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Issues involved: Determination of whether the land in question is agricultural land for the purposes of section 2(14)(iii) of the Income-tax Act, 1961.
Summary: The assessee sold land in Surat and claimed capital gains based on the classification of the land. Initially, the assessee considered a portion of the land as non-agricultural, while claiming the rest as agricultural land used for growing vegetables and grains. The Income-tax Officer disputed this claim, stating insufficient evidence of agricultural use. The Appellate Assistant Commissioner upheld the assessment, noting the land was within the Town Planning Scheme and Surat's Municipal limits. The Income-tax Appellate Tribunal found the agricultural activity minimal, with no evidence of significant agricultural use beyond personal consumption. The Tribunal also highlighted discrepancies in the City Survey Officer's report and the presence of a rented structure on the land. The Tribunal concluded the land could not be treated as agricultural due to lack of substantial agricultural activity. The assessee's counsel emphasized the vegetable and grain growth on the land, citing the City Survey Officer's report and the Registrar's acceptance of the land as agricultural during registration. However, the Tribunal deemed the agricultural activity trifling, considering the location within Surat city limits, a Town Planning Scheme area, and the presence of a tenanted building on the land. The Tribunal's decision was supported by these factors, outweighing the City Survey Officer's report. Additionally, the sale deed indicated the land was sold for building activity, contradicting the claim of agricultural use. Considering all factors, the Tribunal's conclusion was deemed justified, answering the question in the negative and in favor of the Revenue. The assessee was directed to bear the costs of the reference.
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