TMI Blog2012 (12) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... certify the proof of agricultural operation, distance of land from a particular place, rate of land, etc. Land was sold to developer – Held that:- Just because after the sale, the purchaser was going to put the land to non-agricultural use, it does not mean that on the date of sale the land has ceased to be agricultural land. If in the revenue record, the particular land is recorded as agricultural land and till the date of sale, it is exploited as agricultural land and the owner of the land has not taken any step to indicate his intention to exploit the land for non-agricultural purposes then such land to be regarded as agricultural land Therefore said land was agricultural land. In favour of assessee - IT Appeal No. 207(Ind.) of 2012 - - - Dated:- 31-8-2012 - Joginder Singh And R.C. Sharma, JJ. Keshave Saxena for the Appellant. S.S. Sheetal for the Respondent. ORDER Joginder Singh , Judicial Member - The Revenue is aggrieved by the impugned order dated 31.1.2012 broadly on the ground that on the facts and in the circumstances of the case, the learned first appellate authority erred in treating the land sold as agricultural land when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed exemption from capital gains on sale of land by claiming the same to be agricultural land situated in the revenue record of village Lasudia Parmar (Teh. Sanver) bearing Khasra No. 184, etc. The stamp duty and registration fees were borne by the purchaser and the sale consideration amounting to Rs. 1,29,21,582/- was received through cheque. The Assessing Officer concluded that the impugned land is situated within 8 kms from the municipal limit and then mentioned the provisions of section 10(37) of the IT Act which are applicable in the case of compulsory acquisition, therefore, is not applicable to the facts of the case as the land was sold by private deal and no exemption u/s 54B of the Act was claimed. So far as the argument of the learned CIT DR and observation of the Assessing Officer that since the land was not cultivated by the assessee himself and was carried on by the brother, therefore, it cannot be treated as agricultural land. We are not absolutely convinced by this argument/observation because there is no requirement in any Act more especially the Income Tax Act that only the self-cultivated land will be treated as agricultural land. The Tehsildar is the concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act whereas the issue before us pertains to section 2(14) with respect to agricultural income, therefore, not applicable to the facts of the present case. The learned CIT DR placed reliance on the decision of the Hon'ble Gujarat High Court in Arundhati Balkrishna (supra). We find that in that case, the land was situated within municipal limits of Ahmedabad and the surrounding land was developed and since the land was not agricultural land, the gains from sale of such land was held to be exigible to capital gains tax. However, the land in question is clearly agricultural land situated beyond 9 kms from the municipal limit, therefore, this case may not help the revenue, moreso one fact pertinent to mention here that part of the same land, owned by one of the brothers, was treated as agricultural land, therefore, it is quite unjustified to treat part of the same land/chunk to be non-agricultural. Another case relied upon is from Hon'ble Bombay High Court in Fazalbhoy Investment Co. (P.). Ltd. (supra) wherein there was no evidence showing that no agricultural operations were carried out on the land. The Hon'ble Court held that land was not agricultural. However, in the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depends upon factors like location of the land, use of the land, distance from municipal limit, whether land use was changed, etc. If all these factors are cumulatively kept in mind, one clear fact is oozing out that the impugned land is situated beyond the prescribed limit from the municipality, recorded as agricultural land in the revenue record, agricultural operation was done by one of the brothers, we are of the considered opinion that the no capital gains tax is exigible on sale of such land. So far as the objection of the learned CIT DR that the Tehsildar is not a competent authority for measuring the distance, we are not satisfied with such submission especially when the Inspector of the department of Income tax and Tehsildar both have certified that the land is situated beyond 8 kms from the municipal limit. We are of the considered opinion that Tehsildar is the most competent revenue Officer to certify the proof of agricultural operation, distance of land from a particular place, rate of land, etc. Our view is further fortified by the decision from Hon'ble Punjab Haryana High Court in CIT v. Lal Singh. So far as the issue of measuring the land through straight method/ae ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 TTJ (Mumbai) 364 : [2007] 105 ITD 657 (Mumbai) approved." The above conclusion by the Hon'ble High Court clearly supports the case of the assessee. In the case of Lal Singh (supra) the Hon'ble High Court concluded that "the report of the Tehsildar having certified that the assessee's land was 8 kms away from the municipal limit, the land constituted agricultural land entitling the assessee to exemption u/s 54B of the Act. 7. If the assessment order is analysed, we are of the view that the learned Assessing Officer is more guided by section 45 of the Act which speaks about capital gains arising from the transfer of capital asset. Section 54B of the Act speaks about non-charging of gains of the cases where there is a transfer of land used for agricultural purposes. An amendment was effected with effect from 1.4.1970 so as to include lands situated in certain specified areas within the ambit of non-agricultural land. However, burden is on the assessee to prove that the land is agricultural land and at the same time, onus is on the department to prove that the land is non-agricultural or it forms part of business asset. For the purposes of land being agricultural land, actual ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems that the learned Assessing Officer has not examined the documents produced by the assessee establishing the distance of land beyond prescribed municipal limit and more specifically when Khasra number, etc. has been duly mentioned in the report of Tehsildar. So far as the argument of the learned CIT DR that the land was sold at a substantial amount is not the relevant factor to prove that it was non-agricultural land because it depends upon so many factors. Even in the grounds of appeal, the revenue has raised a ground that the documentary evidences produced by the assessee belong to the land of Shri Rakesh Shukla, brother of the assessee. We are not convinced with this argument also because the total land is adjoining to each other and is from one chunk. This claim of the revenue rather supports the case of the assessee. As mentioned earlier, in the case of one of the brothers, it has been allowed as agricultural land, therefore, no different yard stick can be adopted in the case of another brother, being the land is part of the same chunk. The totality of facts clearly leads to the conclusion, under the facts narrated hereinabove, that the impugned land is agricultural land, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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