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2023 (5) TMI 692

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....rt filed by the Appellant on 29.09.2018, erred in merely relying on the remand report given by the Assessing Officer and concluding that the Appellant has not proved that the impugned land is indeed agricultural land. 5. The CIT (Appeals) erred in ignoring the Certificate from the Additional Tahsildhar and the Village Officer Manarcadu and copy of Receipt issued by the Kerala Government evidencing payment of Basic Land Tax and contribution towards agricultural Workers Welfare Fund according to which these are agricultural lands. Further there is no need for recovering the Tax Revenue to agricultural worker's benefit fund if the appellant's land is not under agricultural category. 6. The CIT (Appeals) ought to have appreciated that the entries in the revenue record are prima facie evidence to indicate that the land in question is agricultural land. 7. The CIT (Appeals) erred in holding the Certificate issued by Additional Tashildar, Kottayam, dt 20.09.2016 mentions the type of land as "wet' and 'dry lands only and there is no mention of the being agricultural land. 8. The CIT (Appeals) ought to have appreciated that according to the Kerala Conservation of Pad....

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....ught to have appreciated the Vendor (i.e) Rubber Board Employee Co-operative Housing Society Ltd has approached the appropriate authority for conversion of the Agricultural land for non agricultural purpose. If the said land is not an agricultural land what is the necessity to approach the appropriate authority for conversion. In the state of Kerala, conversion of Nilam for non-agricultural purpose is not allowed and Agricultural Purayadim can be converted subject to the approval of the appropriate authorities. 16. The CIT (Appeals) ought to have appreciated that If an agricultural operation does not result in generation of surplus that cannot be a ground to say that the land was not agricultural land. 17. The Appellant submits that the surplus arising on sale of impugned agricultural land gave rise to agricultural income and was not assessable to capital gains tax 18. The Hon'ble Madras High Court in the case of Sakunthala Vedachalam 369 ITR 538 (Mad) has held that Assessee cannot be denied exemption from capital gains tax once it has been accepted by revenue authorities that the classification of lands as per the revenue records was agricultural lands and it satisfies o....

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....ue records to verify the nature of land to ascertain whether it is a capital asset or agricultural land. In response, the assessee has filed various details including details for purchase and sale of land, copies of revenue records as maintained by the State Government records, certificate of Village Officer and also copies of tax paid to Kerala Agricultural Workers Welfare Fund Board. The Assessing Officer, however was not convinced with the explanation furnished by the assessee and according to the Assessing Officer, the assessee could not file necessary evidences to prove that said land is an agricultural land and used for carrying out agricultural operations. The Assessing Officer, further noticed that the assessee is by profession is an educational consultant and ordinarily resides at Chennai. Therefore, it cannot be said that the land were used for carrying out agricultural activities. The certificate issued by the Village Officer has not specified to the extent of land put into use for agricultural purposes. In the revenue records produced, no where any mention about the characteristics of the land as agricultural land. The assessee has invested an amount of Rs. 92 lakhs in ....

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....fication of land by State government as agricultural land; (v) receipt for payment of contribution to agricultural Workers' Welfare Fund; and (v) Basic Tax Register. From these materials, it appears that the State government has classified the subject land as agricultural land. The government is collecting tax as agricultural land which is evident from the Basic Tax Register. The assessees are also contributing towards Agricultural Workers' Welfare Fund. The Village Officer certified that the subject lands were subjected to cultivation. In those circumstances, this Tribunal is of the considered opinion that the subject lands were agricultural lands beyond the municipal limits or beyond 8 Kms radius of the notified municipality. Therefore, the Subject land cannot be treated as capital asset Within the meaning of section 2(14) of the Act: hence not liable for capital gain tax Under the Income-tax Act." 7.2 The other case laws relied upon by the appellant in the order of the Hon'ble Madras High Court in Sakuntala Vedachalam Vs Vanitha Manickavasagam reported in (2014) 369 ITR 558 (Mad). In that case, the Hon'ble Court had held that as per Adangal records, lands were ....

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....ither produced any evidence during the assessment proceedings, before the CIT(A) or before the undersigned that agricultural activities such as ploughing, tilling and cultivation of any crops took place till the date of transfer. The assessee himself has admitted during the assessment proceedings that no crops have been cultivated, only some banana tress and vegetables have been grown and that too only in a small scale and used it for own use and distributed to the nearby people. No proof for having paid any wages to the agricultural laborers, expenses incurred on manure, seeds or saplings etc, been provided by the assessee. 7.5 After considering the crucial observations made by the AO in the extracted portion of the Remand Report above and considering the submissions of material evidences during appellate proceedings, I am of the considered view that the appellant fails to convincingly pass the test of proving that the impugned land is indeed "Agricultural" land." 5. The Ld. Counsel for the assessee, submitted that the ld. CIT(A) erred in upholding the land in question was not agricultural land and thereby confirming the addition of long term capital gains tax. The Ld. Counsel ....

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....al land. The Assessing Officer and ld. CIT(A), after considering relevant facts has rightly denied exemption from capital gains tax and therefore, their order should be upheld. 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The factual matrix of the impugned dispute are that the assessee has sold a vacant land measuring 5 acres 41 cents to M/s. Rubber Board Employees Co-operative Housing Society for a total consideration of Rs. 6,81,66,000/-. The assessee has originally purchased said land on 14.07.2006. The assessee has claimed that impugned land sold during the financial year is an agricultural land used for agricultural operations and thus, it is out of the scope of capital asset as defined u/s. 2(14) of the Act. The Assessing Officer, computed long term capital gains on sale of land on the ground that land sold by the assessee is not an agricultural land and assessee could not file any evidence to justify its stand that said land is in fact was agricultural land and used for agricultural operations. The Assessing Officer, has given various reasons to come to the conclusion that impugned land is not an ....

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....y lands. The assessee had also filed various evidences to prove that the land was used for cultivating rubber plants, but because of decrease in rubber prices, the assessee stopped cultivating rubber plant and used land for cultivating seasonal crops like vegetables and plants, and this fact has been certified by the Village Officer at Marnacadu Village, vide his certificate dated 21.03.2014. Therefore, we are of the considered view that as per evidences filed by the assessee including revenue records, it is very clear that the land was an agricultural land when it was purchased in the year 2006 and remained agricultural land when it was sold in the year 2015. Further, the assessee had also filed various evidences to prove that the land has been used for agricultural purposes and also cultivation has been carried out in the past. Therefore, we are of the considered view that when the land has been classified as agricultural land, it would remain to be an agricultural land as long as the appellant does not change the use or put the land for some other purpose. Further, simply because the land is situated in a place where proper road connection exists and further the land was sold to....