TMI Blog1980 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the business of purchase and sale of lands and constructing building thereon. On the eastern side of the land, a bungalow was constructed which continued to be in the ownership of the assessee and his family members. From the land sold to the partnership concern mentioned above, the eastern side of the land of 20 ft. width east to west was to be kept as a road. Rest of the land, admeasuring 938, sq. yds., came to be sold for Rs. 1,41,638 on March 26, 1969, as per sale deed executed on that date. The agreement to sell was executed on January 15, 1968. In both the sale deeds as well as in the agreement to sell, the land had been described as agricultural land. The assessee, claimed before the ITO that the capital gain of Rs. 41,058 should he exempted from capital gains tax. The ITO, however, did 'not agree with the assessee on the ground that no evidence was furnished regarding the actual cultivation of the land and the agricultural operations carried out thereon. No expenses were shown for the purchase of seeds and other expenses of cultivation. The land was surrounded by building sites and was situated in the heart of constructions land in an area which was fast developing. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. This clearly showed that the land in question was meant to be sold for commercial purposes and not for agricultural purposes,. The Tribunal held that the Income-tax Tribunal, Bombay, might have held the said lands to be agricultural lands at the relevant time. But, thereafter, during the supervening period, Gujarat was carved out a a separate State and as a result thereof, there was a great spurt in the commercial and building activities. The result was that all the lands which were lying idle or unutilised or which were agricultural lands were sold to co-operative societies or other commercial agencies at huge profits. The assessee also made hay while the sun was shining. The Tribunal further held that the transaction in question pertained not to agricultural land but to a commercial plot and a commercial transaction took place between, the assessee and M/s. B. K. Jadav and Co., a firm carrying on real estate business. The Tribunal noted that the land in question was covered by a town planning scheme as fat back as on 15th March, 1945, and that the assessee had also not proved that actual cultivation was being carried on as held by the Supreme Court in CIT v. Raja Benoy Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment in the W.T. proceedings for the assessment years 1968-69 and 1969-70 wherein, to be consistent with his finding as ITO in I.T. proceedings, he held the land in question to be non-agricultural land. But it is a well-established fact on the record of this case that for all previous W.T. proceedings, right from 1957-58 to 1967-68, the land in question was held to be agricultural land exempt from the operation of the W.T. Act. 5. In the record of rights for the relevant years, the land in question was shown to be under cultivation. 6. The agreement to sell dated January 15, 1968, as well as the sale deed of March 26, 1969, clearly mentioned that the land which was sought to be conveyed was agricultural land. 7. The HUF of C. C. Dalal had maintained account books wherein accounts for cultivation were written so far as the land in question was concerned. 8. The land in question was never put to non-agricultural use till the date of the sale. The aforesaid features which are well established on the record of the, case raise, a very strong presumption that the land in question was agricultural land at the relevant time. It is further found from. the record of, this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o any use Which could change the character of the land by making it unfit for immediate cultivation and that it was classified and assessed to land revenue as agricultural land, were not conclusive features to find out whether the land was agricultural or non-agricultural, but the fact that the land was classified and assessed to land revenue as agricultural land under the Andhra Pradesh Land Revenue Act alone provided some evidence of the character of the land from the point of view of its purpose. The Supreme Court observed in that connection: "That the property was classified in the revenue records as agricultural land was not conclusive and such entries could raise only a rebuttable presumption." It was further observed: "The determination of the character of the land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of 'each particular case. What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land, by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality, which wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies showing the land to be agricultural land on which cultivation had taken place at the relevant: time, would raise a strong presumption in favour of the assessee to the effect that the land conveyed was agricultural land at the relevant time. The circumstances relied upon by the revenue to rebut that presumption have failed to achieve that purpose and the legal presumption has remained unrebutted in any effective manner by the circumstances relied upon by the revenue. These circumstances are all innocuous and do not displace the legal presumption which arises from the two salient facts that at the relevant time the land was being utilised as agricultural land and the record of rights reflected the said fact consistently over the past number of years till the date of the sale. In Smt. Chandravati Atmaram Patel v. CIT [1978] 114 ITR 302 Division Bench of this court was concerned with a question similar to that which has been posed for our consideration in the present proceedings. It was observed by this court: "Prima facie land could be said to be agricultural which is either actually used, ordinarily used or is meant to be used, for agricultural purposes. If it is actually use ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
