Case Law Details
Chander Mani Sharma Vs ITO (ITAT Delhi)
Introduction: In a crucial legal development, the Income Tax Appellate Tribunal (ITAT) Delhi has directed the re-adjudication of the case involving Chander Mani Sharma and the Income Tax Officer (ITO). The case revolves around the nature of land sold and whether it qualifies as agricultural land or not. The ITAT’s decision underscores the significance of the sale deed in determining the status of the land.
Detailed Analysis: The appeal was filed by the Assessee, Chander Mani Sharma, challenging the order of the Commissioner of Income Tax (Appeals) [CIT (A)], Aligarh. The CIT (A) order was in response to an appeal against the order passed under Section 144/147 of the Income Tax Act, 1961, by the Income Tax Officer, Ward-3(1), Bulandshahar (Ld. AO).
The core issue in this case revolves around the nature of the land sold. The Assessee claimed that the land sold should be considered agricultural, resulting in exempt income. In contrast, the Ld. AO, based on the sale deed, concluded that the land was in the form of an industrial plot, potentially attracting capital gains tax. The Assessee argued that at the time of the execution of the sale deed, there was an agreement to sell, which indicated the agricultural nature of the land.
The case hinges on the interpretation of the sale deed and the agreement to sell. The written submissions on behalf of the Assessee, supported by legal counsel Shri Jai Kisan, advocate, argued that the nature of the land should be considered agricultural, citing relevant case law, including CIT vs. Smt. Sanjeeda Begum [2006] 154 Taxman 346 and the judgment in ITO, Ward – 2, Bulandshahar vs. Sh. Jitender Kumar of the Delhi Tribunal. These judgments emphasize that agricultural land sold in the form of an industrial plot is still considered agricultural and is not liable for capital gains tax.
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