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TMI Blog2012 (10) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act, 1961. Subsequently, it was selected for scrutiny and the assessment was completed u/s 143(3) by determining the total income at Rs. 12,45,87,803/- by adding Rs. 41,28,083/- towards long term capital gains on sale of agricultural land. 3. During the course of assessment proceedings the Assessing Officer had observed that the assessee was having a land and his share of the land measuring 25 cents at Kanathur Reddykuppam village was transferred by way of absolute sale. The assessee provided copy of the sale deed dated 16-04-2007 along with copy of the sketch detailing the topography of them layout in which the plot at Kanathur Reddykuppam is comprised. The sale consideration received by the assessee from Smt. Saroja Thy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf strengthens the department's view that the property under consideration is not agricultural land in nature. The Assessing Officer has further observed that the assessee produced a certificate from the VAO, Kanathur Reddykuppam dated 23-09- 2010 that the said land is a dry, rain-fed agricultural land. The certificate of the VAO has no significance when official website of the Government of Tamilnadu categorises the property as located in residential area - class II and that too from the year 2003. By considering the sketch of the lay out it clearly shows that in the year 2004 itself proper roads had been laid, providing access to each of the plots located in it. If the land was agricultural in nature, such a road approach to each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was agricultural land. Even the letter issued by the VAO dated 23-09-2010 shows that the land belonging to the assessee was agricultural land. He further submitted that the assessee has cultivated vegetables in that land and mostly used for self-consumption. 6. The learned CIT(Appeals) after considering the submissions of the assessee held that as per the revenue record the land is agricultural land and the land is situated at a distance of more than 15 km. from the city limit. Therefore, the asset is not a capital asset in view of the exception provided in section 2(14)(iii) of the Act and subjecting the property to capital gain is not justified. The learned CIT(Appeals) further observed that the assessee has not made any request for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the land is agricultural land or not is essentially a question of fact. It has to be decided based on various facts and circumstances of the case. The other decision relied on by the learned DR is Fazalbhoy Investment Co. P. Ltd. v. CIT (176 ITR 523) (Bom). In this case the Hon'ble Bombay High Court has held that in the absence of evidence to show that the land was put to use for any agricultural use the same cannot be treated agricultural land and the sale of which could not be excluded from the levy of capital gains tax. 8. On the other hand, the learned counsel for the assessee strongly supported the order passed by the learned CIT(Appeals) and submitted that no proper verification was done by the Assessing Officer before comin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the Tamilnadu Government Revenue record (SRO) this land was already classified as a residential area land and also as per the lay out proper roads had already been laid providing access to each plot located in it and the assessee has not carried on any agricultural activity. The learned CIT(Appeals) deleted the addition made by the Assessing Officer by observing that the VAO had issued a certificate stating that the land belonging to the assessee is cultivable agricultural land and the assessee has not made any request for re-classification and had not sought for permission to undertaking housing or construction activity and the land was also used for agricultural purposes upto the point of sale though the produce was used for self con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been laid having access to the plots situated in it and for the past many years, i.e. from the year 2004 when the assessee had purchased the land no single penny was offered as agricultural income. Nothing was brought on record to contradict the findings given by the Assessing Officer. The entire finding of the learned CIT(Appeals) mainly based on the certificate issued by the VAO. When the Tamilnadu Government itself has notified the area in which the land in question is situated as a residential area, the certificate issued by the VAO cannot supersede the classification given by the Tamilnadu Government. Apart from that the other contention of the assessee considered by the learned CIT(Appeals) is that the assessee has not applied for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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