TaxTMI 
TaxTMI 
1993 (7) TMI 28
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....tal gains ?" The assessee is the owner of land admeasuring acres 3.22 gunthas situated in village Paldi which is now within the limits of the Ahmedabad city. Till 1967, it bore S. No. 25/1. From November 1, 1967, because of the TP Scheme framed and finalised under the Bombay Town Planning Act, 1954, the reconstituted area of that land was given Final Plot No. 136. Originally, the land was acres 3.22 gunthas and after it was reconstituted in a final plot, it became a plot of 13,740 sq. yards. On December 18, 1963, the assessee entered into an agreement with Himatlal Jayantilal and Co. for sale of the said land bearing S. No. 25/1. As the sale deed could not be executed within two months as per the terms of the agreement, the said agreement was cancelled. Thereafter, on May 14, 1966, the assessee again entered into an agreement to sell the entire land to Messrs. Caravan Corporation. The land was to be sold at the rate of Rs. 20 per sq. yard. Pursuant to the said agreement, the land was, in fact, sold in three lots: the first sale took place on March 31, 1967, the second on December 5, 1967, and the third on June 25, 1968. During the assessment proceedings for the assessment years 1....
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....He held that the land in question was agricultural land and that the sale of the land by the assessee was not by way of an adventure in the nature of trade. The Revenue, therefore, again appealed to the Tribunal. The Tribunal agreed with the view of the Appellate Assistant Commissioner on both the counts and dismissed the appeals. The Revenue, therefore, moved the Tribunal for referring the abovestated question in respect of each assessment year to this court but it failed in its attempt. It, therefore, approached this court by an application under section 256(2) of the Act, and this court then directed the Tribunal to state the case and refer the said question to this court. What is contended by learned counsel for the Revenue is that this is a case where the assessee wanted to dispose of his land for a non-agricultural purpose. Thus, though the land was originally agricultural and was cultivated till the year 1967-68, cultivation after 1963 was only by way of a stop-gap arrangement awaiting the sale of the land for non-agricultural purpose. The land was sold on a per square yard basis and it was sold at a price at which an agriculturist would not have purchased the same for ag....
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....other than the actual user of the land were therefore given more importance. Even in that case, it has been held that the actual user would ordinarily furnish the prima facie nature of the character of the land. As we will point out hereafter, the Tribunal had taken all these factors into consideration and had thereafter come to the conclusion that the land in question is an agricultural land. Learned counsel next placed reliance upon the decision of this court in CIT v. Siddharth J. Desai [1983] 139 ITR 628. In that case, this court, after considering all its previous decisions, held that the factors which are required to be taken into consideration for determining the question as to whether the land can be said to be agricultural land are : (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 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 stop-gap arrangement ? (4) Whether the income derived from the agricultural operati....
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....n, unless there is some cogent evidence to indicate otherwise, the land should be treated as agricultural land. In our opinion, what is required to be considered is : Was it agricultural land when it was sold ? If the land is recorded as agricultural land in the revenue records and if till the date of its sale it is used and exploited as agricultural land, and if the owner of the land had not taken any step, which would indicate his intention to exploit the land thereafter as non-agricultural land, then such a piece of land will have to be regarded as agricultural even though it is included within the municipal limits or it is sold on a per square yard basis and not acreage basis. The purpose for which such a land is sold, though not relevant, will not have that much importance and weight as it would have been in a case where the land has remained as Padatar or idle or is used for agricultural purposes only by way of a stop-gap arrangement. So far as the facts of this case are concerned, there is no dispute that the land, till it was sold, was classified as agricultural land in the revenue records. In the village Forms Nos. VII and XII, popularly known as "record of rights", it is....