TMI Blog1970 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ant assessment year is 1961-62, and the relevant valuation date is March 31, 1961. The pivotal question around which the present dispute revolves is whether on the valuation date these two plots of land were or were not agricultural land within the meaning of section 2(e)(i) of the Act. If those were agricultural land, as held by the Tribunal, they would be exempt from payment of wealth-tax. If on the other hand they did not fall within that expression, the assessee would be liable to pay wealth-tax in respect of the same. The relevant facts found by the Tribunal with which both sides are bound, and on the basis of which we have to answer the question referred to us are these : The lands in dispute were not within any municipal area. These lands did not fall within any town planning area. Till 1958, these lands were actually under cultivation. Right up to the valuation date, these lands were classified as agricultural lands in the relevant revenue records, and were assessed to payment of land revenue. In 1958, the husband of the assessee, who used to cultivate the land, died and thereafter actual cultivation had not been done in these lands up to the valuation date in question. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, refused to recognise the lands as agricultural as the plots which had been offered for sale on December 29, 1960, to the income-tax department for the construction of the flats for its officers had since been purchased for that purpose, though after the valuation date. On further appeal to the Appellate Tribunal (copy of the grounds of appeal is annexure " E "), it was held by the Tribunal that the expression " agricultural land ", not having been defined in the Act, must be construed in its normal and grammatical sense. After referring to the expression " agricultural land " which appears in entry No. 21, List II of Seventh Schedule of the Government of India Act, 1935, and the judgment of the Federal Court in Megh Raj v. Allah Rakhia and of the Madras High Court in T. Sarojini Devi v. T. Sri Krishna, the Tribunal held, as a result of the consideration of the facts and circumstances of the case, and the Tribunal's findings of fact to which reference has already been made, that the lands in dispute were agricultural lands within the meaning of section 2(e)(i) of the Act. It was held that putting of the surrounding lands to non-agricultural use was not relevant, and unless the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferring to certain decided cases under the Income-tax Act where the question was whether certain income accruing from land could or could not be said to be agricultural income, the learned judges of the Patna High Court laid down the test to which reference has already been made. With great respect to the learned judges we have not been able to agree with the narrow test laid down by them in Syed Rafiqur Rahman's case, for determining whether a particular piece of land is or is not agricultural land for purposes of the Wealth-tax Act. Different considerations apply to the determination of the question whether income from a certain piece of land is or is not agricultural income, and the same considerations cannot be applied to the determination of the question before us. In the ultimate analysis, the question whether a particular piece of land is or is not agricultural land within the meaning of the Act is a question of fact to be decided in the circumstances of a given case, and no hard and fast rule or inviolable test can, in our opinion, be laid down for determining this question generally. We have no doubt that, on the facts and in the circumstances of Syed Rafiqur Rahman's cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question before the Supreme Court in Raja Benoy Kumar Sahas Roy's case was also as to whether the income in question was agricultural income or not. It was in the course of that judgment that their Lordships observed as follows : " It was also pointed out that 'taxes on agricultural income' formed a head of legislation specified in item 46 of List II of the Seventh Schedule to the Constitution and should be liberally construed, with the result that agriculture should be understood in the wider significance of the term and all agricultural income derived from agriculture or so understood should be included within the category. There was authority for the proposition that the expression 'agricultural land' mentioned in entry No. 21 of List II of the Seventh Schedule to the Government of India Act, 1935, should be interpreted in its wider significance as including lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. While reconizing the force of the above expressions of opinion, we cannot press them into service in favour of the assessee for the simple reason that 'agricultural income' has been defined i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned judges of the Gujarat High Court made it clear that they must not be understood to mean that the intention of the user of the land is altogether an irrelevant consideration as it is certainly a factor which would bear on the nature or character of the land, though it does not afford a sole or exclusive criterion for determining whether a land is agricultural one or not. Where the land is actually put to use, there is usually not much difficulty in ascertaining the nature or character of the land, but, observed the Gujarat High Court, the test of actual user may not always furnish a correct answer, for there may be cases where land admittedly non-agricultural, such as a building site, may be used temporarily for agricultural purposes and vice versa. It was in that case that reference was made to some law prevalent in Gujarat under which it was necessary to obtain permission for non-agricultural use of agricultural land and reference was made to no such permission having been taken. The following passage from the judgment of the Gujarat High Court appears to be instructive : " Whether a particular land is agricultural land or not must depend on the general nature or characte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect test. " The land which was declared by the Gujarat High Court to be not agricultural land comprised of plots situtate in a wholly residential area with numerous residential buidings around the plots which were situate in an area in respect of which a town planning scheme was in force since about 1945. Three out of the four plots bad been cultivated up to about 1934-35, but had ceased to be cultivated since then, and no agricultural operations were carried on in those plots for about 21-22 years prior to the valuation date. No special reason was available for cultivation having been stopped by the assessee on those plots. The fourth plot was purchased by the assessee in December, 1951, at the rate of about Rs. 20 per square yard, and had not been put to agricultural use since the purchase. This plot was also situate in the midst of a highly developed residential area, and the only circumstance on which reliance was placed to bring the land within the expression " agricultural land " on behalf of the assessee was that the plots were assessed for agricultural purposes, and the assessee had not applied for and obtained permission of the revenue authorities to make non-agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Appellate Tribunal in the present case were correct. The argument of Mr. Awasthy about barren land not being land within the meaning of section 4(1) of the Punjab Tenancy Act as held by a Division Bench of this court in Shri Nemi Chand Jain v. Financial Commissioner, for purposes of sections 2(8) and 5 of the Punjab Security of Land Tenures Act (10 of 1953) is of no use to him in this case, as it has nowhere been stated in the Wealth-tax Act that the expression " land " used in the phrase " agricultural land " in section 2(e)(i) of the Wealth-tax Act shall have the same meaning as is assigned to it in section 4(1) of the Punjab Tenancy Act. After a careful consideration of the matter, we are inclined to think that, though it is neither proper nor safe to lay down any hard and fast rule in this respect, the tests laid down by their Lordships of the Federal Court in Megh Raj v. Allah Rakhia, and by the Madras High Court in T. Sarojini Devi v. T. Sri Krishna, both of which have been impliedly approved for purposes of defining agricultural land in the course of the judgment of their Lordships of the Supreme Court in Commissioner of Income-tax v. Raja Benoy Kumar Sahas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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