TaxTMI 
TaxTMI 
2007 (7) TMI 339
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.... was an agricultural land situated beyond 8 kms. from municipal limits and hence the same was not a capital asset and was hence exempt from capital gain tax of Rs. 7,86,451 arising from the sale of that agricultural land. 3. In support thereof the assessee furnished a certificate from the Land Revenue authorities wherein the assessee has been shown as Kashtkar indicating that the assessee purchased this agricultural land and sold the same as agricultural land as is evident from the sale deed. Further, according to the assessee the land sold by the assessee was an agricultural land because it was covered under Chakbandi indicating that the land under Chakbandi could not be used for any other purposes than agricultural purposes. Lastly, according to the assessee, as per CBDT Notification No. 9447, dt.6th Jan., 1994, the land falling more than 5 kms. from Sohna District Committee Area was out of the purview of s. 2(14) of the IT Act, 1961. A letter issued by the Tehsildar confirmed that village Roz-ka-Gurjar in Tehsil Sohna, District Gurgaon, was situated beyond 8 kms. from Committee Area, Sohna, and so the land in question fell outside the purview of capital asset and gains arisin....
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....d by the assessee as non-agricultural land and accordingly computed the capital gains thereon. 6. Before us the learned Authorised Representative for the assessee reiterating the submissions made before the tax authorities below submitted that since the agricultural land sold by the assessee does not fall within the definition of s. 2(14) of the IT Act, 1961. hence the tax authorities below were not justified in coming to the conclusion that the land sold by the assessee was not an agricultural land and was liable to pay tax on the capital gains on the sale of the same. 7. On the other hand, the learned Departmental Representative for the Revenue placing strong reliance on the reasoning given in the order of the tax authorities below submitted that they have rightly made/sustained the impugned addition on account of capital gains earned by the assessee on the sale of nonagricultural land. 8. We have considered the rival submissions of both the parties, perused the record and carefully gone through the impugned order of the tax authorities below. 9. In the case of CWT vs. H.V. Mungale at pp. 214-215, their Lordships after properly analyzing ratio of decision of apex Cour....
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....nce to the Revenue. The Tribunal has not in the instant case treated the land in question as agricultural land on the ground that at some future date it can be used as agricultural land. The decision of the Supreme Court has to be read in the light of the fact that the Supreme Court had to deal with an exclusive piece of land which was a part of the palace estate which had never been used as agricultural land or for the purpose of agriculture and the mere possibility that it can be used for agriculture was treated as insufficient to qualify it as agricultural land." Held as under: "In the instant case the facts show that the land was used for agriculture till 1963. It has been so recorded in the Revenue records and the land is assessed as agricultural land. No evidence has been led on behalf of the Revenue to rebut this presumption. Merely because it remained fallow after 1963, the land did not cease to be agricultural land." 10. Their Lordships ofMadrasHigh Court in the case of Gemini Pictures Circuit (P) Ltd. vs. CIT have held as under: "Once it is established that the land is agricultural land in the hands of the assessee until some act on the part of the assessee ha....
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....ctor is to be considered but all relevant factors are to be considered. For example, to determine whether the land is agricultural land or not, the relevant factors to be considered are whether the land from the date when it was purchased till the date when it was sold was classified as agricultural land in the Revenue records, because such entries in Revenue records raises a presumption in favour of the assessee unless successfully rebutted by the Revenue Department. Second, whether the land, from the date of its purchase till the date of its sale, was ever being used for non-agricultural purposes or has been converted to non-agricultural land. Third, whether the land from the date of its purchase was never intended to be used for agriculture and was not ploughed or tilled from the date of its purchase till the date of sale and whether for the non-cultivation the assessee has got any justifiable explanation. Lastly, whether the character of the land from the date of its purchase has been changed by the assessee which makes it unfit for immediate cultivation when the same was sold. Hence, we can say that a mere temporary non-user of the land for agricultural purposes will not effec....