Capital Gains - Ancestral Property

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An individual has sold a 1-acre ancestral property, inherited and subsequently divided into approximately 25 smaller plots, to various buyers. The core question is whether this income should be classified as capital gains or business income. Based on favourable case law, including CIT vs. MLM. Mahalingam Chettiar and National Products vs. CIT, the sale is likely to be treated as capital gains.

Shakthi

Shakthi

(Querist)

08 October 2021 Dear Experts
Assesee sells the ancestral property inherited during the year. The property is 1 acre of vaccant site which is sold to various persons . Almost 25 different documents ( 4cents in each documents approx ) were executed and registered.
My doubt is whether the same has to be conisdered as business income or capital gains.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

08 October 2021 It can be considered as capital gain; as some case laws are in its favor.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

08 October 2021 Capital gains.
Inference - CIT Vs. MLM. Mahalingam Chettiar (1977) 107 ITR 236 (Mad).
- National Products Vs. CIT (1987) 163 ITR 632 (Kar).

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