Case Law Details
A. Ramesh Vs DCIT (ITAT Chennai)
ITAT Chennai held that test applied by AO that land was sold to a company which was not carrying agricultural operations is not justifiable for denying exemption to sale of agricultural land u/s 2(14) of the Income Tax Act.
Facts-
The assessee along with his wife sold 11 acres of land for a sum of Rs. 1,98,00,000/- to M/s. Shree Krishna Polystrap Pvt Ltd, by virtue of a sale deed dated. The above sale consideration was paid in the form of allotment of 12,60,000 equity shares of Rs. 10 to the assessee and allotment of 7,20,000 shares of Rs. 10 to his wife, by purchase company.
The assessee has claimed the capital gains arising on the sale of the above lands as exempt on the ground that the same is arising on sale of agricultural lands. In support of his claim for exemption, the assessee has furnished Village Revenue Officer’s certificate certifying that the said land is situated beyond 8 kms from municipal limits and that the assessee and his wife (co-owner of the impugned land) were carrying on agricultural activity in the said land.
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