Tax tribunal denies Section 54B capital gains exemption over missing agricultural proof

The Indore bench of the Income Tax Appellate Tribunal rejected a taxpayer's claim for capital gains tax relief under Section 54B because sufficient proof verifying agricultural use of the land was not provided. Consequently, the tribunal sustained income additions amounting to Rs 33.56 lakh and simultaneously declined a belated request to refer the matter to the District Valuation Officer.

This ruling establishes that statutory exemptions requiring specific land utilization cannot be claimed without contemporaneous documentary evidence proving active agricultural engagement. Taxpayers must substantiate claims with clear records rather than relying on general land classifications.

Tax professionals and individuals filing returns must compile robust proof of agricultural operations prior to claiming deductions under Section 54B to withstand scrutiny during assessment proceedings.