Agricultural land character for capital gains was upheld where cultivation evidence and location supported the factual finding.

Land used for agricultural purposes was held to retain its agricultural character for capital gains purposes, where agricultural income-tax assessment orders, a revenue certificate, local inspection findings and evidence of tapioca cultivation showed actual cultivation and no idle use at transfer. The land's considerable distance from municipal limits further supported the factual conclusion. On that basis, the disputed portion was correctly treated as agricultural land, and the revenue's challenge to the relief granted on that footing failed.

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Issues: Whether the land transferred by the assessee could be treated, in whole or in part, as agricultural land so as to affect the computation of capital gains.

Analysis: The record included agricultural income-tax assessment orders, a certificate from the revenue authorities and the finding recorded on local inspection that a substantial part of the property had been used for agricultural purposes. The land was not lying idle at the time of transfer, evidence of tapioca cultivation was noticed, and the actual user of the land furnished prima facie evidence of its character. The property was also situated at a considerable distance from municipal limits, supporting the conclusion reached on facts.

Conclusion: The disputed portion of the land was rightly treated as agricultural land, and the revenue's challenge to the relief granted on that basis failed.

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