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 >>
When information contained in loose papers not corroborated with assessee, there is absolutely no room for presumption that it belongs…
When CIT(A) order to remand case to AO was set aside without interfering with direction to delete addition, order of…
Whether a prohibited claim in a contract applies only to the employer and not to the Arbitral Tribunal – Matter…
Where a contractual employee is terminated on the sole ground of ineligibility, the Court is entitled to examine its correctness…
Upon deceased acquiring family, GPF nomination in favour of mother became invalid and in absence of fresh nomination, mother and…
GSTN Advisory on Auto Suspension of GST Registration due to Non-Furnishing of Bank Account Details as per Rule 10A As…