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TMI Blog2016 (12) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... lands as agricultural lands falling outside the definition of capital asset given in sec. 2(14) of the Act. 3. The AO did not accept the claim of the assessee for the following reasons:- (a) The land was not used by the assessee for agricultural purposes. (b) The assessee has not shown any agricultural income on loss from the plots. (c) The certificate of the Talati clearly states that there was no agricultural operation on these lands and it was a barrent land on which only grass (Gawath) grows. (d) The Government of Maharashtra, Urban development Department, vide notification No.TPS 1800/1004/CR-106/2000/UD-13 dated 1.6.2001 has decided to develop the area of Admal Village, Mulshi Taluka as Hill Station. (e) The Maharashtra Tourism Development Corporation Ltd has issued an exemption certificate to the Lavasa Corporation from the Stamp Duty Act 1958 in respect of the sale by transfer or MOU till the tourism policy 2006 is in force. (f) The intention of the assessee was not to carry on agricultural activities on the land, but to sell it appropriate time of spurt in the real estate market. Accordingly, by placing reliance on the decision rendered by Hon'ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant regarding the sale of the land as agricultural land and treated the same as capital asset as per section 2(14) and thus concluded that sale proceeds of the land are liable for capital gains tax. 20. The Assessing Officer has considered the said land as non-agriculture and liable for capital gains tax mainly on the following grounds:- 1. The certificate of the Talati clearly states that there is no agricultural operation on these lands and it is a barren land on which only wild grass( Gawath ) grows. 2. The assessee has also not been showing any agricultural income or loss from these plots of land. 3. The government of Maharashtra, Urban Development Department, vide notification no., TPS 1800/1004/CR-106/2000/UD-13 dated 01/06/2001, has declared the entire area of Admal village, Mulshi Taluka as for the development of Hill Station. 21. The first ground on which the AO has treated the land sold by the appellant as non-agricultural land is that as per certificate of Talati there is no agricultural operation on these lands and it is a barren land on which only wild grass (Gawath) grows. 22. The above contention of the AO cannot be accepted that if the grass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome was shown. Since no produce was sold, therefore, there was no agricultural income and consequently no question of showing the same in the return of income. 28. The above arguments of the appellant has merit. Carrying of agricultural operations is not the essential criteria for determining the nature of land. The land in question is assessed to the land revenue as agricultural land and the appellant has paid the annual agricultural cess (Dhara) as clearly mentioned in the 7/12 Extract. It is not the case of the AO that the land in question is not shown as the agricultural land in the 7/12 Extract. Further in 7/12 Extract, the produce shown on the land of the appellant, is the grass, which is also an agricultural produce. There is nothing on record to indicate that the appellant had ever applied for the change of land use for non-agricultural purposes. These facts are not disputed even by the AO. 29. While deciding a similar issue in the case of CIT Vs. Smt. Debbie Alemao, ITA no: 1 and 2 of 2006; the Hon'ble High Court of Bombay at Goa, vide its order dated: 09/09/2010 has held in the matter as under :- "The Assessing Officer has noted that the said land was entered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present cases. We are bound by the decision in those cases." 30.The term "Capital Asset" has been defined in Section 2(14), whereby agricultural land is kept out of the preview of capital asset, provided such land is not located within the jurisdiction of a municipality or cantonment board having population of not less than ten thousand, or, such land is not located within eight kilometers from the municipality or cantonment board having population of more than ten lakh. 30.1. In the instant case, the village Talati vide certificate dated 20/12/2013 has certified that the nearest Municipal Council is Paud ( which is Tehsil office) approx. 45 km away from the land in question and the population of the village Admal is approx. 300. This fact also clearly proves that the land of the appellant situated in a village having population of 300 and 45 km away from municipality, is agricultural land and not a capital asset as defined in Section 2(14). 31. Further, perusal of the registered sale agreement between the appellant and the purchaser of the land Lavasa Corporation, shows that the land in question sold by the appellant is an agricultural land. The father of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." 33. The land in question is registered in the revenue records in the name of the appellant as on the date of sale. The 7/12 extracts taken from the "Talathi " of the lands of the appellant clearly states the nature of the land is agricultural land. The 7/12 extracts also contains the description of the crops being grown on this land which is stated to be "Gawath" which is also 'an agricultural produce. All these facts clearly prove that the nature of the land in question is agricultural land which cannot be disputed in view of the revenue records of the area. The Assessing Officer has not placed any evidence on record disputing the above revenue records. Till the above revenue records are not in dispute, the lands sold by the appellant cannot be treated as non-agricultural land. 34. The next ground on which the AO has disputed the nature of land being non- agricultural is that the Government of Maharashtra, Urban Development Department, vide notification no. TPS 1800/1 004/CR-106/2000/UD-13 dated 01/06/2001 , has declared the entire area of Admal village, Mulshi Taluka as for-the development of Hill Station. 35. The above argument cannot be used for treating the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi in Pune district, is an agricultural land and since it does not fall within Municipal limits having population of more than ten thousand ,or within 8 kilometers of the municipal limits having population of more than ten lakh, the said land does not fall within the preview of capital asset as defined in section 2(14) and not liable for capital gains. The action of the AO treating the same as non-agricultural and a capital asset and liable for capital gains cannot be accepted in view of the facts narrated above. The addition made by AO consequently is deleted." 8. On a careful perusal of the order passed by Ld CIT(A) along with the arguments advanced before us by both the parties, we notice that the first appellate authority has considered all the grounds raised by the AO for rejecting the claim of the assessee. We notice that the Ld CIT(A) has considered the revenue record and noticed that the impugned land has been shown as agricultural land. He has also noticed that there was no material to show that the land was put to non-agricultural purpose. He has noticed that the growing of grass was also an agricultural activity and the revenue records have also shown that the grass has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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