urgent help reuired on sale of agri. land
This query is : Resolved
05 October 2010
DEAR SIR / MADAM
on of my clients had purchased an agriculture Land in 2002
This land is NOT a Capital asset u/s 2(14)
The thing is, he had sold the land after developing & plotting it in various parts to various different persons
some parts sold within 3 years and some after 3 years
now problem is, Will ITO add the same in Business Income as Assessee had made parts of a single land in various lands (by the way of plotting)& sold such parts of lands to various persons ?
Plz Reply
Its very urgent ...
Thanks a lot in advance
aniruddha.rathi@gmail.com
Thanks a lot
on of my clients had purchased an agriculture Land in 2002
This land is NOT a Capital asset u/s 2(14)
The thing is, he had sold the land after developing & plotting it in various parts to various different persons
some parts sold within 3 years and some after 3 years
now problem is, Will ITO add the same in Business Income as Assessee had made parts of a single land in various lands (by the way of plotting)& sold such parts of lands to various persons ?
Plz Reply
Its very urgent ...
Thanks a lot in advance
aniruddha.rathi@gmail.com
Thanks a lot
06 October 2010
it will not be liable to capital gains
it can be considered as business income only if the person is engaged in that business
it can be considered as business income only if the person is engaged in that business
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06 October 2010
Question is that the same person doing this type of activity as his business activitiy or not.
If yes, then Mr. Punit is correct.
If Not, then i think after purchasing that land has not been used for Agricultural purpose, hence it is not agricultural land at the time of sale. Therefore, this should be taxable under capital gain.
Regards!!!
Dinesh S. Adhikari
If yes, then Mr. Punit is correct.
If Not, then i think after purchasing that land has not been used for Agricultural purpose, hence it is not agricultural land at the time of sale. Therefore, this should be taxable under capital gain.
Regards!!!
Dinesh S. Adhikari
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06 October 2010
Section 2 (14) excludes land out of the definition of capital asset provided it is an agriculture land and it is out of the defined jurisdiction.
Exclusion will apply only if the land at the time of sale was agriculture land (Means it was used to carry agriculture operations).
Development and plotting is an activity carried to enhances sale value of agriculture land. Analogy can be drawn from the enhancing the value of agriculture produce by processing.
It can not be treated as business income unless the owner has carried business activity means transactions of execution and sale are executed.
Case can be argued for exemption.
Exclusion will apply only if the land at the time of sale was agriculture land (Means it was used to carry agriculture operations).
Development and plotting is an activity carried to enhances sale value of agriculture land. Analogy can be drawn from the enhancing the value of agriculture produce by processing.
It can not be treated as business income unless the owner has carried business activity means transactions of execution and sale are executed.
Case can be argued for exemption.
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07 October 2010
Thanks a lot to all of you
Is there any case law regarding the same ?
And, Assessee had done this transaction of purchasing a big Agri Land & selling the same In parts after plotting
So still will it be treated as Business Income ?
Is there any case law regarding the same ?
And, Assessee had done this transaction of purchasing a big Agri Land & selling the same In parts after plotting
So still will it be treated as Business Income ?
07 October 2010
My answer was on the premise that the tax payer is using the land for agriculture purpose until the land was developed and sold.
If tax payer has purchased land, which was used by the seller for agriculture purpose, then it is a business income.
If tax payer has purchased land, which was used by the seller for agriculture purpose, then it is a business income.
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