COMMISSIONER OF INCOME TAX C.R. BUILDING QUEENS ROAD BANGALORE AND THE INCOME TAX OFFICER WARD-3(4) C.R. BUILDING QUEENS ROAD BANGALORE Vs. SMT K. LEELAVATHY 65, VANI VILAS ROAD BASAVANAGUDI BANGALORE

JUDGEMENT

(1.) APPEAL under Section 260A of the Income Tax Act, 1961 [for short, the Act] by the revenue, seeking to raise the following substantial questions of law for our examination in this appeal: Whether the appellate authorities were correct in holding that the land which is subject matter of sale is agricultural land as on the date of sale without taking into consideration conversion of land to non -agricultural purpose and consequently recorded a perverse finding?

(2.) WHETHER the appellate authorities were correct in holding that though the land is converted into non -agriculture, in view of the cultivation of land till the date of sale, the land should he treated as agricultural land, and the same is exempt from capital gains in view of Section 2(14) r/w Sections 45 and 48 of the Act? as questions that arise from out of the order of the income tax appellate tribunal, Bangalore bench in ITA No. 997/Bang/2010, which, by that order, dismissed the appeal of the revenue against the order passed by the appellate commissioner, holding that there is no need to interfere with the finding of the appellate commissioner that the sale transaction dated 7 -4 -2004 effected by the respondent -assessee in favour of some third parties in respect of an extent of 3 acres 38 guntas in Sy No 75 and 3 acres in Sy No 77 of Seshahaili village, Bangalore rural district, put together for sale consideration of Rs. 50.00 lakh, is not a transaction involving transfer of a capital asset and therefore no need to bring the income referable to the capital gains part of the transfer of the asset. 2. Appearing on behalf of the appellant -revenue, submission of Sri M. V. Seshachala, learned senior standing counsel for the income tax department, is that the tribunal and the appellate authority have committed an error in ignoring the finding of the assessing officer that the very sale deed under which the subject land had been sold recited that it is a converted land, converted for non -agricultural use, and as per the permission granted by the competent authority viz., Assistant Commissioner in the revenue sub -division concerned. It is, therefore, submitted that the appellate commissioner and the tribunal should not have ventured to extend the relief to the assessee even against assessee's own document viz., sale deed etc.

(3.) WE have perused the orders impugned and bestowed our attention to the submissions made at the Bar.