9911796707
TMI Blog1983 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... cultivation, 90 acres were planted with coffee; cardamom in 70 acres; eucalyptus grandis and miscellaneous plants in 20 acres. Absolute rock and barren rocky ground accounted for 405 acres. Nearly 500 acres were covered by thickly grown bamboo clusters. The rest of the area was covered by evergreen and mixed type of forests. Wherever the forests were not in command, the ground was covered with a wild growth of grass. The average rainfall in the region is about 115 to 120 inches during south-west monsoon and 15 to 25 inches daring north-east monsoon. Even during March and April, there are thunder showers accounting for 5 to 10 inches. This estate, if it can be so called in its utter present condition, appears once upon a time to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee would be eligible for exclusion from his individual assessment to wealth-tax. On further appeal by the assessees, however, the Tribunal held that barring 405 acres of barren rock, the rest of the estate must be regarded as agricultural lands even if, at the present moment, they were overgrown with dense forest or other foliage. The Department thereupon demanded a reference to this court. The Tribunal complied with the requisition, and have made this group of references in which the following common questions of law have been propounded " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to exemption under section 2(e)(i) of the Wealth-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were swayed by one factor more than any other. It had to do with the fact that once upon a time, this estate was plantation, and, for some reason or other, it had fallen into ruin and become forest land, but it certainly holds the promise or potentiality of again being converted into agricultural land including the areas where the forest had grown thick during 50 years or more of neglect and abandonment. The expression " agricultural land ", as tax exempted property, figures in several contexts in our direct tax laws. For a time, agricultural land was excluded from the definition of a capital asset and, therefore, incapable of yielding taxable capital gains under the I.T. Act. Agricultural land, again, does not even now form part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of judicial opinion came the decision of the Supreme Court in CWT v. Officer-in-Charge (Court of Wards), Paigah [1976] 105 ITR 133. In that case the question was whether a tract of vacant land of the extent of 108 acres, going by the name of " Begumpet Palace " in the heart of Hyderabad City, can be treated as agricultural land and thereby excluded from the charge to wealth-tax under s. 2(e)(i) of the W.T. Act, 1957. A Full Bench of the Andhra Pradesh High Court held that the " Begumpet Palace " answered the description of agricultural land although it was not actually under cultivation. The Full Bench observed that the land was capable of being brought under agriculture, since it had not actually been put to any purpose other than ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in CWT v. Officer-in-Charge (Court of Wards), Paigah [1976] 105 ITR 133 and observed that without evidence to show that the forest land had already been cleared and then prepared or earmarked for agricultural purposes, it would be too soon and too unreal to hold that it had become agricultural land. The Supreme Court further observed that the question in every case had to be decided on evidence of actual or intended user for which land may have been prepared or set apart. They proceeded to observe that the burden was heavily on the assessees or accountable persons, as the case may be, to show that forest land covered with wild and natural growth had been converted into land which is either actually used for agricultural purposes or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire area, barring the rocky land, could be brought sooner or later under cultivation, and, therefore, must be treated as agricultural land. For all the detailed discussion one finds in their order, however, the Tribunal was hard put to it to hold the estate as agricultural land only on the basis that although, on date, it was actually forest land, it had the potential of becoming or being reconverted into, cultivable land. We must point out that excepting for 250 acres, there is no evidence that any steps were at all taken by the assessees for preparing or setting apart the land for recultivation. Forests do not disappear merely under a project report. They do not get converted into agricultural land by the deft use of a writing pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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