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Issues Involved:
1. Determination of whether the land in question is "agricultural land" within the meaning of section 2(e)(i) of the Wealth-tax Act, 1957. 2. Relevance of the intention of the owner and actual use of the land in determining its nature. 3. Impact of surrounding development and changes in land use on the classification of the land. Issue-wise Detailed Analysis: 1. Determination of whether the land in question is "agricultural land" within the meaning of section 2(e)(i) of the Wealth-tax Act, 1957: The core issue is whether the land co-owned by the assessee qualifies as agricultural land under section 2(e)(i) of the Wealth-tax Act, 1957, thereby exempting it from wealth-tax. The land was initially used for agricultural purposes, but the assessee obtained permission for non-agricultural use and parceled it into plots for sale. The Tribunal found that despite the temporary agricultural use, the land's nature had fundamentally changed to non-agricultural due to its location, development, and the owner's intention to sell it for residential purposes. 2. Relevance of the intention of the owner and actual use of the land in determining its nature: The court referenced the case of Rasiklal Chimanlal Nagri v. Commissioner of Wealth-tax, emphasizing that the owner's intention, while relevant, is not the sole determinant of land classification. The actual use of the land provides prima facie evidence of its nature. However, temporary agricultural use does not necessarily define the land as agricultural if other factors indicate a non-agricultural character. The court highlighted that the land's use, development in the surrounding area, and the owner's long-term intentions must all be considered. 3. Impact of surrounding development and changes in land use on the classification of the land: The court noted that the land's location within municipal limits, the permission for non-agricultural use, and the surrounding development significantly influenced its classification. The land was parceled into plots, a substantial portion was sold for residential purposes, and it was situated near developed areas with public and private buildings. These factors collectively indicated a shift from agricultural to non-agricultural land. The court also mentioned that the land's sale to non-agriculturists, permissible only after obtaining non-agricultural use permission, further supported this conclusion. Conclusion: The court concluded that the land had ceased to be agricultural due to the cumulative effect of various factors, including its location, development, and the owner's actions and intentions. The Tribunal's finding that the land was non-agricultural was upheld. The court affirmed that the assessee failed to prove that the land was agricultural on the relevant valuation dates, answering the referred question in the affirmative and awarding costs to the Commissioner.
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