TMI Blog1978 (4) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ld ascertain what portion of the lands in question had actually been utilised for agriculture during the three years, i.e., the previous years relevant to the assessment years 1965-66, 1966-67 and 1967-68 and on which expenditure had been incurred for levelling, etc., in these years and only the profit referable to such portion of the land should be excluded from the amount of capital gains by the ITO ? " The assessee is a private limited company. It purchased in different lots agricultural lands of a total extent of 63.63 acres during the year 1955 for a total cost of Rs. 16,797. The company was using the lands for agricultural purposes since the date of purchase. The managing director of the company took the lands on lease on April 1, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase. In addition to these facts, the assessee produced extracts from the adangal register as also a certificate from the headquarter Deputy Tahsildar, Usilampatti, dated January 21, 1968. The adangal extract showed that in the fasli years 1370 and 1372, an extent of 25 acres were under cultivation, in faslis 1374 to 1376, about 10 acres were under cultivation and in other years smaller portions were under cultivation. The Deputy Tahsildar's certificate showed that the lands were arable lands and fit for cultivation even after mining operations are over and that the purchaser is using the same for the purpose of agriculture. The ITO was of the view that though originally the lands were agricultural lands and were purchased by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee had to be established which would prove that the assessee had converted the property into non-agricultural land. Unless such contrary evidence is available, it will have to be presumed that it continues to be agricultural land and did not change its character. Mere non-user of the land or keeping it fallow for even a long period will not be decisive to hold that there was a change in character. In order to show that the agricultural land is still retaining its character as such it is not necessary to prove that every bit of the land is used for agriculture. If different extents of land of different survey Nos. in different areas are cultivated showing thereby that the land was at some time or other cultivated it goes a long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the entirety of the lands as non-agricultural land or that the land itself lost its character as agricultural land. We, therefore, find as admitted by the department itself, that some of the lands were still used for agriculture and the company had been deriving agricultural income. The Tribunal failed to see that the extract from the adangal showed that only a small extent of 3.84 acres was used for mining and this is consistent with the fact that only on an average 1,000 tons was excavated per year except in two years when it was a little over 2, 000 tons. Over an extent of 3 acres one could even by scraping the land get an yield of 1,000 tons. Merely from the entries in the accounts of the assessee we do not think the Tribunal was rig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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