Assessee got their agricultural lands converted for non-agricultural purpose. The assessee sold the part of the land and claimed the surplus as exempt. The Assessing Office assessed the surplus as capital gains. As per Certificate of Tahsildar and PWD Engineer’s Certificate, distance between lands in question and BBMP was more than 8 kms. Tribunal had recorded that, though land was converted, assessee had continued agricultural operations which was evident from fact that income derived from agricultural operations declared by assessee were accepted by revenue. Even as per Notification issued by Central Government, lands did not fall within 8 kms from BBMP. The Tribunal held that the assessee was not liable to capital gains. Court also held that inclusion of lands in Special Zone cannot be a determining factor, hence, mere inclusion of land without any infrastructure development does not convert land into non-agricultural land. High Court affirmed the order of the Tribunal. SLP by the Revenue, was dismissed and the order of High Court affirmed. (AY. 2008-09)
CIT v. M.R. Anandaram (2023) 453 ITR 757/ 292 Taxman 548 (SC) / CIT v. M.R. Seetharaman . ( 2023) 453 ITR 757/ 292 Taxman 548 ( SC) /CIT v. M. R. Prabhavathy (2023) 295 Taxman 415 (SC) Editorial : Refer, CIT v. M.R. Anandaram (HUF) (2022) 289 Taxman 121/ 216 DTR 432/ 328 CTR 90/ /(2023) 450 ITR 94 (Karn)(HC), order of High Court affirmed.
S. 2(14)(iii) : Capital asset-Agricultural land-Capital gains-agricultural lands converted for non-agricultural purpose-lands did not fall within 8 kms from Municipality of Bangalore-Continued agricultural operation-Mere inclusion of land in Special Zone without any infrastructure development does not convert land into non-agricultural land-Not liable to capital gain tax -SLP of Revenue dismissed. [S. 45, Art. 136]