TMI Blog2017 (4) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... not a capital asset within the definition of section 2(14) of the Act, the Ld. CIT(A) has wrongly affirmed the findings of the AO. We, therefore, set aside the impugned order and allow this ground of appeal of the assessee. - IT APPEAL NOS. 364,365 & 367 (MUM.) OF 2014 - - - Dated:- 28-2-2017 - JASON P. BOAZ, ACCOUNTANT MEMBER AND RAM LAL NEGI, JUDICIAL MEMBER For The Appellant : Nitesh Joshi and Vipul Mody For The Respondent : T.P. Khan ORDER 1. These are the three appeals filed by the Appellants/assessees Shri. Mohit Suresh Harchandrai, Shri. Nihal Suresh Harchandrai and Shri Niranjan Suresh Harchandrai against three separate orders dated 23/12/2013 passed by the Ld. CIT(Appeals)- 25, Mumbai, for the Asst. year 2010-11, whereby the Ld CIT(A) partly allowed the appeals filed by the assessees against assessment order dated 19/02/2013, 31/12/2012 31/12/2012 respectively, passed u/s 143(3) r.w.s. 147, 143(3) and 143(3)(ii) of the Income Tax Act, 1961 (for short 'the Act') respectively. Since all the three appeals are arising out of the transaction of sale of land by the assessees as co-owners, all the three appeals were clubbed, heard together and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Asset within the meaning of Section 2(24) of the Act and thereby taxing the gains arising on sale of the said Agricultural Land as Capital Gains . IT is submitted that the Land sold during the year is an Agricultural Land and not a Capital Assets and as such gains arising on sale of said Agricultural Land is not chargeable to tax. The conclusion arrived at by the Learned lower authorities is based on presumptions and surmises and is contrary to the facts. 2. Without Prejudice to ground no 1 above, the Learned Commissioner of Income-tax(Appeals) erred in confirming the order of the Assessing Officer, not allowing deduction of ₹ 4,21,000/- in respect of brokerage paid towards sale of said agricultural land. It is submitted that the appellant along with other co-owners paid brokerage aggregating to ₹ 4,21,000/- towards sale of agricultural land and for the purpose of computing Capital Gains, the same is ought to be reduced from Sale Value of agricultural land. 4. Before us, the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has wrongly upheld the erroneous order passed by the A.O. The Ld. Counsel further submitted that the assessee alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Smt. Sarifabibi Mohmed Ibrahim v. CIT [1993] 204 ITR 631, Hon'ble jurisdictional High court in Fazalbhoy Investment Co (P.) Ltd. v. CIT [1989] 176 ITR 523 (Bom.). The Ld. DR further submitted that in the present case the purchaser has not purchased the said land for genuine agricultural operation as the sale price works out at ₹ 2.34 lacs per guntha i.e. 1000 sq. ft. and that ₹ 2.34 lacs per guntha cannot be the purchase price for an agricultural land. Since the land was never cultivated by the assessee and remained barren for more than twelve years the same had lost of its agricultural character. Hence, the Ld. CIT(A) has rightly upheld the findings of the A.O. and there is no further scope for interfere with the impugned order. 6. We have heard the rival submissions and also perused the material placed on record before us including the decisions relied upon by the parties in support of their contentions. The common issue involved in these case are at the time sale of the land in question whether the land was an agricultural land or the capital asset within the meaning of section 2(14) of the Act. The Ld. CIT(A) has upheld the findings of the A.O relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land as agricultural land, the same must not only be capable of being used for agricultural purposes but should have actually been used as such at some point of time. As per the Ld. CIT(A) in the present case, the assessee has failed to prove that the land was actually used for agricultural purposes. 9. In Smt. Sarifabibi Mohmed Ibrahim (supra) the Hon'ble Supreme Court has upheld the decision of Hon'ble Gujarat High Court and held the land in question was not an agricultural land at the time of its sale and that the income arising from its sale was not exempt from the capital gain tax irrespective of the fact that the land was registered as agricultural land in the revenue record; the appellant made payment of land revenue till it was sold in the year 1969; that the land was actually cultivated till 1964-65. The Hon'ble Supreme court in the aforesaid case has further held that whether a land is an agricultural land or not is essentially a question of fact. The several tests evolved by the courts are more in the nature of guidelines. Therefore, the question has to be answered on consideration of all of them. 10. We find that the AO has decided the issue involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the provisions of the Act at the time of sale to the purchaser. Since, in our considered opinion the assessee has been able to establish that the land in question at the time of its sale was an agricultural land and not a capital asset within the definition of section 2(14) of the Act, the Ld. CIT(A) has wrongly affirmed the findings of the AO. We, therefore, set aside the impugned order and allow this ground of appeal of the assessee. 11. Since, we have decided the first ground of appeal in favour of the assessee, ground no 2 has become academic. Hence, we do not consider it necessary to adjudicate the said ground. 12. So far as ITA No 365/Mum/14 and 367/Mum/14 are concerned, the appellants/assesses being co-owners of the land in question also sold their shares in the said land along with Sh. Mohit Suresh Harchandrai, assessee in ITA No 364/Mum/14. Hence, the facts of both these case are similar to the facts of the case ITA No 364/Mum/14 aforesaid except on the point that assessment in the said cases were passed u/s 143(3) and 143(3)(ii) of the Act respectively, and the issues involved are also identical. Since we have allowed the appeal ITA No 356/Mum/14 filed by one ..... X X X X Extracts X X X X X X X X Extracts X X X X
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