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TMI Blog2007 (7) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the land in question was situated in village Roz-Ka-Gurjar, which has been certified by the Tehsildar to be situated beyond a distance of 8 kms from the Town Committee Area. Hence, on the basis of the certificate issued by the Tehsildar, we hold that in view of the CBDT circular the land of the assessee fell outside the purview of capital asset. Thus, we conclude that in the existing facts and circumstances the tax authorities below were not justified in treating the land in question as non-agricultural land and computing the capital gains on the sale thereof. Accordingly. the orders of tax authorities below in this regard are set aside and the issue involved in the grounds of appeal is decided in favour of the assessee. The grounds of appeal taken by the assessee are allowed. In the result the appeal filed by the assessee is allowed. - Member(s) : D. R. SINGH., K. G. BANSAL. ORDER-D.R. SINGH, J.M.: The assessee has filed this appeal against the order of CIT(A) passed in appeal No. 444/00-01, dt.18th Sept., 2002, on as many as four grounds. The ground Nos. 3 and 4 are general in nature and need no adjudication from our side. The ground Nos. 1 and 2 involve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of Wards), Paigah 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC), wherein their Lordships observed that "the determination' of the character of land according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case. What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land by some possible future owner or possessor for an agricultural purpose. It is not the mere potentiality, which will only affect the valuation as part of 'assets', but its actual condition and intended user which has to be seen for the purposes of exemption from wealth-tax. One of the objects of its exemption is to encourage cultivation or actual utilization of land for agricultural purpose. If there is neither anything in its condition nor anything in the evidence to indicate the intention of its owners or possessor so as to connect it with an agricultural purpose, the land could not be agricultural land for the purpose of earning an exemption under the Act", held that the land sold by the assessee was nonagricultural land hence was liable to tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. It was pointed out that: "It is not the mere potentiality which will only affect its valuation as part of 'assets', but its actual condition and intended user which has to be seen for purposes of exemption from wealth-tax. If there is neither anything in its condition, nor anything in evidence to indicate the intention of its owners or possessors, so as to connect it with an agricultural purpose, the land could not be 'agricultural land' for the purpose of earning an exemption under the Act. Entries in Revenue records are, however, good prima facie evidence. On the facts of that case the Supreme Court found that the relevant considerations were not kept in view by the taxing authorities in deciding the question of fact and, therefore, according to the Supreme Court the High Court should have sent the case back to the assessing authority for deciding the question of fact after stating the law correctly. The decision of the Full Bench was set aside and the matter was remanded to the Tribunal for a proper decision of the case in accordance with law. The only ratio which can be carved out from this decision of the Supreme Court is that it is not the mere potentiality for being us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same and he assessed the capital gains. The Tribunal found that the land, till it was sold, was classified as agricultural land in the Revenue records. In the village Forms Nos. VII and XII, popularly know as "records of rights" it was mentioned that the whole of the land was cultivated till the year 1967-68. The land was cultivated personally by the assessee. The said land belonged to the family and he got it by way of inheritance and not by way of purchase from some other party. He had not, at any point of time, applied for permission to use the land for non-agricultural purposes. The Tribunal held that no capital gains arose. 12. On reference their Lordships after applying the decision of the apex Court confirming the above order of the Tribunal held as under: "That all the relevant factors had been taken into consideration by the Tribunal along with the other relevant factors, viz., that the land was sold to a cooperative housing society; that it was sold at Rs. 20 per sq. yard, and that it was situated within the corporation limits of Ahmedabad city. It was, therefore, not possible to say that the view taken by the Tribunal was unreasonable or erroneous in law. There wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land to a non-agricultural land at any point of time during his possession. It means that the assessee never purchased the land with an intention of converting it into a non-agricultural land because throughout the period of possession he did not change the agricultural character of the land by carrying out any such activity on it which could bring the land into the fold of non-agricultural land. Though admittedly the assessee had not cultivated the land from the date of purchase till the date of its sale i.e., for a period of fourteen years but explained before us that since he was an athlete of international stature i.e., taking part in Olympics, most of the time remained out of the country and could not devote time for cultivation of the land. The Department has not been able to place on record any evidence to controvert the submissions of the assessee which were supported with evidence. Hence, in our opinion in the facts and circumstances of the case of the assessee, the tax authorities below were not justified in treating the land in question as nonagricultural land merely because the assessee has not cultivated the land for a period of fourteen years i.e., from the date of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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