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TMI Blog2004 (6) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee-company are situated at a distance of 5 kms from Nellore District, Kondayapalyam Village in Bit-1 area. His enquiries further revealed that though agricultural operations are carried on in this area, there is no information available to the fact that agricultural operations have been carried on in this area on the lands owned by the assessee-company from the date of acquisition till the date of sale. During the assessment proceedings, the assessee has also submitted a certificate from the Village Administrative Officer, Nellore which is dt. 29th March, 1993, certifying that the above said lands have been assessed to land revenue. This fact was verified by the Inspector and also recorded the statement from Sri Gopal Reddy, Village Administrative Officer who admitted that the land revenue in Nellore District is collected on the basis of "1'arams or quality' of the lands without reference to the actual crops grown on the above lands for various years. He further admitted that the certificate dt. 29th March, 1993, does not speak about the crops grown on the above lands for various financial years. The Village Administrative Officer, Nellore Mandal, vide his certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available to carry on the agricultural operations but on the valuation date, these lands were held by us agricultural lands only." 2.1 The AO after considering the submission of the assessee gave findings on point-wise which are reproduced below: "(i) It is nowhere stated in the report of the IT Inspector that agricultural operations had been carried on in the lands owned by the assessee company though agricultural operations are carried on in the neighbouring lands. There is a lot of difference between these two statements. (ii) Likewise the Village Administrative Officer (Sri P. Gopal Reddy) has also stated that paddy can be grown on their lands and the Kist had been fixed on the basis of the extent of lands and not with reference to the crops grown on them. The Village Administrative Officer has also nowhere stated that agricultural (operation) have been carried on the lands owned by the assessee-company. (iii) The inadequacy of water supply may result in the lands being left fallow for a year and agricultural operations being carried on in the subsequent years. However, there is no information on record to refer to a similar situation in the case of the lands owned by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural in nature. Aggrieved by the action of the CIT(A), the assessee preferred these appeals before us. 4. Before us, the learned counsel for the assessee, Ms. Anitha Sumanth vehemently argued that the entries in the revenue records show that the land is agricultural land which becomes proved to hold that the land as agricultural land unless it is disproved by any other evidence. She, further argued that the Revenue has not brought any material or evidence which can rebut the revenue record produced by the assessee-company. She contended that the CIT(A) has not appreciated the statement of the Village Administrative Officer, Nellore Mandal, who clearly stated that the lands owned by the assessee were agricultural lands and assessed to land revenue and this statement of the VAO remains unrebutted by the AO as well as the CIT(A). She stated that even the inspector of the income-tax visited the lands and in his report he stated that agricultural operations are carried on in that area and in view of this finding of the inspector, she contended that the land owned by the assessee-company are agricultural lands. She also controverted to the findings of the CIT(A) that the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether agricultural operations have been carried on in the lands owned by the assessee-company, from the date of their acquisition till the date of their sale." During the course of arguments, the learned Departmental Representative further drew our attention to para 2.4 of the assessment order wherein the AO has given a finding that the lands under consideration were sold during the previous year relevant to the asst. yr. 1994-95 and capital gains have been admitted by the assessee-company during the asst. yr. 1994-95, though it is claimed that the above capital gains have been admitted under the deeming provisions of IT Act as contained in the provisions of s. 2(14)(iii) which hold certain lands as non-agricultural in nature depending on the location of such lands. He further argued that inadequacy of water supply resulted in the lands being left fallow without cultivation for a year and agricultural operations being carried on in subsequent years. He further argued that there is no such information from the records to refer to a similar situation in the case of the lands owned by the assessee-company. He invited our attention to ground No 6 of the assessee filed before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing collected on the basis of possible crops grown on the land and not on the basis of crops actually grown. The Village Administrative Officer has certified that the land revenue was collected from fasli years 1396 to 1401 amounting to Rs. 1,062 per year for four years and Rs. 1,207 for one year. 6.2 The second part of this issue is regarding enquiry conducted by the inspector. The inspector of the income-tax in his report revealed that agricultural operations are carried on in this area but there is no information available whether any agricultural operations have been carried on in the lands owned by the assessee-company from the date of acquisition till the date of their sale. The argument of the assessee-company is that the lands owned by the assessee are situated in the area in which agricultural operations are carried on and the land revenue was collected. 6.3 The third part of this is regarding the admission of the assessee-company vide ground No. 6 that the lands could not be put to agricultural operations due to lack of sufficient water since paddy crop alone is grown on the said lands requiring continuous and copious supply of water. It is seen that in all the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case show that this was agricultural land. In the revenue records also it was shown as agricultural land. But in the present case, the facts are different from what was furnished before the Hon'ble Gujarat High Court. In the present case, the assessee-company itself has admitted that no agricultural operations were carried out on these lands due to scarcity of water and even the corresponding income-tax/assessment records clearly show that no income from agricultural operations or any expenditure on agricultural operations have been declared by the assessee-company 7.2 Further, she relied on the decision reported in the case of Dr. Motibhai D. Patel vs. CIT. In this case, the Hon'ble Gujarat High Court has given a finding that the land was under cultivation till the date of sale. Here, in the present case, the land was not cultivated from the date of acquisition till the date of sale. 7.3 The learned counsel for the assessee has also relied on the decision of the Hon'ble Bombay High Court in the case of T.S.M.O. Mohammed Othuman Sahib vs. CIT and the decision of the Calcutta High Court in the case of CIT vs. Borhat Tea Co. Ltd. The facts of these cases are also d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser and/or alternative user was of a permanent or temporary nature? (7) Whether the land, though entered in the revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? (8) Whether the land was situate in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? (9) Whether the land itself was developed by plotting and providing roads and other facilities? (10) Whether there were any previous sales of portions of the land for non-agricultural use? (11) Whether permission under s. 63 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the taxing authorities in deciding the question of fact which was really for the assessing authorities to determine having regard to all the relevant evidence and the law laid down by this Court. The High Court should have sent back the case to the assessing authorities for deciding the question of fact after stating the law correctly." 8. It is pertinent to note that for the asst. yrs. 1990-91 to 1992-93, wealth-tax is to be payable in this case and the land can be held to be non-agricultural land. Considering all the facts and circumstances of the case prevailing on the relevant valuation date, legal position emanating from the various judicial decisions, above all, the Hon'ble apex Court decisions reported in 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC) and (1993) 114 CTR (SC) 467 : (1993) 204 ITR 631 (SC), on identical issue as in the present case, it was held that the land owned by the assessee-company was non-agricultural land which is to be included in the definition of asset within the meaning of s. 2(e) of the WT Act. On the relevant valuation date even though the land was classified in the revenue records as agricultural lands and was also subject to payment of land re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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