TaxTMI 
TaxTMI 
2017 (10) TMI 387
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....-11. 2. Since the facts and the questions of law are common, these cases were heard together and are disposed of by this common judgment. 3. The assessee is a company, engaged in the business of manufacture and sale of oleoresins and spices oil. On 29.03.2005, the assessee purchased 512 cents of agricultural land at Kadayirippu in Aikkaranadu North Village which is a Panchayat and is beyond eight kilometres radius of the nearby Municipality. The land was purchased for expansion of the assessee's factory. However, local people objected to the expansion of the factory and therefore, the assessee dropped its proposal for expansion and decided to convert the land into residential plots with an intention to develop and sell a residenti....
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....4. We heard the learned counsel appearing for the assessee and the learned Senior Counsel appearing for the Revenue. 5. The learned counsel for the assessee contended that at the time when the land was purchased, it was a rubber estate. According to the counsel, the assessee retained the land as agricultural land and returned income from agriculture also. The acquired land being agricultural land, according to the learned counsel, the nature of the land would continue to be agricultural land and therefore, the gain of income on the sale of land would still be income from the sale of agricultural land, exempt from capital gains. 6. These contentions were refuted by the learned Senior Counsel appearing for the Revenue and according to h....
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....ts leaving common areas such as roads etc. and on 27.03.2007 itself, the assessee sold 188 cents of land to various parties and entered into a set of construction agreements to build villas in the project "Spice Village". It is in this background, we have considered whether the income gained by the assessee by the sale of the plots of land from out of 512 cents of land acquired by it, would qualify to be income from the sale of agricultural land. 9. Section 45 of the Income Tax Act provides for levy of capital gains. Under sub-section 1, any profit or gain arising from the transfer of a capital asset effected in the previous year shall, subject to the exemptions provided therein, be chargeable to income tax under the head of "capital gai....
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....et which has been sold by the assessee is agricultural land or not, is the date of sale of the asset. It has been so held by a Division Bench of this Court in its judgment in Kalpetta Estates Ltd. v. Commissioner of Income Tax [1990] 185 ITR 318 (Ker). In this judgment, it was also held that in order to entitle the assessee to earn exemption, it is not enough to allege or show that the land was once an agricultural land at the time of its acquisition and that the assessee should further prove that it was agricultural land at the time of transfer. 11. This question came for the consideration of the Apex Court in Smt.Sarifabibi Mohmed Ibrahim and others v. Commissioner of Income Tax, Gujarat [1993] 204 ITR 631 (SC)]. In that case, taking i....
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.... establish beyond any doubt that though the property was once an agricultural land, its acquisition was for nonagricultural purposes, the assessee did not carry on any agricultural activity in the land and at the relevant date, viz. the date of sale, the land had ceased to be an agricultural land. If that be so, the assessee could not have claimed that the income gained from the sale of the land is from the sale of agricultural land entitling it to exemption from levy of capital gains. This precisely is the concurrent conclusion of the statutory authorities. 13. Before the Tribunal, one document that was relied on by the assessee to substantiate its contention that the land was an agricultural land, was the certificate dated 20.10.2010 i....