Smt K. Rohini, Jamshedpur V. ITO, Jamshedpur

ITA 13/RAN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0028 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY KUMAR
• Assessee Lawyers: S K PODDAR; R R MITTAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition
• Section: 54B; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER ITA NO.13/RAN/2016 ASSESSMENT YEAR :2008-09 SMT. K. ROHINI, FS-K2- 17, SECTOR-3, BARIDHI, JAMSHEDPUR V S INCOME TAX OFFICER, WARD-2(2), JAMSHEDPUR PAN/GIR NO. :ALSPR 5658 N (APPELLANT ) .. (RESPONDENT) APPELLANT BY : SHRI S.K.PODDAR, ADVOCATE & SHRI R.R. MITTAL, CA RESPONDENT BY : SHRI ABHAY KUMAR, DR DATE OF HEARING :15-09-2016 DATE OF PRONOUNCEMENT : 15-09-2016 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27.8.2015 OF COMMISSIONER OF INCOME TAX (APPEALS), JAMSHEDPUR, RELATING TO ASSESSMENT YEAR 2008-09. 2. THOUGH THE ASSESSEE HAS RAISED MANY GROUNDS OF APPEAL, THE ONLY ISSUE THAT WAS PRESSED FOR ADJUDICATION BY THE LEAR NED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING WAS THE ISSUE AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN COMING TO THE CONCLUS ION THAT LAND WHICH WAS SOLD BY THE ASSESSEE WAS AGRICULTURAL LAND, CAPITAL GAIN ON TRANSFER OF WHICH IS NOT EXIGIBLE TO TAX. 2 ITA NO.13/RAN/2016 AY:2008-09 3. THE ASSESSEE IS AN INDIVIDUAL. DURING THE PRE VIOUS YEAR RELEVANT TO AY 2008-09 I.E., ON 19.6.2007, SHE SOLD LAND MEASUR ING ABOUT 4 ACRES AND 55 DECIMAL SITUATE WITHIN THE JURISDICTION OF THE C IRCLE-OFFICER (ANCHAL ADHIKARI), CHANDIL, DISTRICT SARAIKELA-KHARSAWAN FO R A SALE CONSIDERATION OF RS.30 LACS. THE VALUE ADOPTED FOR THE PURPOSE OF ST AMP DUTY AND REGISTRATION BY THE REGISTERING AUTHORITIES WAS A S UM OF RS.1,00,75,000/-. IN VIEW OF THE PROVISIONS OF SEC.50C OF THE INCOME TAX ACT, 1961(ACT), LONG TERM CAPITAL GAIN WILL HAVE TO BE COMPUTED U/S.48 O F THE ACT BY SUBSTITUTING THE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFE R BY THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY. HOWEVER, EVEN IN SUCH C ASE AS PER PROVISIONS OF SEC.50C(2) OF THE ACT, THE AO HAS DISCRETION TO REFER THE QUESTION OF VALUATION TO THE DEPARTMENT VALUATION OFFICER (DVO) . THE DVO HAS IN HIS REPORT ACCEPTED THAT THE VALUE OF THE PROPERTY WAS ONLY RS.30 LACS AND THEREFORE THE CAPITAL GAIN HAD TO BE COMPUTED ACCOR DINGLY. THE LONG TERM CAPITAL GAIN COMPUTED BY THE CIT(A) WAS RS.28,94,08 2/- AND THIS IS NOT IN DISPUTE BEFORE US. AS ALREADY STATED THE DISPUTE I S AS TO WHETHER THE LAND THAT WAS SOLD CAN BE SAID TO BE AGRICULTURAL LAND AND THEREFORE CAPITAL GAIN ON TRANSFER OF THE SAME IS NOT CHARGEABLE TO T AX UNDER THE ACT. SECTION 45 OF THE ACT BRINGS TO TAX CAPITAL GAIN ON TRANSFER OF CAPITAL ASSET TO TAX UNDER THE HEAD CAPITAL GAINS. THE MEANING O F THE TERM CAPITAL ASSET HAS THEREFORE TO BE EXAMINED. 4. AT THE TIME OF ENACTMENT OF THE 1961 ACT, SECTI ON 2(14) READ AS UNDER : (14) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HEL D BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFE SSION, BUT DOES NOT INCLUDE- (I) ANY STOCK-IN-TRADE, CONSUMABLE STORES OR RAW MA TERIALS HELD FOR THE PURPOSES OF HIS BUSINESS OR PROFESSION; (II) PERSONAL EFFECTS, THIS IS TO SAY, MOVABLE PROP ERTY (INCLUDING WEARING APPAREL, JEWELLERY AND FURNITURE) HELD FOR PERSONAL USE BY THE ASSESSEE OR ANY MEMBER OF HIS FAMILY DEPENDENT ON H IM; (III) AGRICULTURAL LAND IN INDIA. 3 ITA NO.13/RAN/2016 AY:2008-09 5. SUB-CL. (III) AS IT EXISTS AT PRESENT WAS SUBST ITUTED W.E.F. 1ST APRIL, 1970 BY THE FINANCE ACT, 1970 FOR ORIGINAL SUB-CL. (III) WHICH READ '(III) AGRICULTURAL LAND IN INDIA'. (III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND S ITUATE- (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNI CIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED B EFORE THE 1ST DAY OF THE PREVIOUS YEAR ; OR (B) IN ANY AREA WITHIN SUCH DISTANCE, NOT BEING MOR E THAN EIGHT KILOMETRES FROM THE LOCAL LIMITS OF ANY MUNICIPALIT Y OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVER NMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANISATIO N OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHA LF BY NOTIFICATION IN THE OFFICIAL GAZETTE; 6. CIRCULAR NO. 45, DT. 2ND SEPT., 1970 TC20S.1251 EXPLAINS THE AMENDMENT MADE BY FINANCE ACT, 1970 IN SECTION 2(14 ) AND CONSEQUENTIAL AMENDMENTS IN SECTION 47 AND SECTION 54E, AS FOLLOW S: CAPITAL GAINS ARISING FROM TRANSFER OF AGRICULTURAL LAND IN URBAN AREAS 29. CAPITAL GAINS ARISING FROM THE TRANSFER OF A CAPITA L ASSET HAVE BEEN CHARGEABLE TO INCOME-TAX FOR SEVERAL YEARS PAS T. WHERE THE TRANSFER OF THE CAPITAL ASSET IS EFFECTED WITHIN A PERIOD OF 24 MONTHS FROM THE DATE OF ITS ACQUISITION BY THE ASSESSEE, T HE CAPITAL GAIN IS TREATED ON A PAR WITH ORDINARY INCOME AND CHARGED T O TAX ON THAT BASIS. GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET HELD BY THE ASSESSEE FOR MORE THAN 24 MONTHS ARE CHARGED TO TAX ON A CONCESSIONAL BASIS. IN THE CASE OF COMPANIES, SUCH GAINS ARE TAXED AT THE RATE OF 40% WHERE THEY RELATE TO LANDS AND B UILDINGS, AND AT 30% WHERE THEY RELATE TO OTHER ASSETS. IN THE CASE OF NON-CORPORATE TAXPAYERS, ONLY A CERTAIN PORTION OF THE CAPITAL GA INS IN EXCESS OF RS. 5,000 IS INCLUDED IN THE TAXABLE INCOME. THIS PROPO RTION IS 55% WHERE THE GAINS RELATE TO LANDS AND BUILDINGS AND 3 5% WHERE THEY RELATE TO OTHER ASSETS. 4 ITA NO.13/RAN/2016 AY:2008-09 30. PRIOR TO THE AMENDMENT MADE BY THE FINANCE ACT, 197 0, THE DEFINITION OF THE TERM 'CAPITAL ASSET' IN S. 2(14) OF THE IT ACT EXCLUDED FROM ITS SCOPE, INTER ALIA, AGRICULTURAL LAND IN IN DIA. ACCORDINGLY, NO LIABILITY TO TAX AROSE ON GAINS DERIVED FROM TRANSF ER OF AGRICULTURAL LAND IN INDIA. THIS EXEMPTION OF THE AGRICULTURAL LAND F ROM THE SCOPE OF LEVY OF TAX ON CAPITAL GAINS HAS A HISTORICAL ORIGI N AND IS NOT DUE TO ANY BAR IN THE CONSTITUTION ON THE COMPETENCE OF PA RLIAMENT TO LEGISLATE FOR SUCH LEVY. AGRICULTURAL LAND SITUATED IN MUNICIPAL AND OTHER URBAN AREAS IS ESSENTIALLY SIMILAR TO NON-AGR ICULTURAL LAND IN SUCH AREAS IN ITS POTENTIALITIES FOR USE DUE TO THE PROGRESS OF URBANIZATION AND INDUSTRIALISATION. THE FINANCE ACT , 1970, HAS ACCORDINGLY AMENDED THE RELEVANT PROVISIONS OF THE IT ACT SO AS TO BRING WITHIN THE SCOPE OF TAXATION CAPITAL GAINS AR ISING FROM THE TRANSFER OF AGRICULTURAL LAND SITUATED IN CERTAIN A REAS. FOR THIS PURPOSE, THE DEFINITION OF THE TERM ' CAPITAL ASSET ' IN S. 2(14) OF THE IT ACT HAS BEEN AMENDED SO AS TO EXCLUDE FROM ITS SCOP E ONLY AGRICULTURAL LAND IN INDIA WHICH IS NOT SITUATE IN ANY AREA COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY OR CANTON MENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAN D PERSONS ACCORDING TO THE LAST PRECEDING CENSUS FOR WHICH TH E RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PRE VIOUS YEAR. THE CENTRAL GOVERNMENT HAS BEEN AUTHORISED TO NOTIFY IN THE OFFICIAL GAZETTE ANY AREA OUTSIDE THE LIMITS OF ANY MUNICIPA LITY OR CANTONMENT BOARD HAVING A POPULATION OF NOT LESS THAN TEN THOU SAND, UP TO A MINIMUM DISTANCE OF 8 KILOMETERS FROM SUCH LIMITS, FOR THE PURPOSES OF THIS PROVISION. SUCH NOTIFICATION WILL BE ISSUED BY THE CENTRAL GOVERNMENT HAVING REGARD TO THE EXTENT OF, AND SCOP E FOR, URBANISATION OF SUCH AREA, AND, WHEN ANY SUCH AREA IS NOTIFIED BY THE CENTRAL GOVERNMENT, AGRICULTURAL LAND SITUATED WITH IN SUCH AREA WILL STAND INCLUDED WITHIN THE TERM ' CAPITAL ASSET '. AGRICULTURAL LAND SITUATED IN RURAL AREAS, I.E., AREAS OUTSIDE ANY MU NICIPALITY OR CANTONMENT BOARD HAVING A POPULATION OF NOT LESS TH AN TEN THOUSAND AND ALSO BEYOND THE DISTANCE NOTIFIED BY THE CENTRA L GOVERNMENT FROM THE LIMITS OF ANY SUCH MUNICIPALITY OR CANTONM ENT BOARD, WILL CONTINUE TO BE EXCLUDED FROM THE TERM 'CAPITAL ASSE T'. 31. THE AMENDMENT TO S. 2(14), AS STATED IN THE PRECEDI NG PARAGRAPH, APPLIES FROM 1ST APRIL, 1970, I.E., FOR AND FROM THE ASST. YR. 1970-71. HOWEVER, BY AN AMENDMENT TO S. 47 OF THE I T ACT, IT HAS BEEN SPECIFICALLY PROVIDED THAT NO CAPITAL GAIN OR LOSS WILL BE COMPUTED WITH REFERENCE TO ANY TRANSFER OF AGRICULT URAL LAND IN INDIA EFFECTED BEFORE 1ST MARCH, 1970. 32. THE EFFECT OF THE AMENDMENTS TO S. 2(14) AND S. 47, AS STATED ABOVE, WILL BE THAT CAPITAL GAINS ARISING FROM TRAN SFER OF AGRICULTURAL LANDS SITUATED IN THE MUNICIPAL AND OTHER URBAN ARE AS ON OR AFTER 1ST 5 ITA NO.13/RAN/2016 AY:2008-09 MARCH, 1970, WILL BECOME LIABLE TO TAXATION EVEN WH ERE SUCH LAND WAS HELD FOR BONA FIDE AGRICULTURAL PURPOSES, OFTEN AS THE MAIN SOURCE OF LIVELIHOOD. WITH A VIEW TO RELIEVING THE BURDEN OF TAXATION ON THE CAPITAL GAINS IN SUCH CASES, A PROVISION HAS BEEN MADE, IN A NEW S. 54B OF THE IT ACT, FOR EXEMPTING FROM TAX TH E CAPITAL GAIN ARISING FROM THE TRANSFER OF AGRICULTURAL LAND IN C ERTAIN CIRCUMSTANCES. UNDER THE NEW S. 54B, WHERE THE CAPITAL GAIN ARISES FROM TRANSFER OF LAND WHICH IN THE TWO YEARS IMMEDIATELY PRECEDING T HE DATE OF TRANSFER WAS BEING USED BY THE ASSESSEE OR A PARENT OF HIS FOR AGRICULTURAL PURPOSES, AND THE ASSESSEE HAS, WITHIN A PERIOD OF TWO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND ( WHETHER IN THE SAME AREA OR ELSEWHERE) FOR BEING USED FOR AGRICULTURAL PURPOSES, THEN THE CAPITAL GAIN WILL NOT BE CHARGED TO TAX TO THE EXTE NT THAT IT HAS BEEN UTILISED FOR ACQUIRING THE FRESH LAND. WHERE THE AM OUNT OF THE CAPITAL GAIN EXCEEDS THE COST OF ACQUISITION OF THE FRESH L AND, ONLY THE EXCESS WILL BE CHARGEABLE TO TAX. THE CONCESSION WI LL, HOWEVER, BE FORFEITED IF THE ASSESSEE TRANSFERS THE FRESH LAND ACQUIRED BY HIM WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE. SOURCE : [REPORTED IN (1971) 79 ITR (ST) 33 AT 48 7. CAPITAL ASSET IN THE FORM OF LAND IF IT WAS AG RICULTURAL LAND, WAS ORIGINALLY OUTSIDE THE PURVIEW OF THE DEFINITION OF CAPITAL ASSET. WITH EFFECT FROM 1-4-1970, AGRICULTURAL LAND IF IT IS SITUATE W ITHIN THE LIMITS SET OUT IN CLAUSE (A) OR CLAUSE (B) OF SEC.2(14) (III) OF THE ACT, THAN THEY ARE TO BE REGARDED AS CAPITAL ASSET NOTWITHSTANDING THE FACT THAT THEY ARE ACTUALLY AGRICULTURAL LANDS I.E., USED FOR CARRYING OF AGRIC ULTURAL OPERATIONS. THE FIRST ASPECT WHICH NEEDS TO BE SEEN IS AS TO WHETHER THE PROPERTY IS SITUATE IN MUNICIPAL AND OTHER URBAN AREAS AND THEREFORE NOTWI THSTANDING THE FACT THAT THE PROPERTY IS USED FOR AGRICULTURAL PURPOSE, IT I S CAPITAL ASSET, BECAUSE THE PROPERTY IS ESSENTIALLY SIMILAR TO NON-AGRICULTURAL LAND IN ITS POTENTIALITIES FOR USE DUE TO THE PROGRESS OF URBANIZATION AND INDUSTR IALISATION. IF THE PROPERTY IS IN RURAL AREAS IT WOULD NOT BE HIT BY CLAUSE (A) OR CLAUSE (B) OF SEC.2(14) (III) OF THE ACT. 8. THE AOS CASE WAS THAT NOTWITHSTANDING THE FAC T THAT THE PROPERTY WAS SITUATE IN AN AREA OUTSIDE THE AREA REFERRED TO IN CLAUSE (A) OR (B) OF SEC.2(14)(III) OF THE ACT, YET THE PROPERTY WAS NOT AGRICULTURAL LAND. THE 6 ITA NO.13/RAN/2016 AY:2008-09 MERE FACT THAT A LAND IS SITUATE IN AN AREA OUTSIDE THE AREA REFERRED TO IN CLAUSE (A) OR (B) OF SEC.2(14)(III) OF THE ACT, DOE S NOT AUTOMATICALLY MAKE IT AN AGRICULTURAL LAND AND SUCH LAND HAS TO BE USED F OR AGRICULTURAL PURPOSES AS LAID DOWN IN SEVERAL JUDICIAL PRONOUNCEMENTS. T HE LEGAL POSITION HAS BEEN LAID DOWN BY THE HONBLE SUPREME COURT IN CWT VS. OFFICER-IN- CHARGE (COURT OF WARDS), PAIGAH 105 ITR 133 (SC) IN WHICH QUESTION TO BE DECIDED WAS WHETHER 108 ACRES OF VACANT LAND ENCLOS ED IN COMPOUND WALLS OF A PALACE SITUATED BY THE SIDE OF A LAKE AN D CLASSIFIED AND ASSESSED TO LAND REVENUE, WHICH WERE NEITHER CULTIVATED NOR HAD BEEN PUT TO NON- AGRICULTURAL USE IN THE PAST COULD BE REGARDED AS ' AGRICULTURAL LAND ' WITHIN THE MEANING OF THAT EXPRESSION WHICH OCCURRED IN TH E DEFINITION OF ' ASSET ' IN SECTION 2(E) OF THE WT ACT, 1957. THE HONBLE SU PREME COURT HELD THAT MUCH WEIGHT CANNOT BE GIVEN TO MERE ' POTENTIALITY ' OF THE LAND FOR USE FOR AGRICULTURAL PURPOSES AND WHAT IS REALLY REQUIRED T O BE SHOWN IS THE CONNECTION WITH AN AGRICULTURAL PURPOSE AND USER AN D NOT THE MERE POSSIBILITY OF USER OF THE LAND, BY SOME POSSIBLE F UTURE OWNER OR POSSESSOR, FOR AN AGRICULTURAL PURPOSE. IT IS NOT MERE POTENTI ALITY, BUT ITS ACTUAL CONDITION AND INTENDED USER WHICH HAS TO BE SEEN. O NE OF THE OBJECTS FOR EXEMPTION IS TO ENCOURAGE CULTIVATION OR ACTUAL UTI LISATION OF LAND FOR AGRICULTURAL PURPOSES AND HENCE IF THERE IS NEITHER ANYTHING IN ITS CONDITION, NOR ANYTHING IN THE EVIDENCE TO INDICATE THE INTENT ION OF ITS OWNERS OR POSSESSORS SO AS TO CONNECT IT WITH AN AGRICULTURAL PURPOSE, THE LAND COULD NOT BE ' AGRICULTURAL LAND '. 9. IN THE CASE BEFORE THE HON'BLE SUPREME COURT T HE FOLLOWING CIRCUMSTANCES WERE EMPHASISED VIZ. (I) AREA WAS VER Y LARGE (108 ACRES) AND WAS ABUTTING A LAKE, (II) THERE WERE TWO WELLS ON IT (III) IT WAS CAPABLE OF BEING USED (THOUGH NOT ACTUALLY USED) FOR AGRICULTU RAL PURPOSES, (IV) IT HAD NOT BEEN PUT TO ANY USE WHICH COULD CHANGE ITS CHAR ACTER BY MAKING IT UNFIT FOR IMMEDIATE CULTIVATION; AND (V) IT WAS CLASSIFIE D AND ASSESSED TO LAND REVENUE AS 'AGRICULTURAL LAND' UNDER THE RELEVANT R EVENUE ENACTMENT. THE 7 ITA NO.13/RAN/2016 AY:2008-09 HON'BLE SUPREME COURT HELD THAT FIRST FOUR CIRCUMST ANCES RELATING TO ABSENCE OF NON-AGRICULTURAL USER WERE NEUTRAL CIRCU MSTANCES AND ONLY FIFTH CIRCUMSTANCE WAS GOOD PRIMA FACIE EVIDENCE OF LAND BEING AGRICULTURAL LAND BUT PRESUMPTION ARISING THEREFROM COULD BE REBUTTED BY OTHER CIRCUMSTANCES. IN THAT CASE THE ASSESSEE HAD NOT LE D ANY EVIDENCE ABOUT INTENDED USER BECAUSE ASSESSEE WAS UNDER MISTAKEN I MPRESSION THAT IT WAS NOT NECESSARY TO DO SO IN VIEW OF EXISTENCE OF PRIMA FACIE EVIDENCE IN THE FORM OF ENTRIES IN THE REVENUE RECORD AND THERE FORE THE HON'BLE SUPREME COURT RESTORED THE MATTER TO TRIBUNAL TO RE CORD A FINDING ON THE QUESTION OF INTENDED USER AND THEN DECIDE THE POINT WHETHER THE LAND IN QUESTION WAS AGRICULTURAL LAND. THE HON'BLE SUPREME COURT DISAPPROVED THE VIEW THAT THAT LAND WHICH IS LEFT BARREN BUT WH ICH IS CAPABLE OF BEING CULTIVATED CAN ALSO BE AGRICULTURAL LAND UNLESS THE SAID LAND IS ACTUALLY PUT TO SOME OTHER NON-AGRICULTURAL PURPOSE LIKE CONSTRU CTION OF BUILDINGS, OR AN AERODROME RUNWAY, ETC. THEREON WHICH ALTERS THE PHY SICAL CHARACTER OF THE LAND RENDERING IT UNFIT FOR IMMEDIATE CULTIVATION A ND OBSERVED THAT MINIMAL TEST OF AGRICULTURAL LAND WAS CREDIBLE EVIDENCE OF AT LEAST APPROPRIATION OR SETTING A PART OF THE LAND FOR A PURPOSE WHICH COUL D BE REGARDED AS AGRICULTURAL AND FOR WHICH LAND WAS USED WITHOUT AN ALTERATION OF ITS CHARACTER. 10. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF OFFICER-IN- CHARGE (COURT OF WARDS) (SUPRA) WAS ANALYSED BY THE HON'BLE GUJARAT HIGH COURT IN CIT VS. SARIFABIBI MOHMMED IBRAHIM 136 ITR 621 (GUJ) AND THE LEGAL POSITION WAS SUMMED UP AS FOLLOWS : (I) THE FACT THAT LAND IS ENTERED AS AGRICULTURAL L AND IN REVENUE RECORDS AND IS ASSESSED AS SUCH UNDER THE LAND REVE NUE CODE WOULD BE A CIRCUMSTANCE IN FAVOUR OF CONCLUSION THA T IT IS AN AGRICULTURAL LAND. HOWEVER, THIS WOULD RAISE ONLY A PRIMA FACIE PRESUMPTION AND SAID PRESUMPTION CAN BE DESTROYED B Y OTHER CIRCUMSTANCES POINTING TO THE CONTRARY CONCLUSION. 8 ITA NO.13/RAN/2016 AY:2008-09 (II) THE FACT THAT AGRICULTURAL OPERATIONS WERE CAR RIED ON IN THE PAST OR ARE CARRIED ON CURRENTLY IS A CIRCUMSTANCE IN FAVOU R OF CONCLUSION THAT LAND WAS AGRICULTURAL LAND. HOWEVER, THIS IS NOT A DECISIVE FACTOR INASMUCH AS AGRICULTURAL CROP CAN BE RAISED EVEN ON BUILDING SITE LAND (EVEN ON DESERT LAND AS OBSERVED BY THE SUPREM E COURT IN SAID CASE) AND SOMETIMES, A CROP IS GROWN IN ORDER NOT T O ALLOW THE LAND TO REMAIN IDLE AWAITING SALE FOR NON-AGRICULTURAL P URPOSES TO A NON- AGRICULTURIST BY WAY OF A STOP-GAP ARRANGEMENT OR I N ORDER TO AVOID PAYMENT OF REVENUE AT A HIGHER RATE OR IN ORDER TO AVOID PAYMENT OF CAPITAL GAINS TAX. (III) THE FACT THAT LAND IS NOT CONVERTED TO NON-AG RICULTURAL USER WOULD BE A CIRCUMSTANCE INDICATING THAT IT IS AN AGRICULT URAL LAND. HOWEVER THIS IS SUBJECT TO SAME RIDER AS IS MENTIONED IN (I I) ABOVE. (IV) THE FOLLOWING FACTS WOULD INDICATE THAT LAND W AS NOT AGRICULTURAL LAND : (A) THE LAND IS SITUATED (EVEN IN THE YEAR PRIOR TO ASST. YR. 1970-71 WHEN AMENDMENT CAME IN FORCE) IN AN URBAN AREA IN T HE PROXIMITY OF BUILDING SITES. (FROM ASST. YR. 1970-71, AGRICULTUR AL LANDS SITUATE WITHIN MUNICIPAL LIMITS ARE NOT OUTSIDE THE AMBIT O F ' CAPITAL ASSETS '). (B) THE LAND IS SOLD TO A NON-AGRICULTURIST FOR NON -AGRICULTURAL PURPOSES. (C) THE LAND IS SOLD ON A PER SQUARE YARD BASIS AT A PRICE COMPARABLE TO THE PRICE FETCHED BY BUILDING SITES. (D) THE PRICE IS SUCH THAT NO BONA FIDE AGRICULTURI ST WOULD PURCHASE THE SAME FOR GENUINE AGRICULTURAL OPERATIONS. (E) WHEN THE PRICE IS SUCH THAT NO PRUDENT OWNER WO ULD SELL IT AT A PRICE WORKED OUT ON THE CAPITALISATION METHOD TAKIN G INTO ACCOUNT ITS OPTIMUM YIELD IN THE MOST FAVOURABLE CIRCUMSTANCES. 11. THE ABOVE DECISION OF HON'BLE GUJARAT HIGH CO URT HAS BEEN AFFIRMED IN APPEAL BY THE HON'BLE SUPREME COURT IN SARIFABIBI MOHMED IBRAHIM VS. CIT 204 ITR 631 (SC) IN WHICH THE HON'BLE SUPREME COU RT EMPHASISED THAT ALL THE CIRCUMSTANCES WERE REQUIRED TO BE WEIG HTED AND THAT HON'BLE HIGH COURT HAS REACHED A CORRECT CONCLUSION. 12. THE PLEA OF THE ASSESSEE WAS THAT THE LAND IN QUESTION WAS ALWAYS SUBJECT TO AGRICULTURAL OPERATIONS BY THE FOREFATHE RS OF THE ASSESSEE. IT WAS 9 ITA NO.13/RAN/2016 AY:2008-09 RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORD S AND QUIT RENT WAS PAID FOR THE LAND UP TO THE YEAR 2002. THE LAND WAS ACQ UIRED BY BIHAR GOVERNMENT IN THE YEAR 1990 AND THE LEGALITY OF SUC H ACQUISITION WAS UNDER CHALLENGE. THE STATE GOVERNMENT PUT UP BOUNDA RY WALL AND DEBARRED AGRICULTURAL OPERATIONS. RELIANCE WAS PLA CED ON THE DECISION OF THE HONBLE PATNA HIGH COURT IN THE CASE OF ADDL.CIT VS. TARA CHAND JAIN 123 ITR 567 (PATNA) WHEREIN IT WAS HELD THAT WHERE REVENUE RECORDS SHOWED LAND TO BE AGRICULTURAL LAND THE FACT THAT P URCHASER PURCHASED THE LAND FOR CONSTRUCTION OF A HOUSE WILL NOT MAKE THE LAND THAT WAS SOLD AS NON-AGRICULTURAL LAND. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF A.R.DAHIYA VS. ACIT 269 ITR 0542 (P & H) FOR THE PROPOSITION THAT WHEN THE LAND ACQUIRED WAS AGRICULTURAL LAND THE SUBSEQUENT CHARACTER OF THE L AND IS IRRELEVANT. 13. THE REVENUE AUTHORITIES HOWEVER HELD THAT THE LAND IN QUESTION WAS NOT CULTIVATED SINCE 1990 AND IN COMING TO SUCH CON CLUSION THE REVENUE AUTHORITIES PLACED RELIANCE ON REPORT OF THE INSPEC TOR OF INCOME TAX. THE REVENUE AUTHORITIES ALSO HELD THAT THERE WAS NO EVI DENCE PRODUCED TO PROVE THAT AFTER NOTIFICATION OF THE LAND FOR ACQUI SITION THE ASSESSEES LOST POSSESSION AND HENCE COULD NOT CARRY OUT AGRICULTUR AL OPERATIONS. THE REVENUE AUTHORITIES ALSO HELD THAT NO TAX WAS PAID EVER SINCE 2003 FOR USE FOR AGRICULTURAL PURPOSE AND IN COMING TO THIS CONC LUSION RELIED ON A COMMUNICATION FROM THE CIRCLE OFFICER, CHANDLI. 14. THE LIMITED PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS TO REMAND THE ISSUE TO THE AO FOR FRESH CONSIDERATION FOR THE REASON THAT THE REVENUE AUTHORITIES DID NOT CONFRONT THE ASSESSEE B Y FURNISHING THE REPORT OF THE INSPECTOR OF INCOME TAX NOR DID THEY CALL UP ON THE ASSESSEE TO EXPLAIN AS TO HOW BEFORE NOTIFICATION OF THE LAND F OR ACQUISITION THE ASSESSEE WAS CARRYING ON AGRICULTURAL OPERATIONS. THE COMMUNICATION WITH REGARD TO NON PAYMENT OF TAX WAS ALSO NOT CONFRONTE D TO THE ASSESSEE. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 10 ITA NO.13/RAN/2016 AY:2008-09 15. THE SUBMISSIONS MADE ABOVE ARE CONSIDERED AND I FIND THE SUBMISSIONS TO BE CORRECT. I ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND REMAND THE ISSUE IN QUESTION TO THE AO FOR CONSIDER ATION DE NOVO AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE AFTER FUR NISHING THE ASSESSEE THE DOCUMENTS REFERRED TO ABOVE AND ALLOWING ASSESSEE L IBERTY TO ESTABLISH HER CASE WITH NECESSARY EVIDENCE. 16. FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/09/201 6 SD/- (N.V.VASUDEVAN ) JUDICIAL MEMBER RANCHI , DATED 15/09/2016 *DKP ,PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT CONCERNED-SMT. K. ROHINI, FS-K2- 17, SECTOR-3, BARIDHI, JAMSHEDPUR 2. THE RESPONDENT CONCERNED-ITO, WARD-2(2), JAMSHEDPUR 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE. BY ORDER, //TRUE COPY // SR.PS, ITAT, RANCHI