TaxTMI 
TaxTMI 
2019 (1) TMI 1989
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....of the Revenue and relates to the assessee Shri. Mafaz Mohammed and appeal 323/Chny/2017 is an appeal of the assessee Smt. Syed Abdul Kader Aysthath Fasleen Amina. Both these appeals are for the same assessment year 2010- 11, and facts relating thereto lie within very same compass. 3. What can be recapitulated from the assessment orders, is that Smt. Syed Abdul Kader Aysthath Fasleen Amina had purchased 11.37 acres of land at survey Nos. 14/2C, 14/3A and 14/3B2 of Egattur Village, Thiruporur Taluk from one Smt. Saradambal through following documents:- (i) Doc. No.3227 of 1998, dated 15.12.1988 (ii) Doc. No.686 of 1989, dated 20.03.1989 (iii) Doc. No.56 of 1992, dated 30.06.1991 (iv) Doc. No.54 of 1992, dated 02.07.1991 (v) Doc. No.55 of 1992, dated 02.07.1991 (vi) Doc. No.1833 of 1992, dated 30.09.1992 (vii) Doc. No.701 of 1993, dated 27.04.1993 All the above documents were registered with Sub- Registrar, Thiruporur. In addition to the above Smt. Syed Abdul Kader Aysthath Fasleen Amina had also acquired 3 acres and 81 cents of land at survey No.14/3B1 in 1992 through document Nos.114/92 and 115/92. All these land ....
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....nd sold as agricultural and not a capital asset. 5. Ld. Assessing Officer during the assessment proceedings noted that sale price came to Rs.20,27,00,000/- per acre against guideline value of Rs.3,00,00,000/- per acre. As per the ld. Assessing Officer, the land was situated in Egattur, which was a suburb of Chennai, in Thiruporur Taluk of Kanchipuram District, lying on the side of Old Mahabalipuram Road. According to the ld. Assessing Officer, Egattur was an upcoming residential area with many flats catering to professionals working in Information Technology companies in and around OMR. Ld. Assessing Officer also noted that Government of Tamil Nadu vide Gazette Notification No.VI(1)/109/2009, dated 09.03.2009 had declared the area of 9.32 acres owned by the assessees alongwith Smt. Aysha, as a multi- storeyed building area for construction of commercial building. Assessees were put on notice. Summary of the reply given by the assessees was as under:- a The land was purchased as agricultural land as per purchase deeds. It is clearly mentioned in the purchase deeds that what was brought was agricultural Punja land and was being cultivated. b Agricultural income w....
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....''the Act'') was conducted in the premises of the assessee Shri. Mafaz Mohammed on 09.03.2015, and it seems the Revenue stumbled upon the JDA dated 25.06.2007, and a Power of Attorney dated 27.06.2007, executed by the assessee's in favour of M/s. SSDPL. Assessees had entered into the JDA with M/s. SSDPL to develop the land for constructing multi-storied building with mall, residential apartments and for commercial use. Through this JDA, parties agreed for 50:50 share in the undivided land. Asessees alongwith Smt. Aysha were entitled to 50% of the total saleable space. Ld. Assessing Officer also noted that M/s. SSDPL had, in turn, entered into agreements with M/s. IGH and M/s. Accent for sale and construction of hotel on 50% of UDS in the land belonging to M/s. SSDPL. M/s. SSDPL had also received a sum of Rs.22,50,00,000/- from M/s. IGH and M/s. Accent, on 11.04.2008. It seems, the joint development agreement entered between assessees and M/s. SSPDL was cancelled on 04.02.2010 and assessees, sold the 1.85 acres of land directly to M/s. IGH and M/s. Accent. The impugned capital gains arose out of the sale effected by the assessees to M/s. IGH and M/s. Accent. 8. Ld. Assessing Offi....
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....44,38,785/- as deduction from income from house property. Though the assessee submitted that such interest was paid on loans taken to repay the advance received from M/s. SSDPL, which was used for construction of the building, this was not accepted by the ld. Assessing Officer. Ld. Assessing Officer noted that a term loan of Rs.4,65,00,000/- availed by the assessee from M/s. Indian Overseas Bank, Gemini Circle, Chennai was for purpose of private investment in immovable property. According to him, it was clear from a letter from Assistant General Manager, Indian Overseas Bank, Chennai that such term loan was preclosed being the surplus fund available with the assessee. Ld. Assessing Officer also relied on answers given by the assessee during the statement taken in the survey. Claim of interest was also thus disallowed. 10. Aggrieved, both the assessees moved in appeal before ld. Commissioner of Income Tax (Appeals). Whereas assessee Shri. Mafaz Mohammed was successful in his appeal, that of Smt. Syed Abdul Kader Aysthath Fasleen Amina met with a different fate. What was held by the ld. Commissioner of Income Tax (Appeals) in the case of the assessee Shri. Mafaz Mohammed in his or....
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....Attorney executed on 2007, Subsequently, the Joint Development Agreement was cancelled on 4.2.2010 and the Power of Attorney was revoked the developer, SSPDL nominated M/s.Interglobe Hotels Private Limited and M/ s. Accent Hotels Private Limited, for the purpose of registration of 1.85 Acres of land and surrendered the balance land by cancellation of Joint Development Agreement and accordingly the assessee and other co owners had to register the property in the name of M/s. Interglobe Hotels Private Limited and My s. Accent Hotels Private Limited being the nominee of the developer. The deed of cancellation of Joint Development Agreement clearly narrates the nomination made by the SSPDL, the Developer in favour of M/s. Interglobe Hotels Private Limited and M/ s. Accent Hotels Private Limited. Thus the registration of the land in favour of M/s. Interglobe Hotels Private Limited and My s. Accent Hotels Private Limited on 5.2.2010 is not a new transaction, It is only a consequential act on part of the assessee to register the land as per the requirements of the developers as contained in the Joint Development Agreement cancellation deed dated 4.2.2010. As per sec.2(47)(v) of the IT.Act....
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....d receive advances from prospective customers and appropriate the same in respect of the developer's share of allotment in the developed property under this agreement." In pursuance of the said clause the developer viz. SSPDL has entered into .agreements with that M/s. Interglobe Hotels Private Limited and M/s. Accent Hotels Private Limited for sale of undivided portion of land. When the Joint Development Agreement was cancelled on 4.2.2010 between the assessee and SSPDL, it has become necessary to honour the commitment made to that M/s. Interglobe Hotels Private Limited and M/s. Accent Hotels Private Limited and the assessee and other co owners had to register 1.85 Acres of land to them in pursuance of the agreement entered In consequence to Joint Development Agreement. On 4.2.2010 M/s. SSPDL had nominated M/s. Interglobe Hotels Private Limited and M / s. Accent Hotels Private Limited, as their nominees for the purpose of Registration of 1.85 Acres of land and surrendered the balance land to the assessee and other co owners by cancellation deed of Joint Development Agreement. Thus, the transaction between the assessee and M/s. Interglobe Hotels Private Limite....
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....ermission to develop the land. On the other hand the developer, using the power of attorney has applied to various authorities for converting of the said land construction of commercial building. But however the said JDA was cancelled on 4.2.2010 without implementing any activities as per the sanction permission obtained. Theland was kept as agricultural land by the SSPDL from the date of entering into JDA till it was cancelled on 4.2.2010. Hence permission obtained was not acted upon. Even in the cancellation deed it was clearly mentioned that only land was handed over back to the assessee and other co-owners without any development. The decision of ITAT Tribunal Chennai in the case of Ravikumar (HUF) Chennai Vs. Department of Income-tax in ITAT No.1076/MDS/2009, squarely applicable to the cause. It held that mere obtaining permission for the layout does not change the character of the lands from agricultural lands and the permission was never implemented nor acted upon. Even after the JDA, the land was continued to be used for agricultural purposes, up to the sale of the land to M/s.IGH and M/s.Accent . This is evident from the VAO Certificate, Patta, Chitta, Ad....
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....he guideline value of Rs.3.00 crore. 19. The impugned land is situated at Egattur which is a suburb of Chennai located south of the Chennai city along the Old Road Mahabalipuram Road(OMR) which is one of the most rapidly developing commercial areas and also is an upcoming residential area as most of. the professionals and information technology companies are renting and buying apartments there. 20. Even the government of Tamilnadu has notified the Survey Nos. in the area as Multi Storied Building area for construction of commercial buildings. 21. During the financial year 2007 - 08, the appellant and the two other shareholders had given a Power of Attorney dated 27/06/2007 in respect of the impugned property in favour of M/S SSPDL Infrastructure Developers Private Limited to do various acts, deeds and things like to make and submit necessary applications to the Directorate of Town and Country Planning, CM DA, TNEB, MWSSB, Fire Department, Local Panchayat Union, etc. for obtaining notifications, approvals for demolition of any structure, re - classification of the property, sub - division of the property, re - constitution of the property etc. etc. ....
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....commercially exploit the impugned land. This intention was expressed by the appellant way back in the year 2007 when she had executed the JDA with M/S SSDPL to develop the property commercially. 29.With regard to the agricultural income shown in the return of income for the year under consideration, the appellant was asked by the AO to furnish the relevant details to substantiate that .she had carried out agricultural operations and had obtained agricultural produce. The appellant was also asked to furnish the details of expenses incurred towards the agricultural activities and also to furnish the details of payment received on account of sale of agricultural produce. However, the appellant failed to produce any such a details. She could furnish only copies of Chitta and Adangal which stated that there were coconut and mango trees planted. 30.After considering the above facts of the case and also keeping in view the observations and the findings of the AO, I am of the considered opinion that the impugned land was a long term capital asset only and the appellant was required to pay the capital gains tax on the sale of this long-term capital asset. The facts of the ....
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....agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land? (5) Whether, the permission under section 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission Was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser 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 situate in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area ....
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....way of a stop-gap arrangement? Even if it is admitted that the appellant had actually enjoyed agriculture income during the year under consideration, such income has not accrued to the appellant in the earlier years. It was shown in the year when the land was sold by the appellant. In fact, it was a stop-gap arrangement only. III. Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land? Even if it is admitted that the appellant had actually earned agriculture income, the same was to the tune of Rs.1,80,0001-only which was disproportionate to the land held by the appellant. Moreover, it is not ascertainable from the submissions of the appellant whether the amount of RS.1 ,80,000/-was the gross amount or the net. IV. Whether, the permission under section 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in . respect of a portion of the land and if it was obtained in the past, w....
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....the above circumstances, the mere fact that vegetables were being raised thereon at the time of the sale or for some years thereto did not change the nature and character of the land. Obviously, it was only a stopgap activity. It was not a true reflection of the nature and character of the land. One has to take a realistic view and see how are the persons selling and purchasing it understood it. 38. Therefore, after considering all the relevant factors and the prevailing circumstances of the case and also taking into account the observations of the Hon'ble Courts, I am of the considered opinion that the impugned land was a non-agricultural land and fell within the ambit of long term capital asset for the purposes of capital gains tax. Hence, the findings of the AO in this regard are confirmed. 39. The other contention raised by the appellant in the grounds of appeal is with regard to the year of taxability of capital gains. It has been submitted by the appellant that even if the capital gains are taxable, it has to be considered in the assessment year when the JOA was entered in, i.e. in the AY. 2008-09, POA was issued during the AY. 2008-09 and the considerat....
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....was sold by the appellant and the others to M/s. IGH and M/S Accent for a total sale consideration of Rs.37.50 crores. From the perusal of the entire relevant facts of the case, it is evident that the transfer of the capital asset took place only on 05/02/2010 i.e. relevant to the AY. 2010- 11 which is the relevant assessment year under consideration. In view of the above, the contention of the appellant that the transfer of the impugned capital asset took place on 25i06/2007, i.e. AY. 2008 - 09, when the JDA was executed with M/S SSPDL, is factually incorrect. Therefore, it is held that the transfer of the impugned capital asset took place on 05/02/2010, during the relevant AY. 2010 - 11 under consideration. Hence, this contention of the assessee is dismissed. Thus the two different ld. Commissioner of Income Tax (Appeals)'s took a diametrically opposite view on the nature of the land sold by the assessees. 12. Now before us, ld. Authorised Representative strongly supporting the order of the ld. Commissioner of Income Tax (Appeals) in the case of Shri. Mafaz Mohammed and opposing the order of the ld. Commissioner of Income Tax (Appeals) in the case of Smt. Syed Abdul Kader A....
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....ied. According to him, there was no act on the part of the assessee to commercialize the land for any non agricultural use. Notification by Government of Tamil Nadu on the zone conversion was at the behest of M/s. SSDPL and not the assessees. Such JDA already stood cancelled by the assessee and therefore assessees, as per the ld. Authorised Representative, could not be held liable for the acts of M/s. SSDPL. According to him, nature of the land remained agricultural all through. Ld. Authorised Representative also placed reliance on a decision of Co-ordinate Bench in the case of ITO vs. Ayisha Fathima (ITA No.1371/Mds/2013, for assessment year 2009- 2010) dated 17.08.2016. As per the ld. Authorised Representative, land considered by the Tribunal in this case was in the close neighbourhood of the property sold by the assessees. According to him, in the said decision this Tribunal had held that the land at Egattur Village measuring 6 acres and 21 cents was agricultural in nature. Thus, according to him, sale of the impugned land was not exigible to capital gains. 14. Per contra, ld. Departmental Representative strongly supporting the order of the ld. Commissioner of Income Tax (App....
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....lly attempted through JDA, as per the ld. Authorised Representative, considering the buyers interest and assessees according to him, had no choice. Further, as per the ld. Authorised Representative, notification made by the Government would not change the intention of the assessee. As per the ld. Authorised Representative, the tests laid down by Hon'ble Gujarat High Court in the case of CIT vs, Siddharth J. Desai (1983) 139 ITR 628 applied by ld. Commissioner of Income Tax (Appeals) in the case of Smt. Syed Abdul Kader Aysthath Fasleen Amina, clearly indicated that assessees had satisfied atleast four out of the thirteen conditions. According to him, Hon'ble Jurisdictional High Court in the case of Sakunthala Rangarajan (supra) had clearly observed that cumulative satisfaction of all the thirteen conditions was not required and which out of these were to be satisfied was dependent on facts and circumstances of each case. As for the decisions of Co-ordinate in the cases of Aboobucker (supra) and that of Vijay Shah (supra), ld. Authorised Representative submitted that such decisions were rendered prior to the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Venkat....
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....arties and perused the material on record. The issue for our consideration is with regard to the year in which the capital gains arise for assessment on transfer of land by the assessee along with other person. We have carefully gone through JDA dated 09.07.2005. The following clauses are reproduced for reference:- Clause 1. The Owner have authorized the Devloper to construct at its own cost of Developer a multistoried complex over the land carefully described in the Schedule A hereunder. The Owners and the Developer have agreed to put up the construction not more than 2 FSI for time being and in such a case the owner is entitled to have 27% builtup p-lint area which should be not less than 1,41,135 sq.ft. and the remaining built-up punt area that is 73% shall be retained by the Developer and in consideration thereof the land owners slaH transfer 73% undivided share over the land described in the- Schedule A hereunder to the Developer or to their Nominiees. If the Developer are able to put up construction more than 2 FSI, the land Owner shall be entitled to get proportionate extra constructed area at 27% for themselves, while the remaining 73% shall be retained by....
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....perty in one or more phases or stages may be required, taking into consideration the market condition and subject only to force major conditions. If any delay in handling over the building within 36 months, the developer agrees to pay Rs,2,00,000/(Rupees Two Lacs Only) per month for the delayed period as compensation to the owner till delivery of the building. In the event of any unavoidable delay in the completion of the building due to any ca use or causes beyond the developer's control the parties hereto shall by mutual consent in writing extend the period of performance. 7. It is agreed that the developer will meet and pay all expenses including the expenses incurred for obtaining the sanctioned building plans, approvals, fee to be paid to various authorities and to apply and obtain service connections for use in the building and for engaging architects, construction engineers, contractors, sub contractors, artisans and to meet the cost of pUrchase of all materials used for construction as per the sanctioned plan with permissible deviations and shall be wholly responsible to comply with all provisions of the law with regard to interest of the aforesaid persons. The cha....
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....e entitled to give such constructors whole of the construction or any part or parts of the work or constructions, provided that the same shall not relieve the Developer for their liability under this Agreement or from active supervision work during its progress. The developer may if it chooses, assigns this agreement to any other party only after getting necessary prior approval from the owners. 28. The Developer shall finish the construction of the building in accordance with the specifications that are set out in the Annexure to this agreement and as per the guidance and instructions of the architects and construction engineers engaged for this purpose. 34. The owners hereby undertake to execute and register the deeds of sale in favour of the Developer and their Nominee conveying to them the Schedule B mentioned property or register a Power of Attorney in favour of the Developer for the same subject to clause 4 above. 37. The Owner and the Developer agrees not to change the common name for the project as may be given by the Developer. The Developer agrees to consider the suggestion of the Owners in this regard. 40. The Owners agree to refund th....
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.... thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment ; or (iva) the maturity or redemption of a zero coupon bond ; or (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property : Explanation 1. - For the purposes of sub-clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA. Explanation 2. - For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever....
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.... fortified by the order of Tribunal in the case of ITO Vs. Shri Bakthavatsalam Gowtham in ITA No.1614/Mds./2010 dated 04.05.2012. Thus, we do not find any error in the findings of the Ld.CIT(A) wherein he has observed that there is no transfer in the assessment year 2009-10 and the same is upheld. 6.3 Without prejudice to the above, the Revenue has raised one more ground regarding findings of the Ld.CIT(A) that the land was agricultural land, though at the time of transfer on 01.04.2008, it was non agricultural land. 6.4 Ld.D.R submitted that the said deed executed on 01.04.2008 mentioned the property as vacant site and not agricultural land. Further ld.D.R submitted that the nature of land changed subsequent to the JDA from agricultural land to vacant site since no agricultural activity was carried out during the period from the date of agreement to the execution of sale of the property by the assessee. He relied on the order of ld. Assessing Officer. On the other hand, ld.A.R relied on the order of Ld.CIT(A). 6.4 We have heard both the parties and perused the material on record. Regarding nature of land whether it is agricultural land or not. It is alwa....
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.... the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser 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 lands 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. Whe....
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....R (Guj) 238 : (1981) 127 ITR 671 (Guj) referring to the Constitution Bench of the Hon'ble Supreme Court had stated that if agricultural operations are being carried on in the land in question at the time when the land is sold and further if the entries in the Revenue records show that the land in question is agricultural land, then, a presumption arises that the land is agricultural in character and unless that presumption is rebutted by evidence led by the Revenue, it must be held that the land was agricultural in character at the time when it was sold. The Division Bench of the Hon'ble Gujarat High Court further held that there was nothing on record to show that the presumption rose from the long user of the land for agricultural purpose and also the presumption arising from the entries of the Revenue records are rebutted. 6.8 The Hon'ble Bombay High Court in the case of CWT vs. H. V. Mungale (1983) 32 CTR (Bom) 301 : (1984) 145 ITR 208 (Bom) held that the Hon'ble Supreme Court had pointed out that the entries raised only a rebuttable presumption and some evidence would, therefore, have to be led before taxing authorities on the question of intended user of the land unde....
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....o purchased it for non- agricultural purposes, were totally irrelevant consideration for the purposes of application of s.54B. 9. In the abovesaid case, the assessee an individual sold 15 karnals, 18 marlas of land out of her share in 23 karnals, 17 marlas land during the financial year 1990-91, relevant to the asst. yr. 1991-92, the sale was effected by three registered sale deeds. While filing her return of income, she claimed exemption from levy of capital gains under s. 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land within two years. The AO rejected the claim of the assessee holding that the land sold by the assessee was not agricultural land and this was upheld by the CIT(A). On further appeal, the Tribunal accepted the claim of the assessee holding that the transaction in question duly fulfilled the conditions specified for relief. On further appeal to the High Court, the Punjab & Haryana High Court found that the finding that the land had been used for agricultural purposes was based on cogent and relevant material. The Revenue record supported the claim. Even the ....
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.... conversion of the agricultural land into non-agricultural land and there is no automatic conversion in this case. 7.4 It is also an admitted position that mere inclusion or proximity of land to any Special zone without any infrastructure development thereupon or without establishing and proving that the land was put into use for non-agricultural purposes by the assessee does not and cannot convert the agricultural land into non-agricultural land. In the instant case, at the relevant point of sale of the land in question, the surrounding area was totally undeveloped and except mere future possibility to put the land into use for non-agricultural purposes would not change the character of the agricultural land into nonagricultural land at the relevant point of time when the land was sold by the assessee. It is also an admitted position that the assessee had not applied for conversion of the land in question into nonagricultural purposes and no such permissions were obtained from the concerned authority. In the Revenue records, the land is classified as agricultural land and has not been changed from agricultural land to non-agricultural land at the relevant point of time wh....
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....distance of 8 kms from the local limits, which is covered by Clause (a) to section 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this Clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a "Capital Asset. 11. In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, Clause (a) to section 2(14][iii] of the Act is not attracted. 12. However, though it is contended that it is located within 8 knits,, within the municipal limits of Dasarahalli City Municipal Council in the absence of any notification issued under Clause (b) to section 2(14)(iii) of the Act, it cannot be looked in as a capital asset within the meaning of Section 2(14)(iii)(b) of the Act also and therefore though the Tribunal may not have spelt out the reason as to why the subject land cannot be considered as a 'capital asset' be giving this very reason, we find the conclusion arrived at by the Tribunal is nevertheless the correct conclusion." 7.7 Further the Kolkata Be....
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....rst find out if it is being put to any use. If it is used for agricultural purposes there is a presumption that it is agricultural land. If it is used for non-agricultural purposes the presumption is that it is nonagricultural land. This presumption arising from actual use can be rebutted by the presence of other factors. There may be cases where land which is admittedly non-agricultural is used temporarily for agricultural purposes. The determination of the question would, therefore, depend on the facts of each case. The assessee, Hindu, undivided family, had obtained some land on a partition in 1939. From that time, up to the time of its sale, agricultural operations were carried on in the land. There was no regular road to the land and it was with the aid of a tractor that agricultural operations were being carried on.The land was included within a draft town planning scheme. The assessee got permission of the Collector to sell the land for residential purposes and sold it.On the question whether the land was agricultural land: Held, that what had to be considered is not what the purchaser did with the land or the purchaser was supposed to do with the land, but what was the char....
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....se (a) was only municipality. 8.1 We also perused the meaning of the term local authority as referred in section 10(20) of the Act. (20) the income of a local authority which is chargeable under the head "Income from house property", "Capital gains" or "Income from other sources" or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service [(not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area]. [Explanation. - For the purposes of this clause, the expression "local authority" means - (i) Panchayat as referred to in clause (d) of article 243 of the Constitution; or (ii) Municipality as referred to in clause (e) of article 243P of the Constitution; or (iii) Municipal Committee and District Board,legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or (iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924); 8.2 It is also evident from the Memorandum explaining the provisions of Fina....
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....ve to see whether the land falls in clause (b) of section 2(14) (iii). This section prescribes that any area within such distance, not being more than 8 km from the local limit of any municipality or cantonment board as referred to in sub-clause (a) of section 2(14)(iii) of the Act, as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette. 8.4 We have carefully gone through the notification issued by the Central Government u/s. 2(1A)(c) proviso (ii)(B) and 2(14)(3b) vide No. 9447 (F. No. 164/(3)/87/ITA-I) dated 6th January, 1994 as amended by notification No. 11186 dated 28th December, 1999. In the schedule annexed to the notification dated 6.1.1994, entry is relating to Chennai wherein mentioned that the areas up to a distance of 8 km from the municipal limits in all directions. It is clear from these notification that agricultural land situated in areas lying within a distance not exceeding 8 km from the local limits of Chennai Corporation is covered by the amended definitions of 'capital asset'. Central Government in ex....
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....se. The mere circumstances, that a property is purchased in the hope that when sold later on it would leave a margin of profit, would not be sufficient to show, an intention to trade at the inception. In a case where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant factor and unless it is offset by the presence of other factors it would raise as strong presumption that the transaction is an adventure in the nature of trade. Even so, the presumption is not conclusive and it is conceivable that, on considering all the facts and circumstances in the case, the court may, despite the said initial intention, be inclined to hold that the transaction was not an adventure in the nature of trade. The presumption may be rebutted. In the present case, considering the facts and circumstances of the case it cannot be considered as an adventure in the nature of trade. The intention of the assessee from the inception was to carry on agricultural operations and even there was no intention to sell the land ....
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....nd mango cultivation. In our opinion, Gazette notification by the Tamil Nadu Government on 18th March, 2009 by itself would not change the intention of the assessees, since such notification was issued on the application of M/s. SSDPL, with whom assessee had entered into JDA on 25.06.2007. Such application was not made by the assessees. It may be true that assessees had given Power of Attorney (PAO) to M/s. SSDPL on 27.06.2007 based on the JDA entered on 25.06.2007. But as noted by the ld. Commissioner of Income Tax (Appeals) dealing with the appeal of Shri. S.A. Mafaz Mohammed, the ultimate sale of the property was made by the assessee to M/s. IGH and M/s. Accent, with which M/s. SSDPL had agreed to construct a hotel in the same land. Ld. Commissioner of Income Tax (Appeals) in the appeal of Shri. S.A. Mafaz Mohammed, has clearly noted that the POA dated 27.06.2007 was a registered one. It is also not disputed that the possession was given by the assessee to M/s. SSDPL on the said date. No doubt the JDA was cancelled on 04.02.2010 and it was the assessees who conveyed the property to M/s. IGH and M/s. Accent. We cannot fault the finding of the ld. Commissioner of Income Tax (Appea....
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....rmission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date ? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use ? If so, whether it was put to an alternative use ? Whether such cesser 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 situate in a developed area ? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agri cultural ? (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 non-agricultural use ? (11) Whether permission under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained becau....
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.... Desai, (1983) 139 ITR 628. As to the relevance of the intention of the purchaser, in deciding on the nature of the land sold, ld. Commissioner of Income Tax (Appeals) who went adverse to the assessee Smt. Syed Abdul Kader Aysthath Fasleen Amina, had himself stated at para 34 of his order that out of 13 conditions set out in this judgment, assessee had satisfied atleast four. Just because assessee received an amount higher than the guideline value would not show that the land was non agricultural. Agricultural land cannot become non agricultural only for a reason that were development of a commercial nature in the nearby areas. As already noted by us, Co-ordinate Bench in the case of Smt. Ayisha Fathima (supra) had held that a piece of land in the immediate neighbourhood in very same village was agricultural. Hon'ble Jurisdictional High Court in the case of M.S. Srinivasa Naicker and Others vs. ITO, (2007) 292 ITR 481 has clearly held that development in nearby areas was not relevant. Coming to the decisions in the case of Co-ordinate Bench in the case of Abookucker (supra), Vijay Shah (supra) and that of Cochin Bench in the case of Abdul Rahmin (supra) in our opinion these decisio....
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....m M/s. BOBL for construction of the building. Nothing has been brought on record by the ld. Departmental Representative to show that the findings of the ld. Commissioner of Income Tax (Appeals) were incorrect or not based on records. 22. Coming to issue of Corporation Tax of Rs.85,966/-, which was allowed by ld. Commissioner of Income Tax (Appeals), admittedly, the receipt was in the name of Smt. Sithi Sayeedha, who was the mother of Shri. Mafaz Mohammed. It is not disputed of 1/3rd of the property was gifted by her to the assessee on 30.03.1994 through a registered release deed. Hence, the corporation tax of Rs.85,966/- paid in the name of previous owner Smt. Sithi Sayeedha in our opinion was rightly considered by the ld. Commissioner of Income Tax (Appeals) as allowable. 23. Accordingly appeal of the assessee Smt. Syed Abdul Kader Aysthath Fasleen Amina in ITA No. 323/CHNY/2017, for assessment year 2010-2011 is allowed. In so far as appeal of the Revenue in the case of Shri. Mafaz Mohammedin ITA No.2337/CHNY/2016 is concerned, its grounds 2, 4 and 5 are dismissed whereas its ground No.3 is allowed. Grounds No.1 & 6 of the latter appeal are general needing no specific adjudi....
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....horities below and remit this issue back to the file of ld. Assessing Officer for consideration afresh as per law. Accordingly appeal of the assessee Smt. Syed Abdul Kader Aysthath Fasleen Amina for assessment year 2012-2013 is allowed for stastical purpose. 26. Now, we are left with an appeal of the Department in ITA No.285/CHNY/2017 in the case of Shri. Mafaz Mohammed for assessment year 2010-2011. In this appeal, Department assails the order of the ld. Commissioner of Income Tax (Appeals) quashing an order passed by the ld. Assessing Officer u/s.154 of the Act. 27. Ld. Assessing Officer had passed an order u/s.154 of the Act noting that interest u/s.234A of the Act was omitted to be charged though the return was filed by the assessee belatedly on 27.03.2012. As per the ld. Assessing Officer by virtue of Explanation (3) of Section 234A(1) of the Act where an assessment was done for the first time such assessment was to be considered as a regular assessment. According to the ld. Assessing Officer, return was filed by the assessee on 27.03.2012, pursuant to the issue of a notice u/s.148 of the Act. Hence, according to him, assessee was liable for interest u/s.234A of the Act.....