1970 (12) TMI 23 - HC - Wealth-tax

Land requisitioned by the Government - whether the land belonging to the-applicant are agricultural lands within the meaning of section 2(e)(i) of the Wealth-tax Act, 1957

Summary

Issues Involved:
1. Determination of whether the land in question qualifies as "agricultural land" under Section 2(e)(i) of the Wealth-tax Act, 1957.
2. Consideration of the land's requisition by the Punjab Government and its current use.
3. Analysis of the land's inclusion in a town planning scheme and its location within municipal limits.
4. Examination of the compensation paid for the land and its impact on the land's classification.

Detailed Analysis:

1. Determination of Agricultural Land:
The primary issue is whether the land qualifies as "agricultural land" under Section 2(e)(i) of the Wealth-tax Act, 1957. The land in question was requisitioned by the Punjab Government in 1946 and has since been used as a parade ground by the police authorities. Despite this, the land is still irrigated by the Jethuwal distributory, assessed to land revenue, and abiana is paid for the use of canal water. The court emphasized that the general character of the land should be considered rather than its use at a particular point in time, citing Megh Raj v. Allah Rakhia and T. Sarojini Devi v. Sri Kristna. The court noted that the land continues to retain its agricultural character, which it bore in 1946 before it was requisitioned.

2. Land's Requisition and Current Use:
The land was requisitioned by the Punjab Government in 1946 and is currently used as a parade ground by the police. The court held that the compulsory requisition and subsequent use by the government do not change the land's nature and character as agricultural land. The court referenced the Gujarat High Court's decision in Rasiklal Chimanlal Nagri v. Commissioner of Wealth-tax, which stated that the intention of the owner to use the land for a particular purpose at a given time cannot be the determining factor. The court also considered the Patna High Court's decision in Syed Rafiqur Rahman v. Commissioner of Wealth-tax, which held that the mere presence of trees on the land did not make it agricultural if basic agricultural operations were not being carried out.

3. Inclusion in Town Planning Scheme and Municipal Limits:
The land's inclusion in a town planning scheme and its location within the municipal limits of Amritsar were also considered. The court held that these factors alone do not change the land's nature as agricultural land. The court cited the Punjab Requisitioning and Acquisition of Immovable Property Act, 1962, which mandates that requisitioned land must be restored to the owner in as good a condition as it was when possession was taken. Therefore, the land's inclusion in a town planning scheme does not affect its classification as agricultural land until its possession is actually acquired by the improvement trust.

4. Compensation Paid for the Land:
The compensation paid by the government to the assessee for the use of the land was Rs. 78-12-0 per month, amounting to Rs. 945 per annum. The court noted that out of this compensation, the assessee pays land revenue amounting to Rs. 618, leaving him with Rs. 328 per annum. The court held that the compensation paid does not affect the land's classification as agricultural land. The court emphasized that the government cannot change the kind or nature of the land after requisition, as it is obligated to restore the land to its original condition under Section 6 of the Punjab Requisitioning and Acquisition of Immovable Property Act, 1962.

Conclusion:
The court held that, based on the facts found by the Tribunal, the land was agricultural land on the relevant valuation dates for both assessment years and is exempt from being included in the assessable wealth of the assessee under Section 2(e)(i) of the Wealth-tax Act. The court answered the question in the affirmative, in favor of the assessee and against the department. The assessee was entitled to costs assessed at Rs. 200.