The assessee sold four pieces of agricultural land to a company Steel Strips Wheels Ltd .  The purchaser received permission for bona fide industrial purposes. Assessee has obtained certificate for change of land use from agricultural to non-agricultural. The assessee contented that the land sold by him did not qualify as “capital asset” in terms of section 2(14)(iii) being rural agricultural land. The AO held that  the land sold by the assessee as non agricultural land and concluded that it qualifies capital asset and therefore capital gained earned is liable to tax.  ITAT held that, AO has erred in interpreting S.63AA of the Gujrat Tenancy and Agricultural land laws Act,1997 and the land did not qualify capital asset in terms of s.2(14)(iii) of the Act. Accordingly the capital gains is not liable to tax .  ( AY.2016-17)