TaxTMI 
TaxTMI 
2016 (9) TMI 1063
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....e assessee has received sale consideration of Rs. 5,31,02,160/- towards sale of property during the F. Y relevant to A. Y. 2010-11. It was noticed that the assessee had admitted short term capital gain of Rs. 96,042/- only in the return of income. Thus, as there was reason to believe that income has escaped assessment, notice u/s. 148 dated 21.01.2014 was issued. It is noticed that the assessee has sold lands measuring 7.38 acres located in Kunnam Village, Sriperumpudur Taluk, Kancheepuram District, Chennai on 26.08.2009 in his individual capacity as well as in the capacity of power agent of Smt. Sushila Kuamri. The total sale consideration received by the assessee in respect of above sale proceeds during the relevant previous year is Rs. 5,31,02,160/- and the above sale has taken place vide document Nos.3614/2009 & 3615/2009 dated 26.08.2009 registered with SRO, Walajahbad. The lands have been sold to M/s. Grundfos Pumps India Pvt. Ltd. No.118, Old Mahabalipuram Road, Thoraipakkam, Chennai- 600097. The assessee has claimed the capital gains arising on the sale of the above lands as exempt on the ground that the same is arising on sale of agriculture lands. The assessee's claim of ....
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....o.14/Mds./15 & CO No.15/MDS./2015 vide order dated 17thJuly, 2015, the property is not liable for capital gains tax. On the other hand, the ld.D.R relied on the order of the Co-ordinate Bench in the case of ITO Vs. Shri Aboobucker in ITA No.1793/Mds./2013 for assessment year 2006-07vide order dated 31.12.2015 wherein considered the property at Navalur village and decide the case against the assessee. However, the AR submitted that the sale transaction effected by the assessee in respect of the above land constituted only sale of agriculture land, and by no stretch of imagination it can be treated as transfer of capital asset and so as to treat the same as 'capital gain' for the following reasons: (i) Purchase and holding of land for a long period and subsequent sale thereof itself cannot be an indicator to hold it as non-agricultural land, the assessee was to carry on business with those assets. (ii) The assessee held land for considerable time. The asset acquired was agriculture land as per the evidence brought on record. Thus, the assessee held the agriculture land for more than 3 years. During that period the assessee carried on regular agricultur....
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.... all the relevant facts. It may be stated here that not all the factors or tests would be present or absent in any case and that in each case one or more of the factors may make appearance and that ultimate decision will have to be reached on a balanced consideration of the totality of the circumstances. 4.4 The expression 'agricultural land' is not defined in the Act, and now, whether it is agricultural land or not has to be determined by using the tests or methods laid down by the Courts from time to time. 4.5 The Supreme Court in the case of Smt. Sarifabibi Mohmed Ibrahim v. CIT [1993] 204 ITR 631/70 Taxman 301 has approved the decision of a Division Bench of the Gujarat High Court in the case of Siddharth J. Desai 139 ITR 628 and has laid down 13 tests or factors which are required to be considered and upon consideration of which, the question whether the land is an agricultural land or not has to be decided or answered. We reproduce the said 13 tests as follows: "1. Whether the land was classified in the Revenue records as agricultural and whether it was subject to the payment of land revenue? 2. Whether the land was ac....
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....ral produce on the basis of its yield?" 4.6 We will therefore proceed to examine the question as to whether the property can be said to be Agricultural land or not. In the case of CWT vs. Officer-in- Charge (Court of Wards), Paigah 105 ITR 133 (SC) in which question to be decided was whether acres of vacant land enclosed in compound walls of a palace situated by the side of a lake and classified and assessed to land revenue, which were neither cultivate nor had been put to nonagricultural use' in the past could be regarded as "agricultural land" within the meaning of that expression which occurred in the definition of "asset" in section 2(e) of the WT Act, 1957. The Hon'ble Supreme Court held that much weight cannot be given to mere "potentiality" of the land for use for agricultural purposes and what is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of the land, by some possible future owner or possessor, for an agricultural purpose. It is not mere potentiality, but its actual condition and intended user which has to be seen. One of the objects for exemption is to encourage cultivation or ac....
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....ws:- (i) The fact that land is entered as agricultural land in revenue records and is assessed as such under the Land Revenue Code would be a circumstance in favour of conclusion that it is an agricultural land. However, this would raise only a prima facie presumption and said presumption can be destroyed by other circumstances pointing to the contrary conclusion (ii) The fact that agricultural operations were carried on in the past or arc carried on currently is a circumstance in favour of conclusion that land was agricultural land. However, this is not a decisive factor inasmuch as agricultural crop can be raised even on building site land (even on desert land as observed by the Supreme Court in said case) and sometimes, a crop is grown in order not to allow the land to remain idle awaiting sale for nonagricultural purposes to a non- agriculturist by way of a stop-gap arrangement or in order to avoid payment of revenue at a higher rate or in order to avoid payment of capital gains tax. (iii) The fact that land is not converted to nonagricultural user would be a circumstance indicating that it is an agricultural land. However this is subject to same ride....
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....a whole and an overall view is to be taken in deciding whether the land was an agricultural land. In a given case large number of circumstances may be indicative of agricultural character but one circumstance may outweigh all of them and on its basis the land would be held to be a non-agricultural land. The case laws cited by the Assessee as well as the Revenue deal with situations where one or two factors was considered as the basis on which the conclusion that property was Agricultural land or was not Agricultural land had been arrived at. 4.11 The Assessee in the present case is not an Agriculturist. He has no background of agricultural activities. Strictly speaking it may not be necessary to have background of agricultural activates. We are making a reference to these circumstances only to weigh the cumulative circumstances to come to a conclusion whether the property can be regarded as Agricultural Land. No evidence of having spent human labour in the sense of preparing the land, filling, sowing seeds, planting on a regular basis has been produced by the Assessee. The property is situated in fast developing area of Chennai. The property is located in developed/ develo....
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.... was a company by name M/s. Olympia Infra Tech (P) Limited which is a registered company under the Companies Act, 1956. The property sold is situated in Navalur which is a suburb in Chennai, it is situated in Kanchipuram Districtt, Tamil Nadu, located south of the city of Chennai, along the Old Mahabalipuram Road. Navalur is located between Sholinganallur and Siruseri and is around 6 kms. from Sholinganallur and comes under Thirporur taluk. The place was once a village but with the advent of Information Technology Companies and the rapid development of the Old Mahabalipuram, it has become a bustling suburban. Navalur is an upcoming residential area with many number of Flats coming up, mostly professionals from Information Technology companies renting and buying apartments. As detailed above, the property sold by the assessee is in the midst of development activities being carried out by builders in promoting housing/ Information Technology corridors, and no agricultural activities were being carried out either by the assesse nor by others in that area, the property is described as a mango grove as per the copy of the sale deed/patta, chitta adangal produced. In view of the same, th....
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....s allowed. 5. On the other hand, ld.A.R relied on the order of Co-ordinate Bench in the case of Mr.N.Jayamurugan, vide order dated 27.04.2016 in ITA Nos.2356 to 2362/Mds./2015. 6. We have heard both the parties and perused the material on record. We have gone through both the orders of the Tribunal cited by the Counsels. In the present case, it is an admitted fact that the impugned land property is situated beyond 8 Kms of the Municipal Corporation limit of Chennai. The land is situated in a distance of 15 Kms from the nearest municipality/Panchayat i.e. Sriperumpudur Taluk, Kancheepuram District, Chennai and population of the village is around 3,000 as per the relevant census. The assessee also declared agricultural income from the said property and the same was assessed as agricultural income more specifically in assessment under consideration also. The AO accepted the agricultural income declared from said property at Rs. 65,300/- for assessment year 2010-11. Further, the land was classified as agricultural land in the Revenue records also. The property was also sold by the assessee as agricultural land only and the impugned land was never converted by assessee for any non....