Income Tax

Water logged land comprised within backwaters held agricultural land when sold along with adjacent agricultural land

Water logged land comprised within backwaters held agricultural land. The land was a kayal land and sold along with adjacent agricultural land-High Court

ABCAUS Case Law Citation:
ABCAUS 2430 (2018) 07 HC

The assessee had sold two land, lying contiguously out of which the one was in backwaters (Kayal). The Assessing Officer found that approx 75% of land was agricultural land. However remaing part was a water-logged area, being comprised in the backwaters and, hence, there could be no classification as an agricultural land.

Therefore the AO, assessed capital gain on that portion of land, which was held to be water-logged and part of backwaters.

The Tribunal accepted the contention of the assessee that the Kayal portion was used for irrigating the other portion of the land. It was found that the Kayal land had acquired the character of a water tank, used for the irrigation of the other land.

The Tribunal held that the Kayal portion of the land could not have different character from that of the main land and the same treatment had to be given to it

Aggrieved with the order of the ITAT, the Revenue approached the Hon’ble High Court and contended that the approach of the Tribunal in equating waterlogged area with backwaters was factually and legally wrong.

The Hon’ble High Court noticed that the Assessing Officer had accepted the fact that major areas of the land sold by the assessee was agricultural land. The adjacent land which was lying as Kayal land and water-logged, would only had made the adjacent land more fertile and admittedly it was not used for any other purpose. The adjacent land remaining as water-logged and comprised within the backwaters, sold along with the agricultural land, could be deemed to be only agricultural land.

The Hon’ble High Court dismissed the appeal by answeting the questions of law against the Revenue and in favour of the assessee.

Download Full Judgment Click Here >>

Share

Recent Posts

  • Income Tax

Plea that assessee was not aware of order cannot be brushed aside in absence of proof of service

Ground taken by assessee that he was not aware of the order cannot be brushed aside so lightly in absence…

1 hour ago
  • Income Tax

Order rejecting stay of income tax demand should recite merits if it is a case for stay or not

In an order rejecting stay of income tax demand there should be a recital of the merits whether it is…

23 hours ago
  • Income Tax

CBDT extends due date of tax audit for FY 2025-26 to 21st October 2026

CBDT has extended the due date for furnishing Return of Income for Assessment Year 2026-27 (FY 2025-26) in respect of…

1 week ago
  • Income Tax

Denying accumulation of u/s 11(2) merely on grounds of delay in filing Form No. 10 is unsustainable

Denying the accumulation of u/s 11(2) merely on grounds of a procedural delay in filing Form No. 10 is unsustainable…

1 week ago
  • Empanelment

Engagement of 05 Young Professionals CAs at Central Registrar of Cooperative Society

Engagement of 05 Young Professionals CAs in the Office of Central Registrar of Cooperative Society on contractual basis The office…

1 week ago
  • Income Tax

AO can’t take two different stands on immunity u/s 270AA(2) for a same transaction

Immunity u/s 270AA(2) in respect of a single transaction can not be denied to one assessee when the penalty was…

1 week ago