TMI Blog2010 (3) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... e. - 2766 (DELHI) OF 2009 - - - Dated:- 26-3-2010 - R.P. TOLANI, A.K. GARODIA, JJ. M.P. Rastogi for the Appellant. Ms. Pratima Kaushik for the Respondent. ORDER A.K. Garodia, Accountant Member. This is an assessee's appeal directed against the order of the Commissioner of Income-tax (Appeals)-XXVIII, New Delhi, dated 19-3-2009 for the assessment year 2006-07. The grounds raised by the assessee read as under : "1. That the authorities below ought not to have assessed the amount of Rs. 10,03,814 being the sale proceeds of agricultural crops, horticulture and trees of fruits and others under the head "Capital gains", but should have considered as agricultural income. 2. That the appellant denies its liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed the assessment order and he has also followed the judgment of the hon'ble Kerala High Court rendered in the case of Travancore Tea Estates Co. Ltd. v. CIT [1974] 93 ITR 314. He also followed the judgment of the hon'ble Apex Court rendered in the case of CAIT v. Kailas Rubber Co. Ltd. [1966] 60 ITR 435 and now the assessee is in further appeal before us. 3. The learned authorised representative for the assessee has drawn our attention to a copy of the sale deed as available on pages 23 to 81 of the paper book and in particular our attention was drawn to pages 77 to 79 of the paper book as per which it is claimed that the vendee has paid the vendor a sum of Rs. 10 lakhs for trees, etc., which is included in total sale value and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was submitted that in this case, the issue in dispute was regarding the sale proceeds of old mango trees and it was held by the Tribunal that the sale proceeds of old mango trees is not liable to tax as capital gains. As against this, it was submitted by the learned Departmental Representative for the revenue that in the case of Surender Singh (supra), there was no composite sale of trees with land whereas in the present case, there is composite sale of land along with trees and hence this Tribunal's decision is not applicable to the present case. Reliance was also placed by him on the following judgments : (a) Kailas Rubber Co. Ltd.'s case (supra). (b) CIT v. M.P. Audyogik Kendra Vikas Nigam (Raipur) Ltd. [1997] 227 ITR 799/[ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Tea Estates Co. Ltd.'s case (supra). It was held by the Kerala High Court in this case that trees that stood on "agricultural land in India" mentioned in section 2(14)(iii) is not "agricultural land in India" and, therefore, property of any kind which will be "capital asset". After holding so, it was also held that profits and gains arising from the transfer of such capital asset are taxable under section 45 of the Income-tax Act, 1961. This judgment of the hon'ble Kerala High Court also supports the case of the Revenue. Another judgment followed by the Commissioner of Income-tax (Appeals) is the judgment of the hon'ble Apex Court, rendered in the case of Kailas Rubber Co. Ltd.'s case (supra). In that case, the assessee purchased a rub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the present case. The second judgment cited by the learned authorised representative for the assessee is the judgment of the Madras High Court in the case of Dr. D.L. Ramachandra Rao's case (supra). This judgment is also similar to the judgment of the hon'ble Rajasthan High Court, discussed above and in this case also it was held that if the land is held for more than prescribed period of 36 months and the building constructed on it was held for less than prescribed period, capital gains attributable to land is assessable as long-term capital gains and the remaining capital gains only can be assessed as short-term capital gains which is pertaining to the superstructure. This judgment is also of no help to the assessee in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... linked with the process of agricultural process undertaken for production of fruit crops and hence the sale proceeds of the trees would amount to revenue derived from the land. The facts in the present case are different. In the present case, the entire land was sold along with trees standing thereon and hence it cannot be said that selling of trees in the present case is in the course of agricultural operation. Hence, this Tribunal's decision is also not applicable to the present case. In the present case, the land was acquired by the deceased father of the assessee along with trees and plants standing thereon and such land along with trees and plants were sold by the assessee. The entire cost price of this land which included the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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