TMI Blog2009 (1) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Mr Rajesh Banati with Mr Hari Mohan For the Respondent : Ms Prem Lata Bansal with Mr M. P. Gupta, Mr Sanjeev Rajpal and Ms Anshul Sharma BADAR DURREZ AHMED, J 1. The substantial question of law which arises in this appeal is:-"Whether the order passed by the Income Tax Appellate Tribunal holding that the land acquired from the ownership of the appellant was not agricultural land, is perverse"? 2. The issue which arose before the Income Tax Appellate Tribunal was with regard to the treatment to be given to the land owned by the assessee company with the future intention of setting up an industry thereon. The said land was acquired under the Land Acquisition Act, 1894. The Assessing Officer charged capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains inasmuch as the Assessing Officer was of the view that the same was not agricultural land in the hands of the assessee company. 5. The Commissioner of Income Tax (Appeals) upheld the assessment order. He was of the view that the land in question ceased to be agricultural land on 15.03.1989 when it was purchased with the intention of setting up an industry. He noted that no agricultural operations had been carried out by the assessee on the land in question as no income from that source had been declared. The Commissioner of Income Tax (Appeals) also noted that the assessee had never intended to carry out any agricultural operations on the land in question. Consequently, he confirmed the finding of the Assessing Officer that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stood amply rebutted because, according to the Tribunal, the assessee never used the same as agricultural land. Moreover, the intention of the assessee was to develop the land for industrial purposes. The Tribunal was also of the view that the intention of the land acquisition authorities for acquiring the land was for planned industrial development. Consequently, the Tribunal concluded that the intention in respect of this land, both of the assessee as well as of the acquiring authorities, was to use it for industrial purposes. The Tribunal held that it is this intention which had acquired the status of a presumption and even if it be construed as a rebuttable presumption, the assessee had failed to rebut this presumption. Consequently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the intention to use the land in a particular way in future was not what was relevant. The important point to be noted was what was the character of the land on the date when it was acquired. 8. Mrs Bansal, the learned counsel appearing on behalf of the revenue, submitted that the facts of the present case were distinguishable from the facts of the three decisions cited by the learned counsel for the appellant. She submitted that in all those cases although the intention was to use the land for non-agricultural purposes, but nothing had been done till the date of acquisition for altering the manner in which the land had hitherto been used i.e., for agricultural purposes. She submitted that in the present case although it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned with the nature of the transaction as to whether it was an adventure in the nature of trade or not but whether the land in question was agricultural land or not? Therefore, the observations of the Supreme Court would not be strictly applicable to the case at hand. However, we do note that the Supreme Court itself has observed that despite the said intention, even while considering the question of whether the transaction was or was not an adventure in the nature of trade, the Court may arrive at a different conclusion considering the attendant facts and circumstances of each case. The presumption, in any case, was rebuttable. 9. Having considered the arguments advanced by the counsel for the parties, we are of the view that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out any operations for setting up any plant or machinery or of the like nature so as to lead to an inference that the nature and character of the land had been changed from agricultural to industrial. The mere fact that the appellant/ assessee did not carry out any agricultural operation did not alter the nature and character of the land. In any event, this discussion is not relevant in the backdrop of the clear finding given by the Tribunal that on the date of the purchase and as also on the date of acquisition, the land in question was agricultural land. Having come to such a conclusion, the Tribunal ought not to have gone into question of intention of the appellant/ assessee and definitely not into the question of intention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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