Ajesh Kumar Agrawal Vs. CIT (Rajasthan High Court)
What is to be considered is that for being granted benefit under sub-section (37) of section 10 of the Act, the land in question should have been put to agricultural use by the assessee for the preceding two years. Even if we accept the contention of the appellant that he was in possession of the land for two years from 27-7-2006 to 7-10-2008, then too, from the records it is not at all clear that for both the years the appellant was carrying out agricultural activity in the land in question. The Tribunal has further examined the issue and held that if at all there was any agricultural activity being carried on by the appellant in the previous two years, some accounts with regard to expenditure made by the appellant for sowing the crops and also revenue generated by selling the agricultural produce would have been submitted by the assessee, which has not been done by him. The same is also a strong ground for not accepting that the appellant was carrying on agricultural activity on the plot in question.
Clear findings of fact have been recorded by all the three authorities, which in our view, do not require to be interfered with by this Court in appeal. As such, we are of the view that since the finding of fact has been given by all the authorities that the appellant was not carrying on any agricultural activity in the plot in question in preceding two years prior to 7-10-2008, the appellant would not be entitled to the benefit of section 10(37) of the Act.
FULL TEXT OF HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:
By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal of the department and assessee’s C.O. has been dismissed.
2. This court while admitting the appeal on 31-1-2017 framed the following questions of law :–
“(i) Whether the learned ITAT was justified under law while reversing the findings of learned Commissioner (Appeals) in respect of granting of relief of Rs. 56,94,231 exemption under section 10 (37) of the Act of 1961 by considering the Khasra Girdavari Report dated 5-12-2011 integral part of the order of Assessment as Annexure- A not furnishing information in respect of growing of Crop on the agricultural land during the year 2007-08?
(ii) Whether the learned assessing officer was justified under law to denying exemption under sections 10(37) of the Income Tax Act on the compensation received by the assessee in respect of its land acquired by RIICO and making Addition of Rs. 1,30,33,036 as Capital Gain by considering a Khasra Girdavari which does not disclose the information for growing of crop during two years immediately preceding the date of transfer?”
3. Counsel for the appellant contended in view of provision section 10(37)(ii) of the Income Tax Act which reads as under :–
“In the case of an assessee, being an individual or a Hindu individual family, any income chargeable under the head” Capital gain” arising from the transfer of agricultural land, shall be exempted, where :–
Such land is situate in any area referred to in, item (a) or item (b) of sub-clause (iii) of clause (14) of section 2 Such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual, or a parent of his.
Such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India
Such income has arisen from the compensation or consideration for such transfer received by such assesses on or after the 1-4-2004.
It may be noted in this connection that exemption is available only if compulsory acquisition has taken place on or after 1-4-2004. Exemption is also available if acquisition has taken place before 1-4-2004 but compensation has been received on or after 1-4-2004.
For the purposes of this clause, the expression, compensation or consideration” includes the compensation or consideration enhanced or further enhanced by any court, tribunal or other authority.”
4. He contended that this is the only condition which was not fulfilled by the appellant therefore, the same is required to be viewed closely. He contended that the land was acquired on 4-7-2008 therefore, the agricultural use is to be considered as under :–
