Case Details: Keshav Sunderam Rajam v. Income-tax Officer (International Taxation) - [2023] 150 taxmann.com 386 (Chennai-Trib.)
Judiciary and Counsel Details
- V. Durga Rao, Judicial Member & G. Manjunatha, Accountant Member
- S.V. Venkateshwaran, FCA for the Appellant.
- AR V. Sreenivasan, Addl. CIT for the Respondent.
Facts of the Case
Assessee, a Non-Resident, sold land adjacent to the sea that was used by the assessee for agricultural purposes for several years and earned long-term capital gains from such sale. While furnishing the return of income, the assessee claimed exemption under section 54B from such capital gains.
Subsequently, the case was selected for scrutiny. The Assessing Officer (AO) contended that the condition stipulated under section 54B(1) was not satisfied and concluded that the asset sold was not agricultural land as no agricultural activity was carried out on it. In response, the assessee furnished the information in adangal, wherein it was submitted that the assessee grew coconut trees on the land.
Unsatisfied with the explanation, the AO denied exemption under section 54B.
On appeal, CIT(A) upheld the additions made by the AO. Aggrieved by the order, an appeal was preferred to the Chennai Tribunal.
ITAT Held
The Tribunal held that the except for the adangal, the assessee did not produce any other document to show that he carried out agricultural activities. The adangal filed by the assessee shows that there were few coconut trees. But, simply because there were coconut trees, it did not mean that the assessee carried out agricultural operations, particularly when the assessee had not reported any agricultural income.
Further, the piece of land sold by the assessee was within the purview of the Coastal Regulation Zone [CRZ] adjoining to sea. The land in question was adjacent to the sea and not useful for any agricultural purposes. To carry out agricultural operations, water is very much required, and seawater is not useful for carrying out any agricultural activities or raising any agricultural crop.
Therefore, it was held that the assessee did not carry out any agricultural activity and affirmed the additions made by AO.
List of Cases Referred to
- ITO (International Taxation) v. Aboobucker [2016] 67 taxmann.com 114/157 ITD 717 (Chennai – Trib.) (para 3)
- Asstt. CIT v. Pallavaram Kothandaraman Ramesh [IT Appeal No. 1808 (Mds.) of 2011, dated 17-10-2012] (para 3)
- ITO (International Taxation) v. Keshav Sunderam Rajan [2018] 89 taxmann.com 411 (Chennai – Trib.) (para 3)
- Pr. CIT v. A. Lalichan [2019] 104 taxmann.com 30 (Mad.) (para 3).
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