| Case ID |
1edecdea-872b-4bae-a7f3-2bcff0b96046 |
| Body |
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| Case Number |
IT REFERENCE No. 67 OF 1971 |
| Decision Date |
May 13, 1980 |
| Hearing Date |
|
| Decision |
The court held that the land owned by the assessee was agricultural land and did not constitute a capital asset under the Income-tax Act, 1961. The nature of the operations carried out on the land was the determining factor, and since agricultural operations were performed, the income derived from the sale of the land was not subject to capital gains tax. The ruling emphasized the importance of the actual use of the land for agricultural purposes, irrespective of the purpose of sale, confirming that the excess realization from the sale was not chargeable to capital gains tax. |
| Summary |
This case revolves around the classification of land as agricultural under the Income-tax Act, 1961. The key issue was whether the land sold by the assessee was a capital asset subject to capital gains tax. The court analyzed the definition of agricultural land and determined that the operations performed on the land constituted agriculture, thereby excluding it from the capital asset category. The ruling reinforced the principle that the use of land for agricultural purposes is essential for tax implications, making it a vital case for understanding agricultural land taxation. The decision clarifies that agricultural operations must involve cultivation activities, and emphasizes the connection between land use and tax liabilities. This case is essential for tax law practitioners and agricultural businesses as it delineates the criteria for land classification, impacting tax obligations significantly. |
| Court |
Calcutta High Court
|
| Entities Involved |
Commissioner of Income Tax,
Sutton & Sons Ltd.
|
| Judges |
Sabyasachi Mukharji,
Sudhindra Mohan Guha
|
| Lawyers |
Suhas Sen,
Ajit Kr. Sengupta,
Dr. D. Pal,
J. Shah
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Sutton & Sons Ltd.
|
| Citations |
1981 SLD 1500,
(1981) 127 ITR 57
|
| Other Citations |
Smt. Chandravati Atmaram Patel v. CIT [1978] 114 ITR 302 (Guj.),
CWT v. Officer-in-Charge (Court of Wards) [1976] 105 ITR 133 (SC),
CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC),
Smt. Manyam Meenakshamma v. CWT [1967] 63 ITR 534 (AP),
Murugesa Chetti v. Chinnathambi Goundan [1901] ILR 24 Mad 421,
Panadai Pathan v. Ramasami Chetti [1922] ILR 45 Mad 710
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
2(14)(iii)
|