LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Barren Land

ADARSH JAIN (14 Points)

02 November 2019

Is sale of barren land which is out of municipal limits taxable as captial gains or not?

Reply
Follow
Share

3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 02 November 2019

No clear cut solution.

Generally Assessing officer will assess it as taxable gains.

Various courts have different judgements over the issue. So, it differs from case to case.

In the case Commissioner of Income-tax Vs. Sashiben [2007] 288 ITR 319 (Guj) where in it was held that: “if the land is recorded as agricultural, it would continue to be agricultural land. If the land is so recorded and it has not been put to any other use by the holder/owner of the land and even I it remains barren or uncultivated for some time and even grass is raised on the land, it would continue to be agricultural land.”

Read more at: https://www.caclubindia.com/forum/capital-gains-on-barren-land--38299.asp

would like to add to the matter discussed herein. In the case Commissioner of Income-tax Vs. Sashiben [2007] 288 ITR 319 (Guj) where in it was held that: “if the land is recorded as agricultural, it would continue to be agricultural land. If the land is so recorded and it has not been put to any other use by the holder/owner of the land and even I it remains barren or uncultivated for some time and even grass is raised on the land, it would continue to be agricultural land.”

Read more at: https://www.caclubindia.com/forum/capital-gains-on-barren-land--38299.asp

As a thumb rule, if the land had ever been cultivated by seller, anytime during its holding, and if revenue record it is not recorded as 'NA LAND'; you have quite better chances...

For some more clarification refer ...

https://www.caclubindia.com/forum/capital-gains-on-barren-land--38299.asp

&/or https://indiankanoon.org/doc/1323891/

1 Like

rama krishnan (12234 Points)
Replied 03 November 2019

As stated by Mr. rambhia ,there are different rulings by different courts. however the act is clear that where any income derived from agricultural land is exempt. in my opinion if the land is not agricultural then gains derived from its sale is chargeable to tax

1 Like