TaxTMI 
TaxTMI 
2013 (9) TMI 37
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....e Act. Aggrieved, the assessee filed appeal before the ld. CIT(A), who has finally found, after examining the entire records including the revenue records and statements of various persons and report of Tahsildar/Revenue Officer that the land sold is only agricultural land. The ld. CIT(A) also called for a remand report from the Assessing Officer in respect of fresh documents and written submissions filed before him for the first time. After considering the entire facts and the documents, he finally came to the conclusion that the land sold in this case was actually agricultural land and hence, no capital gain is chargeable thereon. Now, the Revenue is aggrieved and has filed this appeal. 3. During assessment proceedings, the Assessing Officer noticed that the assessee has claimed exemption of Rs. 12,32,84,470/- on account of gains arising on the sale of 'asset' during the year. The Assessing Officer has observed as under: "As per a sale deed dated 27.09.1994, the assessee had purchased 2.14 acres of agricultural lands from Sree Harikrishna Brick Works, Chennai for a total consideration of Rs. 8, 10,000/-. As per sale deed dated 24.01.2007, the land was sold to a company by n....
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....tural land based on these guidelines, there can be no doubt that the profits or gains arising from such sale is exempt from capital gains tax. The basic condition to decide whether a particular land has been agricultural land is that the land has been actually subjected to agricultural operations for a reasonable span of time before the transfer/sale. The character of the land is to be judged on its present connection with an agricultural purpose and user. Enquiries were accordingly made from this angle. The Tahzildar, Sriperumbudur taluk, within whose jurisdiction the land is situated, has furnished the following details in respect of the lands in survey Nos.45/1B, 45/2B, 48/1B, 48/2, 48/3, 48/4: (A) The above said lands are situated in Iyyappanthangal Village Panchayat; (B) Yes. These lands are agricultural lands. (C) During the financial years 2003 to 2006 there is no cultivation carried out on these lands as per the land records; (D) There is no agricultural operation carried out in the above said lands during the above period; (E) The adangal copies for the above mentioned Survey Nos. according to the Fasli years; As per Revenue records even though it is agri....
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....who [vendor or vendee]; (vi) Whether the land on the relevant date had ceased to be put to agricultural use; if so, whether it was put to an alternative use; whether such cesser was of a permanent or temporary nature; (vii) Whether the land, though entered in the Revenue records, had never been actually used for agriculture; whether the owner mean or intended to use it for agricultural purposes; (viii) Whether the land was situated in a developed area; whether its physical characteristics, surrounding situation and use of the land in the adjoining area were such as would indicate that the land was agricultural ; (ix) Whether the land itself was developed by plotting and providing roads and other facilities; (x) Whether there were any previous sale of portions of the lands for non agricultural use; [portions of assessee's lands]. (xi) Whether permission under section 63 of Bombay Tenancy & Agricultural lands Act was obtained because the sale was to a non-agriculture; (xii) Whether the land was sold on yardage or acreage basis. (xiii) Whether an agriculturist would purchase the land at the price at which it is proposed to be sold. 5. Thus, it becomes clear ....
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....ricultural land unless the user of the land has been specifically got changed before such sale. Likewise, the future use of this land will not disentitle the assessee from the benefit as was available to him at the time of the sale. Therefore, we reaffirm that the cumulative effect of he above mentioned facts and circumstances is that the land in question was 'agricultural land' at the time of sale and the assessee is entitled to Long Term Capital Gains thereon. 7. We have considered the rival submissions and have perused the entire records. The assessee had purchased 2.14 acres of agricultural land from one Shree Harikrishna Brick Works, Chennai, vide sale deed dated 27.9.1994 for a total consideration of Rs. 8,10,000/-. This land was subsequently sold to a company by the name Estra IT Park Pvt. Ltd, for a total consideration of Rs. 12,42,00,000/-, vide sale deed dated 24.1.2007. In the sale deed, it is mentioned in para 3 that the assessee is compelled to sell the property as at present it is not fetching any income. The issue involved before us is as to whether the land sold is agricultural land or it is to be treated as a capital asset in the terms of section 2(14) of the Ac....