9911796707
|
Home
Issues:
1. Whether the forest land sold by the assessee during the assessment years was agricultural land or not. Analysis: The appeals were filed by the revenue against the orders of the Commissioner (Appeals) for the assessment years 1970-71, 1971-72, and 1972-73. The main issue was whether the forest land sold by the assessee in those years was to be considered as agricultural land. The Tribunal had initially held that the land was agricultural and had deleted the capital gains arising from the sales. However, the Tribunal later reversed this finding and referred the assessments back to the ITO to decide the nature of the land in light of a Supreme Court decision. The facts for the three years were identical, with the assessee leasing a large tract of land and converting it into a plantation over several years. The Tribunal's order detailed the history of the land, showing that the land was originally private forest leased for agricultural purposes, specifically for planting rubber. The land had been progressively developed into a plantation by the assessee over the years. The Tribunal confirmed that the statement of facts provided was accurate, and additional documents were submitted to support the conversion of forest land into plantation land. The ITO, during reassessment proceedings, contended that merely obtaining a lease for forest land did not automatically make it agricultural land. He argued that the land needed to be physically changed, such as by clearing and preparing it for agriculture, to be considered agricultural. The Commissioner (Appeals), however, held that the land was indeed agricultural based on the intention of the assessee to convert the forest land into agricultural land, supported by the progressive conversion activities over the years. In the subsequent appeal before the ITAT, the departmental representative reiterated the argument that without actual agricultural operations on the land, it should not be considered agricultural. On the other hand, the assessee's counsel emphasized that the purpose of the lease was for agricultural conversion, and the intention to set apart the land for agriculture was sufficient, as per the Supreme Court's decision in a relevant case. After considering the submissions, the ITAT upheld the Commissioner (Appeals) decision, concluding that the land in question should be treated as agricultural land. The ITAT emphasized that the intention of the assessee to convert the forest land into plantation or agricultural land was clear from the lease agreement and the progressive conversion activities undertaken. The lack of actual conversion due to financial constraints did not change the fact that the land was set apart for agriculture, aligning with the Supreme Court's decision. In summary, the ITAT dismissed the appeals, affirming that the forest land sold by the assessee during the assessment years should be classified as agricultural land based on the intention and actions of the assessee towards converting the land into a plantation or agricultural area.
|
