I would like to have your valuable views on the problem faced by one of
my best friend's father. My friend's father sold some agricultural lands
during the assessment year 2005-06. As he was of the view that those
lands which he sold were agricultural lands and it was outside the
purview of capital gains. With this in mind he did not show capital
gains in his returns. During the scrutiny procedure the Assessing
Officer treated these lands as non agricultural and charged to Capital
Gains Tax based on enquiry from the CMDA authorities and the district
Tashildhar . My queries are:
1. Whether the lands sold at the time of sale is classified as non
agricultural but if the assessee was carrying on agricultural activities
before such sale could such Sale be treated as agricultural income and
be protected from capital gains tax.
2. The sale consideration received by my friends father is far below the
market price and the assessing officer has substituted the market price
as the consideration received by him U/s. 50c to calculate Capital
At present he is very much disturbed and being a senior citizen he would
like to know whether there is any other avenue open to fight his case.
CA Shankar S.C.
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