TMI Blog1995 (6) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of the said land is not assessable under the head 'capital gains' in the hands of the appellant. 3. The facts that are relevant for the better appreciation of the issue involved in this appeal may be stated thus. For the purpose of laying new broad gauge railway line from B.B. Nagar to Nandipuri, a vast extent of land belonging to various farmers of Chityal village including the extent of Ac. 14.02 guntas of land owned by the appellant was acquired by the Govt. Acquisition proceedings commenced in the middle of the year 1977. The Govt. took possession of the land of the appellant on 3rd Aug., 1977 and handed it over to the Railway authorities. Draft notification under s. 4(1) and draft declarations under s. 6 of the Land Acquisition A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aug., 1977 when possession of the land was taken over by the Govt. Aggrieved by it, the assessee preferred the appeal in ITA No. 943/Hyd/1989 before the Tribunal. In the said appeal that arose out of the assessment made for the asst. yr. 1978-79 two grounds were raised by the appellant before the Tribunal. The first and the main ground was that the lands were agricultural lands and, hence, no capital gains arose out of the transfer of the said land. The second ground was that in any view of the matter, no capital gain arose in the previous year relevant to the asst. yr. 1978-79, since no transfer under law took place in the previous year 1977-78. On a consideration of the facts available on record and the position of law applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aug., 1977 and the vesting of the land in the Govt. under law took place in June, 1980, the assessee could not have carried on any agricultural operations in this land in the previous years 1977- 78 to 1980-81 and so much so the said land ceased to be agricultural land by the date of its transfer, i.e., vesting in June, 1980. Further he also recorded a finding that the lands were non-agricultural even by 3rd Aug., 1977 basing on the sole ground that the assessee claimed and obtained higher compensation in Court saying that the land is useful for house sites. Aggrieved by the assessment for the asst. yr. 1981-82 the assessee preferred an appeal. 6. The learned CIT(A) upheld it saying that there is no evidence to show that any agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal rendered in the assessee's own case in ITA No. 943/H/1989 for the asst. yr. 1978-79. As we have already stated, in the first instance the ITO brought to tax under the head 'capital gains' the compensation amount and solatium received by the assessee in respect of this very identical land for the asst. yr. 1978-79. The main ground that was taken by the assessee in that appeal was that the land in question was agricultural in character and it is not a capital asset within the meaning of s. 2(14) of the IT Act and, hence, no capital gain arose on the transfer of the said land. The Tribunal in its order dt. 27th Oct., 1989 rendered in ITA No. 943/Hyd/89 on a consideration of the evidence on record gave a categorical finding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the relevant facts. We are satisfied from the material available on record that the lands in question are agricultural lands. The finding of the Tribunal recorded in its order made in ITA No. 943/Hyd/89 also supports our view that the lands in question are agricultural lands. 10. The main thrust of the contention of the learned Departmental Representative is that the land should continue to be agricultural land till the date of its transfer, i.e., till June, 1980 when the vesting took place and that inasmuch as there was no agricultural operation admittedly conducted in these lands from 3rd Aug., 1977 onwards, i.e., the date on which possession of land was taken by the Govt. it ceased to be agricultural land by the date of transfer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said land to tax under the head 'capital gains'. The assessee contended that the said land continued to be agricultural land upto the date of transfer. The Tribunal held that the assessee carried on agricultural operations till the land was requisitioned in 1962; that the land was transferred to the Govt. in the year 1970; that simply because the military authorities used this land for non-agricultural purposes from 1963 to 1970, it does not cease to be agricultural land. Accordingly, the Tribunal rejected the contention of the Department that the character of the land changed merely because it was in the possession of the Govt. for some time and in that period the Govt. used it for non-agricultural purposes. In the case on hand sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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