9911796707
TMI Blog1964 (11) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt from assessment under the Wealth-tax Act by virtue of the provisions of section 2(2)(i). 3. The material facts bearing on these points are: (i) The assessee owns four plots of land in Ellis Bridge area in Ahmedabad City. The numbers given to the plots are: Plot No. Area In sq. yards. 801 2,541 964 1,210 970 6,812 346/4-A 670 There are on record two maps showing the different plots and the area in which they are situate. The maps are annexed hereto as annexure A and form part of the case. (ii) The plot No. 801 mentioned above originally belonged to a Hindu undivided family consisting of two brothers, Chimanlal H. Nagri (assessee's father), and Popatlal H. Nagri, and their descendants. The plot came to be allotted to the assessee's branch under a partial partition dated December 14, 1926. The Town Planning Scheme was applied to this area since 1945. The plot has been situate within the Municipal limits of Ahmedabad from about 1935. Thereafter there has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for less than ₹ 15 per sq. yard. Hence the value, ₹ 1,58,445. M.C. No. 346/4-A of 670 sq. yards has been valued by the assessee at ₹ 10 per sq. yard but the same is taken on the ruling market rate at ₹ 12 per sq. yard, i.e., ₹ 8,040. The Wealth-tax Officer added ₹ 1,66,485 as the value of these properties in the assessment for 1957-58. The assessment for 1958-59 was also completed on the same basis. This value as such is not now in dispute. 6. There were appeals against these assessments before the Appellate Assistant Commissioner who held as follows: In the present case, it is evident that the land had not been used for any purpose on the valuation date, but if it was to be used, it could only be used for agriculture and, as such, it is to be admitted that the land was meant only for agriculture. It may be that the land could have been used for a purpose other than agriculture, and the appellant could even hazard an eviction or the imposition of a fine by the Collector, but then it is only if he has actually used the land for a purpose other than agriculture that we can say that the land which is even classified as agricultural land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (the application being identically worded for both the years): 1. Whether the lands bearing S. Nos. 801, 964, 970 and 346/4-A belonging to the applicant are agricultural lands within the meaning of section 2(e)(i) of the Wealth-tax Act, and their total value of ₹ 1,66,485 is exempt from Wealth-tax Act or not? 2. Whether the Tribunal was justified in law in holding that the lands bearing S. Nos. 801, 964, 970 and 346/4-A are not agricultural lands within the meaning of section 2(e)(i) after having held that in the past agricultural operations were carried out and that in Government records they are held as agricultural lands and are assessed for land revenue under the Bombay Land Revenue Code as agricultural lands? 3. Whether the Tribunal was justified in law in holding that the lands bearing S. Nos. 801, 964, 970 and 346/4-A have ceased to be agricultural lands within the meaning of section 2(e)(i) simply because agricultural operations are not carried out during the last few years, though these lands are readily capable of being used for raising agricultural produce? 10. In our opinion, the only question that arises out of the Tribunal's order can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds and their value was not liable to be included in computing the net wealth of the assessee. A similar claim was also made by the assessee in regard to the assessment to wealth-tax for the assessment year 1958-59, for which the relevant valuation date was 23rd October, 1957, but that claim was confined only to plots Nos. 964 and 346/4-A since the other two plots had gone out of the Hindu undivided family of the assessee prior to the valuation date as a result of partition effected on 16th October, 1957. The claim for exclusion of the value of these plots was rejected by the Wealth-tax Officer, but on appeal it was allowed by the Appellate Assistant Commissioner. The revenue thereupon appealed to the Tribunal. The Tribunal took the view that these plots were not agricultural lands within the meaning of section 2(e)(i) and their value was, therefore, not liable to be included in computing the net wealth of the assessee. This view of the Tribunal is now challenged before us on the present reference on behalf of the assessee. The Wealth-tax Act imposes a tax on the net wealth of the assessee and net wealth is defined in section 2(m) to mean the amount by which the aggregate valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind the fundamental principle of construction that the expression occurs in a head of legislative power and should, therefore, receive the widest and most liberal meaning. Now considering the expression according to its ordinary natural sense, what is it that distinguishes agricultural land from other land? One thing is clear that the intention of the owner of the land to put it to any particular use at a given point of time cannot be the determining factor. Whether a land is agricultural land or not cannot depend on the fluctuating or ambulatory intention of the owner of the land. The criterion must be something more definite, something more objective, something related to the nature or character of the land and not varying with the intention of the owner as to the use to which he wants to put the land at a particular point of time. Of course when we say this we must not be understood to mean that the intention as to user is altogether an irrelevant consideration; it is certainly a factor which would bear on the nature or character of the land but it does not afford a sole or exclusive criterion for determining whether a land is agricultural land or not. Where the land is act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, but we may point out at once that the test suggested by him cannot be accepted by us as the correct test. Whether a particular land is agricultural land or not must depend on the general nature or character of the land, and various factors would have to be taken into account. The development and use of the lands in the adjoining area and the surroundings and situation of the land would be an important factor which would have a bearing on the question whether the land is agricultural land or not. This factor may affect the land and its capacity of being used for agriculture and would also indicate the purpose for which the land would ordinarily be likely to be used. The physical characteristics of the land would be another factor to be taken into account. The physical characteristics may show the general nature or character of the land particularly in regard to its adaptability for being used for agricultural purpose. Then the intention of the owner as gathered from all the relevant circumstances would also have a bearing on the general nature or character of the land. Of course, as we pointed out above, the intention of the owner of the land to put it to a particular use at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is used to produce something else (as often happens in this country), it should be governed by and descend according to laws framed under List 3. Now it is difficult to see how these observations in any way support the contention of Mr. Kaji. The learned judge in making these observations expressed a tentative opinion that while considering what is agricultural land for the purpose of the relevant entries in Lists 2 and 3, it may be right to take into account the general character of the land as agricultural land and not the use to which it may be put at a particular point of time and so far as that goes, we are in entire agreement with it for, as we have pointed out above, it is the general nature or character of the land which must determine whether it is agricultural land or not and the actual use to which it is put at a particular point of time is of importance only in so far as it throws light on the general nature or character of the land. The learned judge did not go further and say that the capacity of the land for being put to agricultural use must be regarded as the sole or exclusive test for deciding the general nature or character of the land, namely, whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing this observation cannot, therefore, be regarded as having laid down any general or universal test applicable in all cases for determining when a land can be said to be agricultural land. Mr. Kaji also relied on a decision of the Calcutta High Court in Nil Govinda Misra v. Rukmini Deby* and he drew our attention to the following observations from the judgment in that case at page 425 of the report: Lands used or lands though lying unused, but capable of being used, having regard to its general nature and character, for raising through the labour of man, food for men and beasts, foodgrains and vegetables and fodder...should be regarded as agricultural lands. But if these observations are read along with what is stated a little earlier in the judgment, it will be clear that these observations, far from supporting the contention of Mr. Kaji, actually militate against it and lay down the same test which we have discussed above and accepted as the correct test. This is what the Calcutta High Court observed a little before the passage quoted above: Where, however, a piece of land is not being actually used but is lying waste, its general nature and character must be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential area with numerous residential buildings around the plots and they are situate in an area in respect of which a town planning scheme was in force since about 1945. Three out of the four plots were cultivated up to about 1934-35 but had ceased to be cultivated since then and no agricultural operations were carried on in those plots since about 21 to 22 years. The assessee did not say that he had any special reasons for stopping cultivation on those plots other than the intention to use them for non-agricultural purposes. It is rather significant that the assessee ceased cultivating those plots from about the time when that area started developing as a fine residential area. So far as the fourth plot is concerned, the assessee purchased it on 16th December, 1951, at the rate of about ₹ 20 per square yard and ever since it was acquired, it has not been put to any agricultural use. It is rather difficult to believe that any prudent and reasonable man would purchase agricultural land in the midst of a highly developed residential area and that too, on payment of an enormously high price of about ₹ 20 per square yard. It is also strange that the assessee should al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case must have made provision for these matters. Now, the plots in question were admittedly not used for the purpose of either of the first two matters. Nor was it the case of the assessee that they were allotted or reserved for roads, open spaces, gardens, recreation grounds, schools, markets or public purposes of any other kind. It must, therefore, be concluded that the plots were plotted out as building sites and if that be the position, it can hardly be disputed that if permission for non-agricultural use of the plots is applied for, such permission would be granted as a matter of course by the revenue authorities. The assessee obviously did not apply to the revenue authorities for permission to make non-agricultural use of the plots until the relevant valuation dates, for the assessment for non-agricultural purpose would be many times higher than the assessment for agricultural purpose and it would be highly unprofitable to the assessee to apply for and obtain permission for non-agricultural use and pay considerably higher assessment unless the assessee wanted to make immediate non-agricultural use of the plots. The assessee could always apply for and obtain permission for non ..... X X X X Extracts X X X X X X X X Extracts X X X X
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