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Facts
The assessee sold a piece of land for Rs. 5,20,00,000 and claimed the capital gains as exempt, stating it was agricultural land. The Assessing Officer (AO) treated it as a capital asset, stating it was in an industrial zone and not used for agricultural purposes. The CIT(A) upheld the AO's order.
Held
The Tribunal held that the issue of whether a land is agricultural or not is a factual one, requiring consideration of various factors. The lower authorities had not properly examined all the facts and arguments. Therefore, the appeal was remitted back to the AO for re-examination with specific directions.
Key Issues
Whether the land sold by the assessee qualifies as agricultural land for the purpose of capital gains exemption under Section 2(14) of the Income Tax Act, considering its location in an industrial zone and alleged non-agricultural use.
Sections Cited
250, 2(14), 133(6), 131, 46A, 143(3), 63, 63-1A
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG&
(Assessment Year: 2016-17) Mrs. Snehlata Goel, DCIT-3(3)(1), 24, 4th Floor, Alka Building, Room No. 609, Aayakar Bhavan, B Road, Marine Drive, Vs. M.K. Road, Mumbai-400020. Mumbai-400020. PAN: AEMPG0144F Appellant) : Respondent) Assessee by : Shri S K Tulsian and Lata Goel, AR : Shri Swapnil Choudhary, Sr. DR Revenue by 09.10.2025 Date of Hearing : : 03.11.2025 Date of Pronouncement O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 01.03.2024 for Assessment Years (AY) 2016-17. The assessee raised the following grounds of appeal:
Mrs. Snehlata Goel Sr.No. Grounds of Appeal
Tax effect relating to each Ground of appeal
1. On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A). NFAC erred in upholding the addition of Rs. 5,18,99,990/-made by the Ld. A.O. by overlooking the submissions made and documentary evidences filed by the appellant and without appreciating the fact that the land sold by the appellant was an agricultural land within the meaning of exclusions provided under section 2(14) of the Income Tax Act, 1961.
2. On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/- made by the Ld. A.O. without appreciating the fact that the agricultural land sold by the appellant always had the intention to conduct agricultural activities which she could not carry out due to the encroachment of squatters on the land and the tedious litigation which lasted for more than 3 decades.
3. On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/-made by the Ld. A.O. by wrongly assuming that the suit filed by the appellant against the Jadhav family was decided in her favor in the year 1985 which is factually incorrect.
4. On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/-made by the Ld. A.O. by relying on the statement of Mr. Utpal shah (Director of M/s. Jayesh Industries Ltd) against the appellant without appreciating the fact that during the course of his statement vide question 8 he categorically admitted that the land sold by the appellant is an agricultural land for which he or his company made an application to concerned authorities for approval to convert the agricultural land into non- agricultural.
5. On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/- made by the Ld. A.O. by only relying on that part of the sale agreement which was beneficial to Mrs. Snehlata Goel the department thereby resorting to the illegal cherry picking approach and erroneously concluding that the agricultural land sold by the appellant was in industrial zone which is only partially correct. 6 On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/- made by the Ld. A.O. by ignoring the submission made by the appellant in relation to the reply received from the Talathi, Khalapur in response to notice issued u/s 133(6) wherein he categorically stated that the land was still assessed as an agricultural land as per his records and it was still not converted to non-agricultural land by the purchaser company. 7 On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in upholding the addition of Rs. 5,18,99,990/- made by the Ld. A.O. by ignoring the settled position in law i.e. "lex non cogit ad impossibilia' and 'impotentia excusat legem which is squarely applicable to facts of the case. 8 On the facts and circumstances of the case and in law, the 1,19,74,370/- CIT(A), NFAC erred in not admitting the additional evidences filed by the appellant under Rule 46A of the Income Tax Rules, 1962 which had a direct bearing on case of the appellant.
The assessee is an individual and filed the return of income for AY 2016-17 on 04.08.2016 declaring a total income of Rs. 25,58,120,/-. The assessee's case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing officer (AO) during the course of assessment noticed that during the year under consideration, the assessee has sold a land bearing survey No.132/2A lying at Village Tambati, Taluka Khalapur, Raigad District, Maharashtra to M/s Jayesh Industries for a consideration of Rs. 5,20,00,000/-. The AO further noticed that the assessee has claimed the Capital Gain arising out of the said sale as exempt stating that the land sold is an agricultural land. The AO also noticed that the land sold is falling in the Industrial Zone of sanctioned Pen, Mrs. Snehlata Goel Panvel, Khalapur Growth Centre of Raigad Regional Development Plan. Accordingly, the AO issued a show-cause notice to the assessee as to why the land sold should not treated as capital asset and taxed accordingly. The assessee in response filed various details and explanations as summarised below:
“1. The referred land parcel sold by the assesse was purchased as agricultural land.
2. The land parcel satisfies all the conditions of being an agricultural land as per definition u/s. 2(14) 3. The area in which land parcel was situated was designated as Industrial Zone by the Government of Maharashtra subsequently.
The mentioning of land numbers in 7/12 extracts itself substantiate that it was agricultural land parcel.
The land parcel was never used for any industrial purpose by the assessee and had actually used for agricultural purposes as substantiated by 7/12 extracts submitted.
The purchaser has done its due diligence before registering the agreement and obtained confirmations that the land is covered under the Industrial Zone so that it can it can put industry thereon.
7. The land parcel was sold by the assessee as agricultural land.
8. The conversion of land has been done by the purchaser after purchasing the land parcel who also paid the premium amount “Nazarana Fees” for conversion as required under the Rules prescribed in this regard.”
The AO issued a summons under section 131 to the Director of M/s Jayesh Industries and based on the statements recorded held that the purchaser would not have purchased the land if the land did not fall in the Industrial Zone and therefore the land sold is not an agricultural land. The AO further held that though the 7 /12 extracts mentioned the land as agricultural land, the assessee has not carried out any agricultural activity from 1997-98 and therefore there is no intention of the assessee to carry on any agricultural activity. The AO also deployed Inspector to proceed to impugned land and from the report of the inspector the AO recorded a finding that the entire belt comprises of 7 industrial set up and that M/s Jayesh Mrs. Snehlata Goel Industries has constructed industrial unit therein. The AO further recorded a finding that the assessee has sold a land for non-agricultural purposes i.e. to be used for industrial purposes. Accordingly, the AO held that the land sold by the assessee is not an agricultural land and therefore the gain arising from the sale of the land cannot be exempt.
4. Aggrieved assessee filed further appeal before the CIT(A). Before the CIT(A) the assessee submitted that the land sold is an agricultural land which is evident from 7/12 extract and that the land was notified as industrial zone after many years from the date of purchase. The assessee further submitted that it is the purchaser who has converted the agricultural land to non-agricultural land by paying the premium amount i.e. Nazarana Fees post purchase of the land from the assessee. With regard to the assessee not carrying out any agricultural activity, the assessee submitted before the CIT(A) a party from whom the assessee had purchased the land did some mischief and once again sold the major portion of the land to another person due to which the assessee was involved in prolonged legal dispute until 2007. The assessee further submitted that the legal battle was finally settled by paying a sum of Rs. 21,00,000/- to the parties to end the dispute in the year 2015. The assessee also submitted that failure to carry out any agricultural activity cannot be the only reason for not treating the land as agricultural land since the assessee has submitted other documentary evidences to substantiate that the land sold is an agricultural land.
5. The CIT(A) confirmed the addition made by the AO by holding that “i) During the year under consideration, the appellant sold a piece of agricultural land bearing survey number 132, Hissa Number 2A, 2B, 2C, 3AB, Mrs. Snehlata Goel and C in village Tambati, Taluka Khalapur, Disrict Raigarh, Maharashtra for Rs. 5,18,99,960/- to M/s Jayesh Industries. ii) The claim of the appellant that the gain from sale of agricultural land was exempt was denied by the AO on the basis of the following facts: Assessing Officer after analysis of the Agreement found that the said land is falling in industrial zone of sanctioned Pen, Panvel, Khalapur Growth Centre of Raigarh Regional Plan. The AO sent notice u/s 133(6) to Talahati (revenue collector at village/accountant), Khalapur for verification of the land details. The reply from Talhati stated that there had been no agricultural activity on this land since 1997-98 and this is the barren land. Director of M/S Jayesh Industries, the company which purchased the said land, Sh. Utpal Shah's statement was recorded u/s 131 of the Income Tax Act by the AO, at SI No. 8 he stated that, "the land was an agricultural land situated in industrial zone and we wanted to setup an industry on the said land. However, as informed to us the said land was an agricultural land and hence, we were asked to take NOC from various authorities to setup an industry over it. This is also mentioned in MOU." (Page 7 of the assessment order). Mr. Utpal Shah further stated that he would have not purchased the said land if the same does not fall under industrial zone, in reply to Q. No. 14 of the statement recorded (Page No. 8 of the assessment order). The AO tried to prove that no agricultural activities was done on the said land. During the assessment proceeding Inspector of the charge was sent to visit impugned plots. In its report the Inspector reported that on the impugned land there is construction of big industrial unit. On the basis Talahati & Inspector's Report and Statement of the Director of M/s Jayesh Industries. The AO held that there was no agricultural activity caried out on the said land. In the absence of the very fundamental activity of carrying on agricultural process merely mentioning of the land as agricultural land in the purchase deed or sale deed or even the revenue records cannot establish the case of the assessee that the land was sold by it was an agricultural land. The fact that the land was never used for agricultural purposes and there was a likelihood that the land will be used for non-agricultural purposes soon after its transfer, are also very important facts. Based on the above factual position and judgment of Apex Court in the case of Sarifa Bibi Mohmmad Ibrahim [1993] 204 ITR 631/73 Taxmann 301 (Supreme Court) and various other judicial pronouncement of the High Court, The AO concluded that the sold parcel of land is a capital asset as per section 2(14) of the Income Tax Act and is chargeable to tax under Mrs. Snehlata Goel head Income from capital gains and made an addition of Rs. 5,19,99,960/- to the income of the appellant. The AO relied on the judgment of the Hon'ble Supreme Court in case of Sarifa Bibi, wherein it was that: "Whether a piece of land is agricultural land or not is essentially a question of fact. Several tests have been evolved in decisions of the Supreme Court and the High Courts, all of them are more in the nature of guidelines. The question has to be answered in each case, having regard to the facts and circumstances of that case. There may be factors both for or against a particular point of view. The court has to answer the question on a consideration of all of them a process of evaluation. The inference has to be drawn a cumulative consideration of all the relevant facts" iii) The appellant in its reply dated 27.11.2023 and 07.12.2023 submitted that: The land sold by the appellant was purchased as an agricultural land. The area in which land parcel is situated was designated as industrial zone by the Government of Maharashtra after many years of date of the purchase of the land. The land parcel was neither converted to non-agricultural land by the appellant or it was ever used for any purpose other than agriculture by the appellant. The land was converted into non agricultural land by the purchaser i.e. M/s Jayesh Industries Ltd. The appellant submitted the copy of certificate of distance submitting that the agricultural land of the appellant is at the distance of 36 Km from Mumbai Municipal Corporation. (Page 101 of paper book submitted on 27.11.2023). A Certificate dated 22.10.1969 signed by the Addl. Tehsildar certifying that Smt. Snehlata Mahavir Prasad Goyal is a farmer in village Tambati, is also submitted at (page no 12 of the paper book dated 27.11.2023) The AO sought information under section 133(6) of the Act from Talati, Khalapur and relied on the reply dated 14.12.2018 that no agricultural activity carried on by the appellant on the land sold by her. The AO recorded the statement under oath u/s 131 of the Income Tax Act of Mr. Utpal Shah, Director of M/s Jayesh Industries Ltd. And relied on it, that the Land purchase by them was not an agricultural land. The AO formed its opinion based on the report of the ITI who visited the land and submitted that no agricultural activity was carried on there.
Mrs. Snehlata Goel The appellant was not confronted with the material information collected and statement recorded by the AO. The AO violated the Principles of Natural Justice as the appellant was neither informed about any such information or statement relied by AO nor was it confronted with the material in the position of the AO. Thus, the appellant never got the opportunity to explain her case to the AO and rebut the allegation made by the AO based on the enquiry made by him. iv) It is a matter of fact that the land purchased by the appellant was agricultural land at the time of purchase, in its support, the appellant submitted copy of Certificate of Distance, a certificate from Tehsildar that she is a farmer. The appellant was provided sufficient opportunities to explain its grounds and make submissions in support of the issues under consideration. Thus, the appellant's contention that it had not been provided an opportunity to cross examine the ITI and Mr. Utpal Shah, Director of M/s Jayesh Industries Ltd. as statements were recorded behind its back, v) to (x) **** xi) As discussed earlier the various circumstances/facts appearing for and against the appellant's case at para no. ii) and iii) respectively. The facts in favor of the appellant are that it has a certificate showing it is a farmer, the land sold by the appellant was purchased as agricultural land; the agricultural land was not converted by the appellant, the copy of Certificate of Distance. The facts appearing against the appellant are the ITI's report that the land was barren no-agricultural activities carried out on the piece of land and a huge building structure was there; statement of Mr. Utpal Shah, Director of M/s Jayesh Industries that the land was an agricultural land situated in the industrial zone and he would have not purchased the said land if the same does not fall under the industrial zone, the Conveyance Deed mentioning the said land is falling in the industrial zone; information from Talati that there has been no agricultural activities on this land as it is a barren land. Though the appellant stated that the said land was encroached and occupied by the Jadhav's family but the suit filed by the appellant was decided in its favour in 1985, still no agricultural activities were carried out by the appellant. The appellant further submitted that since 1985 to 2015 the land was under dispute occupied by the squatters and completely out of its control but no documentary evidence or proof has been submitted by the appellant. The full bench of Andhra Pradesh in Begampet Palace case evolved indicators to determine whether a land is agricultural land or not, the most important Indicator was land which is left barren but which is capable of being cultivated can also be agricultural land unless the said land is actually put to some other non-agricultural purpose. In the instant case the land was sold for non-agriculture purpose and Mrs. Snehlata Goel the appellant was aware of this fact and she was aware that the land would be used for industrial purpose. The appellant never till the land and sold it too for non-agricultural purpose. The Conveyance Deed clearly mentions that the land is in the industrial zone. The land had been sold to a company not for agricultural purposes for cultivation of crops rather it was sold by the appellant for non-agricultural purposes and purchased by the company M/s Jayesh Industries Ltd. for industrial purposes. In view of the above facts of the case, submissions of the appellant and various judicial pronounces I do not find any reason to interfere with the order of the Assessing Officer as the land sold was not an agricultural land. Accordingly, the addition of Rs. 5,19,99,960/- made by the AO is upheld. Thus, the ground of appeal no 1 to 4 are decided against the appellant.”
6. The ld. AR submitted that the assessee has sold the agricultural land which is not a capital asset within the meaning of section 2(14) of the Act. The ld. AR argued that for the purpose of claiming exemption the assessee need to satisfy two conditions i.e. the sale must be of an agricultural land and the land must be situated beyond the municipal limit as specified in the section. The ld. AR further argued that plethora of documentary evidences were submitted before the lower authorities to substantiate the fact that the land is an agricultural land including copy of 7/12 extract (page 68 to 84 of PB). The ld. AR drew our attention to 7/12 extract where it is mentioned that out of the total area only small insignificant portion has been mentioned as non-cultivable which goes to prove that the land is mostly a cultivable land. The ld. AR further submitted that the location of the agricultural land sold by the assessee is situated beyond the limit provided under the Act that is approximately 36 km from the nearest municipality (page 101-102 of the PB). The ld. AR further submitted that prior to declaration as industrial zone from 17.08.2015 the land was always used as agricultural land. The ld. AR also submitted that the Director has categorically stated that he has purchased the agricultural land and that he has to obtain NOC for converting the agricultural land into industrial land. The ld. AR also drew our attention to the reply of the Talathi Mrs. Snehlata Goel Khalapur dated 10.12.2018 to the notice issued under section 133(6) by the AO where in point no. 3 it is stated that “As per section 63-1A(3) of Maharashtra Tenancy & Agricultural Land Act, 1948 there is a provision that the land in industrial section can be purchased for industrial purposes and utilization of such land is to be stated within 5 years from the date of its purchase. As per the above rule, the company had purchased the land. At present working of erecting the company is being done on this land. The competent authority has not sent a copy of non-agricultural permission to our office hence in the column of crop of the land there is no entry of non- agricultural is made. Only after getting non-agricultural order on the column of crop entry of non-agriculture can be made. At present from the company unauthorized non-agricultural utilization fine has been taken. In the crop column of this land since year 1997-98 till today there is no entry of any crop is appearing.”
The ld. AR also submitted that the assessee has also provided sufficient evidence and the reason for not carrying on any agricultural activity in the said land since the assessee was involved in the long legal battle with the illegal occupants of the land. The ld. AR argued that the lower authorities have failed to consider the settlement deed entered into by the assessee with the illegal occupants after payment of Rs.21 lakhs and has held that since the land is not being used for agricultural purposes cannot be held as agricultural land.
The ld. DR on the other hand submitted that the land has been notified as industrial area well before the land is being sold by the assessee and that the purchaser could not have bought the land if it is not notified. The ld. DR further submitted that the assessee has sold the land for non-agricultural purposes and the intention of the purchaser is to use it for industrial purposes and therefore the land cannot be held as agricultural land. The ld. DR also submitted that mere mention in the agreement that the land is an agricultural land is not sufficient since the assessee has not been using the land for any agricultural purposes. The ld. DR Mrs. Snehlata Goel argued that the assessee has not submitted the documentary evidence to substantiate the claim that it is the purchaser who has converted the agricultural land for industrial use and that the nature of NOC obtained by the purchaser is not produced. The ld DR further argued that the distance cannot be reckoned from the limits of Mumbai Municipal Corporation as done by the assessee and that as per section 2(14) the distance should be measured from the jurisdiction of a municipality whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name or a cantonment board. The ld DR further argued that the distance from Mumbai Municipal Corporation is not relevant since there are other Municipal Corporations having much in excess of population specified in clause (b) of section 2(14)(iii). Accordingly, the ld. DR argued that the land sold by the assessee is a non- agricultural land and therefore the gain arising there from cannot be treated as exempt.
We have heard the parties and perused the material on record. The assessee during the year under consideration has sold a piece of land bearing survey number 132 / 2A, 2B, 2C, 3A, 3B & 3C at village Tambati Taluka Khalapur, Dist Raigad, Maharashtra and claimed the gain on the sale as exempt for the reason that she has sold an agricultural land as defined in section 2(14)(iii) of the Act which reads as under – (14) capital asset" means— (a) **** (b) ***** but does not include— (i) **** (ii) **** (iii) agricultural land in India, not being land situate— (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area Mrs. Snehlata Goel 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 aerially,— (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (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 preceding census of which the relevant figures have been published before the first day of the previous year;
The contention of the assessee is that the land satisfies the conditions specified under section 2(14) of the Act interms of distance and population and that as per the 7/12 extracts the land is cultivable land. The further argument of the assessee is that purchaser has admitted to have bought agricultural land and the purchaser has paid the Nazarana Fees to convert the land to non-agricultural land. It is also the argument of the assessee that land has been sold for a rate lesser than the rate notified by the Government for agricultural land in that area. From the perusal of orders of the AO we notice that the land is held as non-agricultural for the reason that the same has not been used for agricultural purposes since 1997-98 as has been stated in the Talathi Khalapur letter. However it is relevant to mention that the AO has not recorded any finding regarding the submission of the assessee that the land was illegally occupied till 2015 and that the assessee obtained the unencumbered possession of the land only after settlement due to which she could not do any agricultural activities. It is noticed that the CIT(A) has observed that the Mrs. Snehlata Goel assessee has not produced any documentary evidence regarding the dispute which is factually not correct since the assessee has submitted the settlement deed before the lower authorities which is part of records.
Whether a land is an agricultural land or not is a factual issue and the courts have taken decision in favour of as well as against the assessee based on the facts of each case. The following observations of Hon'ble Supreme Court in the case of Smt. Sarifabibi Mohmed Ibrahim vs CIT ([1993] 70 Taxman 301 (SC)) are note worthy in this regard – 9. Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them— a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts.
Further in the above case the Apex Court considered the decision of division Bench of the Hon'ble Gujarat High Court in the case of CIT v. Siddharth J Desai [1982] 10 Taxman 1/[1983] 139 ITR 628 which has laid down 13 test or factors which are required to be considered and upon consideration of which, the question whether the land is agricultural or not, has got to be decided or answered. The said 13 test are reproduced as under: "1. Whether the land was classified in the Revenue records as agricultural and whether it was subject to the payment of land revenue? 2. Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? 3. Whether such user of the land was for a long period or whether it was of a temporary character or by any of a stopgap arrangement? 4. Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land?
Mrs. Snehlata Goel 5. Whether, the permission under s. 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser and/or alternative user was of a permanent or temporary nature? 7. Whether the land, though entered in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? 8. Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads and other facilities? 10. Whether there were any previous sales of portions of the land for nonagricultural use? 11. Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist? If so, whether the sale or intended sale to such non agriculturists was for non-agricultural or agricultural user? 12. Whether the land was sold on yardage or on acreage basis? 13. Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield?"
The AO in order under section 143(3) has reproduced the above 13 points and has stated that the assessee is failing few tests. However it is not coming out clearly as whether the AO called for and examined relevant details in the light of the above points. During the course of hearing, the ld AR submitted certain documents to substantiate the claim that it is the purchaser who has applied for the conversion of the land into non-agricultural land and therefore at the time of sale Mrs. Snehlata Goel the land continued to retain the status of agricultural land. In this regard we notice that section 63 of The Maharashtra Tenancy and Agricultural Lands Act 1948, restricts the transfer of agricultural land for non-agricultural purposes except with specific permission of the Collector or an officer authorised by the State Government in this behalf. However section 63-1A of the said Act allows sale of such land without permission to any person who is a non-agriculturist and who intends to convert the same to a bona fide industrial use. In the present case, the assessee is not required to obtain any approval under section 63 and that it is factually established that the purchaser has made an application under section 63- 1A for necessary permission. Further in assessee's case it is an admitted fact that the impugned land has been included in the notified Industrial Zone –Growth Centre 7 months prior to sale. During the course of hearing the ld AR drew our attention to the certificate obtained by the assessee dated 03.07.2015 from the Office of Assistant Engineer Class-1 Karjat stating that impugned land in Survey No.132/1,2,3,4 is at a distance of 36 kms from Mumbai Municipal Corporation (pg 101) in support of the claim that the condition under section 2(14)(iii) is fulfilled. From the perusal of the orders of the lower authorities we notice that these facts have not been properly examined by the lower authorities. Further the entire premise on which the revenue has proceeded is that the impugned land is a "non- agricultural" land and therefore has not tested the other conditions as prescribed for an agricultural land under section 2(14)(iii). The assessee before us submitted some additional documents at the request of the bench such as NOC application made by the purchaser and the response from Maharashtra State Road Development Corporation Ltd., etc which needs factual examination. In view of these discussion we are of the considered view that it would appropriate to remit the appeal back to the AO with the following directions Mrs. Snehlata Goel i. Verify the additional evidences submitted by the assessee before the CIT(A) under Rule 46A of the Income Tax Rules 1962 and the additional documents submitted before the Tribunal as called for. ii. Examine the facts by calling for necessary details as may be required in the light of the 13 factors to be tested as has been laid down by the Hon'ble Supeme Court in the case of Smt. Sarifabibi Mohmed Ibrahim (supra) iii. If the land is held to be an agricultural land, examine whether the agricultural land meets the eligibility conditions as per the provisions of section 2(14)(iii) of the Act and in the light of the rival submissions brought out as above iv. Examine the effect and applicability of section 63 and section 63-1A of Maharashtra Tenancy And Agricultural Lands Act 1948 v. Consider the claim of the assessee regarding land being under dispute due to which the assessee could not carry out any agricultural activity. vi. Examine the claim that the price at which the assessee has sold the land is closer to the rate prescribed by the Government for agricultural land and not the price an industrial land would fetch which is 10 times more
The AO is directed to re-examine the impugned issue as per the above directions and decide in accordance with law after giving a reasonable opportunity of being heard to the assessee. It is ordered accordingly.
In result, appeal filed by the assessee is allowed for statistical purposes.