VIJAYA RAM SHEWALKAR,NAGPUR vs. INCOME TAX OFFICER WARD - 5(2) NAGPUR, NAGPUR

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, NAGPUR BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER& SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No. 458/NAG/2025 (AY : 2014-15) Vijaya Rama Shewalkar ITO, Ward – 5(2) (L/R Through Ashutosh Vs BSNL, RTTC Building Ram Shewalkar) Nagpur – 440010 80, North Ambazari Road, Daga layout, Dharmapeth, Nagpur - 440010 [PAN: AEPPS8103M] Appellant / Assessee Respondent / Revenue Assessee by Shri Manoj G Moryani, Adv& Shri Bhavesh M Moryani, Adv Revenue by Shri Surjit Kumar Saha, Sr. DR Date of hearing 27.02.2026 Date of pronouncement 20.04.2026 PER KHETTRA MOHAN ROY, AM: 1. The assessee has filed the aforesaid appeal challenging the impugned order dated 15/07/2025, passed by the National Faceless Appeal Centre, Delhi, [“Ld. CIT(A)], for the assessment year 2014-15. The assessee has raised the following grounds of appeal: “1.The CIT(A) NFAC erred in confirming the order passed U/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 by assessing officer, therefore order passed is illegal, invalid and bad in law;

2. On the facts and circumstances of the case, the Ld. NFAC failed to consider that agriculture income were duly shown and accepted in previous years by revenue, therefore the order passed is illegal, invalid and bad in law;

Kast Ltd. and not assessee, therefore addition made is illegal, invalid and bad in law; 9. The assessee is denied the liability of interest charge U/s. 234A, 234B and 234C of the Income Tax act, the same may kindly be deleted 10. The appellant craves leave to amend, add or take a new ground or grounds at the time of hearing;” 2. We have heard the submissions of ld Counsel for assessee and the ld Sr DR for the revenue and have seen the orders of lower authorities carefully. both the parties, perused the material placed on record. The Ld. Counsel for the assessee argued that the grounds of appeal raised by the assessee is squarely covered in favour of the assessee in co-owners’ case in Manisha Ashutosh Shewalkar Vs Income Tax Officer, ITA No. 67/Nag/2025, copy of which is filed on record. The ld Counsel for the assessee argued that assessee with his co-owners have sold agriculture land and similar additions were made against the co- owners and on appeal before Tribunal similar additions in case of co-owners have been deleted. 3. On the other hand, the Ld. DR relied upon the orders passed by the revenue authorities and requested for dismissal of assessee appeal. 4. We have considered the submissions of both the parties and on considering the facts of the case and the material available on record, we find that the grounds of appeal raised by assessee is squarely covered by the decision of 3

this Bench in case of Manisha Ashutosh Shewalkar Vs. Income Tax Officer in ITA No. 67/Nag/2025 dated 04/04/2025. The operative portion of the same is reproduced hereunder 7. We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. As also contended by the learned counsel for the assessee, we find that the land was agriculture land as per revenue records and located beyond the municipal limits, qualifying the exemption under section 2(14) of the Act. The agricultural income had been consistently reported in previous years, demonstrating the said land as agricultural in nature. We further find that the enquiry conducted by the Assessing Officer is after six years of sale of the said immovable property and as such the same is futile due to passage of time. While going through the material on record, we further find that the sale was for agricultural purposes and the non-agricultural conversion was initiated by the purchaser and not by the assessee. Page-47 & 48 of the Paper Book is relevant in this regard. The learned Counsel for the assessee relied on various case laws in support of his contentions. We particularly consider it relevant to reproduced from the order passed by the Co-ordinate Bench of the Tribunal, Chennai Bench, in Shri Pandit Vettrivel v/s ACIT, ITA No. 146/Chny./2020, Α.Υ. 2007-08, vide order dated 22/09/2023, wherein the Hon'ble Judicial Member was a party to the Coram, on similar issue, the Bench held as under :- "8. We find that the assessee has furnished Adangal Extract Receipts issued by Tahsildar, Perundural dated 21-10-2017 where the agricultural crop 'corn' is shown as cultivated on the agricultural land. The assessee has also furnished Electricity Board Receipts. The assessee has been granted subsidy on 4

electricity charges. The assessee has also furnished Land test Report mentioning soil content and nature of crop which could be grown on the land. The copy of Land Revenue Tax Receipt dated 29.03.2007 for Fasli Year 1416-Perundurai Taluka has also been placed on record. The Village Administrative officer Letter dated 29-03-2007 confirms that the village Kengayapalaym has population of less than 1600 people. In the Patta, land has been classified as "Punjal" wet land. The assessee has furnished agricultural Income Receipts dated 10- 11-2006 & 10-08-2006 in support of agricultural produce. The Ploughing Expenses Receipts has also been placed on record. All these documents supports the case of the assessee. However, the lower authorities has not placed on record any contrary document to rebut the same rather they have gone on the prime reasoning that the area where the impugned land was situated, had commercial potential and the land was acquired only as a part of real estate business to reap the benefits of commercialization. However, the fact that the land was classified as agricultural land in the revenue record remain uncontroverted before us thought he assessee may not be successful in establishing that the whole parcel of land was put to agricultural activities during the year. However, the said fact, in our considered opinion, would not jeopardize the claim of the assessee and would not alter the character of land as an agricultural land. Upon perusal of all these documents, it could be concluded that the assessee has fairly established that the land was agricultural land and had duly discharged the onus as casted upon him, in this regard. The onus, now, was on revenue to rebut the documentary evidences of the assessee and bring on record adverse material to suggest that the land was not classified as an agricultural land. However, nothing of that sort is available on record. 9. The Hon'bje High Court Madrass in the case law of Shakuntala Vedachalam (369 ITR 558), considering the decision of Hon'ble Apex Court in Raja Benoy Kumar Sahas Roy (32 ITR 466), held as under :- 9. The issue involved in the above Tax Case (Appeals) lies on the narrow compass, viz, whether the lands sold by the assessee are agricultural lands and whether they are entitled to the benefit of exemption capital gains tax 10. It is on record that in a report has been submitted by the revenue authorities, it is admitted that the lands are classified as agricultural lands in the revenue records and they are dry lands. The remand report of the Assessing Officer in this regard reads as follows: "During the time of assessment proceedings itself, a confirmation was obtained from the Headquarters Deputy Tahsildar, Thirukazhukundram who has certified in his letter dated 23.12.2010, refer to at 2 above, that in land in question casuarinas are grown for the past one and a half year and hence the same are agricultural lands. He has also confirmed in the said letter that the lands are situated at one kilometer distance from the Town Panchayat of Mamallapuram (i.e. within the specified distance from the outer limits of the nearest municipality/town panchayat) and the population of the Mamallapuram Town Panchyat as per 2001 census was 12,345" 11. The assessee has also produced a copy of the adangal and the letter from the Tahsildar, which showed that the lands were agricultural in nature and the Revenue has also accepted that the lands are falling within the restricted zone in terms of Section 2(14) of the Income Tax Act. 12. Hence, the only point that has to be considered is that whether the test as laid down in the decision reported in Siddharth J. Desai (supra) has been satisfied by the assessees. In the said decision, in paragraph 11, it is held as follows; "On a conspectus of these cases, several factors are discernible which were considered as relevant and which were weighed against each other while determining the true nature and character of the land. It may be useful to extract from those decisions some of the major factors which were considered as having a bearing on the determination of the question. Those factors are : 6 (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 way of a stop- gap arrangement? (4) Whether the income derived from the agricultural operation carried on in the land bore and rational proportion to the investment made in purchasing the land? (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 vender 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 lands, 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 development area? Whether it 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 non-agricultural 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 the non agriculturist? If so, whether the sale or intended sale to such non- agriculturist was for non-agricultural or agricultural user? (12) Whether the land was sold on yardage or on acreage basis? (13) According to the Tribunal that if the above test are applied, the assessee could not satisfy any of the conditions except condition No. 1,5,11 and 12. The Tribunal held that the assessees could not prove that the lands was actually or ordinarily used for agricultural purposes. This reasoning does not appear to be correct in view of the above-said decision of the Gujarat High Court, wherein it was clearlyheld in Clause (10 in paragraph 11 that whether the land was classified in the revenue records as 7 agricultural and whether it was subject the payment of land revenue has to be considered for grant of exemption. (14) Thus it is evident from the above, which clearly states that any one of the above factors can be present in a case to qualify for the benefit of classification as agricultural lands. In this case, the assessee have qualified under clause 11(1) since as per the adangal records, these lands were classified as agricultural lands and the assessee have also paid revenue kist, namely, revenue payment. Therefore, the Tribunal has misconstrued the judgment of the Gujarat High Court 9supra) that all conditions laid down in paragraph 11 should be satisfied, which is not a correct interpretation. 15. To get exemption, assessee has to satisfy the conditions laid down in Section 2(14) of the Income Tax Act, which read as under; 2(14) "capital asset" means-property of any kind held by an assessee, whether or not connected with his business or profession, but does not include (i) any stock-in-trade [other than the securities referred to in sub-clause (b)], consumable stores or raw materials held for the purposes of his business or profession ; (ii) personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him: Explanation 1. For the purposes of this sub-clause, "jewellery" includes (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi- precious stone, and whether or not worked or sewn into any wearing apparel; (b) precious or semi- precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel: (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 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 before the first day of the previous year b) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area are other relevant considerations, specify in this behalf by notification in the Official Gazette: 9iv) 68 per cent Gold Bonds, 1977, or 7 per cent. Gold Bonds 1988, or National Defence Gold Bonds, 1980, issue by the Central Government: (v) Special Bearer Bond, 1991, issued by the Central Government (vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government.

the nature of land at the time of sale is crucial. Accordingly, we hold that the learned CIT(A) was not justified in confirming the addition made by the Assessing Officer. Since the land is conclusively proved to be an agricultural land, it does not fall within the definition of "Capital Asset". It is trite law that to thrust upon the chargeability of capital gain under section 45 of the Act, transfer of capital asset is sine qua non which is conspicuously absent here. Hence, the entire addition of Rs.1,11,50,582, is directed to be deleted. Thus, impugned order passed by the learned CIT(A) is hereby set aside and the grounds raised by the assessee are allowed.”

to be deleted and retuned income of the assessee has to be accepted. Thus, the impugned order passed by learned CIT(A) is hereby quashed and the grounds raised by the assessee are allowed. 6. In the result, the appeal filed by the assessee stands allowed. Order pronounced on 20.04.2026 under Rule 34 of Income Tax Appellate Tribunal) Rules 1963.

sd/- sd/- PAWAN SINGH KHETTRA MOHAN ROY JUDICIALMEMBER ACCOUNTANT MEMBER Nagpur: Dated: 20/04/2026 KRK, Sr. PS

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. By order

Senior Private Secretary ITAT, Nagpur