TMI Blog2019 (2) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned Talathi of the land transferred by the assessee has certified in the 7/12 extract that the “Jowar Crop” was grown on the land in last four years in line. It is, therefore, held that the land transferred by the assessee was an “agricultural land” and the capital gain arising from such land is eligible for exemption u/s.54B. We, therefore, overturn the impugned order on this issue and uphold the assessee’s point of view. Treatment of agricultural income as “income from other sources” - Held that:- We have held in earlier paras of this order that the land transferred by the assessee was an agricultural land on which jowar crop was raised. However, in order to claim exemption for a particular sum as an agricultural income, it is sine qua non for the assessee to prove the quantum of agricultural income claimed with relevant evidence. Existence and quantum of agricultural income are two separate things. AR fairly conceded that no formal sale of crop receipts were available as the “Jowar crop” was sold directly without routing it through commission agents. In view of the foregoing and in the absence of direct evidence of quantum of income, we estimate the existence of agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission, the AO held that the capital gain arising from the transaction was out of non-agricultural land and hence, no exemption u/s.54B could be allowed towards investment made by the assessee in two agricultural lands. The ld. CIT(A) echoed the action of the AO on this score. 4. We have heard both the sides and perused the relevant material on record. The assessee along with other two coowners transferred 2 acres of land to Mr. Dhanraj Malchand Rati vide agreement dated 08-12-2007. The case of the assessee is that the land transferred by him was an agricultural land and since he invested a sum of ₹ 57,39,500/- in purchasing two other agricultural lands, he was entitled to exemption u/s.54B of the Act. On the other hand, the Revenue has canvassed a view that since the land transferred by the assessee was non-agricultural land, there can be no grant of exemption u/s.54B of the Act. 5. Section 2(14) of the Act defines `capital asset to mean property of any kind etc. held by the assessee but does not include certain assets including agricultural land in India , not being a land situated within 2/6/8 kms, as the case may be, from the local limits of any Municipality. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itating against the claim of agricultural land. The Revenue has deeply relied on the fact that the assessee entered into an agreement dated 08-12-2007 with Mr. Dhanraj Malchand Rati for `the development of land . We have perused the agreement, a copy of which has been placed on page 26 of the paper book. The agreement styled as `Development agreement was entered into between the assessee and two other co-owners, who transferred the land, on one hand and Mr. Dhanraj Malchand Rati, a builder and developer, on the other. Clause (1) of the Agreement provides the description of the property as 00 Hector 81 Are or 8100 sq.mtr situated at Village Kondhwa Budruk. The assessee and other two co-owners have been defined as Owners in this agreement, while Mr. Dhanraj Malchand Rati as a `Developer . It has been mentioned in clause (2) of the Agreement that the Owners have decided to develop and construct the said property for which they forwarded the proposal to the Developer. Consideration has been set out in clause (7) of the agreement at ₹ 1.70 crore. It has been mentioned in clause (6) that the Developer will obtain necessary building plans and sanctioned layouts and maps and he wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f agricultural land . The ld. CIT(A) has noticed in Para 3.5 of the impugned order that Jirayat means `a barren land . Similar fact has been recorded at page 18 of the impugned order, whereby he has held that the Jirayat land means that the land was a fallow land . It, therefore, emerges that the authorities below have proceeded on the premise that the land transferred by the assessee was a Jirayat land , which as per them means a barren or a fallow land. The assessee has admitted w.r.t. the 7/12 extract that the land transferred was a `Jirayat land . However, we find that the meaning ascribed to the Jirayat land by the authorities, is not correct. We have gone through the commentary by A.K. Gupte on Maharashtra Land Revenue Code, 1966 , relevant pages from which have been placed on record. Certain classification has been given in this commentary, as per which Jirayat or Jirait means land appropriated to or fit for agriculture . The term Jirayat has been defined on page 20 of the commentary to mean dry crop land, which means the cultivation mainly depends upon annual rainfall . Even otherwise, a Jirayat land is used for seasonal crops like Khariff and Rab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land was actually or ordinarily used for agricultural purposes at or about the relevant time ? (3) Whether such user of the land was for a long period or whether it was of a temporary character or by way of a stopgap arrangement ? (4) Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land ? (5) Whether the permission under s. 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land ? If so, when and by whom (the vendor or the vendee) ? Whether such permission was in respect of the whole or a portion of the land ? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date ? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use ? Whether such cesser and/or alternative user was of a permanent or temporary nature ? (7) Whether the land, though entered in revenue records, had never been actually used for agriculture, that is, it had never bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no hesitation in holding that the assessee transferred `agricultural land to Mr. Dhanraj Malchand Rati. It is so for the reason that the land was classified as agricultural land in land revenue records; subjected to land revenue; was being cultivated on which Jowar crop was grown. Reliance placed by the ld. DR on a Tribunal order dated 27.5.2015 passed in the case of Abhijit Subhash Gaikwad (ITA Nos. 699/Pn/2013 etc.) is misplaced in as much as the Tribunal returned a categorical finding in that case that the concerned Talathi had stated : that the land was never used for agricultural activity . This position is contrary to the extant case. Here the concerned Talathi of the land transferred by the assessee has certified in the 7/12 extract that the Jowar Crop was grown on the land in last four years in line. It is, therefore, held that the land transferred by the assessee was an agricultural land and the capital gain arising from such land is eligible for exemption u/s.54B of the Act. We, therefore, overturn the impugned order on this issue and uphold the assessee s point of view. 16. The only other ground raised by the assessee in his appeal is against treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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