SHRI SHAILESH GUINDE. vs. COMMISSIONER OF INCOME TAX.

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TXA/85/2014HC BombayHCBM05002635201423 March 2017Author: ANOOP V. MOHTA,HON'BLE KUM. JUSTICE NUTAN D. SARDESSAI28 pages
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What did the High Court hold?

The High Court held that the land in question is agricultural land and was used for agricultural purposes, as defined under the law. The Court found that the ITAT's findings, which classified a portion of the land as cultivable (approximately 1/5th or 42,000 sq. mtrs.) and the balance as non-agricultural, were to be tested. However, the Court was not inclined to accept the Revenue's submission for remand, deeming the approach of reassessing or inspecting the land after 2-3 years of transfer unacceptable. The Court relied on its own previous Division Bench judgments in Commissioner of Income Tax vs. Shri Minguel Chandra Pais and Commissioner of Income Tax vs. Smt. Debbie Alemao, which held similar lands as agricultural. The Court also noted that the Revenue had not challenged similar matters for other assessees arising from the same sale deed, citing the principle of consistency from Berger Paints India Ltd. Therefore, the property was not to be treated as a 'Capital Asset' under Section 2(14)(iii). The appeals were allowed, and the demand and penalty were quashed and set aside.

What were the facts?

These are appeals filed by various assessees against the Commissioner of Income Tax. The appeals concern assessment years not explicitly stated in the provided text. The core issue revolves around whether certain land, sold by the assessees, should be treated as 'agricultural land' or 'capital asset' for income tax purposes. The assessees contend it is agricultural land, exempt from capital gains tax. The Revenue disputes this, arguing it's a capital asset. The Income Tax Appellate Tribunal (ITAT) had made findings on the nature of the land. The High Court is examining these findings for the first time under Section 260A of the Income Tax Act. The procedural history involves appeals against orders passed by the CIT(A) and the ITAT, with the Revenue seeking remand in some instances.

What were the issues?

1. Whether the land in question qualifies as 'agricultural land' as defined under the relevant Code, and consequently, whether its sale is exigible to capital gains tax (turning on the definition of 'agriculture' and 'agricultural land' under the Code and Section 2(14) of the Income Tax Act). Assessee's Contentions: - The land is agricultural land and was used for agricultural purposes, as supported by reports and classifications. - The ITAT's findings on the nature of the land should be respected. - The Revenue's attempt to reassess or inspect the land years after the transfer is unacceptable. - The Supreme Court judgments cited by the Revenue should be applied considering the specific facts and the purpose of the Code. - The Revenue has not challenged similar cases for other assessees arising from the same sale deed, implying finality in those matters, citing Berger Paints India Ltd. vs. Commissioner of Income Tax. - The property cannot be treated as a 'Capital Asset' under Section 2(14)(iii) as it is agricultural land. Revenue's Contentions: - The matter should be remanded for consideration of the factual aspect of whether the land is 'agricultural land' or 'non-agricultural land', citing a Supreme Court judgment.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 260A

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Income Tax Appellate Tribunal, Panaji

a. The appeals are allowed. b. The issue is answered in favour of the assessee. c. No costs. NUTAN D. SARDESSAI, J. ANOOP V. MOHTA, J. ssm.

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