TaxTMI 
TaxTMI 
2001 (4) TMI 47
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the circumstances of the case, the Tribunal was justified in law in holding that the land in question was agricultural land and, therefore, the capital gains arising out of the sale of the land was not taxable ?" The dispute relates to the assessment year 1972-73. The factual position in a nutshell is as follows : The assessees, Krishan Kumar Kapoor and R. K. Kapoor, who are the sons of one Muralidhar Kapoor, inherited separate pieces of land from their father wherein agricultural operations were carried on till 1949-50, when in each case the assessee's land was requisitioned by the Punjab Government for extracting earth for manufacture of bricks. Extraction was continued up to 1953-54 though no brick kiln was created on the said lan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....change in character, and it became non-agricultural. Therefore, at the time of sale it lost its character as agricultural land and exemption as claimed was not available. In the case of K. K. Kapoor, the assessee's appeal was allowed. It was held that the land was taken over by the Punjab Government as agricultural land and, therefore, the sale did not attract capital gains. The appeal was filed by R. K. Kapoor challenging the conclusions of the Appellate Assistant Commissioner in his case ; while questioning the correctness of the decision rendered in K. K. Kapoor's case, the Revenue filed appeal. Both the appeals were taken up together and the Tribunal held as follows : "After hearing both the parties, we are of the view that the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as exempt from capital gains being sale proceeds of agricultural land." The Revenue moved an application for reference under section 256(l) of the Act before the Tribunal which was rejected. However, as indicated above, on being moved this court directed reference of the question as set out above for the opinion of this court. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of notice. The main plank of learned counsel for the Revenue's argument was that the mere fact that rent was paid as agricultural land or that there was prohibition under the Punjab Scheduled Roads and Controlled Areas (Restriction of Unregulated Development) Act, 1963, regarding the change of character of the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t be given the meaning which it ordinarily bears in the English language and as understood in ordinary parlance ; (3) the actual user of the land for agriculture is one of the indicia for determining the character of the land as agricultural land ; (4) land which is left barren but which is capable of being cultivated can also be 'agricultural land' unless the said land is actually put to some other non-agricultural purpose, like construction of buildings or an aerodrome, runway, etc., thereon, which alters the physical character of the land rendering it unfit for immediate cultivation ; (5) if land is assessed to land revenue as agricultural land under the State revenue law, it is a strong piece of evidence of its character as agr....