TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 971
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....e returned of Rs. 12,46,968/- at a higher amount of Rs. 108,74,396- and the Commissioner of Income tax has erred in confirming the same. 2. in the facts and circumstances of the case and the attendant law, the learned Assessing Officer, Pune has erred in making the addition of Rs. 96,27,428/- in the assessment order passed for A.Y. 2009-10 on account of capital gains and the Commissioner of Income tax has erred in confirming the same. 3. The learned Assessing Officer, Pune has erred is not considering the affording benefit of exemption from tax available under the income tax law to income earned by the assessee from sale of agricultural land and the Commissioner of Income tax has erred in confirming the same. 4. The assessment order under section 143(3) r.w.s. 153A of the Income Tax Act, 1961, dated 30.12.2011 is passed without following principles of natural justice and therefore, the same needs to be cancelled. 5. The order under section 143(3) r.w.s. 153A of the Income Tax Act, 1961, dated 30.12 2011 of the Deputy Commissioner of Income tax, Central Circle-2(1), Pune, in case of the assessee is bad in law. 6. The appellant craves leave to add, amend or alter any of the grou....
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....axability of land was concerned, what was relevant was the user of land at the time of sale. The Assessing Officer also noted that the land of around one acre had been sold for a crore and no agriculturist would purchase such land for agricultural purposes at this rate. The Assessing Officer thus, held that the land in question was not an agricultural land and therefore, profit from transfer of such land was not exempt as an agricultural income. Reliance in this regard was placed upon by the Assessing Officer on the following decisions:- 1. Smt. Sarifabibi Mohmed Ibrahim v. CIT [1993] 204 ITR 631 (SC) 2. CIT v. V.A. Trivedi [1993] 172 ITR 95 (Bom) 3. Gopal C. Sharma v. CIT [1994] 209 ITR 946 (Bom) 5. Another aspect noted by the Assessing Officer was that the assessee inthe return of income had himself computed capital gains of Rs. 96,27,428/-, against which he had claimed the deduction under section 54 of the Act. Since the claim of deduction could not be supported by any documentary evidence, the claim of the said deduction was denied to the assessee and income from capital gains at Rs. 96,27,428/- was taxed in the hands of assessee. 6. Before the CIT(A), the assessee made wr....
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....as held in CWT v. Officer-in-charge (Court of Wards) [1976] 105 ITR 133 (SC). Further, reliance was placed on the ratio laid by Hon'ble Gujarat High Court in Siddharth J. Desai (supra) and Ranchhodbhai Bhaijibhai Patel v. CIT [1971] 81 ITR 446 (Guj), wherein it was held that true test to be applied for the purpose of determining whether a particular land was agricultural land or not is first to ascertain the use to which the land is actually being put. The CIT(A) vide para 6.7 held as under:- "6.7 In the present case, not a shred of evidence has been presented by the appellant either before the AO or before me during appellate proceedings to establish that the land in question was actually being used for cultivation at any time or any "basic operations" or "subsequent operations" as explained by the Supreme Court in Raja Benoy Kumar Sahas Roy (supra) were carried out on the land. In fact, the AO, based on the report submitted by the Inspector after inquiry, has mentioned that the land was not fit for cultivation. This has not been challenged by the assessee. Under the circumstances, the core attribute of agricultural land, namely, use thereof for the purposes of agriculture, w....
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....d Authorized Representative for the assessee has furnished synopsis of arguments which are placed on record. 11. In reply, the learned Departmental Representative for the Revenue submitted written submissions and pointed out as under:- '4. In this context it is submitted that the assessee has not rebutted the findings of fact given by AO based on the inspector's report, 7/12 extracts submitted during the course of assessment proceedings and Talati's report that the land was never used for agricultural purpose in past. No evidences were produced to prove factum of land cultivation in recent past. The Supreme Court in the case of Sarifabibi Mohmed Ibrahim (supra) has laid down the principal that it is a question of fact and whether the particular land is to be treated as agricultural land is to be tested on 13 parameters mentioned in the order. The actual cultivation in recent past or intention of using the land for agricultural purpose in near future was most important. Nature shown as agricultural land in revenue records is not conclusive test. In this case also land was not put to use for agricultural purposes in recent past prior to date of sale and there was no evi....
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....he income from capital gains and claimed deduction under section 54 of the Act, however, during the course of assessment proceedings, the plea of the assessee was that the said land sold by the assessee was an agricultural land and hence outside the purview of being taxed under the head 'income from capital gains' as it fell outside the definition of capital asset under section 2(14) of the Act. 13. Second 2(14) of the Act defines agricultural land as under:- '2. In this Act, unless the context otherwise requires, - (14) "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include. (i) . . . . . . (ii) . . . . . . (iii) agricultural land in India, not being land situate- (a) in any area which is comprised within the jurisdiction of a municipality (whether kno....
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....6. Further, the Hon'ble Gujarat High Court in Siddharth J. Desai (supra) had laid down 13 tests to determine whether a particular land is agricultural land or nor which are as under:- "(1) Whether the land was classified in the revenue records as agricultural land whether it was subject to the payment of land revenue? (2) Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? (3) Whether such user of the land was for a long period or whether it was of a temporary character or by way of a stopgap arrangement" (4) Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land? (5) Whether, the permission under s.65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of a portion of the land and if it wa....
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....ultural land or not is essentially a question of fact. Several tests have been evolved in decisions of the Supreme Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case, having regard to the facts and circumstances of that case. There may be factors both for or against a particular point of view. The court has to answer the question on a consideration of all of them - a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts." 19. The Bombay High Court in V.A. Trivedi (supra) i.e. the decision relied upon by the Assessing Officer, after considering the facts of the case, it was held that to ascertain the true character and nature of the land, it must be seen whether it has been put to use for agricultural purposes for a reasonable span of time, prior to the relevant date and further whether on the relevant date the land was intended to be put to use for agricultural purposes for a reasonable span of time in the future. 20. Following the judicial proposition laid down by the Supreme Court and various High Courts in order to determine the nature of the agricu....
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....records as agricultural land is not decisive to determine the nature of land being agricultural land. Where the land has not been put to use for agricultural purposes for reasonable span of time prior to the date of its transfer, the land in question cannot be held to be agricultural land. The onus was upon the assessee to establish its case of having cultivated the land in recent past and in the absence of assessee having discharged its onus and merely because the land is recorded as agricultural land in the revenue records, does not establish the case of assessee. 23. Now, coming to the facts of the present case, the assessee before the Assessing Officer had furnished the copy of 7/12 extract,according to which the land was a Jirayat fallow land i.e. land being not capable of cultivation. The 7/12 extract furnished by the assessee has been scanned by the Assessing Officer, copy of which is placed at pages 4 and 5 of the assessment order, which reflects no agricultural activity having been carried on by the assessee. The assessee has not declared any agricultural income in its hands nor any evidence has been produced by the assessee in any of the proceedings or even before us to ....
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.... finding that the land was not agricultural land was reversed by the Hon'ble Delhi High Court (supra). However, the finding of the Hon'ble Delhi High Court (supra) is contrary to the finding of jurisdictional High Court in Gopal C. Sharma (supra), which has been referred to by us in the paras hereinabove, which in turn has been relied upon by the Assessing Officer/CIT(A) and also by the learned Departmental Representative for the Revenue. Though the learned Authorized Representative for the assessee had filed compilation of case laws, but during the course of hearing had only relied on the ratio laid down by the Hon'ble Delhi High Court in Hindustan Industrial Resources Ltd. (supra). The learned authorized Representative for the assessee placed reliance on the decision of Hon'ble High Court of Bombay at Goa in CIT v. Smt. Debbie Alemao [2011] 331 ITR 59 and Pune Bench of Tribunal in Haresh V. Milani v. Jt. CIT [2008] 114 ITD 428. The Perusal of facts of both the cases reflect that in both the abovesaid decisions, the land was cultivated by the assessee and even the nature of the crop is mentioned. However, in the facts of the present case before us as pointed out by....
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....pector of Income Tax. It is reported that the land was not used for agricultural activity for many years. It has also been certified by the Talathi that the land records in his office have been tampered to show crops grown from 2006-07 onwards. This finding was communicated to the above assessee vide this office letter dated 21/12/2012 by RPAD & was also physically served on the assessee 24/12/2012 separately. A copy of the letter dated 21/12/2012 along with the Talathis report is enclosed for ready reference. In response the assessees above have not availed the opportunity of joint visit to the land given to them. Their reply is vague without any documentary evidence in support of their claim. Therefore the 'facts' brought out in the assessment order gets substantiated & the following factual position is very clear. (1) Land was not at all used for a agricultural activity as being claimed by the above assessees. (2) Land is in fact a barren land as reported in the 7/12 extracts furnished prior to the completion of the assessment. (3) Someone tampered the land records of Talathi Donje to show that crops were grown subsequent to 2006-07. (4) All the above factual positi....