If the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempt u/s 2(14)

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If the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempt u/s 2(14)

If the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempt u/s 2(14)
Raj Kumar Yadav Vs ITO
Whether if the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempted u/s 2(14) – YES: ITAT
– Assessee’s appeal dismissed: JAIPUR ITAT
Whether if the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempted u/s 2(14) – YES: ITAT
++ as per the terms and conditions of the said Lease issued by the JDA, the land in question was given only for environmental friendly residence/farm house. Further as per the conditions of conversion of the land to farm house, the activity permitted in the area is only construction of low coverage, low height structure for residential use. In the activities permitted on conversion of the land into farm house is restricted to the environmental friendly residence. Therefore, the land use was changed from agriculture to environmental friendly residence and no more an agricultural land. Once the land in question was no more an agricultural land at the time of transfer, then the same will not be considered as agricultural land for the purposes of section 2(14). The sale deed dated 09.12.2009 clearly describes the intention of the parties not for agricultural use. Therefore, the very purpose and object of the incentive for giving the exemption under section 2(14) of the IT Act as per exclusion clause of the said section shall not be available once the actual use of the land is no more an agricultural.

 

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