Jairam G Kimmane Vs DCIT (ITAT Bangalore)
In the present case, the claim of the Assessee that agricultural operations were carried out over the property and the property was actually used for agricultural purpose was sought to be established by relying on the classification of the property in revenue records. The Revenue contends that there is no evidence of the Assessee having carried out agricultural activities over the property. The Assessee has not established as to how agricultural activities were carried out and what expenses were incurred in carrying out agricultural operations over the property. The revenue also contends that the Assessee has not declared any income from Agriculture from the property in question. There is no evidence of availability of Agricultural produce and how they were dealt utilized. The Revenue also contends that the burden of proof that the property was agricultural land at the time of transfer to claim exemption was on the Assessee. As already observed, the question whether the land was Agricultural land has to be decided on facts of each case and decided cases are only guidelines to be kept in mind. Facts and all the circumstances are to be considered as a whole and an overall view is to be taken in deciding whether the land was an agricultural land. In a given case, large number of circumstances may be indicative of agricultural character, but one circumstance may outweigh all of them and on its basis the land would be held to be a non-agricultural land.
We will now apply the tests laid down by the Hon’ble Gujarat High Court in the case of Sarifabibi Mohammed Ibrahim (supra) which was approved by the Hon’ble Supreme Court, to the facts and circumstances of the case:-
Factors in favour of the Assessee:
(i) The land in question is entered as agricultural land in revenue records and is assessed as such.
(ii) The land is not converted to non-agricultural user.
(iii) The Assessee as well as the purchaser are Agriculturalist.
Factors against the Assessee:
(i) The land is too small for carrying out agricultural operations, considering the fact that the Assessee is basically a trader in betel nuts and carries on agricultural operation in Chikamagalur-Shimoga, a place far away from the land at Agarsure.
(ii) The land is sold at a price comparable to the price fetched by building sites.
(iii) The price is such that no bona fide agriculturist would purchase the same for genuine agricultural operations.
(iv) No Evidence of Agricultural operations carried out have been placed on record. The Assessee was owner of the property in question for 16 years. The evidence filed regarding use of the land for agricultural purpose are sporadic not sufficient to discharge the burden on the Assessee.
As already mentioned, the question whether land was used for agricultural purpose or not to be considered as Agricultural land is a question of fact to be decided on the basis of facts and circumstances of a given case. The decisions cited by the learned counsel for Assessee in the case of Venkateswara Hospital (supra) is a case where the Hon’ble High Court of Madras refused to entertain an appeal on the ground that the question whether a property is Agricultural land or not is essentially a question of fact which action was confirmed by the Hon’ble Supreme Court. The decision does not per se lay down any proposition that classification of land in the revenue record as Agricultural land is conclusive to hold that the land in question is agricultural land, as is sought to be canvassed by the learned counsel for the Assessee before us. As far as the decision of the Hon’ble Madras High Court in the case of Sakuntunala Vedachalam (supra) it was held that the user of adjacent lands for non agricultural purposes cannot be the basis to conclude that the Assessee’s lands cannot be regarded as Agricultural lands. No such conclusion has been drawn in the present case on the basis of potential use for of the land for non agricultural purpose. As far as the decision of Hon’ble Bombay High Court in the case of CIT vs. Smt. Debbie Alemao and Joaquim Alemao,(supra) is concerned, the ratio laid down therein is that where the land is shown in revenue record as agricultural land and no permission was taken for conversion of land, it is immaterial whether any agricultural income is shown in the return or not. The basis on which revenue authorities came to a conclusion that the property is not Agricultural land in the present case is different from the facts of the case decided by the Hon’ble Bombay High Court viz., the fact that agricultural income from the property had not been declared by the Assessee.
If one considers the facts and circumstances of the present case as a whole and an overall view is to be taken in deciding whether the land was an agricultural land, one would come to a conclusion that the property cannot be considered as Agricultural land. Though the circumstance that the land is classified as Agricultural in the revenue records is in favour of the assessee, in our view, the other circumstances pointed out above outweighs all of the circumstances in favour of the Assessee and on the basis of those circumstances, we are inclined to conclude that the property was not an agricultural land. We therefore find no merits in this appeal and hence dismiss the same.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is against the order dated 29.7.2019 of the CIT(Appeals)-11, Bengaluru relating to assessment year 2013-14.
2. The assessee is an individual. Consequent to search u/s. 132 of the Income-tax Act, 1961 [the Act] conducted in the case of assessee on 24.11.2015, proceedings u/s. 153A of the Act were initiated for AY 2013-14 by issue of a notice dated 21.11.2016. The assessee in response to the said notice filed return of income for AY 2013-14 declaring an income of Rs.14,91,410.
3. In the course of assessment proceedings, the AO noticed that assessee received a sum of Rs.2 crores on sale of 0.40.0 hectares (ha) of land at Agarsure Village, Alibaug Taluk, Raigad Dist., Maharashtra (hereinafter referred to ‘the property’ or ‘land’). Since capital gain on sale of the property had not been disclosed in the return of income, the AO called upon the assessee to explain why the same was not declared. The assessee took a stand that the property was an agricultural land and therefore was not a capital asset and capital gain on sale of agricultural land was not exigible to tax. The contentions of the assessee in this regard were as follows:-
