1969 (8) TMI 11 - HC - Wealth-tax

Disputed land not agricultural for Wealth-tax Act due to lack of evidence. Tribunal decision upheld.

Syed Rafiqur Rahman Versus Commissioner of Wealth-Tax, Patna

The High Court held that the disputed land was not considered agricultural land for the Wealth-tax Act due to insufficient evidence of agricultural use on ... Agricultural Land Issues Involved:1. Determination of whether the disputed land was 'agricultural land' for the purpose of the Wealth-tax Act.Issue-wise Detailed Analysis:1. Determination of whether the disputed land was 'agricultural land' for the purpose of the Wealth-tax Act:The assessee was assessed under the Wealth-tax Act for the year 1962-63. The Wealth-tax Officer included a sum of Rs. 1,50,000 representing the value of a plot of land owned by the assessee, which the assessee contended was agricultural land and thus not liable to assessment. The Appellate Assistant Commissioner and the Appellate Tribunal dismissed the assessee's appeals, leading to a reference to the High Court under section 27(3)(b) of the Wealth-tax Act.The question formulated for the court was: 'Whether, on the facts and circumstances of the case the Tribunal was justified in holding that the disputed land was not agricultural land on the relevant date for the purpose of the Wealth-tax ActRs.'Relevant Provisions:- Section 3 of the Wealth-tax Act: Tax is payable on the net wealth.- Section 2(m) of the Act: Defines 'net wealth.'- Section 2(e) of the Act: Defines 'assets' and excludes agricultural land.Facts and Evidence:- The land in question was recorded as a mango orchard in the survey khatian of Patna City Municipality published in 1933.- The land was situated at Bhattacharjee Road, in the heart of Patna, surrounded by residential buildings.- The land was sold in July 1962 for Rs. 1,50,000.- In previous assessments, no tax was levied on this land.Arguments and Findings:- The assessee argued that the land was agricultural, as evidenced by the survey khatian and a certificate from the Road Transport Corporation's Branch Manager, stating the land had banana trees, palm trees, and other vegetation.- The Wealth-tax Officer's inspection in November 1962 found no evidence of extensive cultivation, only a few palm trees.- The court noted that the inspection was after the valuation date (March 31, 1962) and the certificate from the Branch Manager lacked a date.- The court referenced several decisions to define 'agricultural land,' including:- Deen Mohammad Mian v. Hulas Narain Singh: Mango orchard as agricultural land under Bihar Tenancy Act.- T. Sorijini Devi v. T. Sri Kristna: Mango grove as agricultural land under Hindu Women's Rights to Property Act.- Paramananda Das v. Sankar Rath: Agricultural land includes land for raising valuable plants or trees.- Raja Mustafa Ali Khan v. Commissioner of Income-tax: Cultivation and human skill required for land to be agricultural.- Commissioner of Income-tax v. Raja Benoy Kumar Sahas Roy: Cultivation and integrated agricultural activity required.- Rasiklal Chimanlal Nagri v. Commissioner of Wealth-tax: Nature or character of the land determines if it is agricultural, not the owner's intention.Conclusion:The court concluded that there was no satisfactory evidence of the land being used for agricultural purposes on the valuation date. The land's location in a residential area and its high sale price indicated it was not agricultural. The Tribunal was justified in holding that the disputed land was not agricultural land for the purposes of the Wealth-tax Act. The reference was answered in the affirmative, with no order for costs.