2019 (1) TMI 867 - HC - Income Tax

Sale of agricultural land - capital gain tax for sale of the land - Held that - AO could not bring any adverse material on record. It was also noticed that the Assessee was one of three co-owners of the property. Nothing was brought on record to suggest that any one of the other co-owners, had been taxed under the head capital gain tax for sale of the land. The Tribunal also relied on the fact that the land is shown as an agricultural land in the Revenue record. The Tribunal, therefore, held that the land was agricultural land. We find that the Tribunal came to the conclusion that the land in question was agricultural land. Importantly, it was shown as agricultural land in the revenue record and revenue was collected on such basis. There were fruits bearing trees on the land. There was irrigation facility available in the form of tubewells. The Division Bench of this Court in CIT v/s. Minguel Chandra Pais & Another 2005 (3) TMI 46 - BOMBAY HIGH COURT had occasion to consider a question as to when a certain land can be categorized as agricultural land. The facts of the present case would also fall within such tests. No question of law arises.

Summary

Issues:
1. Whether the land in question qualifies as agricultural land for the purpose of capital gain tax exemption.
2. Whether the Tribunal's decision on the classification of the land as agricultural was correct based on the evidence presented.

Issue 1:
The Respondent-Assessee initially filed a return of income without reflecting the sale of land but later filed a revised return, claiming the land as agricultural to avoid capital gain tax for the Assessment Year 2009-10. The Commissioner of Income Tax (Appeals) accepted the Assessee's claim after considering the presence of fruit-bearing trees, tube-wells, and a small house on the land. The CIT(A) found that the land was shown as agricultural in the Revenue record and subjected to agricultural assessment for land revenue collection. The Assessee's argument was supported by the additional materials produced during the Appellate Proceedings, and no adverse material was presented by the Assessing Officer. The Tribunal dismissed the Revenue's Appeal, emphasizing the lack of evidence against the Assessee and the co-ownership aspect, ultimately affirming that the land was agricultural.

Issue 2:
The High Court upheld the Tribunal's decision, noting that the land was classified as agricultural in the revenue record and had fruit-bearing trees with irrigation facilities. The Court referenced the case law in CIT v/s. Minguel Chandra Pais & Another, establishing tests for categorizing land as agricultural. The Court found that the facts aligned with these tests and concluded that no question of law arose. Consequently, the Tax Appeal was dismissed, affirming the Tribunal's ruling on the classification of the land as agricultural and the consequent exemption from capital gain tax.