1988 (11) TMI 103 - HC - Income Tax

Court affirms Tribunal ruling that disputed lands are not agricultural under Income-tax Act.

The Court upheld the decision of the Income-tax Appellate Tribunal, ruling that the lands acquired by the Government were not agricultural lands under the ... Capital Asset, Capital Gains, Exemptions Issues involved: Interpretation of whether the lands acquired by the Government were 'not agricultural lands' u/s 2(14)(iii) of the Income-tax Act, 1961.Summary:The reference pertains to the assessment years 1967-68 to 1969-70, concerning the acquisition of lands at Chembur by the Government. The Income-tax Officer assessed long-term capital gains, rejecting the assessee's claim that the land was agricultural. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal upheld this decision, noting the lack of evidence of agricultural use beyond the sale of mangoes and grass. The Tribunal emphasized that the use of the land indicated its character, leading to the conclusion that it was not agricultural.The assessee contended that the Tribunal's finding was flawed as it disregarded evidence of paddy cultivation and grass growth on the land in the past. Referring to the judgment in CIT v. S. P. Jain, the assessee argued that the High Court could intervene if the Tribunal's conclusion was perverse. However, the Court found no question challenging the Tribunal's findings had been referred, and the Tribunal's decision was not deemed unreasonable or perverse. The Court clarified that the Tribunal did consider the evidence presented but found it insufficient to establish the land as agricultural.Ultimately, the Court answered the question in the affirmative in favor of the Revenue, directing the assessee to bear the costs of the reference.