Agricultural Land Sold to Non-Agriculturist Remains Agricultural and cannot be treated as Capital Assets: ITAT

The ITAT ruled that agricultural land sold to a non-agriculturist retains its status as agricultural land and cannot be treated as a capital asset for tax purposes. The case involved an assessee who sold agricultural land, and the tax authorities sought to treat the land as a capital asset, thereby subjecting it to capital gains tax. The tribunal, however, held that as long as the land is classified as agricultural, its sale cannot attract capital gains tax, regardless of the buyer’s status. This ruling reinforces the principle that the nature of the land, not the buyer, determines its tax treatment.