TMI Blog2013 (1) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the value of the plot on which the farm house is located and the land appurtenant be fixed as Rs. 2 lakhs. Thus unable to accept the contention of the appellant that the value of the entire land must be considered in arriving at the value of the residential building. No illegality committed by the tribunal. It is not open to the appellant to invoke Section 54B of the Act in regard to the rest of the land at Koothattukulam. This is for the reason that the appellant has not been able to satisfy the requirements of Section 54B with regard to the land at Ayyanthole as the appellant's late father had applied for sanction for construction of a compound wall before the Thrissur Urban Development Authority. The appellant had claimed in the return, exemption on the basis of Section 54F of the Act. But, during the assessment proceedings, the appellant relied on Section 54B of the Act. In other words, initially the appellant even did not have a case that the land at Ayyanthole was used for agricultural purposes. Therefore, at any rate, there can be no basis for invoking Section 54B for deducting the value of the land purchased at Koothattukulam - against assessee. - I.T.A. NO. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Year 2005-06 ?". 3. We heard Shri G. Sarangan, learned senior counsel for the appellant and also Shri Jose Joseph, learned counsel appearing for the Department. 4. Learned senior counsel for the appellant would submit that the approach of the tribunal in denying the benefit of the exemption under Section 54B is unsupportable. There were materials before the authorities indicating that the land at Ayyanthole was indeed being put to agricultural use for a period of two years. In this regard, he drew our attention to certain photographs showing coconut trees. He also relied on the receipt for the water cess. Further more, he drew support from the certificate of the village officer. We find that the certificate from the agricultural officer is also referred to in the order of the tribunal. A copy of the certificate from the agricultural officer was made available to us by the appellant. It is further pointed out that a receipt was produced from the Electricity Board and it was contended that the connection was an agricultural one. He would point out further that the tribunal and the authorities have taken into consideration irrelevant facts. In this regard, he would poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the aid of the following case law: (i) The Apex Court in Commissioner of Income Tax, West Bengal, Calcutta v. Raja Benoy Kumar Sahas Roy [(1957) XXXII ITR 466)] held as follows: "Agriculture" in its primary sense denotes the cultivation of the field and is restricted to cultivation of the land in the strict sense of the term, meaning thereby tilling of the land, sowing of the seeds, planting and similar operations on the land. These are basic operations and require the expenditure of human skill and labour upon the land itself. Those operations which the agriculturist has to resort to and which are absolutely necessary for the purpose of effectively raising produce from the land, operations which are to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable undergrowth, and all operations which foster the growth and preservation of the same not only from insects and pests but also from depredation from outside, tending, pruning, cutting, harvesting and rendering the produce fit for the market, would all be agricultural operations when taken in conjunction with the basic operations. The human labour a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing two years and that the agricultural income shown in the returns by the assessee was not genuine. We do not think that after having assessed the income, it is open to the Department to take this stand without any evidence. At any rate, the findings of the Tribunal that there was material on record to show that the land had been used for agricultural purposes is based on cogent and relevant material. The Revenue record supports the claim. Thus, the Tribunal was justified in holding that the conditions laid down for claiming relief under Section 54B of the Act stood satisfied. Once it is so, the other contentions about the land being located in the commercial area or the land having been partially utilised for non-agricultural purposes or that the vendees have also purchased it for non-agricultural purposes, are totally irrelevant considerations for the purposes of application of Section 54B of the Act." (Emphasis supplied) (iii) Still further, the learned senior counsel sought to draw support from the decision of the Allahabad High Court in Commissioner of Income-Tax v. Janardhan Dass (Late) through legal heir Shyam Sunder [(92008) 291 ITR 210)] essentially for the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the land at Ayyanthole was used for agricultural purposes. A perusal of the order of assessment would show that the appellant had produced tax receipt of property and a receipt from the KSEB. The assessing officer has found that no power charge is payable on the basis of the receipt. It is true that the connection was an agricultural one. But, the officer notes that the opening and closing meter reading, as per the receipt, is the same. It is also found that tax receipt does not throw light on the nature of the property. It does not say that the tax is levied in respect of agricultural property. No doubt, the learned senior counsel for the appellant may be right in complaining that the assessing officer should not have relied on the circumstance that the subsequent purchaser converted the property into an apartment complex. Going by the decisions cited by the appellant, it may also be true that unless there is a surplus, a person may not show agricultural income in the return. But, it is equally true that had the agricultural income been declared in the return, it would have been a circumstance to assist the authorities to conclude that the appellant is entitled to the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a claim based on the photographs. Nothing, as we see, stood in the way of the appellant producing the photographs before him. We must also not forget that the property in the hands of the purchaser was used for putting up an apartment complex. Therefore, we cannot certainly blame the officer for not conducting any inspection. At least, the appellant has not posted us with sufficient materials with reference to which we could have formed an opinion that the nature of the property continued to be such that the officer could have conducted an inspection. The photographs were, no doubt, produced before the appellate authority. But, as rightly pointed out by the learned counsel for the Revenue, the photographs, we must remind ourselves, could be relied on only if it is established that it related to the property. Therefore, it may not be safe for us to overturn a finding of fact in a proceeding under Section 260A of the Act which is premised on a substantial question of law being made out. The other material produced by the appellant before the assessing officer appear to be a self-defeating act, as the receipt of the electric connection, though shown to be for agricultural one, rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 54B is perverse. We therefore repel the case under Section 54B of the Act. 11. Next, it is contended that the officer should have granted, at any rate, the benefit of exemption under Section 54F of the Act in regard to the value of the property, namely the officer should have deducted the entire Rs..11 lakhs paid for purchasing 1 acre 92 cents with the farm house. 12. Section 54F is intended to encourage construction of or acquisition of residential house with the aid of the proceeds from the transfer of any long term capital asset, which is not a residencial house. The provision contemplates computing the cost of the residential building, but the value of the plot on which the farm house stands and the land appurtenant could also be considered. The tribunal has categorically found that the appellant has not produced material to show that the entire area of 1.92 acres should be considered as land appurtenant to it. It is in such circumstances, the tribunal made an estimation and directed that the value of the plot on which the farm house is located and the land appurtenant be fixed as Rs..2 lakhs. We are unable to accept the contention of the appellant that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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