TMI Blog1983 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that the land in question was agricultural land? " In view of s. 45 of the Act any profit and gain arising from the transfer of capital asset is chargeable to income-tax under the heading " Capital gains " and is treated to be an income of the previous year in which the transfer took place. " Capital assets " has been defined in sub-s. (14) of s. 2 of the Act. The definition of " Capital asset " has been amended by, the Finance Act, 1970, which came into force with effect from April 1, 1970. In this reference we are concerned with the definition of "Capital asset " as it stood prior to April 1, 1970. During the relevant period an agricultural land could not have been included in the definition of " capital asset ". As such, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it for the purpose of industrial use. The AAC also pointed out that the price received for the land was a clear indication of the fact that the land was no more an agricultural land. When the matter went to the Tribunal, the Tribunal found from a perusal of the orders of the Agrl. ITO that after the acquisition of this land in 1953, the assessee company had been carrying on agricultural operations in partnership with some other sister concerns. The Tribunal also looked into the balance-sheet and profit and loss account of the company for different years and it was found that in each year, income from agriculture (zirat) was being shown by the assessee in its accounts, and on the records there were materials to show that tractors and tubewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly published shall be evidence of the matter referred to in such entry and shall be presumed to be correct " until it is proved by evidence to be incorrect ". It cannot be disputed that the aforesaid presumption about the correctness of the entry is a rebuttable one. Moreover, any land which might be under non-agricultural use at the time when an entry in the record of rights is made, may later be converted to agricultural use so as to become an agricultural land. It is a matter of common experience that lands which had been recorded in the cadastre survey, decades ago, as parti, forest land, have been, in due course, converted into agricultural lands under the changed circumstances. Can it be said that later when such lands are transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being maintained for cultivation. From the order of the Tribunal it appears that the land was subject to land revenue and its income was being charged to agricultural income-tax for more than 12 years. Learned counsel for the Department pointed out that as the lands were located near the railway station, and as lands near about the lands, which are the subject-matter of controversy, were being used for industrial purpose, it should have been held that the lands were no more agricultural lands. In this connection, it was also pointed out that the lands are within a municipality and had been purchased by an industrial concern at a high price. In the case of CWT v. Officer-in-Charge (Court of Wards), Paigah [1976] 105 ITR 133 (SC), while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question was not an agricultural land, if on materials it is otherwise, established that it was an agricultural land on the date it was sold. It was also observed that there may be cases in which for one reason or the other, actual agricultural operations might not have been carried on and yet the owner had always intended to use it for agricultural purposes. In the case of CIT v. Manilal Somnath [1977] 106 ITR 917 (Guj), it was held that in order to determine whether a particular land is agricultural land or not one has first to find out the use to which it is being put. In the case of CED v. V. Venugopala Varma Rajah [1976] 105 ITR 593, the Supreme Court again pointed out that " the question whether a land is an agricultural land " has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agricultural land. For arriving at that conclusion several circumstances have been mentioned from the records of the case, including that the land was situated in an urban area within municipal limits. It was also taken note of that, it had been sold on sq. yard basis for non-agricultural purposes to a building society. It need not be pointed out that any finding on the question whether on a particular date the land is an agricultural land or not will depend on the facts and circumstances of each case. A land which might have been recorded as agricultural land on material on record, can be held to be non-agricultural one because of the use it had been put for the last several years before the sale. Similarly, a land which originally migh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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