TMI Blog2014 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, the Tribunal has misdirected itself. The plea of the Revenue that there was no agricultural operations prior to the date of sale is of no avail as the definition u/s 2(14) of the Income Tax Act has the answer to a plea raised - the lands are agricultural lands classified as dry lands, for which kist has been paid – relying upon Commissioner of Income-tax V. Raja Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME Court) - There was authority for the proposition that the expression "agricultural land" mentioned in Entry 21 of List II of the Seventh Schedule to the Government of India Act, 1935, should be interpreted in its wider significance as including lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry - the Tribunal was not justified in rejecting the exemption – Decided in favour of Assessee. - Tax Case (Appeal) Nos.566 and 567 of 2013 & M.P.Nos.1 and 1 of 2014 - - - Dated:- 6-8-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellants : Mr. C. Ramakrishnan for Mr. R. Sivaraman For the Respondents : Mr. J. Narayanasamy Standing Counsel for Income Tax Dept. JUDGMENT (Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands and therefore they were exempted from capital gains tax. Accordingly, the appeals filed by the assessees were allowed. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Revenue filed appeals before the Income Tax Appellate Tribunal. 4. The Tribunal primarily relying on the decision reported in 139 ITR 628 (CIT V. Siddharth J. Desai), where various tests have been laid down by the High Court of Gujarat and applying those tests, found that the assessees could not prove that the lands were actually or ordinarily used for agricultural purposes. Hence, the Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and restored the order of the Assessing Officer, thereby allowed the appeals filed by the Revenue. Aggrieved by which, the assessees have preferred the present Tax Case (Appeals) before this Court. 5. At the time of admission, this Court framed the following substantial questions of law for consideration: T. C. (A) No. 566 of 2013: 1. Whether, on the facts and circumstances of the case, the Tribunal was right holding that the lands were not agricultural lands, ignoring the Certificate of the Tahsildar and the certified ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided into plots, rejected exemption. In this connection, he relied on the decision reported in (1957) 32 ITR 466 (Commissioner of Income Tax V. Raja Benoy Kumar Sahas Roy). He further submits that since the assessees have produced evidence showing that the lands sold are agricultural lands, they have to be granted exemption. 8. Per contra, learned Standing Counsel appearing for the Revenue submits that that there were no agricultural operations prior to the date of sale. Hence, the lands are not agricultural in nature. Accordingly, the Tribunal is correct in coming to the conclusion that the assessees are not eligible for exemption. 9. The issue involved in the above Tax Case (Appeals) lies on the narrow compass, viz., whether the lands sold by the assessees are agricultural lands and whether they are entitled to the benefit of exemption from capital gains tax. 10. It is on record that in a report has been submitted by the revenue authorities, it is admitted that the lands are classified as agricultural lands in the revenue records and they are dry lands. The remand report of the Assessing Officer in this regard reads as follows: During the time of assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date ? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use ? If so, whether it was put to an alternative use ? Whether such cesser and/or alternative user was of a permanent, or temporary nature ? (7) Whether the land, though entered in revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled ? Whether the owner meant or intended to use it for agricultural purposes ? (8) Whether the land was situate in a developed area ? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural ? (9) Whether the land itself was developed by plotting and providing roads and other facilities ? (10) Whether there were any previous sales of portions of the land for non-agricultural use ? (11) Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist ? If s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effects, that is to say, movable property (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him: Explanation.--For the purposes of this sub-clause, jewellery includes -- (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel ; (b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel ; (iii) agricultural land in India, not being land situate -- (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or (b) in any area w ..... 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