Case Law Details
DCIT Vs Hanuman Tubewell Co (ITAT Jaipur)
ITAT Jaipur held that capital gain on sale of land as covered under the provisions of section 50C of the Income Tax Act is to be assessed separately.
Facts- Assesse has preferred the present appeal contesting that CIT(A) has erred in taxing capital gain Rs. 2,42,38,984/- from agricultural land as income from capital gain whereas agricultural land sold is not capital asset as per section 2(14)(iii)(b) of the Act and therefore not liable for capital gain under section 45 of the Income Tax Act.
Conclusion- CIT(A) held that In the assessment order, the AO has highlighted that the assessee had shown the receipts in the credit side of P&L a/c as gains from sale of land. Thus from the perusal of the basic details itself it is seen that the stand of the assessee is contradictory and now it is resorting to alternate claim of land being agricultural once the AO excluded its being utilized to set off the business losses in the assessment order.
The DLC of the land was Rs.2,81,89,384/- the same is found duly covered by the provisions of Section 50C and the only relief available is in terms of cost of acquisition and its indexation. If the AO has considered the gains, the asset could not be without any cost. If the cost of Rs.6,06,265/- taken by the assessee as duly indexed to Rs. 13,74,016/- is duly considered as reasonable and is required to be deducted from the DLC rate of Rs.2,81,89,384/- for determination of capital gains in this case. The long term gain comes to Rs.2,68,15,368/-and is being upheld to be assessed separately as done by the AO correctly.
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