TaxTMI 
TaxTMI 
2016 (3) TMI 1118
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.... purchase of the land. 2.3 The learned CIT(A) erred in, the land sold was an agricultural land though, the fact that the land was purchased by a company engaged in real estate and construction business at a price which is several times more than what it was purchased a few years before clearly shows that even the purchaser has no intention of carrying out any agricultural operation there on. 2.4 The CIT(A) erred in the land sold was an agricultural land based on the classification of land as agricultural land in revenue records are not good reason to term of the land as agricultural land, A mere classification by the Revenue Authorities in general terms that the lands are agricultural land does not in any way exempt the assessee from filing evidence showing that agricultural operations were in fact carried out during his tenure of ownership. 2.5 The CIT(A) has failed to note that' the Assessing Officer had clearly established with detailed reasoning in the assessment order. 3 The CIT(A) ought to have considered the decision of Supreme Court in the case of Sarifa Bibi Md.Ibrahim reported in 2041TR 631, the decision of the jurisdictional ITAT in the case of Pallava Resort....
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....s, the said land was acquired by the assessee vide sale deed dated 06.12.2006 for a cost of Rs. 18,63,900/- and the said property sold for consideration of Rs. 2.14 crores to M/s.Olympia Infra Tech (P) Ltd. According to the assessee, the property is an agricultural land, not liable for tax in view of the order of the Tribunal in the case of ITO Vs. Smt.Lalitha in ITA No.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 ho....
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....estion has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. We have to answer the question on a consideration of all of them, a process of evaluation and the inference has to be drawn on a cumulative consideration of 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 wh....
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.... 13. Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural 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 non-agricultural 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 ....
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....Supreme Court in the case of Officer-in- Charge (Court of Wards ) was analysed by the Gujarat High Court in CIT vs. Sarifabibi Mohammed Ibrahim 136 ITR 621(Guj) and the legal position was summed up as follows:- (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 non-agricultural purposes to a nonagriculturist by way of a stop-gap arrangement or in order to avoid payment of revenue at a higher rate or in order to avoid paym....
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.... As already observed the question whether the land was Agricultural land has to be decided on facts of each case and decided cases are only guidelines to be kept in mind. Facts and all the circumstances are to be considered as 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 nonagricultural 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 ....
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....fetched by building sites. (d) The price is such that no bona fide agriculturist would purchase the same for genuine agricultural operations. 4.13 In the present case, the purchaser of the property 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 activi....