Agricultural land character depends on facts: urban indicia can make sale proceeds taxable as capital gains.

Land sold by an assessee is not treated as agricultural land where the surrounding facts show urban character, a building yielding rent, only limited trees, and no reliable evidence that the tree income was agricultural. On that factual footing, the land falls within the definition of capital asset, so profits from its sale are assessable as capital gains under section 12B of the Indian Income-tax Act, 1922. The discussion also notes that the availability of statutory appellate and reference remedies makes writ jurisdiction inappropriate in such a tax dispute.

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Issues: Whether the land sold by the assessee was agricultural land excluded from the definition of capital asset, and whether the gains arising from its sale were liable to be assessed as capital gains under section 12B of the Indian Income-tax Act, 1922.

Analysis: The land was situated on a busy municipal road, comprised only a small extent, contained a building yielding rent, and carried only a few trees, with no reliable material to show that the income from those trees was agricultural income. The nature of the land was therefore treated as a question of fact, and on the facts found it could not be regarded as agricultural land. Once the land did not fall within the exclusion in the definition of capital asset, section 12B applied to the profits arising from its sale. The availability of the statutory appellate and reference remedies also showed that writ jurisdiction was not the proper course.

Conclusion: The land was not agricultural land, it was a capital asset, and the sale proceeds were assessable as capital gains under section 12B. The writ petition failed.

Ratio Decidendi: Land on which agricultural character is not established on the facts, especially where it is urban in character and bears a building or non-agricultural indicia, is not excluded from the definition of capital asset and its sale profits are taxable as capital gains.

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