Case Law Details
Prodyut Kumar Ghos Vs ITO (ITAT Kolkata)
ITAT noted that assessee in his R.O.I (return of income) erroneously reflected the sale consideration that he received to the tune of Rs.26,96,250/- as agricultural income. On being confronted by the AO and when asked by the AO to produce evidence of agricultural income, the assessee realized the mistake that Rs. 26,96,250/- was wrongly reflected as agricultural income in R.O.I where as it should have been shown as “Exempted Capital Gain “. However, the AO did not bother to examine the claim of assessee as to whether the sale of agricultural land is exempted from capital gain, have taxed the same as ‘income from other sources’. On appeal the ld. CIT(A) taking note that assessee failed to produce any documents to substantiate his claim, was pleased to dismiss the appeal. We note that assessee’s claim is that assessee’s agricultural land which was sold for a consideration of Rs.26,96,250/- cannot be taxed as a Capital Asset as per the definition given under sec. 2(14) of the Act. According to the assessee the land he sold was agricultural land which was about 3 kms (aerially) away from the Municipal boundaries of Dankuni Municipality. And since the population of Dankuni Municipality as per the latest Census of Year 2011 was only 94,936, which is below one lakh population which was a condition precedent to qualify as a Capital Asset, the assessee’s agricultural land sold in the A.Y cannot be treated as Capital Asset and the sale consideration cannot be taxed. I am satisfied with the claim of the assessee that the sale consideration of Rs. 26,96,250 received from sale of agricultural land in the facts narrated above if found factually correct should not be taxed. Since the AO/CIT(A) has not examined the veracity of the documents filed before me, I am inclined to remand this issue back to the file of AO for the limited purpose of verification of documents and if found correct, then the claim that Rs. 26,96,250/- to be allowed as not taxable. In any event, if the assessee fails in the verification of the facts discussed [supra], the consideration the assessee received for sale of agricultural land in any way cannot be taxed under the head ‘income from other sources’ and then only capital gain to be levied in accordance to law after hearing the assessee.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal is preferred by the assessee against the order of Ld. CIT (Appeals) , 6, Kolkata dated 21-01-2019 for the assessment year 2014-15.
2. Grounds of appeal of the assessee are as under:-
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