AI Overview...
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Section 54B - Agricultural Land Use Date - The exemption under section 54B applies when the land is used for agricultural purposes at the time of transfer and the subsequent investment in agricultural land occurs within two years. The key factor is the date of agricultural use, which is considered the date when the land is actively used for agricultural operations, not merely when it is acquired or registered. Several case laws emphasize that the land must be used for agricultural purposes at the time of transfer to qualify for exemption Maheshwari Agro Industries VS Union of India - Rajasthan, Tulla Veerender VS Additional Commissioner of Income-tax, Range-6 - Income Tax Appellate Tribunal, Kapil Chit Funds (P. ) Ltd. VS Income-tax Officer, Ward -1, Karimnagar - Income Tax Appellate Tribunal.
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Case Law Insights:
- In K. S. K. Nair v. CIT (not directly cited but relevant), the courts have held that the date of agricultural use is critical and must be established as the date when the land was actually used for agriculture, not the date of purchase or registration.
- The Jasbir Singh Sarkaria case (supra) clarified that the intent and actual use of land for agricultural purposes at the time of transfer are decisive factors for exemption eligibility Smt. Binder Khokher VS Assistant Commissioner of Income-tax, Circle -5(1), Chandigarh - Income Tax Appellate Tribunal.
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The fact of use for agriculture is often established through evidence such as cultivation, farming activities, or income derived from agricultural operations around the time of transfer Principal Commissioner of Income Tax, Kolkata VS ITC Limited - Calcutta.
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Additional Points:
- Exemption is not available if the land was not used for agricultural purposes at the time of transfer, even if it was later used for agriculture ITO W-4 PANCHKULA vs SMT. SEEMA BISHNOI PANCHKULA - Income Tax Appellate Tribunal.
- The date of agricultural use is distinct from the date of acquisition or registration of the land; the former is the date when the land was actively used for agricultural activities Maheshwari Agro Industries VS Union of India - Rajasthan.
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The courts have consistently held that mere possession or registration does not suffice; actual use for agriculture at the relevant time is necessary Tuhi Ram VS Land Acquisition Collector And Anr. - Punjab and Haryana.
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Analysis and Conclusion:
- For claiming exemption under section 54B, the date of agricultural use is pivotal and must be established as the date when the land was actively used for agricultural purposes, not merely when it was acquired or registered.
- The case laws reinforce that the use of land for agriculture at the time of transfer is the main criterion, and the exemption is not available if the land was not used for agricultural purposes at that time.
- Proper evidence demonstrating actual agricultural use at the relevant date is essential to substantiate the claim.
References: - Sec. 54B and related instructions Maheshwari Agro Industries VS Union of India - Rajasthan - Judicial decisions on agricultural use and exemption criteria Tulla Veerender VS Additional Commissioner of Income-tax, Range-6 - Income Tax Appellate Tribunal, Kapil Chit Funds (P. ) Ltd. VS Income-tax Officer, Ward -1, Karimnagar - Income Tax Appellate Tribunal, Principal Commissioner of Income Tax, Kolkata VS ITC Limited - Calcutta, ITO W-4 PANCHKULA vs SMT. SEEMA BISHNOI PANCHKULA - Income Tax Appellate Tribunal, Tuhi Ram VS Land Acquisition Collector And Anr. - Punjab and Haryana
Search Results for "Case Laws on Exemption U s 54b Stating that the Date of Agricultural Use"
1991 0 Supreme(P&H) 1188 • India - Punjab and Haryana
ASHOK BHAN, B.C.VARMA
Fact of the Case: Extensive agricultural land was acquired under the Land Acquisition Act after due process of law. ... INCOME TAX - Capital gains - Agricultural land - Whether amount received as compensation on compulsory acquisition of agricultural ... The resultant income is not agricultural income. 6. ... It, however, does not include agricultural land in India, except the classes of land included in items (a) and (b) of Section 2(14)(iii) of the Act. In order to qualify for such....
2011 0 Supreme(Raj) 1438 • India - Rajasthan
VINEET KOTHARI
Secs. 54,54B and 54D grant exemption in respect of capital gains arising on transfer of property used for self-residence, land used for agricultural purposes and compulsory acquisition of lands and buildings under any law, provided the conditions laid down in the three sections are satisfied. ... But, if he is not able to do so but wishes to avail of the exemption in the subsequent years, he will have to disclose the capital gain, in the return of income of the relevant year. ... 2. ... ... (ii) Instruction number 635 was issued on 12/11....
2024 0 Supreme(Cal) 1236 • India - Calcutta
SURYA PRAKASH KESARWANI, RAJARSHI BHARADWAJ
(Paras 24-30) ... ... Facts of the case: ... Appellant contested ITAT's decision which classified ... (iii) agricultural land in India, not being land situate: (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or ... (c) any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof....
2021 Supreme(Online)(ITAT) 142 • India - Income Tax Appellate Tribunal (Ahmedabad Bench)
be on the assessee to show that his case comes within the parameters of the exemption clause of exemption notification ". ... Land for Rs. 11,41,430/- and claimed exemption u/s 54B of the Act. ... Ld.AR controverted these findings of the AO stating that various judicial pronouncement have allowed assessee's claim u/s 54B when agriculture land was purchased from advance money received out of sale consideration and so it was not necessary to buy agricultural#....
• India - Income Tax Appellate Tribunal
CHANDRA POOJARI, SAKTIJIT DEY
It is seen from the aforesaid decision that the agricultural land sold by the assessee with an intent to purchase another land within two years had also been permitted to claim exemption under s. 54B of the IT Act, 1961. ... While filing her return of income, she claimed exemption from levy of capital gains under s. 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land with....
• India - High Court of Rajasthan - Rajasthan High Court Principal Seat Jodhpur
on transfer of property used for self-residence, land used for agricultural ... Secs. 54,54B and 54D grant exemption in respect of capital gains arising wishes to avail of the exemption in the subsequent years, he (i)Clarification to Instruction number 95 was issued on 14/09/1970 stating
• India - Income Tax Appellate Tribunal
CH.G.KRISHNAMURTHY, D.S.MEENAKSHI SUNDARAM, T.N.C.RANGARAJAN
To understand this proposition, let us take the case of a company which has got agricultural income. In drawing up its P & LA/c, it is bound to show the profit from the agricultural operations also as part of its profits. ... This shows that exemption of capital gains was not intended to be restricted. ... But can a tax be levied under section 115J on the agricultural income which is not to form part of the total income under section 10? ... The assessee is faced with the decision of the High Court whic....
• India - Income Tax Appellate Tribunal
T.R.SOOD, SUSHMA CHOWLA
The second relevant decision cited by the Revenue is by Authority for Advance Ruling (AAR) New Delhi in the case of Jasbir Singh Sarkaria (supra). In that case the assessee was co-owner of agricultural land measuring about 27.7 acres and his share was 4/9. ... This position is further strengthened by the fact that Legislature itself has inserted clause (v) to section 2(47) and while referring to the provisions of section 53A, reference has been made by stating that contracts in the nature of section 53A should also be co....
2019 Supreme(Online)(ITAT) 1201 • India - Income Tax Appellate Tribunal (Chandigarh Bench)
Assessee is not eligible for exemption u/s 54F on the following reasons:- 1. Exemption u/s 54F is available for purchase of the residential house, not for purchase of agricultural land. ... The Assessing Officer also observed that the assessee had not declared any agricultural income for any Assessment Year and therefore no agricultural operations were being performed. ... In this regard we submit that the assessee vide letter dated 30.03.2016 has clarified the issue regarding claim for deduction u/s 5....
• India - Income Tax Appellate Tribunal
CHANDRA POOJARI, ASHA VIJAYARAGHAVAN
While filing her return of income, she claimed exemption from levy of capital gains under s. 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land within two years. ... It is seen from the aforesaid decision that the agricultural land sold by the assessee with an intent to purchase another land within two years had also been permitted to claim exemption under s. 54B of the ....
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