Sale of agriculture land

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2012 Dear expert,
One of my client had sold his agriculture land in FY 2010-11 for consideration of Rs. 30 lacs in cash and deposited the amount in his savings a/c. After six months he purchased an agriculture land from sale consideration deposited in his savings a/c. And the said sold out land is out of 8 km. radius of municipal area.
Now he has received an intimation from income tax department on the basis of AIR furnished by bank.
Now what answer he should file in his responce of intimation.
please advise

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 April 2012 write a letter to the AO with the facts by indicating the assessee has not liable for any capital gain tax or income tax(if any other taxable income not earned by him).
However interest on SB account is liable for tax i think the assessee approx earned Rs.60,000 for 6 months on such amount in his other income and compute the taxable income.
I think your client is farmer and he has Agricultural income only then he no need to file income tax return in such case proceed with letter to AO by computing his total taxable income and indicating capital gain is exempted. Otherwise file Income tax return in such return compute capital gain tax and claim exemption.
If you understands this then ok otherwise approach any CA for your clarification.
OM SAI SRI SAI JAI JAI SAI

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CA Kishore Tallam

CA Kishore Tallam (Expert)
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12 April 2012 U can write a correspondence to the AO that he has sold Agricultural Land and received Rs. 30 lacs as sale consideration.
Agricultural land is not a capital asset at all. Hence, no problem.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2012 In above case, there is one more problem, that sale consideration was shown on stamp papers is 25 lacs to save stamp duty. In such a case what defence can be taken for the amount of remain 5 lacs (as whole amount 25+5 was deposited on the same day).
Please advise in this regard.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 April 2012 The treatment of Rs.5 lacs will be depend on the assessee source and available options to him i think this is not possible to give correct direction through this way. If face to face discussion then depending on the facts we can decide. How ever the following possible ways is available.
1) it is from the assessee earning income from previous years.
2) realisation of debtors(if any balance in his balance sheet)
3) gift from relatives or friends(however gift from friends or non-relatives taxable income)
4) Cash loan taken(however cash loan should not be take as per section 269SS)
5) His agricultural Income(if any possible to show such amount) etc....
But correct treatment would be depend on the possible ways available to the assessee. I think better to approach any CA for correct treatment.
OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2012 Rs. 5 lacs are also the sale consideration, but the purchaser drafted the sale deed only for 25 lacs. however assessee has to explain the whole of 30 lac before AO. In your opinion, which amount that assessee should state in his letter to AO as sale consideration between 25 lacs and 30 lacs, to avoid any tax liabilty.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 April 2012 Thats way i am saying it is unpublic amount so depending on the options and provisions available we can decide how to show it as public amount because it was already in public by way of depositing of amount into the bank but sources not available so depending on the provisions and options and ways available to the assessee we can decide how to show it sources of income. thats way i told approach CA. Other wise then explain it also arises from sale of Agricultural land as like as commission but i think this is not the correct way.
OM SAI SRI SAI JAI JAI SAI