COMMISSIONER OF INCOME TAX Vs. RAVINDER KUMAR

JUDGEMENT

(1.) ARE the profits and gains made by the assessee on account of sale of agricultural land exigible to the levy of income-tax under the heading 'Capital gains' ?

(2.) THE AO had disallowed the claim for exemption of the price of land made by the assessee. The order was affirmed by the CIT(A), Chandigarh. However, the Tribunal relying upon the decision of their Lordships of the Bombay High Court in Manubhai A. Sheth & Ors. vs. N.D. Nirgudkar, ITO & Anr. (1981) 22 CTR (Bom) 41 : (1981) 128 ITR 87 (Bom) : TC 20R.604, held that the income was not exigible to the levy of income-tax. Aggrieved by the order, the Revenue filed a petition under s. 256(1) of the IT Act, 1961. The Tribunal has referred the following question for the opinion of this Court :

(3.) INCOME derived from sale of agricultural land is not 'agricultural income'. Thus, it would be exigible to the levy of tax under the head 'Capital gains'. Respectfully following the view taken in the aforesaid two cases, we answer the question in favour of the Revenue and against the assessee. In the circumstances of the case, we make no order as to costs.