midst of developed lands and there were buildings round about - It was further noted that said land was situated within corporation limits of city within Draft Town Planning Scheme which was sanctioned and was eminently suitable for construction of houses - Whether in view of aforesaid circumstances, land in question could not be characterised as agricultural land merely because it was entered in revenue records as agricultural land - Held, yes - Whether, therefore, capital gains derived on sale of said land were exigible to tax under section 45 - Held, yes Section 47 of the Income-tax Act, 1961 - Capital gains - Transaction not regarded as transfer - Assessment year 1969-70 - Whether a transaction must be treated as having become effective from date on which document was executed in case its registration is subsequently admitted before Registrar and eventually it is registered - Held, yes FACTS During the accounting year relevant to the assessment year 1969-70, the assessee sold half of the portion of land which yielded more than ten times of its original value. The assessee claimed that it was entered in revenue records as agricultural land and was assessed to assessment on that basis and a crop which yielded a gross annual normal income of less than Rs. 200 (two hundred) was grown on the same during the relevant years. It was the case of the assessee that accordingly the profit as derived by her from that transaction was not exigible to tax as capital gains under section 45. However, the ITO disallowed assessee's claim and included…

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