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 >>

----------- Similar Posts: -----------
Share

Recent Posts

  • Income Tax

Order not in conformity of Faceless Assessment Scheme if not est? – ITAT remands case

Order not in conformity of Faceless Assessment Scheme 2019 if not est? - ITAT remands the case in view of…

2 days ago
  • FCRA

Extension of the validity of FCRA registration certificates till 30.09.2024

Extension of the validity of FCRA registration certificates till 30.09.2024 Home Ministry has decided to extend the validity of FCRA…

2 days ago
  • Income Tax

Section 68 to 69B applicable only if assessee is required to maintain books of accounts

Provisions of section 68 to 69B applicable only if assessee is required to maintain books of accounts under provisions of…

3 days ago
  • Income Tax

When show cause notice proposed addition u/s 68, addition can not be made u/s 69A

When show cause notice proposed addition u/s 68 as unexplained cash credits, in assessment order addition can not be made…

3 days ago
  • Income Tax

AO directed to consider belated reply due to illegible copy of SCN u/s 148A(b)

AO directed to pass order u/s 148A(d) after considering belated reply filed by assessee after supply of legible copies of…

4 days ago
  • Income Tax

Limited scrutiny converted into complete scrutiny without permission illegal

AO converted limited scrutiny into complete scrutiny without obtaining permission and in violation of CBDT Instruction - ITAT quashed Assessment…

4 days ago