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TMI Blog2016 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... t earned from the sale of said plots as exempt from income. As per the contentions of the assessee, the plots sold are part of agricultural land and hence, is not a capital asset within the meaning of section 2(14) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The Assessing Officer rejected the contentions of the assessee and applied the test as laid down by the Hon'ble Gujarat High Court in the case of CIT Vs. Siddharth J Desai, 139 ITR 628 to determine the nature of land. The Assessing Officer held that the plots of land sold by the assessee are situated in predominant developed area, the land is not under cultivation and does not fulfill the test laid down by the Hon'ble Gujarat High Court. The Assessing Officer held the land to be capital asset as defined in section 2(14) of the Act and brought to tax the gain arising from the sale of plots of land. Aggrieved by the assessment order dated 22-12-2009, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) upheld the findings of the Assessing Officer and dismissed the appeal of the assessee. Now, the assessee is in second appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R further submitted that the Commissioner of Income Tax (Appeals) has rejected the contentions of the assessee on the ground that no agriculture income was shown in the return of income. Therefore, the land cannot be considered as agricultural land. Further, on account of minor discrepancies in the 7/12 extracts the Commissioner of Income Tax (Appeals) has held the same to be not reliable. The 7/12 extracts was prepared by Revenue authorities and the assessee has no control over them. There are minor discrepancies in mentioning of the crops grown on the land. However, from the perusal of the 7/12 extracts it is evident that the land was cultivable and was under cultivation. As far as plots comprising in S No. 106 and 161 at Khadkale, Tal.-Maval, Distt.-Pune is concerned there is no dispute that the land/plots were under cultivation. The dispute is only with regard to the land comprising in Gat No. 244 (Old 135), Kusegaon. In the 7/12 extracts it has been mentioned that part of land is 'pad' (barren). However, in 7/12 extracts for the subsequent year, the said land is shown as cultivable. The ld. AR submitted that without prejudice to his earlier submissions the plot comprises in Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounding area and nearness of the highway cannot be a ground to characterize the land as nonagriculture. 6. The Commissioner of Income Tax (Appeals) has rejected the 7/12 extracts merely on the ground that there are contradictions in two 7/12 extracts for the same year. In one of the 7/12 extracts for the year 2002-03 the crops mentioned are 'Bhat', 'Gehu' and 'Vipath', whereas in the second 7/12 extracts for the same year the crops mentioned are 'Bhat' and 'Gehu'. We are of the view that these discrepancies are trivial. The 7/12 extracts are prepared by the Revenue authorities and the assessee has no control over them. The main purpose of referring to 7/12 extracts is to ascertain: i. the ownership and possession of land; ii. nature of land; iii. crops cultivated on the land; and iv. source of irrigation, if any. From the perusal of 7/12 extracts placed on record by the assessee it is evident that the land was under cultivation. Therefore, the reasons for rejecting 7/12 extracts by the Commissioner of Income Tax (Appeals) are not sustainable. 7. Another reason for holding the land as capital asset by the Revenue is that the assessee has not disclosed agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial or evidence in support of the fact that the assessee has put the land in use for nonagricultural purposes has been brought on record. Merely because the assessee has not given any direct evidence of sale of agricultural produces, which were stated to have been consumed by the assessee for own purposes, is not sufficient to say that the land in question was not agricultural land when it is classified as agricultural land in 7/12 extracts where the nature of the crop and the person who cultivated the land are duly mentioned at the relevant point of time when the lands were sold by the assessee and where nothing is brought on record to show that the land was put in use for non-agricultural purposes by the assessee. In view of the decision of the Hon'ble jurisdictional High Court in the case of Gopal C. Sharma vs. CIT (supra), it is also clear that the profit motive of the assessee in selling the land without anything more by itself can never be decisive to say that the assessee used the land for non-agricultural purposes. We may also refer to a decision of the Hon'ble Supreme Court in the case of N. Srinivasa Rao vs. Special Court (2006) 4 SCC 214 where it was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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