Valuation of agricultural land comprised in tea, coffee, rubber and cardamom plantations-Guidelines regarding - Income Tax - 357/1983

Valuation of agricultural land comprised in tea, coffee, rubber and cardamom plantations-Guidelines regarding Circular No. 357 Dated 26/3/1983 Attention is invited to Board's Circular No. 326 dated 6th February, 1982, issued from file No. 319/15/80-WT (Reported in [1982] 134 ITR (St.) 167) on the above subject. In view of various practical difficulties in implementing this circular the Board makes the following broad guidelines for the valuation of lands comprised in coffee plantations in order to have some uniform procedure for speedy completion of the pending assessments as far as Karnataka charges are concerned. 2. The plantation land in the coffee plantations may be classified into the following three categories, namely: (a) lands covered by plants which have started yielding; (b) virgin land which is in the process of being developed and land covered by plants which have not started yielding; (c) virgin land capable of being planted but which has not been planted and lands not falling in any of the above specified categories. 3. In valuing lands at 2(a) above, the value will be determined on the basis of yield per acre. As far as coffee plantations are concerned, the following yield/value pattern was considered reasonable: Yield per acre in kg. Valuation Rs. 250 and below 5,000 251-350 6,000 351-450 7,000 451-550 9,000 551-650 11,000 651-750 13,000 751 and above 15,000 The average of six years' production of the yielding area is to be arrived at on this basis. Where, however, six years' data is not available, the average is to be worked out with reference to the number of years for which yield is available. 4. In respect of lands at 2(b) above, the value may be taken at Rs. 3,000 per acre with due consideration to peculiar factors in individual cases. With regard to value of lands at 2(c) above, no value need be taken as the value of such virgin lands may be negligible. 5. Regarding the stock of coffee, a value of the same may be separately determined on the basis of the average of the preceding three years' dividends and added to the value of the land. 6. With regard to the other assets, such as land utilised for constructing roads, paths, farm houses, store houses, yards, buildings for processing, building for housing the coolies and the supervisory staff, etc., no separate addition need be made. 7. Pending wealth-tax assessments involving valuation of coffee plantations may be finalised on the above basis. (Sd.) (P. Ranganathan) Under Secretary, CBDT