Syed Hussain Saheb Babu, CHENNAI V. ITO, CHENNAI

ITA 3241/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7497 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-05-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 28-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: MRS S VIDHYA
• Keywords: Capital asset; Gift
• Section: 143(3); 2(14); 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . ,%& BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.3241/MDS/2016 ( / ASSESSMENT YEAR: 2013-14) / APPELLANT BY : MRS. S. VIDHYA, FCA /RESPONDENT BY : MR. SUPRIYO PAL, JCIT / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE DIRECTED AGAIN ST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-5, CHENNAI DATED 10.11.2016 IN ITA NO.8/CIT(A)-5/16-17 FOR THE ASSESSMENT YEAR 2013-14 PASSED U/S.256 R.W.S 143(3) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN SHRI SYED HUSSAIN SAHEB BABU, AKBER RIFA & CO, AP 122, 6 TH STREET, AF-BLOCK, 11 TH MAIN ROAD, ANNA NAGAR, CHENNAI 40 VS THE INCOME TAX OFFICER, NON CORPORATE WARD 4(5), CHENNAI PAN:AEBPB1952R ( /APPELLANT) ( /RESPONDENT) /DATE OF HEARING : 01.03.2017 ! /DATE OF PRONOUNCEMENT : 17.03.2017 2 ITA NO.3241/MDS/2016 CONFIRMING THE ADDITION MADE BY THE LD.AO FOR RS.5, 12,92,076/- BY TREATING THE SALE OF THE AGRICULTURAL LAND OF THE A SSESSEE WHICH IS EXEMPT U/S. 2(14) OF THE ACT AS NON-AGRICULTURAL LA ND. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING LEATHER, FILED H IS RETURN OF INCOME ON 25.09.2013 ADMITTING INCOME OF RS.5,74,290/- SUB SEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS BECAUSE O F LARGE INVESTMENT IN PROPERTY AND INTRODUCTION OF CAPITAL IN THE RELEVANT PREVIOUS YEAR. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, IT WAS EXPLAINED BY THE ASSESSEE THAT HE HAD SOLD HIS AGRI CULTURAL LAND EXTENDING TO 2.36 ACRES FOR SALE CONSIDERATION OF R S.5,15,02,500/- TO M/S. PROVIDENT HOUSING LTD., BANGALORE ON 30.08.201 2. THE ASSESSEE HAD ALSO SUBMITTED BEFORE THE LD.AO THAT T HE LAND IN QUESTION WAS BEYOND 8 KMS., FROM TAMBARAM MUNICIPAL LIMIT AND THE LAND WAS USED ONLY FOR AGRICULTURAL PURPOSES. IT W AS ALSO EXPLAINED THAT IN THE ENTIRE LOCALITY THE LAND WAS USED ONLY FOR AGRICULTURAL PURPOSES. HOWEVER, THE LD. AO DID NOT ACCEPT THE A RGUMENT OF THE ASSESSEE THAT THE LAND SOLD BY HIM IS AGRICULTURAL LAND BECAUSE OF THE FOLLOWING REASONS:- 3 ITA NO.3241/MDS/2016 1) THE ASSESSEE HAD NOT DECLARED ANY AGRICULTURAL I NCOME IN HIS RETURN OF INCOME. 2) THE GAIN ARISING OUT OF THE SALE OF THE AGRICULT URAL LAND WAS ALSO NOT REFLECTED IN THE RETURN OF INCOME BUT ONLY A FOOT NOTE ABOUT THE TRANSACTION WAS MENTIONED IN SUCH A MANNE R SO AS TO ESCAPE FROM THE EYE OF THE TAX ENFORCING AUTHORI TY. 3) THE ASSESSEE IS NOT AN AGRICULTURIST BY PROFESSI ON AND HE IS NOT DEPENDING UPON AGRICULTURAL INCOME, RATHER HE I S A BUSINESS MAN AND HIS MAIN SOURCE OF INCOME IS ONLY FROM BUSINESS. 4) NOWHERE IN THE SALE DEED IT WAS MENTIONED AS AGR ICULTURAL LAND, IN FACT IT WAS ONLY STATED AS VACANT LAND. F URTHER IN THE SETTLEMENT DEED BY VIRTUE OF WHICH THE ASSESSEE BEC AME THE OWNER OF THE LAND ALSO, IT WAS MENTIONED ONLY AS VA CANT LAND. 5) THE CLASSIFICATION IN THE REVENUE RECORDS STATE THE LAND AS PUNJAI. 6) THE ADANGAL CERTIFICATE ALSO DOES NOT MENTION TH AT ANY AGRICULTURAL ACTIVITY WAS PERFORMED IN THE LAND. 7) THE LAND IN QUESTION FALLS IN THE ZONE OF URBANI SABLE AREA AS PER THE NOTIFICATION OF 2004 ISSUED BY THE GOVERNME NT OF TAMIL NADU. 4 ITA NO.3241/MDS/2016 8) THE LAND IS IN CLOSE VICINITY OF PUDUPAKKAM VILL AGE WHICH IS VERY NEAR TO SIPCOT INDUSTRIAL AREA, A HUB FOR INFO RMATION TECHNOLOGY PARK. 9) IN THE SURROUNDING AREA HIGH POWER LINES AND TOW ERS WERE ERECTED AND IN THE WESTERN SIDE OF PUDUPAKKAM VILLA GE REPUTED INDUSTRIES, HOUSING UNITS, CEMENT FACTORY, DRY FISH FACTORY, ETC., HAVE SPRUNG UP WHICH SHOWS THAT THE LAND TRANSFERRED BY THE ASSESSEE IS NOT AGRICULTURAL LAN D. 10) THE VALUATION OF THE LAND MENTIONED BY THE SUB- REGISTRAR WAS IN SQ.FT. AND NOT IN YARDAGE OR ACREAGE. 11) AS PER THE LETTER OF THE SUB-REGISTRAR, THIRUPO RUR, THE LAND WAS SOLD AT A HIGHER RATE OF RS.500/- PER SQ.FT., O N 30.08.2012 WHEREAS THE LOWEST RATE WAS RS.50/- PER SQ.FT., AS ON 01.04.2012. 12) THE LAND WAS NOT SOLD FOR AGRICULTURAL PURPOSE, INSTEAD FOR PROMOTING A MEGA HOUSING SOCIETY. 13) THE INTENTION OF THE PURCHASER WAS TO GIFT THE PORTION OF THE LAND TO TNEB FOR INSTALLING A SUB-POWER STATION AND TO PROVIDE CAR PARKING FACILITY TO THE 2500 FLAT OWNERS OF THE PROJECT COSMO CITY. 5 ITA NO.3241/MDS/2016 14) THE ASSESSEE HAD LEVELED THE LAND IN THE FIRST QUARTER OF THE YEAR 2012 ENGAGING M/S. BRK ENTERPRISES, CIVIL CONT RACTORS, KELAMBAKKAM AND HAD SPENT RS.13,19,000/- FOR THE SA ME. 15) THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME F OR A PERIOD OF 19 DAYS ONLY FOR THE ASSESSMENT YEAR 2012-13 PRI OR TO WHICH THE ASSESSEES SPOUSE HAD HELD THE PROPERTY A S VACANT LAND. 16) THE ASSESSEE HAD ALSO NOT FURNISHED ANY EVIDENC E TO SHOW THAT HE HAS EARNED AGRICULTURAL INCOME. 17) IN THE STATEMENT RECORDED FROM SHRI R. KESAVAN AND SHRI S. BABU ALSO SUGGEST THAT THE LAND OWNED BY TH E ASSESSEE IS IN THE INDUSTRIAL AND RESIDENTIAL AREA. 4. BASED ON THE ABOVE FACTS, THE LD. AO COMPUTED TH E CAPITAL GAIN OF THE ASSESSEE AT RS.5,12,92,076/-. 5. ON APPEAL, THE LD. CIT(A) UPHELD THE ORDER OF TH E LD. AO BY REITERATING HIS FINDINGS AND BY RELYING ON THE FOLL OWING DECISIONS I. ABHIJIT SUBHASH GAIKWAD V. DCIT IN ITA NOS. 699 TO 701 (PN) OF 2013, PUNE BENCH REPORTED IN [2015] 60 TAXMANN.COM 259 (PUNE-TRIB). 6 ITA NO.3241/MDS/2016 II. B. RAMACHANDHIRAN V. CIT, TAX CASE (APPEAL) NO. 262 OF 2009 IN HIGH COURT OF MADRAS REPORTED IN [2014] 43 TAXMANN.COM 430 (MADRAS). III. CIT-II, AMRISTAR V. SMT. NEERU AGARWAL, IT APP EAL NOS.190, 208 & 209 OF 2012 IN HIGH COURT OF PUNJAB AND HARYA NA REPORTED IN [2013] 40 TAXMANN.COM 295 (PUNJAB & HAR YANA) IV. G.M. OMER KHAN V. ACIT. CIVIL APPEAL NO.2830 OF 1977 IN SUPREME COURT OF INDIA REPORTED IN [1992] 63 TAXMA N 533 (SC) V. INCOME TAX OFFICER V. ABOOBUCKER IN ITA NO.173 ( MDS) OF 2013, CHENNAI BENCH REPORT IN [2016] 67 TAXMANN.COM 114 (CHENNAI-TRIB.) VI. CIT V. SMT. RANI TARA DEVI, ITA APPEAL NOS.104 & 105 OF 2009 IN HIGH COURT OF PUNJAB & HARYANA REPORTED IN [2013] 31 TAXMANN.COM 234 (PUNJAB & HARYANA) VII. CIT V. GEMINI PICTURES CIRCUIT (P.) LTD, CIVIL APPEAL NOS. 6133 6134 OF 1983 IN SUPREME COURT OF INDIA REPOR TED IN [1996] 85 TAXMAN 594 (SC) 6. BEFORE US, THE LD. AR MADE THE FOLLOWING SUBMISS ION. (A) THE ASSESSEES WIFE HAD PURCHASED THE LAND AND SUBSEQUE NTLY TRANSFERRED THE SAME IN THE ASSESSEES NAME VIDE SE TTLEMENT DEED. (B) THE LAND WAS SITUATED BEYOND 8 KMS., FROM THE M UNICIPAL LIMITS OF THIRUPORUR PERATCHI WHICH IS EVIDENT FROM THE CERTI FICATE ISSUED BY THE VAO. (C)THE POPULATION OF PUDUPAKKAM VILLAGE IS BE LOW 10,000 AS 7 ITA NO.3241/MDS/2016 PER THE STATE CENSUS DATA WHICH IS VERY MUCH AVAILA BLE IN THE PUBLIC DOMAIN AND THERE IS NO DISPUTE ON THE SAME. (D) TH E ASSESSEE HAD ALSO PERFORMED CERTAIN AGRICULTURAL OPERATIONS IN T HE LAND THOUGH NOT CONTINUOUSLY. (E) THE ENCUMBRANCE CERTIFICATE ISSUED BY THE REGISTRATION DEPARTMENT ALSO MENTIONS THAT THE LAND TRANSFERRED BY THE ASSESSEE ON 30.08.2012 IS AGRICULTURE LAND A ND ONLY DURING THE MONTH OF APRIL 2013 THE CLASSIFICATION O F THE LAND WAS CHANGED AS HOUSING SITE BY THE SUB-REGISTRAR. (F) THE ASSESSEES WIFE HAD ALSO OFFERED AGRICULTURAL INCOME DURING TH E PAST 14 YEARS WHICH WAS ACCEPTED BY THE DEPARTMENT. (G) THE LAND WAS PURCHASED BY THE ASSESSEE ON 19 TH APRIL 1989 VIDE SALE DEED REGISTRATION NO. 959 OF 1989, THIRUPORUR SUB-REGISTRAR OFFICE WHEREI N IT IS CLEARLY STATED THAT THE LAND IS AGRICULTURE LAND. (H) ON TH E NORTH SIDE OF THE LAND THERE IS A LAKE FROM WHICH THE WATER WAS DRAWN FOR CULTIVATING THE LAND. FOR THE ABOVE REASONS IT WAS ARGUED THAT THE LAND SOLD BY THE ASSESSEE IS AGRICULTURE LAND AND AS PER SECTION 2(1 4) OF THE ACT IT FALLS OUTSIDE THE AMBIT OF CAPITAL ASSET AND THEREF ORE THE SALE OF THE LAND WILL NOT ATTRACT CAPITAL GAIN TAX. THE LD. AR ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MRS. SAKUNTHALA VEDACHALAM VS. ACIT IN TCA NO.56 6 & 567 OF 2013 AND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. 8 ITA NO.3241/MDS/2016 SIDDHARTH J. DESAI REPORTED IN 139 ITR 628 WHEREIN IT WAS HELD THAT WHEN THE LAND IS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURE LAND AND THE OTHER CONDITIONS LAID DOWN IN SECTION 2(14) OF THE ACT IS COMPLIED WITH THEN THE CAPITAL GAIN ARISING OUT OF THE SALE OF THE LAND SHALL BE EXEMPT FROM TAX. 7. BEFORE US THE LD. DR VEHEMENTLY ARGUED IN SUPPOR T OF THE FINDINGS OF THE REVENUE AUTHORITIES AND PLEADED FOR SUSTAINING THEIR ORDERS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD AND WE FIND THAT THE FOLLOWING FACTS EMERGE:- I) THE LAND SOLD BY THE ASSESSEE WAS EARLIER PURCHASED BY THE ASSESSEES SPOUSE ON 20 TH APRIL 1989 FROM SHRI S. SEETHARAMA IYER VIDE REGISTERED DOCUMENT NO.959 OF 1989 IN SUB-REGISTRAR OF THIRUPORUR, BOOK NO.1, VOLUME 814, PAGES 231 TO 234. II) THE ABOVE PURCHASE DEED OF THE ASSESSEES SPOUSE MENTIONS THE LAND TO BE AGRICULTURE PUNJAI LAND S ITUATED IN 9 ITA NO.3241/MDS/2016 PUDUPAKKAM PANCHAYAT, THIRUPORUR PANCHAYAT UNION IN PAGE NO.2 OF THE DEED. III) THE ASSESSMENT ORDER DATED 26.08.2009 BY THE INCOME TAX OFFICER, BUSINESS WARD XII(2), CHENNAI 6 OF THE ASSESSEES SPOUSE (PAN:AOWPS1957A) FOR THE ASSESSME NT YEAR 2007-08 ALSO REVEALS THAT THE ASSESSEE HAS EAR NED AGRICULTURAL INCOME. IV) SUBSEQUENTLY, THE LAND MEASURING 2.36 ACRES AT SURV EY NO.5/13 IS TRANSFERRED IN THE NAME OF THE ASSESSEE BY WAY OF SETTLEMENT DEED; DOCUMENT NO.2509 OF 2012 DATED 13.03.2012 AT SUB-REGISTRAR OFFICE, THIRUPORUR. V) THEREAFTER THE ASSESSEE SOLD THE LAND TO M/S. PROVI DENT HOUSING LIMITED ON 30.08.2013 FOR A SALE CONSIDERAT ION OF RS.5,15,02,500/- VIDE DOCUMENT NO.8492 OF 2012, BOO K-1, PAGE NO.4 TO 13. FROM PAGE NO.3, CLAUSE VII IT IS EVIDENT THAT THERE IS A LAKE IN SURVEY NO.2 ADJOINING TO TH E LAND. VI) THE ENCUMBRANCE CERTIFICATE ISSUED BY THE REGISTRAT ION DEPARTMENT CLEARLY SHOWS THAT THE LAND SOLD BY THE ASSESSEE IS CLASSIFIED AS AGRICULTURE LAND AS ON 30.08.2012 WHICH IS SUBSEQUENTLY CONVERTED AS HOUSING SITE DURING THE M ONTH OF APRIL 2013. THE SAME IS EXTRACTED HEREIN BELOW FOR REFERENCE. 10 ITA NO.3241/MDS/2016 VII) THE POPULATION OF THE PUDUPAKKAM VILLAGE IS LESS TH AN 10,000 AS DISCLOSED IN THE PUBLIC DOMAIN. THE RELEV ANT PAGE EXTRACTED FROM THE INTERNET IS ENCLOSED HEREIN BELO W FOR REFERENCE. 11 ITA NO.3241/MDS/2016 VIII) THE VILLAGE OFFICER HAS ALSO CERTIFIED THAT THE LAN D IS BEYOND 8 KMS. FROM THE THIRUPORUR MUNICIPAL LIMIT V IDE HIS CERTIFICATE DATED 27.01.2016. COPY OF THE SAME IS E NCLOSED IN THE PAPER BOOK. 12 ITA NO.3241/MDS/2016 IX) THE CASE LAWS RELIED BY THE LD. CIT(A) ARE NOT APPL ICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. IN THOSE CAS ES PROVISION OF SECTION 2(14)(III)(A)&(B) OF THE ACT A RE VIOLATED AS DISCUSSED HEREIN BELOW WHICH IS NOT IN THE CASE OF THE ASSESSEE:- A. ABHIJIT SUBHASH GAIKWAD V. DCIT (SUPRA): IN THIS CASE THE LAND REVENUE RECORDS MAINTAINED BY THE REVENUE AUTHORITIES SHOWED THAT THE LAND IS NOT CAPABLE FOR CULTIVATION. FURTHER THE ASSESSEE HAD ALSO NOT IND ULGED IN ANY AGRICULTURAL ACTIVITY. B. B. RAMACHANDHIRAN V. CIT (SUPRA): THE ASSESSEE HAD NOT DISCHARGED ANY MATERIALS TO ESTABLISH THAT THE LAND IN QUESTION IS AGRICULTURE LAND. FURTHER HE HAS NOT PERFORMED ANY AGRICULTURAL OPERATIONS IN THE LAND. C. CIT-II, AMRISTAR V. SMT. NEERU AGARWAL (SUPRA) : THE LAND IN QUESTION WAS WITHIN THE DISTANCE OF 8 KMS., FROM THE MUNICIPALITY LIMIT. D. G.M. OMER KHAN V. ACIT (SUPRA) : THE LAND IN QUESTION THOUGH SITUATED IN A VILLAGE WAS WELL WITHIN THE MUNICIPALITY LIMIT OF THE CITY. 13 ITA NO.3241/MDS/2016 E. ITO V. ABOOBUCKER (SUPRA) : IN THIS CASE THERE WAS A SPECIFIC FINDING THAT (I) THE ASSESSEE HAD NOT CARR IED OUT ANY AGRICULTURAL ACTIVITIES, (II) THE LAND WAS SITU ATED IN THE HUB OF DEVELOPMENT ACTIVITIES ENCIRCLED BY HI-T ECH COMMERCIAL & RESIDENTIAL APARTMENTS AND (III) IN TH E ENTIRE BELT THERE WAS NO AGRICULTURAL ACTIVITIES AN D THE AREA WAS TRANSFORMED IN TO PRIVATE TOWNSHIPS. F. CIT V. SMT. RANI TARA DEVI (SUPRA) : THE LAND WAS SITUATED WITHIN THE LIMITS OF THE WIDE SCOPE OF THE TERM MUNICIPALITY. G. CIT V. GEMINI PICTURES CIRCUIT (P.) LTD . (SUPRA) : THE LAND WAS SITUATED WITHIN THE MUNICIPALITY LIMITS UN DER THE CLASSIFICATION OF URBAN LAND. 9. FROM THE ABOVE IT IS CRYSTAL CLEAR THAT THE ASSE SSEES SPOUSE PURCHASED AGRICULTURE LAND WHICH WAS SUBSEQUENTLY T RANSFERRED IN THE NAME OF THE ASSESSEE. THE ASSESSEES SPOUSE HA D PERFORMED AGRICULTURAL OPERATIONS IN THE LAND DURING THE ASSE SSMENT YEAR 2007- 08. FURTHER THE NATURE OF THE LAND REMAINS THE SAM E UNTIL IT WAS TRANSFERRED TO M/S. PROVIDENT HOUSING LIMITED. THE SE FACTS CANNOT BE DISPUTED AS IT IS EVIDENT BY DOCUMENTS REFERED H EREIN ABOUT. IN 14 ITA NO.3241/MDS/2016 THIS SITUATION THE ORDERS CITED BY THE LD. AR IS RE LEVANT. THE HONBLE JURISDICTIONAL JURISDICTIONAL HIGH COURT IN THE CAS E OF MRS. SAKUNTHALA VEDACHALAM VS. ACIT SUPRA HAD HELD THAT A) THE MANNER IN WHICH THE ADJOINING LANDS ARE USED BY THE RESPECTIVE OWNERS IS NOT A GROUND TO TREAT THE LAND IN QUESTION AS NON-AGRICULTURE LAND. B) IT IS NOT NECESSARY FOR THE ASSESSEE TO PERFORME AGRICULTURAL OPERATIONS DURING THE RELEVANT ASSESSMENT YEAR TO C LAIM HIS LAND TO BE AGRICULTURE LAND. C) EVEN AGRICULTURE LAND CLASSIFIED AS DRY LAND FOR WHICH KIST HAS BEEN PAID WILL BE ELIGIBLE TO BE HELD AS AGRICULTUR E LAND FOR THE PURPOSE OF SECTION 2(14) OF THE ACT. D) THE DECISION IN THE CASE CIT V. RAJA BENOY KUMAR SAHAS ROY REPORTED IN 32 ITR 466 FORTIFIES THAT THE EXPRESSIO N AGRICULTURE LAND SHOULD BE INTERPRETED IN ITS WIDE SIGNIFICANC E AS INCLUDING LANDS WHICH ARE USED OR ARE CAPABLE OF BE ING USED FOR RAISING ANY VALUABLE PLANTS OR TREES OR FOR ANY OTHER PURPOSE OF HUSBANDRY. E) ONCE THERE IS A FINDING THAT THE LAND IS CLASSIF IED AS AGRICULTURE LAND IN THE REVENUE RECORDS EVIDENCE BY ADANGAL AND LETTER OF THE REVENUE AUTHORITIES SATISFYING THE CONDITIONS O F SECTION 15 ITA NO.3241/MDS/2016 2(14) OF THE ACT; THEN THE REVENUE IS BOUND TO TREA T THE LAND IN QUESTION AS AGRICULTURE LAND. 10. IN THE CASE OF THE ASSESSEE THE ENCUMBRANCE CE RTIFICATE ISSUED BY THE REVENUE AUTHORITIES CLEARLY STATES TH AT THE LAND SOLD BY THE ASSESSEE IS AGRICULTURE LAND. THE VILLAGE O FFICER CERTIFICATE ALSO STATE THAT THE LAND IS SITUATED OUTSIDE 8 KMS. OF THIRUPORUR MUNICIPAL LIMITS. FROM THE PUBLIC DOMAIN EXTRACTED HEREIN ABOVE IT IS EVIDENT THAT THE POPULATION OF THE PUDUPAKKAM VILLA GE WHEREIN THE LAND IS SITUATED IS LESS THAN 10,000. HENCE THE CO NDITION LAID DOWN IN SECTION 2(14)(III) OF THE ACT, IS COMPLIED WITH AND THE LAND TRANSFERRED BY THE ASSESSEE CANNOT BE TREATED AS CA PITAL ASSET AND THEREFORE WILL FALL OUTSIDE THE AMBIT OF CAPITAL GA IN TAX. MOREOVER THE REASONS CITED BY THE LD. AO DO NOT HAVE ANY FORCE. ONCE THE ASSESSEE HAS ESTABLISHED THAT THE LAND IN QUESTION IS AGRICULTURE LAND, IT IS NOT NECESSARY FOR HIM TO PROVE THAT HE HAS CARRIED ON AGRICULTURAL OPERATION, OR EARNED AGRICULTURAL INCO ME IF THE LAND IS KEPT VACANT AND NOT USED FOR ANY OTHER PURPOSE. TH E REVENUE RECORDS ONLY STATES WHETHER THE LAND IS WET LAND OR DRY LAND AND BOTH CATEGORY OF LAND ARE CAPABLE FOR AGRICULTURAL ACTIV ITIES. THEREFORE, IT CANNOT BE SAID THAT IF THE LAND IS CLASSIFIED AS PU NJAI I.E., DRY LAND, AGRICULTURAL ACTIVITIES CANNOT BE PERFORMED ON SUCH LAND. THE FUTURE 16 ITA NO.3241/MDS/2016 PLANNING OF THE GOVERNMENT TO BRING THE LAND UNDER URBANIZATION ZONE IS NOT RELEVANT UNLESS AND UNTIL THE LAND IS C LASSIFIED AS NON- AGRICULTURAL LAND IN THE REVENUE RECORDS. THE DEVE LOPMENTS IN THE CLOSE VICINITY ARE ALSO IMMATERIAL UNLESS THE LAND IS CLASSIFIED AS NON-AGRICULTURE. SIMILARLY THE VALUATION OF THE LAN D BY THE SUB- REGISTRAR OFFICE, THE INTENTION OF THE PURCHASER OF THE LAND IS ALSO NOT RELEVANT BECAUSE NOWHERE IN THE ACT IT IS MENTIONED THAT IN SUCH SITUATION THE BENEFIT OF SECTION 2(14)(III) OF THE ACT SHALL BE DENIED. FURTHER ON THE IDENTICAL ISSUE, THIS BENCH OF THE T RIBUNAL IN THE CASE OF SHRI N. VENKATRAMAN, IN ITA NO.1380/MDS/2016 VID E ORDER DATED 04.01.2017 HAD HELD AS FOLLOWS: 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. THE LEARNED AUTHOR IZED REPRESENTATIVE PRODUCED THE FOLLOWING DOCUMENTS BEF ORE US WHICH COULD NOT BE CONFRONTED BY THE REVENUE:- S.NO. DESCRIPTION PAGE NO. IN THE PAPER BOOK 1. PATTA NO.1071 IN THE NAME OF THE ASSESSEE MR.N.VENKATRAMAN S/O, S.NAGARAJAN TO THE EXTENT OF 1 HECTARE 12.50 ARE IN KATTAVAKKAM VILLAGE ISSUED BY THE TAHSILDAR, KANCHIPURAM TALUK. 151 2. PATTA NO.1061 IN THE NAME OF THE ASSESSEE MR.N.VENKATRAMAN S/O. S.NAGARAJAN TO THE EXTENT OF 0.81.50 ARE IN KATTAVAKKAM VILLAGE ISSUED BY THE TAHSILDAR, KANCHIPURAM TALUK 153 3 CERTIFICATE ISSUED BY TAHSILDAR, KANCHIPURAM TALUK OFFICE DATED 31.05.2011 TO THE EFFECT THAT NATHANALLUR & KATTAVAKKAM VILLAGES ARE SITUATED BEYOND 8 KMS (APPROXIMATELY 20 KMS AWAY) FROM KANCHIPURAM MUNICIPALITY AND IN THE ABOVE 155 17 ITA NO.3241/MDS/2016 MENTIONED VILLAGES POPULATION IS LESS THAN 20,000 4 IN RESPONSE TO THE SUMMON ISSUED U/S.131 THE VAO, KATTAVAKKAM VIDE HIS LETTER DATED 7.1.2016 HAD ENCLOSED THE COPY OF RELEVANT ADANGAL REGISTER WITH RESPECT TO THE CULTIVATION PERFORMED IN THE LAND OWNED BY SHRI N.VENKATRAMAN (THE ASSESSEE) AND OTHERS OF THE NEIGHBORHOOD :- 1. GROUNDNUT 2. COCONUT PLANTATION 3. TURMERIC 4. SUGARCANE 157, 159, 161 5. LAND TAX RECEIPT IN THE NAME OF MR. N.VENKATRAMAN (THE ASSESSEE) DATED 24.04.2008 FOR PATTA NO.1071 FOR RS.500/- AND FOR PATTA NO.1061 FOR RS.400/- 163 9. FROM THE ABOVE, IT IS EVIDENT THAT THE LAND OWNE D BY THE ASSESSEE WHICH WAS SUBSEQUENTLY SOLD IS AGRICULTURA L LAND AND CERTAIN AGRICULTURAL ACTIVITIES WERE PERFORMED ON IT. THE ADANGAL CERTIFICATE ISSUED BY THE STATE GOVERNMEN T REVENUE OFFICIALS ALSO STATES THAT THE NEIGHBORHOOD LANDS ARE ALSO AGRICULTURAL LAND AND AGRICULTURAL ACTIVITIES WERE PERFORMED ON THE SAME (P.B. PAGE NO. 159 & 161). FU RTHER, THESE LANDS WERE LOCATED BEYOND THE MUNICIPAL LIMIT OF EIGHT KILOMETERS SAY APPROXIMATELY TWENTY KILOMETERS FROM THE MUNICIPAL LIMIT AS PER THE CERTIFICATE ISSUED BY TH E REVENUE AUTHORITIES. THESE FACTS COULD NOT BE SUCCESSFULLY DISPROVED OR CONFRONTED BY THE LEARNED DEPARTMENTAL REPRESENT ATIVE. THE BLUNT REASON STATED BY THE LEARNED ASSESSING OF FICER IN HIS ORDER FOR DENYING TO TREAT THE LAND SOLD BY THE ASSESSEE AS AGRICULTURAL LAND ARE THAT:- I) THE LAND IN QUESTION WAS DRY LAND. 18 ITA NO.3241/MDS/2016 II) NO AGRICULTURAL OPERATION WAS CARRIED OUT IN THE LA ND. III) THE LAND IS SITUATED IN THE CLOSE PROXIMITY TO THE INDUSTRIAL AREA OF ORAGADAM. IV) THE LAND WAS SOLD TO REAL ESTATE COMPANY FOR NON- AGRICULTURAL PURPOSES. V) THE LAND WAS SOLD AT EXORBITANT PRICE. VI) ONLY IN THE REMOTE PAST THE LAND WAS USED FOR AGRICULTURAL PURPOSES. VII) THE ASSESSEE HAD NOT DECLARED AGRICULTURAL INCOME I N HIS RETURN. 10. AT THIS JUNCTURE, THE CASE LAWS CITED BY THE LE ARNED AUTHORIZED REPRESENTATIVE ARE VERY RELEVANT. I) IN THE CASE CWT VS OFFICER IN-CHARGE(COURT OF WARDS ), PAIGAH REPORTED IN 105 ITR 133. THE HONBLE APEX CO URT HAS EXPLAINED THE MEANING OF THE AGRICULTURAL LAND IN RESPECT TO WEALTH TAX MATTER EVEN WHEN THE LOCATION OF THE LAND WAS WITHIN THE MUNICIPAL LIMITS AS FOLLOWS:- 'AGRICULTURAL LAND' MEANING OF. THE QUESTION WAS WHETHER THE PROPERTY CALLED 'BEGUM PET PALACE' WITHIN THE MUNICIPAL LIMITS OF HYDERABAD CONSISTING OF VACANT LANDS OF ABOUT 108 ACRES AND ALSO BUILDINGS ENCLOSE D IN COMPOUND WALLS CONSTITUTED 'AGRICULTURAL LAND' WITHIN THE ME ANING OF CLAUSE (I) OF SECTION 2(E) OF THE WEALTH-TAX ACT, 1957. BECAUS E THE LAND WAS NEVER INTENDED TO BE USED FOR AGRICULTURE AND WAS N OT PLOUGHED OR TILLED, THE INCOME-TAX AUTHORITIES AND THE APPELLAT E TRIBUNAL HELD THAT THE PROPERTY COULD NOT BE TREATED AS 'AGRICULT URAL LAND' WITHIN THE MEANING OF SECTION 2(E). ON A REFERENCE, THE HI GH COURT HELD THE LAND TO BE AGRICULTURAL LAND BECAUSE: (I) THE A REA WAS 108 ACRES ABUTTING THE HUSSAIN SAGAR TANK; (II) THE LAND HAD TWO WELLS IN IT; (III) IT WAS CAPABLE OF BEING USED FOR AGRICULTURAL PURPOSES, (IV) IT 19 ITA NO.3241/MDS/2016 HAD NOT BEEN PUT TO ANY USE WHICH COULD CHANGE THE CHARACTER OF THE LAND BY MAKING IT UNFIT FOR IMMEDIATE CULTIVATI ON; AND (V) IT WAS CLASSIFIED AND ASSESSED TO LAND REVENUE AS 'AGRICUL TURAL LAND' UNDER THE A.P. LAND REVENUE ACT. ON APPEAL TO THE SUPREME COURT: HELD, THAT THE FIRST FOUR FEATURES CONSIDERED BY TH E HIGH COURT AND BASED UPON ABSENCE OF ANY USER FOR NON-AGRICULTURAL PURPOSES WERE INCONCLUSIVE, AND THE FIFTH FEATURE ALONE PROVIDED SOME EVIDENCE OF THE CHARACTER OF THE LAND FROM THE POINT OF VIEW OF ITS PURPOSE. THAT THE PROPERTY WAS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL LAND WAS NOT CONCLUSIVE AND SUCH ENTRIES COULD RAIS E ONLY A REBUTTABLE PRESUMPTION. THEREFORE, THE APPELLATE TR IBUNAL SHOULD DETERMINE AFRESH WHETHER THE LANDS WERE AGRICULTURA L AFTER GIVING OPPORTUNITY TO BOTH SIDES TO LEAD FURTHER EVIDENCE. SIMPLY BECAUSE 'AGRICULTURAL LAND' HAS NOT BEEN DEF INED IN THE WEALTH TAX ACT, 1957, IT IS NOT CORRECT TO GIVE THE EXPRESSION AS WIDE A MEANING AS POSSIBLE. THE CORRECT RULE IS TO FIND OUT THE EXACT SENSE IN WHICH THE WORDS HAVE BEEN USED IN THE PART ICULAR CONTEXT AND GIVE AN INTERPRETATION IN CONSONANCE WITH THE P URPOSE OF THE STATUTE. THE OBJECT OF THE ACT IS TO TAX SURPLUS WE ALTH AND IT IS CLEAR THAT ALL LAND WAS NOT EXCLUDED FROM THE DEFINITION OF 'ASSETS'. THEREFORE, IT IS IMPERATIVE TO GIVE REASONABLE LIMI TS TO THE SCOPE OF THE EXPRESSION 'AGRICULTURAL LAND' AND GIVE IT A RE STRICTED MEANING;. THE DETERMINATION OF THE CHARACTER OF THE LAND, ACC ORDING TO THE PURPOSE FOR WHICH IT IS MEANT OR SET APART AND CAN BE USED, IS A MATTER WHICH OUGHT TO BE DETERMINED ON THE FACTS OF EACH PARTICULAR CASE. WHAT IS REALLY REQUIRED TO BE SHOWN IS THE CO NNECTION WITH AN AGRICULTURAL PURPOSE AND USER AND NOT THE MERE POSS IBILITY OF USER OF LAND, BY SOME POSSIBLE FUTURE OWNER OR POSSESSOR, F OR AN AGRICULTURAL PURPOSE. IT IS NOT THE MERE POTENTIALI TY, WHICH WILL ONLY AFFECT ITS VALUATION AS PART OF 'ASSETS', BUT ITS A CTUAL CONDITION AND INTENDED USER WHICH HAS TO BE SEEN FOR PURPOSES OF EXEMPTION FROM WEALTH-TAX. ONE OF THE OBJECTS OF THE EXEMPTION IS TO ENCOURAGE CULTIVATION OR ACTUAL UTILISATION OF LAND FOR AGRIC ULTURAL PURPOSES. IF 20 ITA NO.3241/MDS/2016 THERE IS NEITHER ANYTHING IN ITS CONDITION, NOR ANY THING IN THE EVIDENCE TO INDICATE THE INTENTION OF ITS OWNERS OR POSSESSORS SO AS TO CONNECT IT WITH AN AGRICULTURAL PURPOSE, THE LAN D COULD NOT BE 'AGRICULTURAL LAND' FOR THE PURPOSES OF EARNING AN EXEMPTION UNDER THE ACT. ENTRIES IN REVENUE RECORDS ARE, HOWEVER, G OOD PRIMA FACIE EVIDENCE. II) IN THE CASE CWT VS. E.UDAYAKUMAR, REPORTED IN 284 ITR 511 ,THE HONBLE MADRAS HIGH COURT HAS HELD AS FOL LOWS:- THE FACT THAT THERE WAS A HOSPITAL IN THE ADJACENT LAND WAS TOTALLY IRRELEVANT. SINCE THE ASSESSEE HAD NOT PUT UP ANY CONSTRUCTION THEREON, THE ASSESSEE WAS ENTITLED TO CLAIM EXEMPTION FROM THE WEALTH-TAX. III) IN THE CASE N.S.SRINIVASA NAICKER & SONS VS. ITO RE PORTED IN 292 ITR 481(MAD) THE HONBLE MADRAS HIGH COURT HAS HELD AS FOLLOWS:- HELD THAT IT WAS AN ADMITTED CASE THAT TILL THE DA TE OF SALE, AGRICULTURAL OPERATIONS WERE CARRIED ON BY THE ASSE SSEE. THE LAND WAS PUT TO USE ONLY FOR AGRICULTURAL PURPOSES AND NOT FOR ANYTHING ELSE. THE LANDS IN QUESTION WERE ALSO REGI STERED AS AGRICULTURAL LANDS AND ASSESSED TO LAND REVENUE. TH E FACT THAT THE PURCHASER HAD PUT IT TO USE FOR A TOTALLY DIFFE RENT PURPOSE FROM THAT OF THE ASSESSEE OUGHT NOT TO HAVE WEIGHED WITH THE TAX AUTHORITY. CAPITAL GAINS TAX COULD NOT BE LEVIED. IV) IN THE CASE CIT VS. MANILAL SOMNATH REPORTED IN 106 ITR 917 (GUJ), THE HONBLE GUJARAT HIGH COURT HAS HELD AS FOLLOWS:- 21 ITA NO.3241/MDS/2016 HELD THAT WHAT HAD TO BE CONSIDERED IS NOT WHAT TH E PURCHASER DID WITH THE LAND OR THE PURCHASER WAS SUPPOSED TO DO WITH THE LAND BUT WHAT WAS THE CHARACTER OF THE LAND AT THE TIME WHEN THE SALE TOOK PLACE. THE FACT THAT THE LAND WAS WITHIN MUNICIPAL LIMITS OR THAT IT WAS INCLUDED WITHIN A PROPOSED TOWN PLAN NING SCHEME WAS NOT BY ITSELF SUFFICIENT TO REBUT THE PRESUMPTI ON ARISING FROM ACTUAL USE OF THE LAND. THE LAND HAD BEEN USED FOR AGRICULTURAL PURPOSES FOR A LONG TIME AND NOTHING HAD HAPPENED T ILL THE DATE OF THE SALE TO CHANGE THAT CHARACTER OF THE LAND. T HE POTENTIAL NON-AGRICULTURAL VALUE OF THE LAND FOR WHICH A PURC HASER MAY BE PREPARED TO PAY A LARGE PRICE WOULD NOT DETRACT FRO M ITS CHARACTER AS AGRICULTURAL LAND AT THE DATE OF THE SALE. THE L AND IN QUESTION WAS THEREFORE, AGRICULTURAL LAND. V) IN THE CASE CIT VS. SMT. LILAVATI THAKORELAL PAT EL REPORTED IN 152 ITR 565 (GUJ), THE HONBLE GUJARAT HIGH COURT H AS HELD AS FOLLOWS:- HELD THAT IN DETERMINING WHETHER LAND IS AGRICULTUR AL OR NOT, THE IMPORTANT FACTORS WHICH SHOULD BE TAKEN INTO CONSID ERATION ARE: (I) CLASSIFICATION OF THE LAND IN THE REVENUE RECORDS A S AGRICULTURAL LAND; (II) ACTUAL OR ORDINARY USE OF THE LAND FOR AGRICULTURAL PURPOSES AT OR ABOUT THE RELEVANT TIME; (III) WHETHER SUCH USER WAS FOR A SUBSTANTIAL PERIOD OR IT WAS FOR A TEMPORARY DURATION ONLY BY WAY OF A ST OP-GAP ARRANGEMENT; (IV) RATIONAL PROPORTION OF INCOME FROM THE LAND TO INVESTMENT MADE THEREIN; (V) PERMISSION UNDER S. 65 OF THE BOMBAY L AND REVENUE CODE FOR CHANGE OF USER, AND WHEN AND BY WHOM IT HAS BEE N OBTAINED; (VI) CESSATION OF THE AGRICULTURAL USE AND CONVERTING TH E LAND TO NON- AGRICULTURAL PURPOSE; (VII) NON-USE FOR AGRICULTURA L PURPOSE OF THE LAND THOUGH LISTED IN REVENUE RECORDS AS AGRICULTURAL LA ND; (VIII) ITS SITUATION, PHYSICAL CHARACTERISTICS AND DEVELOPMENT IN THE VIC INITY; (IX) PERMISSION UNDER S. 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT, 1948, AND WHEN AND BY WHOM; (X) PRICE OF THE LAND ON SALE , AND WHETHER THE 22 ITA NO.3241/MDS/2016 VALUE WAS DETERMINED AS A UNIT OF THE LAND OR ON YA RDAGE OR ON ACREAGE BASIS? VI) IN THE CASE MRS. SAKUNTHALA VEDACHALAM & AN OTHER VS. ACIT REPORTED IN 369 ITR 558 (MAD), THE HONBLE MA DRAS HIGH COURT HAS HELD AS FOLLOWS:- HELD, ALLOWING THE APPEALS, THAT THE ASSESSEES HAD ALSO PRODUCED A COPY OF THE ADANGAL AND THE LETTER FROM THE TAHSILD AR, WHICH SHOWED THAT THE LANDS WERE AGRICULTURAL IN NATURE AND THE REVENUE HAD ALSO ACCEPTED THAT THE LANDS WERE FALLING WITHIN THE RES TRICTED ZONE IN TERMS OF SECTION 2(14) . THE ASSESSEES HAVE QUALIFIED UND ER CLAUSE 11(1) SINCE AS PER THE ADANGAL RECORDS, THESE LANDS WERE CLASSIFIED AS AGRICULTURAL LANDS AND THE ASSESSEES HAVE ALSO PAID REVENUE KIST, NAMELY, REVENUE PAYMENT. THE TESTS LAID DOWN BY THE GUJARAT HIGH COURT RELIED ON BY THE TRIBUNAL CLEARLY STATED THAT ANY ONE OF THE FACTORS CAN BE PRESENT IN A CASE TO QUALIFY FOR THE BENEFIT OF CLASSIFICATION AS AGRICULTURAL LANDS. THE REASON GIVEN BY THE TRIBUNA L WAS THAT THE ADJACENT LANDS WERE PUT TO COMMERCIAL USE BY WAY OF PLOTS AND, THEREFORE, THE VERY CHARACTER OF THE LANDS OF THE A SSESSEES WAS DOUBTED AS AGRICULTURAL IN NATURE. THE MANNER IN WH ICH THE ADJACENT LANDS WERE USED BY THE OWNER THEREIN WAS NOT A GROU ND FOR THE TRIBUNAL TO COME TO A CONCLUSION THAT THE ASSESSEES ' LANDS WERE NOT AGRICULTURAL IN NATURE. THE REASON GIVEN BY THE TRI BUNAL THAT THE ADJACENT LANDS HAVE BEEN DIVIDED INTO PLOTS FOR SAL E WOULD NOT MEAN THAT THE LANDS SOLD BY THE ASSESSEES WERE FOR THE P URPOSE OF DEVELOPMENT OF PLOTS. ALSO THE REASONING GIVEN BY T HE TRIBUNAL NO AGRICULTURISTS WOULD HAVE PURCHASED THE LAND SOLD B Y THE ASSESSEE FOR PURSUING ANY AGRICULTURAL ACTIVITY WAS BASED ON ME RE CONJECTURES AND SURMISES. THEREFORE, THE ASSESSEES WERE ENTITLED TO EXEMPTION. 23 ITA NO.3241/MDS/2016 VII ) IN THE CASE CIT VS. BORHAT TEA CO.LTD. REPORT ED IN 138 ITR 783 (CAL), THE HONBLE CALCUTTA HIGH COURT HAS HE LD AS FOLLOWS:- FOR THE PURPOSE OF LAND BEING AGRICULTURAL LAND, A CTUAL AGRICULTURAL OPERATIONS OR CULTIVATION OR TILLING O F THE LAND IS NOT NECESSARY. WHAT IS TO BE SEEN IS WHETHER SUCH LAND IS CAPABLE OF AGRICULTURAL OPERATIONS BEING CARRIED ON THEREON. 11. FURTHER, PROVISIONS OF SECTION 2(14) (III) IS E XTRACTED HEREIN BELOW FOR REFERENCE. 2(14) CAPITAL ASSET MEANS- (A) (B) . (I).. (II). ( III) AGRICULTURAL LAND IN INDIA, NOT BEING LAND SIT UATE (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; OR (B) IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIA LLY, (I) NOT BEING MORE THAN TWO KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITE M (A) AND WHICH HAS A POPULATION OF MORE THAN TEN THOUSAND BUT NOT EXCEEDING ONE LAKH; OR 24 ITA NO.3241/MDS/2016 (II) NOT BEING MORE THAN SIX KILOMETRES, FROM THE L OCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITE M (A) AND WHICH HAS A POPULATION OF MORE THAN ONE LAKH BUT NOT EXCE EDING TEN LAKH; OR (III) NOT BEING MORE THAN EIGHT KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITE M (A) AND WHICH HAS A POPULATION OF MORE THAN TEN LAKH. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, ' POPULATION' MEANS THE POPULATION ACCORDING TO THE LAST PRECEDIN G CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFO RE THE FIRST DAY OF THE PREVIOUS YEAR; 12. FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT THE LA ND SOLD BY THE ASSESSEE CANNOT BE BROUGHT UNDER THE AMBIT OF CAPIT AL GAINS TAX BECAUSE IT IS AN AGRICULTURAL LAND AND DOES NOT FAL L WITHIN THE DEFINITION OF CAPITAL ASSET UNDER SECTION 2(14) OF THE ACT BEC AUSE OF THE FOLLOWING REASONS:- I) THE LAND IS CLASSIFIED AS AGRICULTURAL LAND IN THE REVENUE RECORDS. II) IT IS SITUATED OUTSIDE THE LIMIT OF EIGHT KILOMETER S FROM THE MUNICIPAL LIMITS. III) AS PER THE REVENUE RECORDS, AGRICULTURAL ACTIVITIES WERE BEING CARRIED OUT IN THE LAND. IV) THOUGH THE REVENUE HAS MADE ALLEGATION THAT THE LAN D IS SURROUNDED BY INDUSTRIAL AREA, HOWEVER NO EVIDENCE IS BROUGHT BEFORE US TO JUSTIFY THEIR CLAIM. 25 ITA NO.3241/MDS/2016 V) THE LAND WAS PURCHASED AND SUBSEQUENTLY SOLD BY THE ASSESSEE WAS CLASSIFIED AS AGRICULTURAL LAND IN THE REVENUE RECORDS. VI) THE INTENTION OF THE PURCHASER OF THE LAND IS IMMAT ERIAL. VII) JUST BECAUSE THE PRICE OF THE LAND IS EXORBITANT, I T CANNOT BE TREATED THAT THE LAND IS NON-AGRICULTURAL, WHEN THE REVENUE RECORD STATES OTHERWISE. VIII) THE LARGE EXTENT OF LAND WOULD ALSO POINT OUT TO TH E FACT THAT IT IS AGRICULTURAL LAND. IX) EVEN IF SOME COMMERCIAL ESTABLISHMENTS HAVE SPRUNG UP IN THE CLOSE VICINITY OF THE LAND, IT CANNOT MEAN THAT THE PRIMARY CHARACTERISTIC OF THE AGRICULTURAL LAND IS LOST. 13. IT IS FURTHER PERTINENT TO MENTION THAT THE CAS E LAWS CITED BY THE REVENUE DO NOT APPLY TO THE FACTS OF THE CAS E OF THE ASSESSEE SIMPLY BECAUSE, THE LAND IN QUESTION FALLS OUTSIDE THE MUNICIPAL LIMIT OF 8 KILOMETERS RATHER 20 KMS., AWAY APPROXIM ATELY AND THE ENTIRE LOCALITY AS EVIDENT FROM THE ADANGAL IS CL ASSIFIED AS AGRICULTURAL LAND. FURTHER IN THE PRESENT SCENARIO WHERE THE ROADS HAVE DEVELOPED AND MODERN VEHICLES ARE IN PLENTY, T RANSPORTATION FACILITIES HAVE DRASTICALLY IMPROVED DUE TO WHICH P RICE OF DISTANT NEIGHBORHOOD LANDS ALSO SHOOTS UP BECAUSE OF EASY A CCESSIBILITY, BUT THAT CANNOT MEAN THAT ALL THOSE LANDS LOOSE THE CHARACTERISTICS OF AGRICULTURAL LAND AND IF HELD SO THE PURPOSE OF THE ACT WILL BE DEFEATED. IN THE PRESENT CASE IT IS NOT IN DISPUTE THAT THE LAND IN QUESTION IS MORE THAN 19 KM., FROM THE NEAREST MUNI CIPAL LIMIT. MOREOVER THE DECISION RELIED BY THE REVENUE IN THE CASE CIT V/S. 26 ITA NO.3241/MDS/2016 SARIFABIBI MOHMED IBRAHIM (SUPRA) THE FACTS ARE NOT IDENTICAL BECAUSE IN THAT CASE THE LAND WAS SITUATED WITHIN T HE MUNICIPAL LIMITS AND WITHIN A TOWN PLANNING SCHEME WHILE AS I N THE CASE OF THE ASSESSEE THE LAND IS SITUATED BEYOND 19 K.M., FROM THE MUNICIPAL LIMITS. FURTHER IT IS NOT NECESSARY FOR THE ASSESS EE TO EXPLOIT THE AGRICULTURAL LAND BY COMMERCIAL PRODUCTION OF AGRIC ULTURAL PRODUCE BUT IT WOULD SUFFICE EVEN IF AGRICULTURAL A CTIVITIES ARE CARRIED OUT FOR SELF CONSUMPTION. FOR THE AFORESAID REASONS, WE HEREBY HOLD THAT THE LAND SOLD BY THE ASSESSEE IS A GRICULTURAL LAND AND CANNOT BE TERMED AS CAPITAL ASSET BY VIRTUE O F SECTION 2(14) OF THE ACT AND HENCE, CAPITAL GAIN ARISING OUT OF THE SALE OF THE LAND SOLD BY THE ASSESSEE WILL NOT ATTRACT CAPITAL GAIN TAX. THEREFORE, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELE TE THE ADDITION MADE FOR RS. 1,28,38,808/- UNDER THE HEAD LONG TERM CAPITAL GAINS. 11. SINCE THE FACTS IN THE CASE OF THE ASSESSEE IS IDENTICAL TO THE CASE DECIDED BY THE TRIBUNAL SUPRA AND BASED ON OUR ABOVE DISCUSSIONS, OBSERVATIONS REASONING AND THE DECISIO N OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE SAKUNTHALA VE DACHALAM VS. ACIT SUPRA, WE DO NOT HAVE ANY HESITATION TO HOLD T HAT IN THE CASE OF THE ASSESSEE CAPITAL GAIN TAX WILL NOT BE ATTRACTED BY VIRTUE OF SECTION 2(14)(III) OF THE ACT, BECAUSE THE LAND SOLD BY THE ASSESSEE IS AGRICULTURE LAND COMPLYING WITH ALL THE CONDITIONS STIPULATED IN THE ACT 27 ITA NO.3241/MDS/2016 AND THEREFORE FALLS OUTSIDE THE AMBIT OF CAPITAL A SSET. ACCORDINGLY, WE HEREBY DIRECT THE LD. AO TO DELETE THE LONG TERM CAPITAL GAIN OF RS. 5,12,92,076/- ASSESSED IN THE HANDS OF THE ASSE SSEE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED ORDER PRONOUNCED IN THE COURT ON THE 17 TH MARCH, 2017 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.MOHAN ALANKAMONY ) # $% / JUDICIAL MEMBER $% / ACCOUNTANT MEMBER '# /CHENNAI, ($ /DATE: 17 TH MARCH 2017 JR $) *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. +/0 1 /DR 6. 02 3 /GF