Agricultural land test under wealth-tax depends on real character; temporary cultivation did not preserve exemption here.

Whether land qualifies as agricultural land under section 2(e)(i) of the Wealth-tax Act, 1957 depends on its real nature and character as shown by the totality of circumstances, not the owner's intention alone. Actual agricultural use may provide prima facie evidence, but that presumption is displaced where the land has in substance been converted for non-agricultural development. Here, non-agricultural permission had been obtained, the land was plotted out, portions were sold for residential construction, it lay within municipal limits and was surrounded by developed properties, and the agricultural use was only temporary pending sale. The land had therefore ceased to be agricultural and remained taxable.

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Issues: Whether the lands in dispute were agricultural lands within the meaning of section 2(e)(i) of the Wealth-tax Act, 1957 and were therefore exempt from wealth-tax.

Analysis: The decisive inquiry was the true nature and character of the land, to be determined from the totality of circumstances and not from the owner's intention alone. Actual agricultural user is relevant and ordinarily furnishes prima facie evidence, but that presumption can be displaced where surrounding circumstances show that the land has been converted in substance to non-agricultural use. Here, permission for non-agricultural use had been obtained, the land was plotted out, substantial portions were sold for residential construction on yardage basis, the area was within municipal limits and surrounded by developed properties, and the agricultural use found by the Tribunal was only temporary pending sale. Those facts showed that the land had ceased to retain its agricultural character.

Conclusion: The lands were not agricultural lands within section 2(e)(i) of the Wealth-tax Act, 1957, and the Tribunal was right in holding them taxable.

Ratio Decidendi: Whether land is agricultural for wealth-tax purposes depends on its real nature and character as revealed by the cumulative effect of relevant circumstances; temporary agricultural user does not preserve agricultural status where the land has in substance been converted for non-agricultural development.

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