Definition of agricultural land for 10(37) ?

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Vignesh (Querist)

03 August 2013 In case of claiming exemption U/s 10(37)the land needs to be agricultural land. But what exactly is the definition of agricultural land for the purposes of this section?
Sec 2(14)(iii) says agricultural land not being so and so is not a capital asset. but does not exactly define it.

My question is, if in case an agricultural land has been converted to non agricultural property in municipal records but agriculture is still carried out on the said property can it still claim exemption U/s 10(37) ?

(It is listed as a non agricultural property due to the conversion but is still being used for agriculture on the date of compulsory acquisition.)

What is the basis for the definition? The work carried out on the land or the municipal records?

In case if you could direct me to an exact definition of agricultural land it would be appreciated.

Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

03 August 2013 In my view, Since the land is being used for the purpose of agriculture activities it is an agriculture land. The required conditions for an agriculture land as prescribed U/s 54B are more relevant to the case.
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Please refer the section and decide.
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The conversion into non-agriculture can be termed as an event incidental to the compulsory acquisition. "Conversion" itself indicates that the land has been converted to Non- Ag. Land. Means priorly it was an Ag Land.
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For Section 10(37) - the best guide is Section 54B as both the provisions have been incorporated for the capital gains on Agriculture Land.

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