07 April 2008
1.A individual sells his ag lands which is not a capital asset as per section 2 of IT act.It complies with the conditions of section 2 in all respects.
2.The nearby area has developed into SEZ and there is a huge appreciation for the land.
3.It is sold to a developer who is proposing township.
4.The view of the IT dept is it has lost the character of agri land and no prudent person will pay such a huge price for agri land and hence it is taxable.
5.pl resolve this and if possible support with case laws.
07 April 2008
According to you the land complies with conditions of section 2 in all respects. Then how come the situation stated in your query 4 arises? On the basis of proposal 3? Please clarify.
07 April 2008
AGR. LAND IS AGR. LAND AS LONG AS IT SATISFIES CONDITIONS OF SEC 2. HUGE PRICE OR LOW PRICE IS NO CRITERION TO DECIDE IF IT IS AGR. LAND OR NOT. WHO SAID AGR. LAND DOES NOT CARRY HUGE PRICE? AGR.LANDS IN THE FERTILE LANDS OF EAST GODAVARI DISTRICT OF ANDHRA PRADESH CARRY A PRICE TAG EQUIVALENT TO REALTORS HIGH PRICED LANDS IN HYDERABD .THIS IS AN ANSWER VERIFIABLE AND SETS AT NAUGHT THE CONTENTION THAT AGR. LANDS DONT CARRY FANCY PRICES. R.V.RAO
08 April 2008
it is quite true that due to declaration that land wll noow come under sez wii be having sky high prices but that does not mean that land has lost its character of agricultural land and land will continue to remain agricultural land.as lanmg as sec 2 reqmnt is fulfilled land wll renmain agri land and in view of this it dept view is not correct.
CAclubindia
