Agricultural Land Cannot Be Treated as Capital Asset Due to Subsequent Commercial Use by Purchaser: ITAT Hyderabad

Advertisement Madhavi Farms Private Limited Vs ITO (ITAT Hyderabad) The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal and held that agricultural land situated beyond the prescribed municipal limits cannot be treated as a “capital asset” under Section 2(14)(iii)(b) of the Income Tax Act merely because the purchaser subsequently used or intended to use the land for commercial purposes. The dispute related to the sale of agricultural land measuring 15 acres 28 guntas situated in Jainapally Village, Bibinagar Mandal, Nalgonda District, during AY...