Tribunal upholds assessee's appeal, finds land agricultural based on lease deed & factual evidence.

The Tribunal dismissed the Revenue's reference application, affirming its decision to accept the assessee's appeal. It found that the land in question was agricultural in nature based on factual evidence and the lease deed's terms, despite the possibility of other uses due to the lease's duration. The Tribunal concluded that no referable question of law arose and upheld the assessee's position, determining that the lease rent should not be taxed as income from other sources.

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Issues:
1. Request for reference under s 256(1) of the IT Act regarding cancellation of order under s. 263 passed by CIT.

Analysis:
The case involved a request for reference under s 256(1) of the IT Act regarding the cancellation of an order under s. 263 passed by the CIT. The CIT had issued a notice under s. 263 stating that the land leased out by the assessee was not being used for agricultural purposes and, therefore, the lease rent should be considered as income from other sources. The CIT set aside the ITO's order and brought the lease rent to tax. The Tribunal, however, allowed the assessee's appeal, stating that the land in question was agricultural and was being used as such before it was leased out. The Tribunal found that the deed indicated the land would be used for agricultural purposes, even though the lease was for 88 years, leaving open the possibility of other uses.

The Tribunal's order highlighted that no referable question of law arose, as it had determined as a fact that the land in question was agricultural and, based on this finding, accepted the assessee's appeal. The Tribunal's decision was based on the factual determination that the land was indeed agricultural and that the lease did not preclude agricultural use, even though it allowed for other potential uses due to its lengthy duration.

In conclusion, the Tribunal dismissed the reference application of the Revenue, affirming its decision to accept the assessee's appeal based on the factual determination that the land in question was agricultural in nature. The Tribunal's decision was grounded in the specific facts of the case and the interpretation of the lease deed, which indicated the land's primary use for agricultural purposes, leading to the dismissal of the Revenue's reference application.

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