TaxTMI 
TaxTMI 
2022 (8) TMI 523
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.... revenue records to grant relief to the assessee. 3. The Ld CIT(A) erred in failing to appreciate the case laws relied upon by the ITAT in the case of Shri Aboo Bucker (s/o the assessee), wherein the impugned asset being land was found to be non-agricultural in nature. 4. The Ld CIT(A) failed to appreciate that the development activity in the vicinity, the real estate worth, the magnitude of transaction making agricultural operations unviable, purpose of transfer, intention of the buyer etc, defines the property transferred as Capital Asset and not agricultural land. 5. For these and other grounds that may be permitted to be presented at the time of hearing, the Hon'ble ITAT may set aside the order of the Learned Appellate Commissioner, restore the order u/s.143 (3) of the Assessing Officer and thus render justice. As evident, the revenue is aggrieved by relief provided by Ld. CIT(A) in the impugned order qua capital gain earned by the assessee on sale of agricultural land. 2. The Ld. Sr. DR, at the outset, submitted that the issue stood covered in revenue's favour by the decision of this Tribunal in the case of joint owner of the property in IT....
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....the date of sale and agricultural income was offered to tax. 4.2 However, rejecting the same and noticing that the sale consideration roughly works out to be Rs.86 Lacs per acre and considering the fact that the purchaser of the property was a real estate company, Ld. AO held that the land was not an agricultural land. The decision of first appellate authority favoring assessee in the case of Shri Aboobucker was held to be not acceptable. Finally, the sale proceeds of Rs.480 Lacs was brought to tax as Long Term Capital Gains. Appellate Proceedings 5. Upon further appeal, Ld. CIT(A) reversed the stand of Ld. AO and held that the land was agricultural land only. The assessee purchased the land as agricultural land, held them as agricultural land, used them for agricultural activities and finally sold them as agricultural lands only. To adjudicate, Ld. CIT(A) also noted that similar issue was decided in favor of joint owner by learned first appellate authority. The facts of the present case were quite same and therefore, there was no logic and cogent basis to differ with the findings of or predecessor rendered in the case of Shri Aboobucker. Aggrieved, the revenue is in furth....
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....wn, it is always the tendency of a person to take a quick decision so that the realization on the investment is maximum or the loss is minimum. (vi) As already mentioned the assessee carried on regular agricultural operations in the said agriculture land. (vii) By the above agriculture land the assessee earned agriculture income which were brought into the account books of the assessee. Such income was offered to income tax. 5.1 He submitted that in the present case there is no dispute that the assessees acquired agricultural land. There is also no dispute that there was agricultural operation in this land before sale of this land. 5.2 The Departmental Representative submitted that the amount received on sale of this property is nothing but on account of sale of capital asset and the same was brought into income from capital gain. In this case, the Authorised Representative submitted that the land always treated as investment and not at all converted into stock-in- trade. The character of the land in the hands of the assessees has not changed. 5.3 Now the question as to whether a land is agricultural land or not is essentially a question....
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.... the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such lesser and/or alternative user was of a permanent or temporary nature? 7. Whether the land, though entered in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? 8. Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the land in the adjoining area were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads and other facilities? 10. Whether there were any previous sales of portions of the land for nonagricultural use? 11. Whether permission under s. 63 of the Bombay Tenancy and Agricultural Land Act, 1948, was obtained because the sale or intended sale was in favour of a nonagriculturist? If so, whether the sale or intended sale to such non-agriculturists was for non-agricultural or agricultural user? 12. Whether the land was sold on yarda....
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....was good prima facie evidence of land being agricultural land but presumption arising there from could be rebutted by other circumstances. In that case the assessee had not led any evidence about intended user because assessee was under mistaken impression that it was not necessary to do so in view of existence of prima facie evidence in the form of entries in the Revenue record and therefore the Supreme Court restored the matter to Tribunal to record a finding on the question of intended user and then decide the point whether the land in question was agricultural land. The Supreme Court disapproved the view that that 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 nonagricultural 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 and observed that minimal test of agricultural land was credible evidence of at least appropriation or setting apart of the land for a purpose which could be regarded as agricultural and for which land was used without an alteration of its....
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.... Gujarat High Court has been affirmed in appeal by the Supreme Court in Sarifabibi Mohmed Ibrahim vs. CIT 204 ITR 631 (SC) in which the Supreme Court emphasised that all the circumstances were required to be weighted and that High Court has reached a correct conclusion. 5.10 The claim of the Assessee that agricultural operations were carried out over the property and the property was actually used for agricultural purpose was sought to be established by relying on the classification of the property as agricultural land in the revenue records, existence of mango trees for agricultural purpose. The Revenue contends that there is no evidence of the Assessee having carried out actual agricultural activities over the property. The Assessee has not claimed any expenses incurred in carrying out agricultural operations. There is no evidence of the Agricultural produce having been sold. The Hon'ble Kerala High Court in the case of Kalpetta Estates Ltd. 185 ITR 318 (Ker) it has been held by the Hon'ble Kerala High Court that the burden of proof that the land in question was agricultural land at the time of transfer to claim exemption was on the Assessee. As already observed ....
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....t 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 are 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 payment of capital gains tax. (iii) The fact that land is not converted to non-agricultural user would be a circumstance indicating that it is an agricultural land. However this is subject to same rider as is mentioned in(ii)....