Back
2026 Supreme(Online)(ITAT) 8081
INCOME TAX APPELLATE TRIBUNAL (NAGPUR BENCH)
Pawan Singh, Judicial Member, Khettra Mohan Roy, Accountant Member
Ashutosh Ram Shewalkar – Appellant
Versus
ITO, Ward – 5(2) – Respondent
ITA No. 431/NAG/2025
For the Appellants/Petitioners: Manoj G Moryani, Bhavesh M. Moryani
For the Respondents: Surjit Kumar Saha
Lands classified as agricultural in revenue records, and situated beyond the prescribed municipal limits under Section 2(14) of the Income Tax Act, 1961, qualify for capital gains tax exemption, regardless of the non-agricultural conversion initiated by the purchaser or the commercial use of surrounding lands.
Headnote:(A) Income Tax Act, 1961 - Section 2(14) - Capital gains tax - Exemption for agricultural land - Assessee claimed land sold was agricultural and situated beyond 8 km from municipal limits - Assessing Officer made addition citing non-agricultural nature/conversion - Tribunal held that land classified as agricultural in revenue records qualifies for exemption - Conversion initiated by purchaser does not negate nature of land - Reliance placed on precedent where identical factual issues in co-owner's case were decided in favor of assessee. (Paras 5, 7, 8)
Facts of the case:
The assessee challenged an order confirming an addition of Rs. 1,11,50,582/- made by the Assessing Officer on the sale of land. The assessee contended the land was agricultural, located beyond the 8 km municipal boundary, and consistently reported as agricultural in past records. The conversion for non-agricultural use was initiated by the purchaser, not the assessee.
Findings of Court:
The Tribunal found that the land was classified as agricultural in revenue records and located outside the restricted zone. Adhering to the principle that revenue records and certificates from local authorities carry primacy over speculative uses, the Tribunal allowed the appeal.
Issues: Whether the land sold by the assessee qualifies as 'agricultural land' under Section 2(14) of the Income Tax Act, 1961, and is exempt from capital gains tax.
Ratio Decidendi: If land is classified as agricultural in revenue records and satisfies the distance criteria under Section 2(14), it remains exempt from capital gains tax regardless of the purchaser's subsequent intent or the usage of surrounding plots.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. condonation of delay for substantial justice. (Para 1 , 2 , 3) |
| 2. criteria for agricultural land exemption under section 2(14). (Para 4 , 5 , 6 , 7 , 8) |
| 3. final outcome allowing the assessee's appeal. (Para 9) |
PER KHETTRA MOHAN ROY,AM:
1. The assessee has filed the aforesaid appeal challenging the impugned order dated 20/02/2025, passed by the National Faceless Appeal Centre, Delhi, [“Ld.CIT(A)], for the assessment year 2014-15. The assessee has raised the following grounds of appeal:
“1. The CIT(A) NFAC erred in confirming the order passed U/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 by assessing officer, therefore order passed is illegal, invalid and bad in law;
2. On the facts and circumstances of the case, the Ld. NFAC failed to consider that agriculture income were duly shown and accepted in previous years by revenue, therefore the order passed is illegal, invalid and bad in law;
3. On the facts and circumstances of the case, the Ld. CIT(A) NFAC failed to consider actual use of the land at the time of Memorandum of Understanding dated 15/06/2012 was agriculture land, therefore order passed is illegal, invalid and bad in law;
4. On the facts and circumstances of the case, the Ld. CIT(A) NFAC failed to consider that land were duly shown as agriculture land on records and in sale deed as well as Memorandum of Understanding dated 15/06/2012, therefore the order passed is unjustified, unwarranted and excessive;
5. On the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Center erred in confirming the addition of Rs. 1,11,50,582/- made by assessing officer and same is unjustified, unwarranted and excessive;
6. On the facts and circumstances of the case, the Ld. CIT(A) NFAC erred in not considering that the land sold by the assessee is agriculture land and situated beyond 8 Kms from Municipal limit of Nagpur and is exempt from tax, therefore addition made is unjustified, unwarranted and excessive;
7. On the facts and circumstances of the case, the Ld. CIT(A) NFAC erred in considering definition provided U/s. 2(14) of the Income Tax Act, 1961, therefore the order passed U/s. 143 r.w.s. 147 is illegal, invalid and bad in law;
8. On the facts and circumstances of the case, the Ld. CIT(A) NFAC erred in not considering that the aforesaid agriculture land was converted into non-agriculture as per the order of the Deputy Divisional Officer, Nagpur, in which clearly mentioned that conversion application made by the Purchaser Varon Auto Kast Ltd. and not assessee, therefore addition made is illegal, invalid and bad in law;
9. The assessee is denied the liability of interest charge U/s. 234A, 234B and 234C of the Income Tax act, the same may kindly be deleted
10. The appellant craves leave to amend, add or take a new ground or grounds at the time of hearing;”
2. At the very outset, we noticed that there is a delay of 79 day in filing the present appeal before the Tribunal. In the Ld. AR submitted that the earlier the matter has been handled by Shri V.T. Buldeo, CA who is senior citizen and order u/s 250 of the Act was received by the staff of Shri V.T. Buldeo, CA was not communicated to assessee and he is not used to about used of online portal, hence not aware of order. The Ld. AR humbly requested due to above reason appeal filed by the assessee is delay of 79 days and delay may kindly be condoned in the interest of justice and appeal be heard and decided on merits.
3. On the other hand, the ld DR of the revenue not opposed the plea of delay raised by the assessee.
4. We have heard counsel for both the parties, perused the material placed on record, and the judgment cited before us on application seeking condonation of delay. Considering the entire factual position as explained before us and also keeping in view the principles laid down by Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag & Ors v sMst. Katiji & Ors 1987 AIR 1353 (SC) w
