Natesan Ekambaram Vs DCIT (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT), Chennai, recently addressed a case involving Natesan Ekambaram and the Deputy Commissioner of Income Tax (DCIT) concerning capital gains tax on land transfer. The core issues revolved around whether the land in question qualified as a “capital asset” for tax purposes and the correct valuation of the sale consideration. The assessee had appealed an order from the Commissioner of Income Tax (Appeals)-18, Chennai, which upheld the Assessing Officer’s (AO) decision to tax the sale of land as capital gains.
The dispute originated from the sale of 30.35 cents of land out of the assessee’s total holding of 121 cents in Siruseri Village, Kancheepuram District. The sale was executed through a power agent for a stated consideration of Rs. 1,00,44,000 on October 14, 2013. The AO, however, determined the total sale consideration to be Rs. 2,50,00,000, including an advance for the remaining land, and treated the land as a capital asset, leading to a computed long-term capital gain of Rs. 2,45,19,108. The assessee’s primary contention was that the land was agricultural and thus not a capital asset under Section 2(14)(iii) of the Income-tax Act, 1961. Alternatively, the assessee argued that the sale consideration should be restricted to the amount received for the portion of land actually transferred and that capital gains exemption under Section 54/54F should be allowed.
