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TMI Blog2018 (4) TMI 1481X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the order of AO as well as CIT(A). Counsel for the appellant has framed following questions of law:- In DBITA No. 98/2018 "i) Whether in the facts and circumstances of the case the learned ITAT was justified in rejecting the claim of the assessee under Section 54B claimed on account of capital gain on transfer of land used for agricultural purposes amounting to Rs. 9,01,332/-? ii) Whether in the facts and circumstances of the case, the ITAT was justified in holding the order of the Coordinate Bench of ITAT Hyderabad completely at variance without discussing and considering the facts of the case of the assessee as also the facts of the case of ACIT vs. N. Raghuverma (2013) 42 ITS 421 Hyd.? iii) Whether in the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording 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, which will only affect its valuation as part of "assets", but its actual condition and intended user which has to be seen for purposes of exemption from wealth-tax. One of the objects of the exemption seemed to be to encourage cultivation or actual utilisation of land for agricultural purposes. If there is neither anything in its condition, nor anyt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case, we have non-agricultural use for brick-making for a period of two years and thereafter the land was allowed to lie fallow and agricultural operations were started and bajri was grown in this land in the revenue year 1964-65. We may point out that under the Bombay Tenancy and Agricultural Lands Act, 1948, "land" has been defined in s. 2, sub-s. (8), to mean, inter alia, land which is used for agricultural purposes or which is sometimes used as agricultural land, but is allowed to lie fallow, is agricultural land for the purposes of the Tenancy Act, and it is that agricultural land for the sale of which to non-agriculturist permission under s. 63 is necessary and it is in the light of this definition which has obviously to be borne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plying the principles laid down by this court in CWT v. Narandas Motilal MANU/GJ/0021/1970 : [1971]80ITR39(Guj) , Manilal Somnath's case MANU/GJ/0009/1976 : [1977]106ITR917(Guj) , Smt. Chandravati Atmaram Patel v. CIT MANU/GJ/0021/1977 : [1978]114ITR302(Guj) and Chhotalal Prabhudas v. CIT MANU/GJ/0006/1978 : [1979]116ITR631(Guj) , read in the light of the observations of the Supreme Court in Begumpet Palace's case MANU/SC/0232/1976 : [1976]10ITR133(SC) , it is clear that the Tribunal was in error when it held on the facts found that in law the land was not agricultural land. The conclusion that it was not agricultural land was a mixed question of law and fact and the approach of the Tribunal adopted in coming to this conclusion was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that:- 1. A photo copy of Girdawari of just preceding year of sale of land is enclosed which indicating what type of crops were sawed and produce. This aspect were examined by the A.O in the A.Y. 2010-11 and considered the same as well as found in ourder. 2. The agricultural land sold out during the year under consideration were given on contract Batai to agriculturist and taken one time payment for year as per practice here Girdawari indicating nature of crops sowed by the Kastkar cultivator was known as Mulla Ji of Kesarpur village adjoining to the Bhugore as per past practice. The agricultural land was given on batai orally year to year. In the just preceding year the ld. AO completed the assessment of sale of land the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of it. Accordingly, out of the total land involved in three Khasra's of measuring (0.62+0.01+1.10) =1.73 hec, the land measuring 0.62 haec which comes to 0.62/1.73 hec=35.84% of total lands involved in three khasra's., is not eligible for deduction u/s 54B (1) of the IT Act, 1961. thus out of the claim of total deduction u/s 54B of Rs. 28,92,480/- the deduction to the extent of Rs. (2514850x35.84%) = 9,01,.322/- is hereby withdrawn/disallowed on account of land sold was not being used for agricultural purposes within last 2 years from the date of sale for the purpose of computing income chargeable of "Capital Gains" in this case." The above finding was confirmed by the CIT(A) as well as the Tribunal. The Tribunal while considering the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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