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TMI Blog2021 (1) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of which is filed at page 14 of the paper book as is apparent from the registered sale deed which means that the land is wet land in which paddy is grown. 2.1. On a query from the Bench, she submitted that the assessee is a senior citizen and was having income only from pension and interest from savings bank account and fixed deposits account and that he was not aware that no capital gains arises on purchase and sale of agricultural land and hence had submitted a legally incorrect and erroneous computation to the Revenue authorities initially, on being questioned. She submitted that the law has to be applied and acquiescence is no ground for taxing a transaction which is not taxable under law. She submitted that there is no estoppel against law. She relied on a number of case laws in support of her propositions that the land is not a capital asset and hence the profits from the sale of this land cannot be taxed under the provision of the Act. 3. The ld. Sr. D/R Ms. Chinmaya on the other hand, opposed the contentions of the ld. Counsel for the assessee and submitted that the assessee has approbated and reprobated in this case. She submitted that the assessee responded to an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The ld. CIT(A) at the last paragraph of his order records the fact as follows: "Rather on the basis of above discussion it proves that it is a residential bungalow surrounded by gardens of mango, guava etc." 6.1. In the total, the land measures 11.8 acres and the residential bungalow at best would be much less than half an acre. This does take us to a conclusion that all the mango, guava and other gardens are in fact located as agricultural land. The sale deed records that the land in question is Don land. In the State of Jharkhand the cultivable land in the district is divided into classes, viz., Don and Tanr. The Don lands are the terraced low lands on which mainly rice is grown, and the Tanr are the uplands which produce a course from of rice, millets, pulses and oil-seeds. The land in question is classified as Don in the revenue records and is thus wet land in which paddy is grown. Based on these documentary evidences it is clear that the land in question which is sold, is agricultural land. The AO or the ld. CIT(A) have no evidences to controvert the documentary evidences furnished by the assessee. The assessee has submitted a copy of Indian Village Directory where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale in question. The state government's revenue records strongly support the assessee's case rather that its lands are very much agricultural in nature. The Assessing Officer tried to apply "performance" test that for determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the land user by some possible future owner for agricultural objects. We see no merit in the impugned reasoning. The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scope for urbanisation and other consideration, specifically in the behalf....." (ii) Naiyer Sultan v. ITO [2019] 106 taxmann.com 191 (Kol ITAT) "7. We have considered the rival submissions on this issue and also perused the relevant material available on record. During the year under consideration, land owned jointly by both the assessees in the present case was sold and the gain arising from the said land was claimed to be exempt on the ground that the said land being an agricultural land was not a capital asset within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue relating to the exemption claimed by the assessees in respect of gain from the sale of their land." (iii) Pr. CIT vs. P. S. Raghupathy [2018] 96 taxmann.com 200 (Mad) - In this case the assessee sold a piece of land and claimed that the land was an agricultural land recorded in Revenue records and the same was situated beyond 8 K.M from the nearest municipality. The Hon'ble Madras High Court held and observed as under: "18. Mr. T.R. Senthil Kumar, emphatically argued that the Assessing Officer arrived at his finding based on the fact that the land in question had been classified in the records of the Sub Registrar Office as revenue land. However, as would appear from the order of the assessment itself, it was classified as agricultural land in the revenue records. Even otherwise, the learned Tribunal had looked into the relevant materials including the revenue records, as also records which indicate that the respondent assessee ran a Nursery. 19. The learned Tribunal was of the view that whether there was agricultural income or not was not relevant. Nofault can be found with the reasoning of the learned Tribunal. The fact that there was loss and not income could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and an assessee who is engaged in agricultural operations in such agricultural land and also being specified as agricultural land in Revenue records, the land is not subjected to any conversion as non-agricultural land by the assessee or any other concerned person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like the case before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income (vi) CIT vs. Siddharth J. Desai[1982] 10 Taxman 1 (Guj) = [1983] 139 ITR 628 (Guj) Held 1. Several factors are relevant and are weighted against each other while determining the true nature and character of the land. The major factors which are considered as having a leaning on the determination of the question are as follows: a. whether, the land was classified in the revenue record as agricultural and whether it was subject to the payment of land revenue, but this factor alone will not be conclusive; b. whether the land was actually or ordinarily used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was not actually put to agricultural use since about one year prior to the sale, there was no evidence to establish that it was converted to any other use. The fact that permission under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained by the assessee to sell the lands to the society for residential purposes would not, militate against the land continuing to be agricultural on the date of its sale, as the permission was obtained only about two and a half months prior to the sale. Therefore, till the land was held by the assessee its character as agricultural land was not changed either as a result of its reclassification in the revenue records or by the actual alteration of its use. Again, there was no evidence on record to show that there was any development in the surrounding area or that the land itself was developed prior to its sale. The land was located on the outskirts of the village but it was not situate in the municipal limit. The land must, therefore, be taken as having been situate in a rural area and it continued to have an agricultural bias right up to the date of its sale. Further, there was no evidence or material on record to indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s respective findings. We make it clear first of all that there is no rebuttal coming from the department that the land in question has ever been converted from agricultural to non-aaricultura! use at any point of time before the sale in question. The state government's revenue records strongly support the assessee's case rather that its lands are very much agricultural in nature. The Assessing Officer tried to apply "performance" test that for determination of land in issue what is required to be shown is connection with the agricultural purpose is the use and not the mere possibility of the land user by some possible future owner for agricultural objects. We see no merit in the impugned reasoning. The legislature makes it clear that agricultural lands beyond 8 Kms. from the local municipality etc.; as the Central Government may, having regard to the extent/scope for urbanisation and other consideration, specifically in the behalf....." DCIT v. P. Ashok Kumar ITA No.1581/Mds/2010, Judgment dated 20.01.2011 (Chennai Trib.) "6. There are good reasons given by the ld.AR for explaining that the land was not recently used for cultivation. In our considered opinion, the non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the nomenclature of 'agricultural land'. The assessee grows coconut on this land and the same are sold in the market and these receipts are treated as agricultural receipts by the Revenue. The assessee has also paid agricultural land tax and copies of the same were made available to the authorities. The land in question is situated in the revenue estate of a Village named Ivvappanthanaal Panchavat which is situated more than 8 kms away from the limits of Alandur Municipality. We have found that the land has been agricultural land for the past many years and has been classified as such in the records of the revenue Department. The assessee has paid kist of ' 400/- each in respect of land on 30.1.2007 regarding fasli years 1413, 1414, 1415 and 1416. It was brought on record that this land was being cultivated by one local person, namely Shri Murugan, but for assessment years 2005-06 and 2006-07, agricultural operations were carried out by him, he could not get food returns and that is why he did not admit any agricultural income in the returns filed. The report of the Tahsildar refers to non-cultivation of the land because an agricultural operation in a large scale was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Tribunal that on the date of the purchase and as also on the date of acquisition. the land in question was agricultural land. Having come to such a conclusion, the Tribunal ought not to have gone into question of intention of the appellant/assessee and definitely not into the question of intention of the land acquiring authority, the latter being a wholly irrelevant consideration." PCIT v. Heenaben Bhadresh Mehta [2018] 96 taxmann.com 164 (Guj) "9. As observed hereinabove. the land was sold as an agricultural land and in fact. what was sold was agriculture land. What was the intention of the purchaser cannot be the determinative factor to treat the profit earned by the assessee on sale of agriculture land as business income. Similarly, merely because for whatever reason, the assessee has earned sufficient huge amount of profit also cannot be a ground to treat the profit earned by the assessee on sale of agriculture land as business income." M. Vijaya v. DCIT [2014] 49 taxmann.com 26 (Hyd-ITAT) 37. Further, we make it clear that when the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso was agricultural. Even though the land was not actually put to agricultural use since about one year prior to the sale, there was no evidence to establish that it was converted to any other use. The fact that permission under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained by the assessee to sell the lands to the society for residential purposes would not, militate against the land continuing to be agricultural on the date of its sale, as the permission was obtained only about two and a half months prior to the sale. Therefore, till the land was held by the assessee its character as agricultural land was not changed either as a result of its re-classificanon in the revenue records or by the actual alteration of its use. Again, there was no evidence on record to show that there was any development in the surrounding area or that the land itself was developed prior to its sale. The land was located on the outskirts of the village but it was not situate in the municipal limit. The land must, therefore. be taken as having been situate in a rural area and it continued to have an agricultural bias right up to the date of its sale. Further, there was no evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imits. Accordingly, we allow this ground of all the appeals." WTO vs. Premier Polymers Pvt. Ltd. WTA No.06/Kol/2012, Judgment dated 31.05.2012 (Kol Trib.) "4. We are unable to share the perception of the ld. D.R. Even though, there is no res judicata in tax proceedings, the principle of consistency must find its place. When the revenue authorities accept the position for one particular assessment year by not challenging relief granted to assessee in appeal, it cannot be open to them to challenge the same relief being granted in favour of the assessee by the CIT(A) in other years, or, for the purpose, in the case of other assessees as well. Hon'ble Supreme Court, in the case of Union of India & Others -vs-Kaumudini Naravan Dalal and Another 249 ITR 219, had an occasion to consider whether it is open to revenue to accept a judgment in the case of one assessee, and appeal, against identical judgment, in the case of another assessee. Their Lordships held that such a differential treatment on the same set of facts was not permissible in law and observed that "it is not open to revenue to accept the judgment in the case of one assessee and challenge its correctness in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise taxable, cannot become taxable because of misunderstanding or wrong understanding of law by the assessee or because of his admission or on his misapprehension. If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. either there can be any waiver of the right by the assessee. The Department cannot rely upon any such admission or misapprehension if it is not otherwise taxable. (Emphasis ours) This question was dealt with by this court in Bhaskar Mitter's case [1994] 73 Taxman 437, at paragraph 8 at page 442. In this decision, this court observed: "An assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the Income-tax Officer to assess the income of an assessee according to law and determine the tax payable thereon. In doing so, he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppel by conduct against law nor is there any waiver of the legal right as much as the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther cash or mercantile system of accounting regularly employed by the assessee. There is no gainsaying that the department circulars are ITA No.6076/Del/2012 AY 2009-10 Sh. Haripal Singh binding on the assessee. Admittedly the assessee followed mercantile system of accounting. Under these circumstances, the interest income in question cannot be brought to tax during the year." Mumbai Bench of the Tribunal in the case of Khandelwal Laboratories Pvt. Ltd. vs. Department of Income Tax in ITA No. 3721/Mum/2009 order dated 26.03.2009 held as follows. "4. The jurisdictional High Court in I.T. Appeal No. 217 of 2001 in the case of Mr. Balkumund Acharya )Prop. Laxmi General supply Company) vs. DCIT vide judgment dated 19th Dec., 2008 at para 31,32,33 on pages 18 & 19 held as follow: "31. Having said so, we must observe that the Apex Court and the various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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