| Question And Answer | |
|---|---|
| Subject: | Advance in cash received from sale of agriculture land |
| Category: | Income-Tax |
| Querist: | Manohar |
| Answered by: | Research Team |
| Tags: | advance, Agricultural Income, Agricultural land, cash, Sale of Agricultural land |
| Date: | September 28, 2023 |
We have converted the rural agricultural land into non agricultural land in 2020 for the purpose of sale. I have received cash advance 300000 from the purchaser of land in the year of 2018( before convertion of agriculture land into NA land). Whether section 269ss or any other sections for penalty is applicable for cash advance of 300000. I’m in opinion that, advance cash received before conversion will be treated as advance against agricultural land which is not a capital asset. If I would have received advance cash after conversion of land, section 269ss or other sections for penalty will applicable.
Explanation to section 269SS reads as under (iv). ‘Specified sum’ means any sum of money receivable , whether an advance or ,otherwise in relation to transfer of an immoveable property , whether or not the transfer takes place .
Agricultural land is also an immoveable property .
In PCIT v. Tehal Singh Khara and Sons (2018) 400 ITR 243 (P&H)(HC) the Court held that the depositors were agriculturists and transactions were genuine hence cancellation of penalty was held to be justified. If the assessee is able to demonstrate the reasonable cause , the penalty may not be levied .