Section 2(14) of the Income Tax Act

The decision most relied on for Section 2(14) is Smt. Sarifabibi Mohmed Ibrahim v. CIT (204 ITR 631), cited in 197 of the 1,130 judgments on BharatTax that turn on this section.

Leading authorities on Section 2(14)

Smt. Sarifabibi Mohmed Ibrahim v. CIT
204 ITR 631 · 1993 · Supreme Court
197
citing judgments

The determinative test for whether land is agricultural land or a capital asset is its actual user for agricultural purposes, not merely ownership. An explicit intention to stop cultivation or convert the land to non-agricultural use can cause it to lose its agricultural character, making its sale proceeds chargeable to capital gains tax.

Assam Bengal Cement Co. Ltd. v. CIT
27 ITR 34 · 1955 · Supreme Court
174
citing judgments

The Supreme Court established the foundational test for distinguishing between capital and revenue expenditure, holding that the aim and object of the expenditure and whether it brings into existence an asset or an advantage of an enduring nature determines its character, irrespective of the payment method. An advantage lasting five years or more can be considered enduring.

CIT v. Raja Benoy Kumar Sahas Roy
32 ITR 466 · 1957 · Supreme Court
132
citing judgments

Income is considered agricultural income, exempt under Section 10(1), only if the land undergoes a measure of cultivation involving basic primary operations prior to germination and subsequent post-germination activities requiring human skill and labour.

CIT v. Tata Services Ltd.
122 ITR 594 · 1980 · High Court
76
citing judgments

A right to purchase property under an agreement to sell is a capital asset as defined under Section 2(14) of the Income-tax Act. The relinquishment or extinguishment of such a right constitutes a transfer of a capital asset, the consideration for which is taxable as capital gains.

Travencore Rubber & Tea Co. Ltd. v. CIT
325 ITR 422 · 2010 · Supreme Court
72
citing judgments

Forfeited advance money received for the transfer of a capital asset is not taxable as revenue receipt. Such forfeiture pertains to a capital receipt directly related to the potential sale of a capital asset.

Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi
255 ITR 258 · 2002 · Supreme Court
61
citing judgments

The Supreme Court upholds the constitutional validity of Section 269SS of the Income Tax Act, 1961, which prohibits certain cash loans and deposits. This ruling is foundational for penalties under Section 271D and considering exemptions under Section 273B.

P.M. Mohammed Meerakhan v. CIT
73 ITR 735 · 1969 · Supreme Court
58
citing judgments

The assessee bears the onus to prove the genuineness and voluntary nature of donations received, including corpus donations. Failure to discharge this burden allows the Assessing Officer to treat such donations as non-genuine or accommodation entries.

Hirday Naran v. Income Tax Officer
78 ITR 26 · 1970 · Supreme Court
56
citing judgments

Even if statutory language appears merely enabling, courts infer a duty to exercise such power when it aids a citizen's right. Public authorities cannot decline to act when circumstances warrant help, nor can they act to a person's detriment without justification.

CIT v. Motilal Hirabhai Spg. And Wvg. Co. Ltd.
113 ITR 173 · 1978 · High Court
49
citing judgments

The determination of whether share transactions constitute a business activity or an investment depends on the facts of the case. Factors like volume, frequency, and regularity indicate business activity, irrespective of how such transactions are presented in accounts.

CIT v. Siddharth J Desai
139 ITR 628 · 1983 · High Court
45
citing judgments

This case lays down 13 specific tests and factors for determining whether land qualifies as agricultural land under the Income-tax Act. It holds that obtaining permission to sell agricultural land for non-agricultural purposes shortly before the sale does not automatically alter its agricultural character.

Judgments on Section 2(14)

ACIT, Ncc 4(1), Chennai vs. M/S Master Developers, Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 873/CHNY/2020[2010-11]Status: DisposedITAT Chennai22 Feb 2023AY 2010-11

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No.873/Chny/2020 िनधा"रण वष"/Assessment Year: 2010-11 The Assistant Commissioner Of Vs. M/S. Master Developers, Income Tax, No. 123, Mint Street, Sowcarpet, Non Corporate Circle 4(1), Chennai 600 079. Chennai. [Pan:Aarfm5470B] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri Ar V Sreenivasan, Addl. Cit ""थ" की ओर से/Respondent By : Shri D. Anand, Advocate सुनवाई की तारीख/ Date Of Hearing : 30.01.2023 घोषणा की तारीख /Date Of Pronouncement : 22.02.2023 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Revenue Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 5, Chennai, Dated 13.03.2020 Relevant To The Assessment Year 2010-11. The Grounds Raised By The Revenue Are As Under: 1. The Order Of The Ld.Cit(A) Is Contrary To Facts & Circumstances Of The Case. 2. 1 The Ld.Cit(A) Has Erred In Not Considering The Fact That The Assessee Firm Is Engaged In The Business Of Real Estate & During The Year In Question, The Act Of The Assessee Viz Purchasing Land, Developing The Same & Selling The Same At Higher Cost Shows That The Intention Of The Instant Assessee Is Business Only & Not Investment. 2.2 The Learned Cit(A) Has Erred Is Not Distinguishing The Instant Case From The Case Replied Upon By Him I.E. Acit Vs. M/S Indus Valley Housing, On The Point

For Appellant: Shri AR V Sreenivasan, Addl. CITFor Respondent: Shri D. Anand, Advocate
Section 143(3)Section 148