Agricultural land status for wealth-tax ends once diversion permission is granted and non-agricultural use is intended.

Land ceases to retain agricultural character for wealth-tax exemption once lawful permission is obtained to divert it to non-agricultural use. The grant of diversion permission, the approved residential colony layout, and the assessee's application for non-agricultural use showed the intended change in user. Temporary cultivation carried on thereafter only as a stop-gap arrangement pending sale did not preserve agricultural status. The land was therefore not agricultural land for wealth-tax purposes, and the exemption was unavailable.

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Issues: Whether land continued to be agricultural land for wealth-tax purposes after permission had been obtained to divert it for non-agricultural use and the land was being cultivated only as a stop-gap arrangement pending sale.

Analysis: Once permission for diversion of the land for non-agricultural purposes was granted under the revenue law, the character of the land changed. The approved residential colony layout, the application for diversion, and the grant of permission showed that the assessee intended to use the land for a non-agricultural purpose. In that situation, cultivation carried on thereafter only as an interim arrangement did not preserve the land's agricultural character. A land that has ceased to be agricultural cannot be treated as an exempt agricultural asset under wealth-tax law.

Conclusion: The land was not agricultural land for wealth-tax purposes, and the question was answered in favour of the Revenue.

Ratio Decidendi: Once lawful permission is obtained to divert agricultural land to a non-agricultural use, the land ceases to retain its agricultural character for tax exemption purposes, notwithstanding temporary cultivation thereafter.

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