M J George Vs DCIT (Kerala High Court)
Kerala High Court dismissed an appeal by M.J. George against an Income Tax Appellate Tribunal (ITAT) order concerning capital gains tax on the sale of land. The case pertained to the 2006-2007 assessment year, where the assessee declared an income of Rs. 63,420 but had a significant bank credit of Rs. 899.10 lakhs from selling 5.21 acres of land in Kakkanad. The assessee claimed tax exemption under Section 2(14)(iii) of the Income Tax Act, arguing that the land was agricultural. While the First Appellate Authority ruled in his favor based on a Village Officer’s certificate, the ITAT set aside this decision and remanded the case to verify if the land was within 8 km of Cochin Municipality. The High Court, in a prior ruling, directed the ITAT to determine the land’s nature based on available evidence rather than remanding the case unnecessarily.
Upon reconsideration, the ITAT ruled against the assessee, citing a lack of concrete proof of agricultural activity beyond the Village Officer’s certificate. The revenue records classified the land as “Purayidam” (dry land fit for construction), and the assessee failed to provide supporting documents like labor wages, agricultural input purchases, or irrigation details. Despite presenting minor agricultural income records, the ITAT found no substantial evidence to classify the land as agricultural. The High Court upheld the ITAT’s factual findings, emphasizing that the burden of proof rested on the assessee to claim the tax exemption. Since no substantial question of law arose, the appeal was dismissed.
