Sale of Agricultural Land does not amount to Capital Gain: ITAT allows Tax ExemptionRead More: htt

The Kolkata Bench, of the Income Tax Appellate Tribunal (ITAT), has held that the sale of agricultural land does not amount to capital gain for the purpose of allowing exemption under section 10(1) of the Income Tax Act, 1961.

The assessee was represented by Shri Guruswamy and the revenue was represented by Shri V.S. Chakrapani.

The A.O. made the addition of Rs.2.06 crores as long-term capital gain arising from the sale of land situated at Survey No.40, Chikkanahalli Kammanahalli, Sarjapur hobli, Anekal Taluk, Bengaluru. The assessee contended that the said land is situated beyond the Municipal limits of 10 km and it was not a capital asset as per section 2(14) of the Act. Further contended that the sale of agricultural land outside municipal limit is to be treated as agricultural land and should be exempted u/s 10(1) of the Act.

The A.O. held that the land was converted for non-agricultural purposes before execution of the sale deed, therefore it was a capital asset u/s 2(14) of the Act, and it cannot be exempted u/s 10(1) of the Act. The CIT(A) on appeal confirmed the finding of the A.O.

It was submitted that the assessee entered into a sale agreement to sell the subjected property and the land was got converted as per the condition laid down by the purchaser and got converted the land for non-agricultural purposes on 16.9.2013 by order of Commissioner of Bangalore district OM. Further, it was submitted that land has been used by the assessee till the date of transfer as agricultural land and also assessee declared income from agriculture in its return of income.

The revenue stated that the land was converted for non-agricultural purposes before sale and the sale of converted land for non-agricultural purposes should be liable for tax as it is not an agricultural income in terms of section 2(14) of the Act

The Tribunal observed that if the cultivation of land continued till the date of sale of the land, then the land should have been treated as agricultural land and exempt from the capital gain in view of section 2(14) of the Act.

As the revenue failed to bring anything on record to controvert the tribunal’s observation the Coram consist of Chandra Poojari, accountant member and Smt. Beena Pillai, judicial member allowed the exemption u/s 10(1) as the sale not amounts to capital asset. The appeal filed by the assessee was allowed.

New GST Functionality: Refund Application Withdrawal Enabled on GSTN

The GST Network has enabled the facility to withdraw the refund application on the GST Portal. With this, the Users can now withdraw the applications in case of mistakes while claiming the refund. The new facility will reduce the chances of rejection of refund applications by the GST department on the ground of clerical errors/defects.

In case of noticing any mistakes in the application, the users can now withdraw the application simply by filing Form RFD-01W on the portal and thereafter file the corrected refund application immediately for quick processing.

GST refund is a process in which, registered taxpayers can claim excess amount if they paid more than the GST liability. They can claim after submitting a refund application with the necessary details in the GST portal.

Mere Disallowance of Claim u/s 54F will not attract Penalty u/s 271(1)(c): ITAT

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench has held that mere disallowance of the claim under section 54F will not attract a penalty u/s 271(1)(c).

During assessment proceedings, the Assessing Officer levieda penalty of Rs.2,92,210/- u/s.271(l)(c) of the Act, 1961 onthe assessee, Mr. Ashif Mehbbobelahialleging that the assessee having wrongly claimed capital gains, earned by it on a transaction of sale of property, as long-term capital gains and thereafter having claimed exemption of the same u/s. 54F of the Act by investing the long-term capital gains in a residential house. The aggrieved, assessee filed appeal against the order before CIT(A), which allowed the appeal and deleted the addition. Aggrieved, Revenue filed appeal before ITAT.

The revenue submitted that the long-term capital gain had been claimed on a depreciable business asset and was therefore likeshort-term capital gain as per section 50 of the Act and the assessee was not therefore entitled to exemption u/s. 54F of the Act which was allowed as per the law only on long-term capital gains.

The Tribunal observed that CIT(A) has rightly deleted the levy of penalty noting that the assesseehad furnished all particulars relating to the claim of exemption by way of investment in residential properties and that the claim was made under the bonafide belief that all investment would be made within the period specified but could not be done so for reasons beyond his control as the construction was not completed in time.

The Coram Ms. Annapurna Gupta, Accountant Member,and Shri TR Senthil Kumar, Judicial Memberhave held that mere disallowance of claim in law would not tantamount to charging the assessee withconcealing/furnishing inaccurate particulars of income to levy penalty u/s 271(1)(c) of the Act and upheld the order of the CIT(A) deleting penalty levied amounting to Rs.2,92,210/-.

Mr. Shri V.K. Singh and Mr. S L Poddarhave appeared for the appellant and respondent respectively.