TMI Blog1982 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... der the W.T Act the assessee claimed that the property in question was agricultural land for which land revenue was being paid, and that it was liable to be excluded for the purposes of computation of wealth of the assessee having regard to the provisions of s. 2(e)(1)(i) of the said Act. The valuation report of the property was accepted by the WTO, who declined to exclude the value of the land while computing the net wealth of the assessee. In appeal the AAC also took the same view. He found that having regard to the situation of the plot and other surrounding circumstances the land could not be said to be agricultural land. In appeal by the assessee, the Tribunal held that the land was agricultural land and was, therefore, not liable to be included in the net wealth of the assessee. The Revenue being aggrieved by the decision of the Tribunal had sought the reference of the question reproduced above. On facts there is no dispute in this case. It has been established that Survey No. 699, Hissa No. 1, is recorded in the revenue records as agricultural land, it is assessed to land revenue, it is situated on the outskirts of Poona City, and there are permanent structures in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding whether land is an agricultural land or not no difficulty would normally arise where the land is actually being used for agricultural purposes. But in the case where the land, which is in fact recorded as an agricultural land but is not under the actual cultivation of the owner and is lying fallow for one reason or the other, including it being uneconomical to cultivate the land, the question would arise whether the land should continue to be treated as agricultural land. According to the Revenue, the test for deciding whether the land is agricultural land or not has been laid down by the Supreme Court in the Court of Wards' case [1976] 105 ITR 133, referred to above. It is, therefore, necessary to deal in some detail with that decision. The property involved in that case was known as " Begumpet Palace ", Hyderabad. The buildings in that property were valued at Rs. 8,81,336 and the extent of the surrounding vacant land was 108 acres. The entire plot of land was enclosed in a compound wall and the property was situated within the limits of the Hyderabad Municipal Corporation. The vacant land was never used for agriculture, in the sense that it had never been ploughed or till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue as agricultural land under the State revenue law, it is a strong piece of evidence of its character as agricultural land; (6) mere enclosure of the land does not by itself render it a non-agricultural land ; (7) the character of the land is not determined by the nature of the products raised, so long as the land is used or can be used for raising valuable plants or crops or trees or for any other purpose of husbandry; (8) the situation of the land in a village or in an urban area is not by itself determinative of its character." Having regard to the above conclusions, the Full Bench took the view that the large extent of 108 acres of land possessed all the characteristics of agricultural land and that it was capable of being put to agriculture and the further fact that the land had been admittedly assessed to land revenue as " agricultural land " strongly indicated that the land in question was agricultural land. The correctness of this view of the Full Bench was challenged before the Supreme Court. The Supreme Court did not approve of the proposition that as wide meaning as possible to terms used in a statute should be given simply because the statute did not define a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the taxing authorities on the question of intended user of the land under consideration before the presumption could be rebutted. The Supreme Court clearly pointed out that the burden to rebut the presumption would be on the Revenue. The following observations of the Supreme Court may be reproduced (p. 143 of 105 ITR): " It has, however, to be remembered that such entries could raise only a rebuttable presumption. It could, therefore, be contended that some evidence should have been led before the taxing authorities of the purpose or intended user of the land under consideration before the presumption could be rebutted. If the ' prima facie ' evidence of the entries was enough for the assessee to discharge his burden to establish an exemption, as it seemed to be, evidence to rebut it should have been led on behalf of the department. " According to the Supreme Court, this aspect of the question had not been examined by the Full Bench from a correct angle, because no finding was recorded that the conclusion reached by the taxing authorities that the land was never intended to be used for an agricultural purpose rested on no evidence at all. Further, the Full Bench had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere potentiality for being used for agricultural purposes that is relevant for the purpose of deciding whether the land is an agricultural land or not but that what is to be determined is the character of the land according to the purpose for which it was meant or set apart and can be used. Even according to the Supreme Court, entries in revenue records are good prima facie evidence with regard to the character of the land and the purpose for which it is intended to be used and the burden is on the Revenue to rebut this presumption. Having analysed the decision of the Supreme Court, it is difficult for us to see how this decision can be of assistance to the Revenue. The Tribunal has not in the instant case treated the land in question as agricultural land on the ground that at some future date it can be used as agricultural land. The decision of the Supreme Court has to be read in the light of the fact that the Supreme Court had to deal with an exclusive piece of land which was a part of the palace estate which had never been used as agricultural land or for the purpose of agriculture and the mere possibility that it can be used for agriculture was treated as insufficient to qual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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