TaxTMI 
TaxTMI 
2011 (11) TMI 475
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....Facts in brief facts are that there was search action in the case of the assessee at her residential premises on 17-10-2007. The assessee filed her return of income for the assessment year under consideration at Rs. 30,98,620/-and agricultural income of Rs. 8,400/-. In the course of assessment proceedings, the assessing officer made disallowance of Rs. 8,400/- treating the agricultural income as non-agricultural income. He also made disallowance of Rs. 21,000/-claimed by the assessee under section 80C of the Income-tax Act. Further, the assessee along with three others, who are also appellants before us, had sold 5 acres 6 ghuntas of agricultural land situated in survey No. 218, 219 and 225 of Narsingi Village, Rajendra Nagar Mandal, Hyderabad to Sun Breeze Estates & Developers Ltd. and received consideration of Rs. 33,25,00,000. The assessee was having 1/4th share therein. The assessee claimed that no capital gains arose out of the said transaction, as the land sold was of agricultural nature, and hence not a capital asset in terms of S.2(14)(iii) of the Income-tax Act. However, the Assessing Officer rejecting the contention of the assessee, proceeded to bring to tax long term cap....
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....m Village Revenue Officer who mentioned that due to pressure of work, he had not filled in the column of 'cultivation' in the Pahani Patrika. However, relying on the evidence collected by him, and taking note of the disputes that were existing with regard to the ownership of the land between the assessee and others, the assessing officer concluded that the land sold by the assessee was not agricultural use. Hence, for this reason also, the assessing officer rejected the claim of the assessee for relief under S.54B of the Act, observing it is not allowable unless the land sold was agricultural land. 5. Though the assessing officer raised no dispute with regard to the sale consideration received on the sale of land, which was adopted at Rs. 33,25,00,000, he disputed the cost of acquisition of land as on 1.4.1981 disclosed by the assessee at Rs. 7,21,000, i.e. Rs. 1,40,000 per acre, and called upon the assessee to furnish necessary evidence with regard to adoption of Rs. 1,40,000 per acre as on 1.4.1981. Since the assessee failed to furnish such evidence, the assessing officer adopted the rate per acre at Rs. 10,000 based on the rate adopted by other persons selling land to DLF gro....
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.... assessee in support of such agricultural income or agricultural activities carried on by the assessee, and treated the agricultural income declared as income from other sources. On appeal, the CIT(A) confirmed the view by the assessing officer, following his order for the assessment years 2002-03 to 2004-05 and 2006-07 dated 15.3.2007, which is also impugned before us. 11. We heard both sides. The contention of the authorised representative of the assessee is that the agricultural operations were carried out in the land under consideration. During the course of proceedings before the assessing officer, the assessee requested the assessing officer to inspect the lands at that stage. The assessee also filed pahani patrika for the financial year 2006-07, the slab pass-book issued by the Electricity Board before the lower authorities. It was also submitted that there was an open well in the land and water was supplied to the crop through electric motor pumping. Even after the request of the assessee the assessing officer not carried out any enquiry and drew adverse inference against the assessee. Further, the learned AR of the assessee stated before us that the assessee being an ag....
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....the agricultural income declared by the assessee is to be accepted as agricultural income only. 12. The next effective grievance of the assessee in this appeal relates to computation of capital gains, treating the land sold by the assessee as non-agricultural land. 13. Learned counsel for the assessee, reiterating the contentions urged before the lower authorities submitted that the land sold, being agricultural in nature and falling outside the notified area, does not represent the capital asset of the assessee. In this behalf, he placed reliance on the decision of the Hyderabad Bench of the Tribunal in the case of Srinivas Pandit (HUF) v. ITO [2010] 39 SOT 350. Further, it is submitted that the land sold is an agricultural land, and the consideration received on the sale of land in question was utilized for the purchase of agricultural lands only, and as such the assessee is very much entitled for relief under S.54B of the Act, and the lower authorities were not justified in rejecting the claim of the assessee. He submitted that the lower authorities were not justified in treating the lands of the assessee giving rise to the capital gains in dispute, as of non-agricultural ....
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....is within the specified area of 8 KMs of any municipality, not necessarily within the jurisdiction of the Revenue authority, the property assumes the character of urban land. He placed reliance on the unreported decision dated 1.3.2011 of the Hon'ble Punjab and Haryana High Court in the case of CIT v. Smt. Anjana Sehgal [Income-tax Appeal No.276 of 2004], duly filing a copy thereof before us, in support of this proposition. He also submitted that mere payment of advances for purchase of lands, would not entitle the assessee to relief under S.54B of the Act, and what is required to be complied with to fulfil the conditions prescribed under S.54B is the actual purchase of the agricultural lands within the time stipulated. He also submitted that the cost of acquisition arrived at and reported by the assessee is excessive, and the assessee could not substantiate the claim in this behalf, by producing necessary evidence in the form of comparable cases of the relevant time, notwithstanding opportunity given by the assessing officer for that purpose. 15. We have considered the rival submissions. We do not find merit in the contention of the assessee. The land in question giving rise to....
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....t of acquisition of the land disposed of, we are of the opinion that considering the proximity of the land to the city, it is reasonable to fix the value of as on 1.4.1981 at Rs. 30,000 per acre, instead of Rs. 10,000 determined by the Assessing Officer, as against Rs. 1,40,000 claimed by the assessee. One of the reasons for which the claim of the assessee for relief under S.54B was rejected by the assessing officer was that what was paid by the assessee was only an advance for purchase, and unless it is actual purchase of land, assessee would not be entitled for relief under S.54B. There is some merit in this reasoning of the assessing officer. However, in terms of S.54B of the Act, assessee has to purchase the agricultural land within a period of two years. Hence, though mere payment of advance does not entitle the assessee for relief under S.54B of the Act, if ultimately whole transaction of purchase of land was completed within a period of two years as contemplated under S.54B of the Act, assessee is entitled for relief under S.54B of the Act. In this view of the matter, we set aside the orders of the lower authorities, and restore this issue to the file of the assessing office....
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....find that the assessing officer has discussed the issue of agricultural income in the assessment order for AY 2008-09 while disallowing the claim of exemption u/s. 54B of the Act. Apparently the AO had obtained the Pahani Patrika from the Dy. Collector and Tahsildar, Rajendranagar Mandal to verify the claim of the appellant about cultivation. The Pahani obtained from Tahsildar indicated the land were not cultivated during 2005-06. Incidentally the land on which agricultural income is being claimed was under dispute with another group of appellant's relative. Mirza Iqbal Ahmed and his brother. Surprisingly Mirza Iqbal and group had also claimed to be doing agricultural operation on the same piece of land. They had also produced the same type of evidence as that the appellant has produced. It is not possible that two different group of individuals both claiming right over the same land can do agricultural operation on the same piece of land during the same period. In such a situation, a land in which there are several claimants, it is unimaginable that one of the claimants can carry on the agricultural operation to the detriment of others interest and others would be silent spectator....