TMI Blog1996 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the aforesaid land was agricultural land and was not liable to wealth-tax. According to the assessee, the value of the aforesaid land, even if it is regarded as liable to wealth-tax, should have been taken at Rs. 1,80,000. The WTO observed that in the year under consideration, the assessee has entered into an agreement with Bareilly Development Authority (hereinafter referred to as BDA) vide agreement dt. 5th March, 1984, for sale of the lands in question @ Rs. 39.52 per sq. mt. + 15% solatium thereon. The assessee also handed over the possession of the said land vide Dakhalnama, dt.21st March, 1984. The AO observed that the assessee was no longer the owner of the asset on the valuation date. He had only the legal right to receive compensation from BDA. The value of the aforesaid asset was determined by the WTO as per discussion made in para 5 of the assessment order which is reproduced hereunder : "5. As per letter dt. 5th Dec., 1985, issued by Sri Ganesh Dutt Punetha, Secretary, BDA, Bareilly, value of the said land has been taken at Rs. 38,59,082.87 (Rs. 10,00,000 advance tax paid on 9th Oct., 1984 + Rs. 28,59,082.87). Value of the said land as per agreement dt.5th March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of Rs. 39.52 per sq. mt. + 15% solatium after taking into consideration the fact that the land in question has been declared as surplus land under provisions of ULC Act. Therefore, the impact of the applicability of ULC Act in relation to the said land has already been taken into consideration while arriving at the agreed rate on which the assessee agreed to transfer the land to BDA. (e) The CIT(A) also held that the land in question cannot be regarded as agricultural land. For arriving at such conclusion he relied upon several judgments including the various tests laid down by the Hon'ble Gujarat High Court in the case of CIT vs. Siddharth J. Desai (1982) 28 CTR (Guj) 148 : (1983) 139 ITR 628 (Guj). The CIT(A) thus in principle agreed with the value determined by the AO except to the extent that the WTO arrived at the value of the two plots of land at Rs. 32,77,981 but has adopted the value of the said lands while computing taxable wealth at Rs. 38,59,083 on the basis of a letter dt.5th Dec., 1985, received from the Secretary, BDA. But he did not reconcile the difference between the aforesaid two figures. He, therefore, restored back the matter for the limited purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount will be received by the assessee. 8. The learned counsel further submitted that even if it is treated that the land at S.No. 239 cannot be considered as agricultural land in asst. yr. 1984-85, the value of the said land along with value of land at S. No. 99 should be taken at Rs. 1,80,000 because both the aforesaid lands were declared as surplus land vide order dt.2nd July, 1977, passed under the ULC Act. Once any particular land has been declared as surplus land, the owner of the land is entitled to receive only the compensation as per the provisions contained in ULC Act and he is restrained from transferring the said land. He invited our attention towards the decision of the Tribunal in assessee's own case for asst. yr. 1980-81 where the value of the aforesaid land situated at S. No. 239 and S. No. 99 was taken at Rs. 1,75,000. The Tribunal took into consideration the subsequent developments, namely, agreement executed with BDA, possession given to BDA in March, 1984 and other relevant facts. After considering the entire material and evidence, the Tribunal confirmed the order of the CWT(A) accepting the declared value of Rs. 1,75,000. 9. The learned counsel further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Senior Departmental Representative submitted that he is required to submit his arguments about the nature of land only with regard to land at S. No. 239 for asst. yr. 1984-85. 11. The learned Senior Departmental Representative pointed out that the land at S.No. 239 was agreed to be sold on5th March, 1984, to BDA. The Dakhalnama (document for handing over possession) was executed on31st March, 1984. The relevant valuation date was31st March, 1984. On the relevant valuation date the assessee had already handed over the possession to BDA and, therefore, the same cannot be treated as agricultural land on the relevant valuation date. Even assuming that the land in question was put to agricultural use for a major part of the financial year 1983-84, it would not establish that the land continued to be an agricultural land in the hands of the assessee on31st March, 1984, as the possession had already been given to BDA on31st March, 1984. 12. The learned Senior Departmental Representative further submitted that the order passed by the ULC authorities on22nd July, 1977is not a final order for taking over of the surplus land in question. In the said order, it has been specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the assessee and the BDA. Therefore, the question of granting further discounting in the value determined as per the rate agreed with BDA would be unwarranted and unjustified. 15. The learned Senior Departmental Representative further submitted that the facts in asst. yr. 1985-86 are similar so far as the valuation of the asset in question is concerned. He supported the order of the CIT(A) and urged that the same should be confirmed. 16. We have carefully considered the rival submissions made by the learned representatives of the parties and have also gone through the orders of the Departmental authorities as well as various other documents to which our attention was drawn during the course of hearing. 17. We will first deal with the assessee's contention that land at S. No. 239 should be treated as agricultural land and should be held to be exempt in asst. yr. 1984-85. After a deep and thoughtful consideration to the entire submissions made by the learned counsel for the assessee, we are of the view that the said submission made on behalf of the assessee cannot be accepted. The reasons for our taking such a view are as under. 18. For determining the nature and fair mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner, help the assessee as few days prior to the relevant valuation date the assessee had abandoned its intention to use the land for agricultural purpose and had in fact handed over the possession to BDA in accordance with the agreement executed with them. We, therefore, hold that the land at S. No. 239 cannot be treated as agricultural land for asst. yr. 1984-85. 19. The learned counsel for the assessee had himself conceded in favour of the Revenue so far as the nature of the land at S. No. 239 as well as in respect of land at S. No. 99 for both the years under consideration and had submitted that the same land may be treated as urban land as held by the CWT(A). We accordingly approve the view taken by the CWT(A) holding that the land at S. Nos. 239 and 99 cannot be regarded as agricultural land for both the years under consideration. 20. Now, we will consider the question relating to the valuation of the aforesaid two lands for both the years under consideration. 21. We will first deal with the valuation of land at S. No. 239. Since the assessee had already entered into an agreement for sale of the aforesaid land on5th March, 1984and had also handed over the possession th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land at S.No. 99 is concerned, it is an undisputed fact that the land in question, although originally agreed to be purchased by BDA in accordance with the agreement dt.5th March, 1984, was ultimately not purchased/required by BDA. The land in question still continues to be owned by the assessee. The matter relating to grant of exemption under ULC Act is also stated to be still pending. The learned Senior Departmental Representative had submitted that the value adopted by the CIT(A) on the basis of rate offered by BDA is justified, cannot be accepted in the present case, in view of the fact that the Tribunal in assessee's own case had determined the value of the entire surplus land covered by the land situated at S. No. 239 and 99 at Rs. 1,75,000 in asst. yr. 1980-81. While determining the said value, the Tribunal had duly taken into consideration the impact of ULC Act and had also taken note of the various agreements executed with BDA in the year 1984. After considering all the submissions, the Tribunal had determined the total value of the entire surplus land at Rs. 1,75,000. The facts so far as land at S. No. 99 are concerned continues to remain the same. The land at S. No. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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