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TMI Blog1988 (5) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the aforesaid godowns in terms of section 5(1)(iva) of the WT Act. Section 5(1)(iva) lays down that the agricultural land belonging to the assessee is exempt to a maximum of Rs. 1,50,000 : Provided that where the assessee owns any house or part of a house situated in a place with a population exceeding 10,000 and to which the provision of clause (iv) applies and the value of the said house or part of the house, together with the value of agricultural land exceeds Rs. 1,50,000, then the amount that shall not be included in the net wealth of the assessee in this clause shall be Rs. 1,50,000 as reduced by so much of the value of such house or part of the house, as has not been included in the net wealth of the assessee under clause (iv). The exemption is only with respect of agricultural land and since the property referred to above consists of two godowns let out to Food Corporation ofIndiaand other company, this do not fall within the definitions of agricultural land in any provisions of Act. Therefore, the exemption claimed by the assessee under clause (iv) of section 5(1) of the Wealth-tax Act is rejected." 3. The assessee preferred appeals to the AAC, who directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural according to Master Plan of Delhi. 5. Copy of suit No. 27/76, dated9-8-1977. He has thus contended that the appellant had purchased agricultural land and its character, had not been changed either by the Master Plan or by the MCD. He has further contended that in view of the aforementioned judgments of the Hon'ble Madras High Court and Gujarat High Court the character of the land had not changed even with the construction of a godown. I have carefully considered the arguments advanced by the appellant. It Is manifest that in view of the position explained the WTO was not justified in holding that the character of land had changed and provisions of section 5(1)(iva) of the WT Act were no longer attracted. In the fact and circumstances of the case the WTO is directed to treat the land as agricultural land and allow the exemption sought for by the appellant." 4. The learned Departmental Representative contended that by the construction of buildings in the shape of godowns the land ceased to be agricultural land and that a godown cannot be termed as agricultural land. According to him, therefore, the AAC was in error in directing the WTO to treat this property as agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 sq. mts. Out of this the covered area of the godowns was 23,000 sq. ft. and the roads provided for servicing the godowns covered another 6,000 sq. ft. Thus the assessee was left with only about 1,000 sq. ft. In which he bad his clinic, etc. If the assessee bad ever desired to run a cattle breeding farm and if these constructions were Intended to be used as cattle sheds then the assessee would have had a large area open around these alleged sheds. Cattle cannot be kept all the time In blind rooms like these. Further but for these alleged sheds, the assessee did not make any other preparation for the cattle breeding farm. Any person intending to run a cattle breeding farm would put up only a small shed, etc., and start his business by purchasing a few cattle. He would not act in the manner in which the assessee did by constructing a big closed hall by raising bank loans. We are, therefore, of the view that the assessee's contention that the constructions were built for being used as cattle sheds is not truthful and that the assessee in fact built godowns for specifically letting them out to the Food Corporation of India. Even otherwise it is not the intention alone that is mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of sale and it was only as a stop gap arrangement that agricultural operations were not carried on for some time. In that case permission to convert land into nonagricultural use had been obtained but the Hon'ble High Court observed that that did not make the land non-agricultural. This ruling too does not help the assessee. In the case before us the construction of the godowns on the land effectively negatives any intention to carry on agricultural operations thereon. Rather, after such a massive building is raised agriculture becomes impossible. The Hon'ble High Court's observation that mere permission to convert land into non-agricultural use did not make it non-agricultural also shows that the converse would also be true. Simply because the assessee has not sought conversion of use, or the land continues to be recorded in the revenue records as agricultural land would not make it agricultural land if in fact it is being used for an entirely different purpose. 10. Reliance is also placed on CWT v. H. V. Mungale [1984] 145 ITR 208 (Bom.) That was a case in which agricultural land had been actually cultivated till the year 1963 and it remained fallow thereafter for some ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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