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TMI Blog2013 (12) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... nds are capable of with the aid of facilities available and the assessee cannot be denied the relief – The assessee was actually unable to put the land to use due to vagaries of nature and non-availability of resources – It is not the fault of the assessee if rained lands are not actually put to use during the drought – Decided against Revenue. - IT Appeal Nos. 613, 614 & 692 (Hyd.) of 2010 - - - Dated:- 9-1-2013 - CHANDRA POOJARI AND SMT. ASHA VIJAYARAGHAVAN , JJ. For the Appellant : Smt. Vidisha Kalra. For the Respondent : A.V. Raghuram. ORDER:- PER : Chandra Poojari All the above appeals by the Revenue are directed against the different orders of the CIT(A) for assessment year 2006-07 in respect of the above three a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Revenue records as agricultural land, there is no proof of regular payment of land revenue applicable to such land. The assessee has not produced any evidence with regard to agricultural operations carried on by the assessee. She also submitted that the sale deed executed by the assessee for sale of such property has mentioned that there are no trees on the land at the time of purchase. It also mentioned in the sale deed that the vendor has not been able to realise any income. Though there was mention that there was subabul crop on the land, in the sale deed it was shown as vacant land. For this purpose he drew our attention to clause No. 7 of the sale deed mentioning "the vendor declares that there are no trees, fish ponds and mines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in acquiring other agricultural lands, which were being to agricultural use. 6. We have heard both the parties and perused the material on record. U/s. 54B of the Act where a land was being used by the assessee or his parents for agricultural purposes in the two years preceding the date it was transferred and the assessee has within a period of two years after that date purchased another land for being used for agricultural purposes, then the amount of capital gain shall be reduced by the cost of the new asset. The question, therefore, is whether the land which was held by the assessee and transferred by the assessee had been utilised by the assessee or his parents for agricultural purpose. The Revenue cannot deny this fact since the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the agricultural operations in the said land and the Department cannot deny deduction u/s. 54B on mere technicalities. The object of section is to encourage cultivation. The Hon'ble Supreme Court in the case of CWT v. Officer-in-charge (Court of Wards) [1976] 105 ITR 133 held that : "The determination of the character of the 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, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used as agricultural land as it was used earlier. There is no evidence to show that the assessee by himself had decided to abandon the intention to cultivate the land even though the actual cultivation was not possible due to lack of water. That might have been the reason for selling the lands and might have fetched a higher price because of the intended user of the purchaser; but, in our opinion, it does not in any way rebut the initial presumption that the property, classified as agricultural land in revenue records and accepted as agricultural land in the wealth-tax assessments, ceased to be such agricultural land before the transfer of such lands. 9. Section 2(14), which defines capital asset, was amended by the Finance Act, 1970 to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich in the two years immediately preceding the date of transfer was being used by the assessee or a parent of his for agricultural purposes, and the assessee has, within a period of two years after that date, purchased any other land (whether in the same area or elsewhere) for being used for agricultural purposes, then the capital gain will not be charged to tax to the extent that it has been utilised for acquiring the fresh land. Where the amount of the capital gain exceeds the cost of acquisition of the fresh land, only the excess will toe chargeable to tax. The concession will, however, be fortified if the assessee transfers the fresh land acquired by him within a period of three years from the date of its purchase.' 10. It was argued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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