Manoj Kumar Singh Vs ITO (ITAT Varanasi)
The Income Tax Appellate Tribunal, Varanasi Bench, heard together two appeals filed by Shri Manoj Kumar Singh and Shri Sanjay Kumar Singh as they involved identical issues relating to Assessment Year 2017-18. Both appeals challenged the orders of the Commissioner of Income Tax (Appeals), which had upheld additions made by the Assessing Officer by treating the sale of land as giving rise to taxable long-term capital gains instead of accepting the assessees’ claim that the land was agricultural land falling outside the definition of “capital asset” under Section 2(14)(iii) of the Income-tax Act, 1961.
In the case of Shri Manoj Kumar Singh, the Assessing Officer completed the assessment under Section 143(3), determining the total income at ₹52,92,320 as against the returned income of ₹1,38,120. An addition of ₹51,54,197 was made towards long-term capital gains on the sale of land. The Assessing Officer rejected the claim that the land was agricultural land based on a field enquiry conducted by the Income Tax Inspector, who reported that the land was residential in nature, surrounded by a boundary wall, and that no agricultural activities had been carried out for several years. Although the assessee produced copies of the Khasara showing agricultural use, the Assessing Officer observed that enquiries made with the Tehsildar and the Sub-Divisional Magistrate did not yield any factual report and concluded that the revenue records could not be accepted. The Assessing Officer also noted that the assessee had not disclosed agricultural income in the returns for the preceding two assessment years.
