Mainly purchasing the way of agricultural land below the market value in the cash deal, and later selling the land at an official transaction has been used to legalize the assessed funds by Babas, businessmen, politicians and cine stars for decades. Tax tribunal government This well threatens to throw a spanner in the oil with oil. While the Income Tax Appellate Tribunal (ITAT) views are related to the alleged otherwise spontaneous case. Tax theft And are not connected to any dodi deals, the observations of this go on strike in the center of this laundering machine that thrives on the sale of farm land. ITAT is a semi-judicial right and listens to disputes before the High Court challenges matters.
Consider this: A person with unemployed cash makes a deal to buy land with a farmer, which has a market price of ₹ 10 crore.
Here, the official land value in the sales deed is quoted as ₹ 2 crore while the remaining ₹ 8 crore is paid in cash. The seller, perhaps a farmer who does not pay tax and is not tracked by the IT department, has no qualification in accepting cash. In addition, they may have real use of cash for paying laborers, buying seeds, fertilizers, etc. A few years later, the buyer of the land sells land for 10 million (its actual value), which receives the entire money as a check or bank transfer, registration records sales at the appropriate market price with documents. Two transactions-first buy land and later to sell cash or ‘black money’ to sell it to the original buyer of ₹ 8 crore (between ₹ 10 crore and ₹ 2 crore) to convert it to ‘White’? Depending on the property of being agricultural land, no tax is paid to purchase the ground at a much lower price than any non-agricultural, urban land transactions, where the buyer will have to pay tax at the difference between the market price and transaction price. Again, any ‘capital profit tax’ is paid by the seller when the land is later sold at a full price of ₹ 10 crore as agricultural land is excluded from the definition of ‘capital asset’.
Agricultural land is ‘real estate’
While the Ahmedabad bench of ITAT has supported the capital profit tax exemption on the sale of agricultural land, it has questioned the non-payment of tax payments on the first phase of the transaction (where assets worth ₹ 10 crore are purchased for ₹ 2 crore).
Under Section 56 (2) (x) of the IT Act, complete income tax is levied at the difference between the market value and transaction value of such “real estate” (between other assets). ITAT said in its May 27 judgment, “The term ‘real estate’ is not defined in any other section in Section 56 (2) (x) or IT Act. The word is provided to the word used in General Parliament. In the general understanding of the word, ‘irreversible property’ means that it cannot be included in a property 56 (2) (x).
If this scene is retained by the High Court, buying the land of the losing farm for bribe and cash payment will run in a serious obstacle.
