TMI Blog2016 (2) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... n our view, has considered the assessment year wrongly and initiated proceedings in a later year, when the property was sold on 04.03.2008 relevant to A.Y. 2008-09. In view of that the contentions of the Revenue does not require any consideration - Decided in favour of assessee - ITA.No.1825/Hyd/2014 - - - Dated:- 20-1-2016 - SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Revenue : Mr. M. Sitaram For The Assessee : Mr. P. Vinod ORDER PER BENCH : This appeal by the Revenue is directed against the order passed by the Ld. CIT(A)-II, Hyderabad dated 11.09.2014 for the A.Y. 2009-2010. 2. Though several grounds were urged before us, the main grievance of the Revenue is that the land in question was not used for agricultural purpose after its sale and it was not cultivated prior to the same, apart from the fact that surrounding areas were subjected to developmental activities like Engineering Colleges etc., in which event, the land at the time of sale ought to have been brought to tax under the Head Long Term Capital Gains . Assessee herein is an employee of National Geo Physics Research Institute. In response to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brahim vs. CIT 204 ITR 631 to conclude that the land sold was not an agricultural land. It should be treated as capital asset and consequently the sale proceeds thereof are liable to long term capital gains. 1/3rd share of the assessee was brought to tax under the Head Long Term Capital Gains . 3. On an appeal filed by the assessee, Ld. CIT(A) observed that as per the revenue records and the sale deed, land was described as agricultural land from the pahanies, crops grown were shown as Paddy . Admittedly, the land falls beyond 8 K.M. from urban agglomeration and therefore, did not fall within the definition of capital asset, unless it is shown that it was used for non-agricultural purpose. He has taken into consideration several judicial precedents in this regard and observed that even if agricultural operations are not carried on and the land is kept un-cultivated/fallow for few years, it does not alter the character of the land unless it is specifically put to non-agricultural use. Since, in the instant case, there is nothing on record to suggest that the assessee had made any attempt to convert the land into non-agricultural purpose, the same cannot be considered as capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport, the A.O. agrees that the land is situated beyond 8 KM from Municipal limits and this was not disputed by the A.O. in the assessment order itself. It was also submitted that there was a dispute regarding the actual cultivation carried on this land as per govt. records. It was submitted by the Ld. Counsel that the land was purchased as agricultural land and sold and referred to as agricultural land in the sale deed placed on record in the paper book. 7. We have perused the rival contentions and examined the facts on record. There is no dispute with reference to the fact that the impugned land is situated beyond 8 KM from the Municipal limits, to be precise 9.5 KM from the end of the Municipal limits. Even though, no income was declared by the assessee - who is Director of NGRI, Hyderabad in his individual capacity the land appears to have been purchased in HUF capacity. As seen from the recitals of the sale deed, it is true that Mr. D. Satyanarayana along with his two other brothers Mr. D. Laxminarayana and Mr. D. Mahender purchased agricultural land vide registered document No.526 of 1985. It is also seen that along with the assessee, assessee s mother, wife and son were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erversity. This is so because the Tribunal clearly held that at the point of time when the assessee purchased the said land, it was agricultural land. There is no dispute with regard to this. The Tribunal also noted that the award passed by the District Collector (Land Acquisition), was a document which established beyond doubt that the land in question was agricultural land. Thus, on the date of purchase, the land in question was agricultural land and on the date of acquisition, the character of the land continued to be agricultural. When these two clear findings have been returned, it is apparent that in the transitional period, that is, between purchase and acquisition, the nature and character of the land did not change. The fact that the assessee intended to use the land for industrial purposes did not in any way alter the nature and character of the land. The further fact that the assessee did not carry out any agricultural operations did not also result in any conversion of the agricultural land into an industrial land. It is nobody s case that the assessee carried out any operations for setting up any plant or machinery or of the like nature so as to lead to an inference th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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