Snehlata Goel Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that issue of whether the land is an agricultural land or not needs more verification since department has not tested required conditions as prescribed u/s. 2(14)(iii). Accordingly, matter remitted back to AO.
Facts- During scrutiny assessment, AO noticed that the assessee has sold a land for a consideration of Rs. 5,20,00,000/- and assessee has claimed the capital gain arising out of the sale as exempt stating that land sold is an agricultural land. Post assessment, AO concluded that the land sold by the assessee is not an agricultural land and therefore the gain arising from the sale of the land cannot be exempt. CIT(A) confirmed the addition made by AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that section 63 of The Maharashtra Tenancy and Agricultural Lands Act 1948, restricts the transfer of agricultural land for non-agricultural purposes except with specific permission of the Collector or an officer authorised by the State Government in this behalf. However section 63-1A of the said Act allows sale of such land without permission to any person who is a non-agriculturist and who intends to convert the same to a bona fide industrial use. In the present case, the assessee is not required to obtain any approval under section 63 and that it is factually established that the purchaser has made an application under section 63-1A for necessary permission.
