Whether CG Tax shall be levied on Sale of Rural Agri Land ?
This query is : Open
14 September 2020
My agricultural land satisfies the conditions as specified for the rural agricultural land i.e land is situated at a distance of more than 8 km from the municipal corporation and population less than 10000. But I wanted to know if whether sale of this land would be taxable if some development was done before the land could have been sold to the purchaser.
15 September 2020
The land must have been used for agricultural purposes. If it is not used for agricultural activities then you will have to pay capital gain tax.
15 September 2020
Dear Paras ji
Can you please check again about the land to be used for agricultural purposes and quote section also.
15 September 2020
Please refer section 2(14)(iii). Please also refer the decision of the Honourable Supreme Court in the case of Sarifabibi Mohamed Ibrahim vs CIT wherein certain tests have been laid down to determine whether the land in question was an agricultural land.
SUPREME COURT OF INDIA
Judge(s) : B.P. Jeevan Reddy & S.P. Bharucha, JJ.
Civil Appeal Nos. 4001 to 4004 (NT) of 1982
Date of Decision 14th September, 1993
Source (1993) 204 ITR 631 (SC) : (1993) 114 CTR (SC) 467
Statutes referred to:
Income-tax Act, 1961, Sections 2(14)(iii), 47, 45(1)
Decision pertains to:
Asst. Year 1970-71
Case decided in favour of:
In favour of : Revenue
Capital Gains—Agricultural land—Determination—Cumulative effect of all the relevant factors has to be considered—Facts on record suggesting that land was not agricultural when it was sold and also that assessee had no intention to cultivate it since 1965-66—Land sold to housing co-operative society—Such land could not be characterised as agricultural income
Held:
Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts.
Now, we may consider the various circumstances appearing for and against the appellant's case. The facts in their favour are : the land being registered as agricultural land in the revenue records ; payment of land revenue in respect thereof till the year 1968-69 ; absence of any evidence that it was put to any non-agricultural use by the appellants ; that the land was actually cultivated till and including the agricultural year 1964 65 ; that there were agricultural lands abutting the said land and that the appellants had no other source of income except the income from the said land. As against the above facts, the facts appearing against their case are : the land was situated within the municipal limits it was situated at a distance of one kilometre from the Surat railway station ; the land was not being cultivated from the year 1965-66, until it was sold in 1969 ; the appellants had entered into an agreement with a housing co-operative society to sell the said land for avowed non-agricultural purposes, namely construction of houses ; they had applied in June, 1968, and March, 1969, for permission to sell the said land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and obtained the same on 22nd April, 1969 ; soon after obtaining the said permission they executed sale deeds in the following month, i.e., in May, 1969 ; the land was sold at the rate of Rs. 23 per sq. yard and the purchaser-society commenced construction operations within three days of the purchase. hat is the inference that flows from a cumulative consideration of all he aforesaid contending facts ? This question has to be answered keeping in mind the criteria evolved in the Begumpet Palace case set out hereinbefore. In our opinion, the entering into the agreement to sell the land for housing purposes, the applying and obtaining the permission to sell the land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and its sale soon thereafter and the fact that the land was not cultivated for a period of four years prior to its sale coupled with its location, and the price at which it was sold, do outweigh the circumstances appearing in favour of the appellants' case. The aforesaid facts do establish that the land was not an agricultural land when it was sold. The appellants had no intention to bring it under cultivation at any time after 1965-66 certainly not after they entered into the agreement to sell the same to a housing co-operative society. Though formal permission under s. 65 of the Land Revenue Code was not obtained by the appellants, yet their intention is clear from the fact of their application for permission to sell it for a non-agricultural purpose under s. 63 of the Bombay Tenancy and Agricultural Lands Act.
Cases referred to:
CIT vs. Sarifabibi Mohamed Ibrahim & Ors. (1981) 24 CTR (Guj) 171 : (1982) 136 ITR 621 (Guj)
CWT vs. Officer-in-Charge (Court of Wards), Paigah 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC)
Counsel appeared
B.K. Mehta with S.C. Patel, for the Appellants : S.C. Manchanda with K.P. Bhatnagar & Ms. A. Subhashini, for the Respondent
JUDGMENT
B.P. JEEVAN REDDY, J.:
The assessees are the appellants in these appeals preferred against the judgment of the Gujarat High Court answering the question referred to it in favour of the Revenue and against the assessees. The question referred under s. 256(1) of the IT Act, 1961, is to the following effect :
" Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the land in question admeasuring 30,885 sq. yards excluding 2,607 sq. yards, which was admittedly non-agricultural land, was an agricultural land within the meaning of s. 2(14) of the IT Act, 1961, and, therefore, on the sale thereof, tax on capital gains resulting therefrom was not leviable ? "
2. The assessment year concerned herein is 1970-71.
3. The appellants in these four appeals are co-owners of a plot of land admeasuring in all 30,885 sq. yds., situated within the revenue limits of Navagaon village. It is situated within the municipal limits of Surat Municipality and is situated at a distance of one kilometre from the Surat railway station. This plot of land was purchased on 1st Feb., 1936, by the ancestor of the appellants for a consideration of Rs. 5,425. After the death of the said ancestor, the land was inherited by the father of the assessees, who died on 12th Feb., 1966.
4. On 28th March, 1958, a portion of the said plot to an extent of 2,067 sq. yds. was converted to non-agricultural purposes after obtaining requisite permission under s. 65 of the Bombay Land Revenue Code. A chawl was built thereon. The remaining extent continued to be registered as agricultural land in the revenue records and land revenue was also being paid by the assessees' father. In these appeals, we are concerned only with the said balance extent.
5. On 15th March, 1967, the assessees agreed to sell the said land to a housing co-operative society. To enable them to complete the transaction, they applied, on 12th June, 1968, and 19th March, 1969, for permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948. Such permission is required where agricultural land is sought to be transferred for a non-agricultural purpose. The permission was granted on 22nd April, 1969. A number of sale deeds were executed in respect of the said land between 9th and 30th of May, 1969. The purchaser (housing co-operative society) applied thereafter under s. 65 of the Bombay Land Revenue Code for converting the said land to non-agricultural purposes, i.e., for construction of buildings. Indeed, it appears that it started the construction activity within three days of the execution of the sale deeds in its favour.
6. The income-tax authorities sought to levy capital gains tax on the consideration received by the appellants treating the said land as non agricultural land. The appellants contested the same contending that the land sold is an agricultural land. The ITO rejected the assessees' claim, whereupon they approached the Appellate Assistant Commissioner by way of appeals but without success. The appellants then approached the Tribunal. Their appeals were heard by a Bench of two members who differed among themselves whereupon the matter was referred to a third member who held that the said extent of land is agricultural land and, therefore, no capital gains tax is leviable thereon. The Revenue then obtained a reference under s. 256(1) of the Act which was answered in its favour by a Bench of the Gujarat High Court. The High Court set out the following facts militating against the appellants' plea that the said land was an agricultural land on the date of sale :
" (1) The land is situated at a distance of one kilometre from Surat railway station.
(2) It is within the municipal limits and within a town planning scheme.
(3) It has been sold to a non-agriculturist for a non-agricultural purpose. It is sold to a co-operative housing society for constructing houses and buildings.
(4) It is sold on a per sq. yard basis at Rs. 23 per sq. yd. on 30th May, 1969.
(5) No agricultural operations such as growing of wheat, bajra, juwar, rice, groundnuts or cotton crop have been carried on for the last four years. Only grass for fodder is grown in the last year.
(6) An application for permission to sell the land to a housing society under s. 63 of the Land Revenue Code was made in Aug., 1968, some nine months before the actual sale effected in May, 1969, and it was granted on 24th Feb., 1969, about a month prior to the actual sale.
(7) More than 15 years back a parcel of 2,607 sq. yards out of this very land was converted to non-agricultural user by constructing a chawl on it by the owners themselves after obtaining the requisite permission to convert the land to non-agricultural user under s. 63 of the Land Revenue Code.
(8) Application to convert the land under transaction to non-agricultural user was not made before the sale deed was executed on 30th May, 1969. It was subsequently made by the purchaser-housing society much later. (But then permission could have been applied for if so desired and could not have been refused arbitrarily ; it is common experience that it is granted almost as a matter of course). In fact, it is on record that the purchaser-society commenced actual construction on 2nd June, 1969, that is to say, within three days of the execution of the sale deed in its favour by the assessee in anticipation of the permission.
(9) No agricultural operations were carried on since 1964-65 till the sale in 1969. ''
7. The High Court also mentioned the factors which supported the appellants' case. They are :
" (1) It was still entered as agricultural land in the relevant records.
(2) It was till the date of sale not converted to non-agricultural user.
(3) Application for permission to convert necessary under s. 65 of the Land Revenue Code was not made till the date of sale.
(4) Agricultural operations were carried on in the past. ''
8. On a consideration of the contending factors, the High Court held that it must be held to be as a non-agricultural land. Shri B. K. Mehta, learned counsel for the appellants, assailed the correctness of the conclusion arrived at by the High Court. Learned counsel submitted that : (a) the land was registered as agricultural in the concerned revenue records till it was sold ; (b) land revenue was being paid thereon till the date of sale ; (c) the land was under actual cultivation till it was sold, as evidenced by Pahani Patraks. At any rate the land was fallow only during the years 1964-65 to 1967-68 on account of the illness and death of the appellant's father but it was cultivated again in the year 1968-69 ; (d) that the said land is surrounded by agricultural lands. It was never put to any non-agricultural use. Only a portion of 2,067 sq. yards was converted to non-residential purposes in the year 1958, whereupon a chawl was built. The remaining land remained and continued to be agricultural land ; (e) the appellants and their father had no other income except the income from this land. The mere fact that the land was situated within municipal limits is of no consequence inasmuch as cultivation can be done even on lands situated within municipal limits. Similarly, the fact that the land was sold to a housing co-operative society and the further fact that the said society used the land for housing purposes is irrelevant on the question whether the land was agricultural land on the date of its sale. Learned counsel submitted that applying the several tests evolved by the Gujarat High Court, on a review of the entire case law on the subject, in CIT vs. Siddharth J. Desai (1982) 28 CTR (Guj) 148 : (1983) 139 ITR 628 (Guj), the said land must be held to be an agricultural land on the date of its sale.
9. On the other hand, Sri Manchanda, learned counsel appearing for the Revenue, supported the reasoning and conclusion of the High Court. Counsel submitted that, apart from the factors mentioned by the High Court in favour of its conclusion, there is the further fact that a town planning scheme (draft scheme) was published in March, 1967, covering the said land and that by the date of execution of the sale deeds, the draft scheme was also declared.
10. The sale deeds concerned herein were executed in the month of May, 1969. By virtue of clause (viii) in s. 47 _ which clause was inserted by the Finance Act, 1970, with effect from 1st April, 1970 _ "any transfer of agricultural land in India effected before the 1st day of March, 1970 " is exempt from the levy of capital gains tax. By the very same Finance Act, it may be mentioned, agricultural lands situated within the jurisdiction of municipalities and within a radius of 8 kilometres of such municipalities as may be specified in that behalf by the Central Government [sub-clauses (a) and (b) in cl. (iii) of the definition of "capital asset" in s. 2(14) of the Act] were excluded from the purview of agricultural land but again with effect from 1st April, 1970. Inasmuch as the land concerned herein was sold in May, 1969, it does not fall within the mischief of the said sub-clauses (a) and (b) in cl. (iii) of s. 2(14). If it was agricultural land, it is exempt from capital gains tax notwithstanding the fact that it is situated within the jurisdiction of a municipality.
11. Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them _ a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts.
12. The first decision of this Court which considered the meaning of the expression "agricultural land" is in CIT vs. Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC).. But the question there was whether the income from forest land derived from sal and piyasal trees, "not grown by human skill and labour" constitutes agricultural income. The decision that directly considered the issue, though under the Wealth-tax Act, is in CWT vs. Officer-in-Charge (Court of Wards), Paigah (hereinafter referred to as the `Begumpet Palace case') reported in 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC). It was an appeal from a Full Bench decision of the Andhra Pradesh High Court The High Court had taken the view, following a decision of the Madras High Court in Sarojini Devi vs. Sri Krishna, AIR 1944 Mad 401, that the expression "agricultural land" should be given the widest meaning. It held that the fact that the land is assessed to land revenue as agricultural land under the State revenue law is a strong piece of evidence of its character as an agricultural land. On appeal, a Constitution Bench of this Court held that : (a) inasmuch as agricultural land is exempted from the purview of the definition of the expression "assets", it is "impossible to adopt so wide a test as would obviously defeat the purpose of the exemption given". The idea behind exempting the agricultural land is to encourage cultivation of land and the agricultural operations. "In other words this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Full Bench of the Andhra Pradesh High Court". (b) What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land, by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality, but its actual condition and intended user, which have to be seen for purposes of exemption. (emphasis added). (c) "The person claiming an exemption of any property of his from the scope of his assets must satisfy the conditions of the exemption." (d) "The determination of the character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case." (e) The fact that the land is assessed to land revenue as agricultural land under the State revenue law is certainly a relevant fact but it is not conclusive.
13. That was a case where the question arose with respect to a large extent of 108 acres situated in the City of Hyderabad. The land was enclosed by a boundary wall, wherein there were two wells. The land was abutting the Hussain Sagar tank. The Full Bench of the Andhra Pradesh High Court evolved the following eight indicators to determine whether a land is an agricultural land, viz. :
" (1) The words 'agricultural land' occurring in s. 2(e))(i) of the Wealth-tax Act should be given the same meaning as the said expression bears in entry 86 of List I and given the widest meaning ;
(2) the said expression not having been defined in the Constitution, it must 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 agricultural land ;
(6) mere enclosure of the land does not by itself render it a non agricultural land ;
(7) the character of the land is not determined by the nature of the products raised, so long as the land is used or can be used for raising valuable plants or crops or trees or for any other purpose of husbandry ;
(8) the situation of the land in a village or in an urban area is not by itself determinative of its character. ''
14. This Court characterised the indicators Nos. 6, 7 and 8 as merely negative in character. It disagreed with (1) and (4) and observed that only the 5th indicator was a relevant one though not conclusive. There was no controversy regarding indicator No. 3. Inasmuch as the matter was not examined from the correct point of view, it was remitted to the High Court for a fresh decision.
The decision of the Gujarat High Court in CIT vs. Siddharth J. Desai (supra), relied upon strongly by the learned counsel for the appellant, reviewed the several earlier decisions of the Gujarat High Court as well as the decision of this Court in Begumpet Palace (supra) and has evolved the following 13 factors/indicators applying which the question has to be answered. The 13 factors are the following :
" (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 operations carried on in the land bore any rational proportion to the investment made in purchasing the land ?
(5) Whether the permission under s. 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 the 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 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 non-agricultural use ?
(11) Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist ? If so, whether the sale or intended sale to such non-agriculturist was for non-agricultural or agricultural user ?
(12) Whether the land was sold on yardage or on acreage basis ?
(13) Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield ?
At the risk of repetition, we may mention that not all of these factors would be present or absent in any case and that in each case one or more of those factors may make appearance and that the ultimate decision will have to be reached on a balanced consideration of the totality of circumstances. ''
15. In CIT vs. V.A. Trivedi (1988) 72 CTR (Bom) 199 : (1988) 172 ITR 95 (Bom),a Division Bench of the Bombay High Court, of which one of us (S. P. Bharucha J.), was a member, considered this question again. In this case the assessee had purchased the land of an extent of seven acres in Feb., 1966. The land was covered by the Nagpur Improvement Trust Scheme. In Aug., 1966, he obtained permission to convert the said land to non-agricultural use. In June, 1968, he entered into an agreement with a housing co-operative society to sell three acres out of it. The sale deed was executed in Oct., 1968. In his assessment proceedings, the assessee claimed that the surplus income arising from the sale of land was exempt from tax inasmuch as it was agricultural land at the time of its sale. The matter reached the High Court. The Division Bench referred to several facts established from the record. Some of them supported the assessee's stand while some others militated against his contention. The facts found in favour of the assessee were : (1) at the time of its purchase by the assessee, the Ajni land was agricultural land ; (2) it had been under cultivation by the assessee till the date of its sale ; (3) it continued to be assessed to land revenue as agricultural land until it was sold ; (4) the intention of the assessee, when he purchased it, was to acquire agricultural land for agricultural purposes ; (5) the assessee's use of it was the normal use by an agriculturist ; (6) it was not within any Town Planning Schemes ; and (7) no material has been produced to show any development or building activity surrounding it. The facts which militated against the assessee's stand were three in number, namely : (1) the location of the Ajni land within the Corporation and the improvement trust limits ; (2) the action of the assessee in obtaining on 8th Aug., 1966, permission to convert the user of the Ajni land to non agricultural purposes, and (3) the agreement to sell and the sale of the Ajni land for non-agricultural, i.e., building purposes.
16. The Bench observed that to ascertain the true character and the nature of the land, it must be seen whether it has been put to use for agricultural purposes for a reasonable span of time prior to the relevant date and further whether on the relevant date the land was intended to be put to use for agricultural purposes for a reasonable span of time in the future. Examining the facts of the case from the said point of view, the Bench held that the agreement entered into by the assessee with the housing society is the crucial circumstance, since it showed that the assessee agreed to sell the land to a housing society admittedly for utilisation for non agricultural purposes. The sale deeds were executed four months after the agreement of sale and even if any agricultural operations were carried on within the said span of four months the Bench held it was evidently in the nature of a stop-gap arrangement. On the date the land was sold, the Bench held, the land was no longer agricultural land which is evident from the fact that the assessee had obtained permission even in Aug., 1966, to convert the said land to non-agricultural purposes.
17. Now, let us examine the facts of the case before us in the light of the principles flowing from the above decisions. But before we do that, it would be appropriate to clear the ground regarding the user of the land till the date of sale. The land was undoubtedly under cultivation up to and inclusive of the agricultural year 1964-65. For the years 1965-66, 1966 67 and 1967-68, the land was admittedly not cultivated. Certain grass naturally growing thereon appears to have been utilised. So far as the year 1968-69 is concerned, there exists a good amount of doubt whether it was or was not cultivated. The appellant's case was that they raised "loni" grass said to be used as fodder for horses. They relied upon the entry in Pahani Patrak in this behalf. The third member of the Tribunal (to whom the matter was referred on a difference of opinion arising between the two members who first heard the appeal) found the following facts which are mutually inconsistent : (a) there were unprecedented floods in the Tapti river in the year 1968, which rendered the said land useless for cultivation for a couple of months because of heavy accumulated layers of mud and slush ; (b) the next monsoon sowing season would have started in June, 1969, but even before that the land was sold in May, 1969 ; (c) there is evidence of agricultural cultivation and raising of "loni" grass during the year 1968-69 ; (d) for a period of seven months from Oct., 1968, to April, 1969, the land remained uncultivated. In our opinion, the above findings considered together do negative the theory of actual cultivation of the said land during any part of the year 1968-69. If there were floods in the Tapti river in the year 1968_this must be during the months June to September and there was no cultivation during the period Oct., 1968, to April, 1969, it is difficult to see when the grass was raised in the said land. We conclude, on the basis of the facts found by the learned third Member, that there was no cultivation even during the year 1968-69.
18. Now, we may consider the various circumstances appearing for and against the appellant's case. The facts in their favour are : the land being registered as agricultural land in the revenue records ; payment of land revenue in respect thereof till the year 1968-69 ; absence of any evidence that it was put to any non-agricultural use by the appellants ; that the land was actually cultivated till and including the agricultural year 1964 65 ; that there were agricultural lands abutting the said land and that the appellants had no other source of income except the income from the said land. As against the above facts, the facts appearing against their case are : the land was situated within the municipal limits it was situated at a distance of one kilometre from the Surat railway station ; the land was not being cultivated from the year 1965-66, until it was sold in 1969 ; the appellants had entered into an agreement with a housing co-operative society to sell the said land for avowed non-agricultural purposes, namely construction of houses ; they had applied in June, 1968, and March, 1969, for permission to sell the said land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and obtained the same on 22nd April, 1969 ; soon after obtaining the said permission they executed sale deeds in the following month, i.e., in May, 1969 ; the land was sold at the rate of Rs. 23 per sq. yard and the purchaser-society commenced construction operations within three days of the purchase. hat is the inference that flows from a cumulative consideration of all he aforesaid contending facts ? This question has to be answered keeping in mind the criteria evolved in the Begumpet Palace case set out hereinbefore. In our opinion, the entering into the agreement to sell the land for housing purposes, the applying and obtaining the permission to sell the land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and its sale soon thereafter and the fact that the land was not cultivated for a period of four years prior to its sale coupled with its location, and the price at which it was sold, do outweigh the circumstances appearing in favour of the appellants' case. The aforesaid facts do establish that the land was not an agricultural land when it was sold. The appellants had no intention to bring it under cultivation at any time after 1965-66_certainly not after they entered into the agreement to sell the same to a housing co-operative society. Though formal permission under s. 65 of the Land Revenue Code was not obtained by the appellants, yet their intention is clear from the fact of their application for permission to sell it for a non-agricultural purpose under s. 63 of the Bombay Tenancy and Agricultural Lands Act.
19. We are, therefore, of the opinion that the High Court was right in holding that the said land was not an agricultural land at the time of its sale and that the income arising from its sale was not exempt from capital gains tax. The appeals accordingly fail and are dismissed. No costs.
Appeals dismissed.
SUPREME COURT OF INDIA
Judge(s) : B.P. Jeevan Reddy & S.P. Bharucha, JJ.
Civil Appeal Nos. 4001 to 4004 (NT) of 1982
Date of Decision 14th September, 1993
Source (1993) 204 ITR 631 (SC) : (1993) 114 CTR (SC) 467
Statutes referred to:
Income-tax Act, 1961, Sections 2(14)(iii), 47, 45(1)
Decision pertains to:
Asst. Year 1970-71
Case decided in favour of:
In favour of : Revenue
Capital Gains—Agricultural land—Determination—Cumulative effect of all the relevant factors has to be considered—Facts on record suggesting that land was not agricultural when it was sold and also that assessee had no intention to cultivate it since 1965-66—Land sold to housing co-operative society—Such land could not be characterised as agricultural income
Held:
Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts.
Now, we may consider the various circumstances appearing for and against the appellant's case. The facts in their favour are : the land being registered as agricultural land in the revenue records ; payment of land revenue in respect thereof till the year 1968-69 ; absence of any evidence that it was put to any non-agricultural use by the appellants ; that the land was actually cultivated till and including the agricultural year 1964 65 ; that there were agricultural lands abutting the said land and that the appellants had no other source of income except the income from the said land. As against the above facts, the facts appearing against their case are : the land was situated within the municipal limits it was situated at a distance of one kilometre from the Surat railway station ; the land was not being cultivated from the year 1965-66, until it was sold in 1969 ; the appellants had entered into an agreement with a housing co-operative society to sell the said land for avowed non-agricultural purposes, namely construction of houses ; they had applied in June, 1968, and March, 1969, for permission to sell the said land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and obtained the same on 22nd April, 1969 ; soon after obtaining the said permission they executed sale deeds in the following month, i.e., in May, 1969 ; the land was sold at the rate of Rs. 23 per sq. yard and the purchaser-society commenced construction operations within three days of the purchase. hat is the inference that flows from a cumulative consideration of all he aforesaid contending facts ? This question has to be answered keeping in mind the criteria evolved in the Begumpet Palace case set out hereinbefore. In our opinion, the entering into the agreement to sell the land for housing purposes, the applying and obtaining the permission to sell the land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and its sale soon thereafter and the fact that the land was not cultivated for a period of four years prior to its sale coupled with its location, and the price at which it was sold, do outweigh the circumstances appearing in favour of the appellants' case. The aforesaid facts do establish that the land was not an agricultural land when it was sold. The appellants had no intention to bring it under cultivation at any time after 1965-66 certainly not after they entered into the agreement to sell the same to a housing co-operative society. Though formal permission under s. 65 of the Land Revenue Code was not obtained by the appellants, yet their intention is clear from the fact of their application for permission to sell it for a non-agricultural purpose under s. 63 of the Bombay Tenancy and Agricultural Lands Act.
Cases referred to:
CIT vs. Sarifabibi Mohamed Ibrahim & Ors. (1981) 24 CTR (Guj) 171 : (1982) 136 ITR 621 (Guj)
CWT vs. Officer-in-Charge (Court of Wards), Paigah 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC)
Counsel appeared
B.K. Mehta with S.C. Patel, for the Appellants : S.C. Manchanda with K.P. Bhatnagar & Ms. A. Subhashini, for the Respondent
JUDGMENT
B.P. JEEVAN REDDY, J.:
The assessees are the appellants in these appeals preferred against the judgment of the Gujarat High Court answering the question referred to it in favour of the Revenue and against the assessees. The question referred under s. 256(1) of the IT Act, 1961, is to the following effect :
" Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the land in question admeasuring 30,885 sq. yards excluding 2,607 sq. yards, which was admittedly non-agricultural land, was an agricultural land within the meaning of s. 2(14) of the IT Act, 1961, and, therefore, on the sale thereof, tax on capital gains resulting therefrom was not leviable ? "
2. The assessment year concerned herein is 1970-71.
3. The appellants in these four appeals are co-owners of a plot of land admeasuring in all 30,885 sq. yds., situated within the revenue limits of Navagaon village. It is situated within the municipal limits of Surat Municipality and is situated at a distance of one kilometre from the Surat railway station. This plot of land was purchased on 1st Feb., 1936, by the ancestor of the appellants for a consideration of Rs. 5,425. After the death of the said ancestor, the land was inherited by the father of the assessees, who died on 12th Feb., 1966.
4. On 28th March, 1958, a portion of the said plot to an extent of 2,067 sq. yds. was converted to non-agricultural purposes after obtaining requisite permission under s. 65 of the Bombay Land Revenue Code. A chawl was built thereon. The remaining extent continued to be registered as agricultural land in the revenue records and land revenue was also being paid by the assessees' father. In these appeals, we are concerned only with the said balance extent.
5. On 15th March, 1967, the assessees agreed to sell the said land to a housing co-operative society. To enable them to complete the transaction, they applied, on 12th June, 1968, and 19th March, 1969, for permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948. Such permission is required where agricultural land is sought to be transferred for a non-agricultural purpose. The permission was granted on 22nd April, 1969. A number of sale deeds were executed in respect of the said land between 9th and 30th of May, 1969. The purchaser (housing co-operative society) applied thereafter under s. 65 of the Bombay Land Revenue Code for converting the said land to non-agricultural purposes, i.e., for construction of buildings. Indeed, it appears that it started the construction activity within three days of the execution of the sale deeds in its favour.
6. The income-tax authorities sought to levy capital gains tax on the consideration received by the appellants treating the said land as non agricultural land. The appellants contested the same contending that the land sold is an agricultural land. The ITO rejected the assessees' claim, whereupon they approached the Appellate Assistant Commissioner by way of appeals but without success. The appellants then approached the Tribunal. Their appeals were heard by a Bench of two members who differed among themselves whereupon the matter was referred to a third member who held that the said extent of land is agricultural land and, therefore, no capital gains tax is leviable thereon. The Revenue then obtained a reference under s. 256(1) of the Act which was answered in its favour by a Bench of the Gujarat High Court. The High Court set out the following facts militating against the appellants' plea that the said land was an agricultural land on the date of sale :
" (1) The land is situated at a distance of one kilometre from Surat railway station.
(2) It is within the municipal limits and within a town planning scheme.
(3) It has been sold to a non-agriculturist for a non-agricultural purpose. It is sold to a co-operative housing society for constructing houses and buildings.
(4) It is sold on a per sq. yard basis at Rs. 23 per sq. yd. on 30th May, 1969.
(5) No agricultural operations such as growing of wheat, bajra, juwar, rice, groundnuts or cotton crop have been carried on for the last four years. Only grass for fodder is grown in the last year.
(6) An application for permission to sell the land to a housing society under s. 63 of the Land Revenue Code was made in Aug., 1968, some nine months before the actual sale effected in May, 1969, and it was granted on 24th Feb., 1969, about a month prior to the actual sale.
(7) More than 15 years back a parcel of 2,607 sq. yards out of this very land was converted to non-agricultural user by constructing a chawl on it by the owners themselves after obtaining the requisite permission to convert the land to non-agricultural user under s. 63 of the Land Revenue Code.
(8) Application to convert the land under transaction to non-agricultural user was not made before the sale deed was executed on 30th May, 1969. It was subsequently made by the purchaser-housing society much later. (But then permission could have been applied for if so desired and could not have been refused arbitrarily ; it is common experience that it is granted almost as a matter of course). In fact, it is on record that the purchaser-society commenced actual construction on 2nd June, 1969, that is to say, within three days of the execution of the sale deed in its favour by the assessee in anticipation of the permission.
(9) No agricultural operations were carried on since 1964-65 till the sale in 1969. ''
7. The High Court also mentioned the factors which supported the appellants' case. They are :
" (1) It was still entered as agricultural land in the relevant records.
(2) It was till the date of sale not converted to non-agricultural user.
(3) Application for permission to convert necessary under s. 65 of the Land Revenue Code was not made till the date of sale.
(4) Agricultural operations were carried on in the past. ''
8. On a consideration of the contending factors, the High Court held that it must be held to be as a non-agricultural land. Shri B. K. Mehta, learned counsel for the appellants, assailed the correctness of the conclusion arrived at by the High Court. Learned counsel submitted that : (a) the land was registered as agricultural in the concerned revenue records till it was sold ; (b) land revenue was being paid thereon till the date of sale ; (c) the land was under actual cultivation till it was sold, as evidenced by Pahani Patraks. At any rate the land was fallow only during the years 1964-65 to 1967-68 on account of the illness and death of the appellant's father but it was cultivated again in the year 1968-69 ; (d) that the said land is surrounded by agricultural lands. It was never put to any non-agricultural use. Only a portion of 2,067 sq. yards was converted to non-residential purposes in the year 1958, whereupon a chawl was built. The remaining land remained and continued to be agricultural land ; (e) the appellants and their father had no other income except the income from this land. The mere fact that the land was situated within municipal limits is of no consequence inasmuch as cultivation can be done even on lands situated within municipal limits. Similarly, the fact that the land was sold to a housing co-operative society and the further fact that the said society used the land for housing purposes is irrelevant on the question whether the land was agricultural land on the date of its sale. Learned counsel submitted that applying the several tests evolved by the Gujarat High Court, on a review of the entire case law on the subject, in CIT vs. Siddharth J. Desai (1982) 28 CTR (Guj) 148 : (1983) 139 ITR 628 (Guj), the said land must be held to be an agricultural land on the date of its sale.
9. On the other hand, Sri Manchanda, learned counsel appearing for the Revenue, supported the reasoning and conclusion of the High Court. Counsel submitted that, apart from the factors mentioned by the High Court in favour of its conclusion, there is the further fact that a town planning scheme (draft scheme) was published in March, 1967, covering the said land and that by the date of execution of the sale deeds, the draft scheme was also declared.
10. The sale deeds concerned herein were executed in the month of May, 1969. By virtue of clause (viii) in s. 47 _ which clause was inserted by the Finance Act, 1970, with effect from 1st April, 1970 _ "any transfer of agricultural land in India effected before the 1st day of March, 1970 " is exempt from the levy of capital gains tax. By the very same Finance Act, it may be mentioned, agricultural lands situated within the jurisdiction of municipalities and within a radius of 8 kilometres of such municipalities as may be specified in that behalf by the Central Government [sub-clauses (a) and (b) in cl. (iii) of the definition of "capital asset" in s. 2(14) of the Act] were excluded from the purview of agricultural land but again with effect from 1st April, 1970. Inasmuch as the land concerned herein was sold in May, 1969, it does not fall within the mischief of the said sub-clauses (a) and (b) in cl. (iii) of s. 2(14). If it was agricultural land, it is exempt from capital gains tax notwithstanding the fact that it is situated within the jurisdiction of a municipality.
11. Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them _ a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts.
12. The first decision of this Court which considered the meaning of the expression "agricultural land" is in CIT vs. Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC).. But the question there was whether the income from forest land derived from sal and piyasal trees, "not grown by human skill and labour" constitutes agricultural income. The decision that directly considered the issue, though under the Wealth-tax Act, is in CWT vs. Officer-in-Charge (Court of Wards), Paigah (hereinafter referred to as the `Begumpet Palace case') reported in 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC). It was an appeal from a Full Bench decision of the Andhra Pradesh High Court The High Court had taken the view, following a decision of the Madras High Court in Sarojini Devi vs. Sri Krishna, AIR 1944 Mad 401, that the expression "agricultural land" should be given the widest meaning. It held that the fact that the land is assessed to land revenue as agricultural land under the State revenue law is a strong piece of evidence of its character as an agricultural land. On appeal, a Constitution Bench of this Court held that : (a) inasmuch as agricultural land is exempted from the purview of the definition of the expression "assets", it is "impossible to adopt so wide a test as would obviously defeat the purpose of the exemption given". The idea behind exempting the agricultural land is to encourage cultivation of land and the agricultural operations. "In other words this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Full Bench of the Andhra Pradesh High Court". (b) What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land, by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality, but its actual condition and intended user, which have to be seen for purposes of exemption. (emphasis added). (c) "The person claiming an exemption of any property of his from the scope of his assets must satisfy the conditions of the exemption." (d) "The determination of the character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case." (e) The fact that the land is assessed to land revenue as agricultural land under the State revenue law is certainly a relevant fact but it is not conclusive.
13. That was a case where the question arose with respect to a large extent of 108 acres situated in the City of Hyderabad. The land was enclosed by a boundary wall, wherein there were two wells. The land was abutting the Hussain Sagar tank. The Full Bench of the Andhra Pradesh High Court evolved the following eight indicators to determine whether a land is an agricultural land, viz. :
" (1) The words 'agricultural land' occurring in s. 2(e))(i) of the Wealth-tax Act should be given the same meaning as the said expression bears in entry 86 of List I and given the widest meaning ;
(2) the said expression not having been defined in the Constitution, it must 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 agricultural land ;
(6) mere enclosure of the land does not by itself render it a non agricultural land ;
(7) the character of the land is not determined by the nature of the products raised, so long as the land is used or can be used for raising valuable plants or crops or trees or for any other purpose of husbandry ;
(8) the situation of the land in a village or in an urban area is not by itself determinative of its character. ''
14. This Court characterised the indicators Nos. 6, 7 and 8 as merely negative in character. It disagreed with (1) and (4) and observed that only the 5th indicator was a relevant one though not conclusive. There was no controversy regarding indicator No. 3. Inasmuch as the matter was not examined from the correct point of view, it was remitted to the High Court for a fresh decision.
The decision of the Gujarat High Court in CIT vs. Siddharth J. Desai (supra), relied upon strongly by the learned counsel for the appellant, reviewed the several earlier decisions of the Gujarat High Court as well as the decision of this Court in Begumpet Palace (supra) and has evolved the following 13 factors/indicators applying which the question has to be answered. The 13 factors are the following :
" (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 operations carried on in the land bore any rational proportion to the investment made in purchasing the land ?
(5) Whether the permission under s. 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 the 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 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 non-agricultural use ?
(11) Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist ? If so, whether the sale or intended sale to such non-agriculturist was for non-agricultural or agricultural user ?
(12) Whether the land was sold on yardage or on acreage basis ?
(13) Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield ?
At the risk of repetition, we may mention that not all of these factors would be present or absent in any case and that in each case one or more of those factors may make appearance and that the ultimate decision will have to be reached on a balanced consideration of the totality of circumstances. ''
15. In CIT vs. V.A. Trivedi (1988) 72 CTR (Bom) 199 : (1988) 172 ITR 95 (Bom),a Division Bench of the Bombay High Court, of which one of us (S. P. Bharucha J.), was a member, considered this question again. In this case the assessee had purchased the land of an extent of seven acres in Feb., 1966. The land was covered by the Nagpur Improvement Trust Scheme. In Aug., 1966, he obtained permission to convert the said land to non-agricultural use. In June, 1968, he entered into an agreement with a housing co-operative society to sell three acres out of it. The sale deed was executed in Oct., 1968. In his assessment proceedings, the assessee claimed that the surplus income arising from the sale of land was exempt from tax inasmuch as it was agricultural land at the time of its sale. The matter reached the High Court. The Division Bench referred to several facts established from the record. Some of them supported the assessee's stand while some others militated against his contention. The facts found in favour of the assessee were : (1) at the time of its purchase by the assessee, the Ajni land was agricultural land ; (2) it had been under cultivation by the assessee till the date of its sale ; (3) it continued to be assessed to land revenue as agricultural land until it was sold ; (4) the intention of the assessee, when he purchased it, was to acquire agricultural land for agricultural purposes ; (5) the assessee's use of it was the normal use by an agriculturist ; (6) it was not within any Town Planning Schemes ; and (7) no material has been produced to show any development or building activity surrounding it. The facts which militated against the assessee's stand were three in number, namely : (1) the location of the Ajni land within the Corporation and the improvement trust limits ; (2) the action of the assessee in obtaining on 8th Aug., 1966, permission to convert the user of the Ajni land to non agricultural purposes, and (3) the agreement to sell and the sale of the Ajni land for non-agricultural, i.e., building purposes.
16. The Bench observed that to ascertain the true character and the nature of the land, it must be seen whether it has been put to use for agricultural purposes for a reasonable span of time prior to the relevant date and further whether on the relevant date the land was intended to be put to use for agricultural purposes for a reasonable span of time in the future. Examining the facts of the case from the said point of view, the Bench held that the agreement entered into by the assessee with the housing society is the crucial circumstance, since it showed that the assessee agreed to sell the land to a housing society admittedly for utilisation for non agricultural purposes. The sale deeds were executed four months after the agreement of sale and even if any agricultural operations were carried on within the said span of four months the Bench held it was evidently in the nature of a stop-gap arrangement. On the date the land was sold, the Bench held, the land was no longer agricultural land which is evident from the fact that the assessee had obtained permission even in Aug., 1966, to convert the said land to non-agricultural purposes.
17. Now, let us examine the facts of the case before us in the light of the principles flowing from the above decisions. But before we do that, it would be appropriate to clear the ground regarding the user of the land till the date of sale. The land was undoubtedly under cultivation up to and inclusive of the agricultural year 1964-65. For the years 1965-66, 1966 67 and 1967-68, the land was admittedly not cultivated. Certain grass naturally growing thereon appears to have been utilised. So far as the year 1968-69 is concerned, there exists a good amount of doubt whether it was or was not cultivated. The appellant's case was that they raised "loni" grass said to be used as fodder for horses. They relied upon the entry in Pahani Patrak in this behalf. The third member of the Tribunal (to whom the matter was referred on a difference of opinion arising between the two members who first heard the appeal) found the following facts which are mutually inconsistent : (a) there were unprecedented floods in the Tapti river in the year 1968, which rendered the said land useless for cultivation for a couple of months because of heavy accumulated layers of mud and slush ; (b) the next monsoon sowing season would have started in June, 1969, but even before that the land was sold in May, 1969 ; (c) there is evidence of agricultural cultivation and raising of "loni" grass during the year 1968-69 ; (d) for a period of seven months from Oct., 1968, to April, 1969, the land remained uncultivated. In our opinion, the above findings considered together do negative the theory of actual cultivation of the said land during any part of the year 1968-69. If there were floods in the Tapti river in the year 1968_this must be during the months June to September and there was no cultivation during the period Oct., 1968, to April, 1969, it is difficult to see when the grass was raised in the said land. We conclude, on the basis of the facts found by the learned third Member, that there was no cultivation even during the year 1968-69.
18. Now, we may consider the various circumstances appearing for and against the appellant's case. The facts in their favour are : the land being registered as agricultural land in the revenue records ; payment of land revenue in respect thereof till the year 1968-69 ; absence of any evidence that it was put to any non-agricultural use by the appellants ; that the land was actually cultivated till and including the agricultural year 1964 65 ; that there were agricultural lands abutting the said land and that the appellants had no other source of income except the income from the said land. As against the above facts, the facts appearing against their case are : the land was situated within the municipal limits it was situated at a distance of one kilometre from the Surat railway station ; the land was not being cultivated from the year 1965-66, until it was sold in 1969 ; the appellants had entered into an agreement with a housing co-operative society to sell the said land for avowed non-agricultural purposes, namely construction of houses ; they had applied in June, 1968, and March, 1969, for permission to sell the said land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and obtained the same on 22nd April, 1969 ; soon after obtaining the said permission they executed sale deeds in the following month, i.e., in May, 1969 ; the land was sold at the rate of Rs. 23 per sq. yard and the purchaser-society commenced construction operations within three days of the purchase. hat is the inference that flows from a cumulative consideration of all he aforesaid contending facts ? This question has to be answered keeping in mind the criteria evolved in the Begumpet Palace case set out hereinbefore. In our opinion, the entering into the agreement to sell the land for housing purposes, the applying and obtaining the permission to sell the land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and its sale soon thereafter and the fact that the land was not cultivated for a period of four years prior to its sale coupled with its location, and the price at which it was sold, do outweigh the circumstances appearing in favour of the appellants' case. The aforesaid facts do establish that the land was not an agricultural land when it was sold. The appellants had no intention to bring it under cultivation at any time after 1965-66_certainly not after they entered into the agreement to sell the same to a housing co-operative society. Though formal permission under s. 65 of the Land Revenue Code was not obtained by the appellants, yet their intention is clear from the fact of their application for permission to sell it for a non-agricultural purpose under s. 63 of the Bombay Tenancy and Agricultural Lands Act.
19. We are, therefore, of the opinion that the High Court was right in holding that the said land was not an agricultural land at the time of its sale and that the income arising from its sale was not exempt from capital gains tax. The appeals accordingly fail and are dismissed. No costs.
Appeals dismissed.
15 September 2020
In case, the land was an agricultural land even when it was sold. But the land was not cultivated or may be cultivated by assessee's father. Then what will be the position ?
15 September 2020
But in (Deputy Commissioner of Income-tax Vs Arijit Mitra (ITAT Kolkata)) it was held that Agricultural land would not be a capital asset if it is not within the notified area and thus no Capital Gain would arise.
Even in (Smt. Chalasani Naga Ratna Kumari Vs ITO, (ITAT Visakhapatnam)) it was held that the absence of any agricultural activity would not render the agricultural land as non-agricultural.
So lack of any agricultural activities would not render it as non-agricultural according to me.
Please correct if I am wrong.
Even in (Smt. Chalasani Naga Ratna Kumari Vs ITO, (ITAT Visakhapatnam)) it was held that the absence of any agricultural activity would not render the agricultural land as non-agricultural.
So lack of any agricultural activities would not render it as non-agricultural according to me.
Please correct if I am wrong.
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