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TMI Blog2018 (12) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal would run thus:- Lands measuring an extent of 301 cents at Kelambakkam was purchased through sale deeds dated 04.05.1998 for Rs. 7,76,788/- inclusive of stamp duty. The assessee along with his brother viz., M.A. Antony and one Thilagan had entered into an agreement of sale on 21.08.2006 agreeing to sell the property for a sale consideration of Rs. 2,50,00,000/- per acre and the assessee received a sum of Rs. 8,61,41,416/-. On 17.07.2007, assessee filed Return of Income Tax for the assessment year 2007-08, admitting income of Rs. 3,87,342/- and claimed exemption for payment of tax of sale of the land under section 2(14)(iii) of the Income Tax Act. However, on 05.06.2012, an action under section 133A of Income Tax Act (hereinafter referred to as "the Act") was taken and the Officials of the appellant conducted survey. After the proceedings under section 133A of the Act, a notice under section 148 of the Act was issued on 05.02.2013 to reopen the assessment for the assessment year 2007-08on the ground Long Term capital gains chargeable to tax is escaped from assessment. Thereupon, on 04.04.2013, the assessee filed a Return declaring business loss of a sum of Rs. 14.62 Lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land is an agricultural land under section 2(14) of of the Act. According to the learned counsel, non-consideration of the relevant facts and findings of the Income Tax Appellate Tribunal on irrelevant and inadmissible documents are perverse, warrants interference of this Court. 6. Per contra Sri.K.Doraisami, learned Senior Counsel for the respondent-assessee by placing reliance upon the decisions of this Court reported in (2006) 284 ITR 511 [CWT v. E.Udayakumar], (2007) 292 ITR 481[M.S.Srinivasa Naicker v. ITO], (2016) 388 ITR 514 [PCIT v. Mansi FinanceChennai Ltd.], (2014) 369 ITR 558 [Sakunthala Vedachalam v. ACIT], (2017)99 CCH 185 [CIT v. Dr.N.Rangabashyam] and (2018) 404 ITR 173 [CIT v. Ashok Kumar Rathi] would argue that no substantial question of law arises for consideration in this appeal as, the Income Tax Appellate Tribunal, accepting the materials produced by the assessee viz., Chitta, Adangal and Kist arrived at the factual finding that the lands sold were agricultural lands. Learned Senior Counsel would urge that the assessee had established before the Authorities that the land in question was agriculture till it was sold and the factum that the purchaser would be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been mentioned as agricultural land, however, in the agreement of sale dated 21.08.2006, wherein, the assessee had agreed to sell the property to Vijay Shanthi Builders Limited, the land was not mentioned as an agricultural land. Though the agreement of sale was entered into on21.08.2006, the entire reading of the agreement would show that the purchaser, viz., Vijay Shanthi Builders Limited had almost paid the entire sale consideration to the vendors. The vendors have also executed a Power of Attorney in favour of the person named by the purchaser to enable them to sell the property. The relevant clauses are extracted below:- "13. The vendors through may execute a Power of Attorney in the name of the nominee of the purchaser to deal with the schedule mentioned property, the Vendor agrees, if necessary, in order to facilitate the process of obtaining necessary sanctions and approvals from the authorities, to extend all necessary cooperation to the purchaser as may be required by signing relevant papers / applications which are to be submitted to the authorities concerned including Director of Town and Country Planning and Local Planning Authority Chennai Development Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, the Adangal produced by the assessee creates a serious doubt whether the assessee was in fact was cultivating the land at the relevant point of time. 11. The Hon'ble Supreme Court in the case of Sarifabibi MohmedIbrahim & Others Vs. Commissioner of Income Tax (referred supra), has held that the fact that the land is assessed to the Land Revenue as agricultural land under the State Revenue Law is certainly a relevant fact but it is not conclusive. It is further observed that the Madras High Court in Sarojini Deviv. T. Sri Krishna [AIR 1944 Mad 401] held that the exception "agricultural land" should be given the widest meaning and the land is assessed to land revenue as agricultural land under the State Revenue Law is a strong piece of evidence of its character as an agricultural land, but on appeal, the Constitution Bench of the Hon'ble Supreme Court held that inasmuch as, the agricultural land is exempted from the purview of the definition of the expression "assets", it is "impossible to adopt so wide a test as would obviously defeat the purpose of the exemption given". It is also observed that the idea behind exempting the agricultural land is to encourage cultivat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis? (13) Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield?" The Hon'ble Supreme Court in the case of Sarifabibi held that not of all these factors would be present or absent in any case and that in each case one or more of those factors may make appearance and that the ultimate decision will have to be reached on an balanced consideration of the totality of the circumstances. 13. Further, we would like to make it clear that the burden of proof that the land is an agricultural land is always on the assessee, who seeks exemption under section 2(14)(iii) of the Income Tax Act, because, the Revenue cannot be expected to produce negative evidence. The Constitution Bench of Hon'ble Supreme Court in (1976) 105 ITR 133 (SC) [Commissioner of Wealth Tax vs. Officer-in-Charge (Court of Wards) while considering the issue of granting exemption to the agricultural land under the provisions of the Wealth Tax Act, has held as follows:- "We also think that the Full Bench was not correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Wealth Tax Act. Hence, the decisions have no application to the case on hand. Further, we are notable to agree with the proposition stated therein for the reason that the guidelines / factors framed by the Gujarat High Court and got approval of the Apex Court in Sarifabibi Mohmed Ibrahim & Others Vs. Commissioner of Income Tax (referred supra), were not taken note of. 15. In the present case, no materials have been produced by the assessee for the period between 1998 and 2006 to show that he was carrying on agricultural activities in the land at any point of time except producing Chitta and Adangal for the year 2005. Since relevant columns in the Adangal with regard to crop and extent are left blank, it would not be proper to record a finding on those documents and they have to be discarded. It is an undisputed fact that no genuine agriculturist would purchase a land Rs. 2,50,00,000/- per acre. In our considered opinion, the factors 2, 7, 8 and 13 evolved by the Gujarat High Court (supra) are relevant factors to be taken into consideration for deciding the nature of the land. However, the appellate Tribunal overlooking the above material factors and on the basis of Chitta an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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