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TMI Blog2020 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT v. Siddharth J. Desai [ 1981 (9) TMI 48 - GUJARAT HIGH COURT] and has laid down 13 tests or factors which are required to be considered and upon consideration of which, the question whether the land is an agricultural land or not has got to be decided or answered. Though the circumstances that land is classified as agriculture in revenue record and Akkupet village, Devanahalli Taluk that is not notified under the provisions of Section 214(iii)(a) (b) of the Act still it is considered as agriculture land on the reason that no agriculture operations has been carried out by the assessee in the said land. In our opinion, the land situated on the presumption of urban area and in the municipal limit cannot be considered as agriculture land unless there was actual agriculture operations carried out by the assessee. Further it is to be seen that the income returned in her Return of Income was an agriculture income was just for name sake and does not have any proportion. At the time of sale of land, no agriculture activity was carried out by the assessee. Accordingly we hold that the property sold by the assessee is not an agricultural land and to be treated as a capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensation paid to the tenants for vacating the land and an amount of ₹ 7,50,000 being commission paid. The assessee claimed exemption of ₹ 16 lakhs under section 54F of the Act. The assessment was completed under section 143(3) r.w.s. 147 on 23-12-2009 disallowing the claim of expenditure for vacating the tenants and also commission paid. During the first round of dispute, the Tribunal passed an order and observed that the applicability of clauses (a) and (b) of Section 2(14)(iii) has not appreciated properly by the CIT (Appeals) and set aside the order of CIT (Appeals) and referred the matter to Assessing Officer for fresh consideration. The Assessing Officer passed order under section 143(3) r.w.s. 254 on 27-2-2015 in which he disallowed the claim of the assessee that the land was an agriculture land. He also disallowed the claim of payment of compensation amounting to ₹ 29,75,000 and commission of ₹ 7,50,000/-. The A.O. also disallowed the claim made under section 54F of the Act of ₹ 16 lakhs for want of evidences. The assessee filed an appeal with the CIT (Appeals) who concurred with the view taken by the Assessing Officer on the issues and dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order dated 27-2-2015 in page 6 para 6 stated that It is unambiguous from the above that the land is situated only with in 3 Kms from Devanahalli Town and it is not more than 8 kms from the local limits of Devanahalli Municipality . Hence he submitted that as per section 2(14)((iii)(a) the above land is agricultural land and hence the sale of appellant land does not attract capital gain tax. 5.3 According to him, as per Section 2(14)(iii)(b), the land is an agricultural land in India, not being land situate in any area within such distance, not more than eight kilo meters, from the local limits of any municipality or cantonment board referred to in item (a), as the central government may, having regard to the extent of and scope for, urbanization of that area and other relevant considerations. specify in this behalf by notification in the official Gazette. 5.4 The ld. AR submitted that Devanahalli is a Municipality and it is not notified by the central government in official Gazette for capital gain tax purpose. The nearest notified city to the appellant land is Bengaluru. The appellant land is more than 20 km away from the city limits of Bengaluru. According to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in its order dated 9-1-2014 in Page 11 Para 18, it was mentioned that : As far as Section 2(14)(iii)(b) is concerned the Municipality or Cantonment Board referred to in item(a) is concerned had to notified by Central Government . Hence, he submitted that as per section 2(14)(iii)(b) also the land sold by the appellant is an agricultural land and the sale of agricultural land does not attract capital gain tax. 5.7 Regarding Commission paid to Brokers, it was submitted that it is well known fact that it is impossible to sell or buy property in the city like Bengaluru without the help of Brokers. They are very useful to locate the buyers and to get good price. The appellant has paid ₹ 5,00,000/- to Mr. K N Umesh ₹ 2,50,000/- to Mr. Santhosh Kumar S as commission. The commission amount is hardly 3% of the sale value of ₹ 250 Lacks and it is nominal amount. They helped appellant to locate the buyers and to get good price for appellant Property. The learned Assessing Officer has already summoned these two people and they have accepted that they have received the above money as commission from the appellant. If the receivers of commission did not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther contented that though it is located within 8 KM,, of the municipal limits of Devanahalli Municipality in the absence of any notification issued under clause (b) to section 2(14)(iii) of the Act, it cannot be considered as a capital asset within the meaning of Section 2(14)(iii)(b) of the Act also and therefore the subject land cannot be considered as a 'capital asset'. In our opinion that itself is not sufficient to hold that the land in question is an agricultural land. In our opinion, it is an agricultural land, only if the said land is subject to agricultural operation and agricultural activities is carried on in that land. There is no presumption that all land situated outside the notified area are agricultural land and there is no automatic treatment of land as an agricultural land on the ground that it is covered by section 2(14)(iii)(a) (b) of the Act. 6.1 Now question as to whether a land is agricultural land or not is essentially a question of fact. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. We have to answer the question on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? 8. Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads and other facilities? 10. Whether there were any previous sales of portions of the land for nonagricultural use? 11. Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist? If so, whether the sale or intended sale to such non-agriculturists was for non-agricultural or agricultural user? 12. Whether the land was sold on yardage or on acreage basis? 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 bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the presumption raised from the long user of the land for agricultural purpose and also the presumption arising from the entries of the Revenue records are rebutted. 6.3 The Hon'ble Bombay High Court in the case of CWT v. H. V. Mungale (1983) 32 CTR (Bom) 301 : (1984) 145 ITR 208 (Bom) held that the Hon'ble Supreme Court had pointed out that the entries raised only a rebuttable presumption and some evidence would, therefore, have to be led before taxing authorities on the question of intended user of the land under consideration before the presumption could be rebutted. The Court further held that the Supreme Court had clearly pointed out that the burden to rebut the presumption would be on the Revenue. The Hon'ble Bombay High Court held that the ratio of the decision of the Supreme Court was that what is to be determined is the character of the land according to the purpose for which it was meant or set apart and can be used. It is, therefore, obvious that the assessee had abundantly proved that the subject land sold by them was agricultural land not only as classified in the Revenue records, but also it was subjected to the payment of land revenue and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ops cultivated by the assessee. The column relating to mentioning the crop cultivated by the assessee were kept blank. Being so, the RTC cannot be considered as conclusive evidence to prove that the assessee's land is agriculture land is collapsed. At initial stages, the property might have been agriculture land. That is why the land is classified in the revenue records as agriculture land. That position continued in a religious manner without any further verification of the nature of the property. It is to be noted that because of urbanization, the properties being in the peripheral of the Bangalore Metropolity, real estate development has started in and around Akkupet Village, Devanahalli Taluk and a lot of commercial and private buildings are constructed. Because of the book in the real estate development, the entire adjoin land was become subject matter of transaction intend for the purpose of real estate development. In that background, we have to see whether actual cultivation has been carried out by the assessee in the said land. As we noted in earlier RTC produced by the assessee does not have any entry of crop cultivated by the assessee. Past history alone is not the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in Devanahalli Taluk in Bangalore North where there is rapid development activities and it has become a bustling suburban. The area is upcoming residential area with many private residential flats are coming up. The property sold by the assessee is in the middle of development activity being carried out by builders in and around Devanahalli Taluk on the reason of coming up of Kempe Gowda Airport in immediate vicinity. In view of the same, the sale price received by the assessee is very high which a normal agriculture land will not fetch. The price is in accordance with the development activities and changes happening in and around the land. If we consider the above fact as a whole and overall view is to be taken in deciding whether the land is agriculture land, we come to a conclusion that the land cannot be considered as agriculture land on only the said land is not Notified under section 214(a) (b) of the Income-tax Act. Though the circumstances that land is classified as agriculture in revenue record and Akkupet village, Devanahalli Taluk that is not notified under the provisions of Section 214(iii)(a) (b) of the Act still it is considered as agriculture land on the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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