TMI Blog2017 (4) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... sessees are not doing any regular agriculture operation, this is also on the ground that they never shown agriculture income out of it. Any agriculture produce and products can be for personal use also. Therefore, taking overall view of the matter including the reports placed on record, which supports the case of the assessee and for the reasons so recorded above, we are inclined to allow these appeals. - TAX APPEAL NO. 1,2,10, 12, 16, 80 to 86 OF 2015 - - - Dated:- 23-3-2017 - ANOOP V. MOHTA NUTAN D. SARDESSAI, JJ. Mr. N. N. Sardessai, Senior Advocate with Ms. N. Shirodkar, Advocate for the Appellant. Ms. S. Linhares, Additional Government Advocate for the Respondent. Ms. A. Razaq, Additional Government Advocate for the Respondent. ORAL JUDGMENT :- (PER ANOOP V. MOHTA, J.) Taken out from the final hearing Board. Heard finally by consent of the parties. As common issues are involved revolving around the common facts and the properties, we are disposing of these Tax Appeals by this Judgment. 2. The Appellant-assesses have challenged a common order dated 6.6.2014, passed by the Income Tax Appellate Tribunal, Panaji Bench, Panaji (ITAT), thereb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained for non-agricultural purpose by the respondents. 4. This Court admitted the appeals on two questions of law. The appellants are pressing only the following question of law. Whether, on a true and proper construction of Section 2(14) of the Income Tax Act, the Tribunal was justified in holding that 80% of the land is not an agricultural land and liable to capital gains tax and, as such, the finding thereon is perverse ? 5. For deciding the appeals, the factual background requires to be noted because of typical, nature of transfer of agricultural land within the State of Goa is involved. The ancestral properties were never divided/partitioned any time. It is necessary to clarify at this stage itself that there are total of 20 vendors to the Deed of Sale dated 4th May, 2007. However, out of the said 20 vendors, assessment of only 16 vendors was reopened by the Income Tax Department out of which in the following list of cases, are the 12 vendors. The Assessment of the remaining 4 vendors out of the total 20 vendors, namely Bhushan Prabhu Gaonkar, (Vendor No.9), Mrs. Seema Prabhu Gaonkar (Vendor No.8), Mr. Nikhil Bhobe, (Vendor No.7) and Mrs. Seema Bhobe (Vendor No.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants were served with a notice under Section 148 of the Act calling upon to file return of income since according to the AO income had escaped assessment. On 19.3.2012, the Appellants filed a letter in response to the above notice and stated that return filed on 30.07.2007 be treated as return filed in compliance to notice under Section 148 of the Act and also requested the AO to furnish reasons recorded for issuing the notice. On 20.03.2012, the AO furnished the reasons recorded for re-opening the case of the Appellants. 02.04.2012, the appellants filed its objection. On 7.04.2012 the AO rejected the objections. On 5.10.2012, the AO passed an order under Section 143(3) read with Section 147 of the Act assessing income derived by denying exemption on account of gains arising from sale of agricultural land inter alia on the ground that the land does not constitute agricultural land since no agricultural operations were carried out regularly and same is sold to a company engaged in the business of development of infrastructure, activity. However, the AO gave a finding that the though the land is located beyond the specified limits from the municipal limits i.e. beyond 8 kms, yet i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is necessary to consider the provisions of the Goa, Daman and Diu Land Revenue Code, 1968. (Code) and the Rules made thereunder. The Code defines the term agriculture under Section 2(1), 2. (1) agriculture with its grammatical variations and cognate expressions, means raising of useful or valuable products which derive nutriment from the soil with the aid of human labour and skill and includes horticulture, dairy farming, poultry farming, stock breeding and grazing 10. The term agriculture admittedly not defined specifically under the IT Act. However, judicially the said term has been explained in various Judgments, including the Judgments of the Supreme Court in the case of Commissioner of Wealth Tax Vs. H.V. Mungale [(1984) 145 ITR 208] and Motibhai D. Patel (Dr.) vs. Commissioner of Income Tax [(1981) 127 ITR 671]. These Judgments are referred and relied upon by the learned Counsel appearing for the Department as the impugned Order revolves against the assessee which reflects the reasons and foundation so laid by the Supreme Court to ascertain which land and the activities in such situation or otherwise requires to be treated as agricultural land and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral agricultural property, the families were using the agricultural produce for their own consumption. 13. Here, at this stage, it is relevant to note the definition of the term agriculture as reproduced above. This definition, in our view, ought not to have been overlooked, while taking any action against the assessees. The definition itself provides that expression agriculture means raising of useful or valuable products which derive nutriment from the soil with the aid of human labour. This inclusive definition, no where provides and/or takes away rights of the assessee to treat such land as an agricultural land which they had been using before transfer and/or till the date it came to be transferred as an agricultural land . There is nothing to prevet them from using such land for deriving nutriment from the soil with the aid of human labour and skill, which also includes the appellants' own labour and/or skill. Whatever number of trees which are developed and/or grown were planted, developed and grown by the assessees for so many years and/or have been maintaining the same for various activities as, even reported by the Department, through the respective reports. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application was ever filed at any point of time prior to the date of its transfer and/or even thereafter at least by the assessee or by the third party, after purchase of such property. The owners of such property are always at liberty to convert and/or take action. Even otherwise such subsequent action or inaction, in no way is sufficient to prove such tax liability (Long term capital gain) upon the original vendor, who sold the property as the ancestral agricultural property. 16. The tax law is very clear that it requires clear provisionand clear facts and defaults and/or act of suppression or inaccurate submissions of facts to avoid tax liability. The case in hand, therefore, requires to be considered in the background of geographical as well as physical conditions of the agriculture property and its use and utilization for the stated agriculture purpose. The agricultural purpose, so defined, under the Code therefore, always remains same one who owns such property and so also the purchaser and/or the third party. Therefore, merely because the assessees could not produce and/or could not use and utilize the land fully by employing labourers and/or unable to give the crop sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labourers or workers seen inside the property. The village Talathi stated that no agriculture activity carried out in the said property. 18. The above is one illustration to show how the whole proceedings proceeded to impose such tax and the penalty. The first Appellate Authority however, did not accept the position and referring to the Judgment of the Division Bench of this Court, reversed the basic order of assessment. The Tribunal(ITAT) however, on the request, so recorded above, reinspected the land/area and gave additional reasons by observing that: It is not denied even by the Revenue that part of the land consists of dry crop i.e. trees of cashew, mango, jack, kokum and coconut. To the extent these trees are standing on the land, this portion of the land, in our opinion, has to be regarded to be agricultural land as this portion of the land is being used for the purposes of agricultural. Neither the Assessee nor the Revenue produced before us the exact measurement of the land on which the trees are standing and out of which dry crop is grown. To the extent the land is actually used for dry crop, the land has to be regarded to be an agricultural land. Since, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose and object of the Code. The law laid down by the Supreme Court, as already recorded, needs to be respected by all, but always keeping in mind the facts and position of law. Those judgments also covers the case of the assessees. The subject land in agriculture land and had been used for the agriculture purpose as defined under the law. 21. The Division Bench of this Court in the Commissioner of Income Tax vs. Shri Minguel Chandra Pais and another, Tax Appeals No.1 and 2 of 2002, dated 23.3.2005 , considering the Supreme Court's Judgments referred above, has ultimately held that the the subject land was agricultural land, ordinarily used for agricultural purpose. In para 19, it was observed thus : ..... It is therefore obvious that the assesses had abundantly proved that the subject land sold by them was agricultural land not only as classified in the revenue record, but also it was subjected to the payment of land revenue and that it was actually and ordinarily used for agricultural purpose at the relevant time. .. The judgment was further following by the Division Bench of this Court in the Commissioner of Income Tax vs. Smt. Debbie Alemao, Tax Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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