THE COMMISSIONER OF INCOME T vs. A. VIJAYARAGHAVAN

TCA.No.83 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.02.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.83 of 2021 The Commissioner of Income Tax, Chennai. ...Appellant Vs Mr.A.Vijayaraghavan ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 27.02.2017 made in ITA.No.1379/Mds/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai for the assessment year 2011-12. For Appellant: Mrs.R.Hemalatha Senior Standing Counsel For Respondent: Mr.N.Devanathan JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) is directed against the order 1/6 https://www.mhc.tn.gov.in/judis/ TCA.No.83 of 2021 dated 27.02.2017 made in ITA.No.1379/Mds/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai ('the Tribunal' for brevity) for the assessment year 2011-12. 2. The Revenue has raised the following substantial questions of law for consideration: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the lands sold by the Assessee were agricultural lands especially when the Assessee neither performed any agricultural operations on it nor had returned any agricultural income in the Returns filed from the said lands in any of the previous years commencing from 2006-07 to 2011-12? 2. Whether the Tribunal was right in granting relief by treating the real estate transaction between the assessee and the company engaged in developing resorts as a transfer of agricultural lands when the actual intention behind the transaction was only to develop the resorts and not perform any agricultural operation on the said land? 3. Is not the finding of the Tribunal bad by holding that the lands sold were agricultural in nature especially when the assessee has not furnished any proof of cultivation, purchase of seeds and saplings, payment of labour charges presence of water sources, electricity connection in the case of borewell etc which are essential for doing any agricultural operations? 4. Whether the reasoning and finding of the Tribunal is proper especially when the Apex Court in the case of State of UP Vs Nandkumar Agarwal and 2/6 https://www.mhc.tn.gov.in/judis/ TCA.No.83 of 2021 others reported in AIR 1998 page 476 had clearly held that mere categorization as agricultural lands in revenue records would not be sufficient and only if actual cultivation takes place the benefit has to be granted? 5. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the lands sold were agricultural lands especially when the transaction of the Assessee fails in majority of the test laid down by the Apex Court in the case of Sharifa Bibi Md. Ibrahim reported in 204 ITR page 631?" 3. We have heard Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant-Revenue and Mr.N.Devanathan, learned counsel for the respondent. 4. The Tribunal had allowed the assessee's appeal following the case of another assessee in ITA.No.1380/Mds/2016 dated 04.01.2017. The Revenue has filed an appeal before this Court against the said order dated 04.01.2017 and the appeal is yet to be numbered. However, the appeal would not be prosecuted by the Revenue on the ground of Low Tax Effect. 5. Be that as it may, we have carefully seen the reasons assigned by the Tribunal and we find that the facts in the case of the other assessee, 3/6 https://www.mhc.tn.gov.in/judis/ TCA.No.83 of 2021 which was the subject matter of appeal in ITA.No.1380/Mds/2016 dated 04.01.2017, are identical to that of the case of the assessee, except for the extent of land purchased by the assessee, which is larger than the land held by the other assessee. 6. The Tribunal, in our considered view, rightly took note of the factual position, namely, that the land is classified as agricultural land in the revenue records; it is situated beyond eight kilometers from the municipal limits; as per the revenue records, agricultural activities were being carried out in the land; the land was purchased by the assessee in the year 2005 as an agricultural land and sold in the year 2010 as an agricultural land; and that the larger extent of land would also point out to the fact that it is an agricultural land. 7. The Tribunal also rightly took note of the fact that the intention of the purchaser of the land is immaterial to decide as to whether that the land should be treated as an agricultural land or not. The Tribunal applied various decisions and in particular referred to the decision of the Hon'ble Division Bench of this Court in the case of Mrs.Sakunthala Vedachalam & 4/6 https://www.mhc.tn.gov.in/judis/ TCA.No.83 of 2021 Another Vs. ACIT reported in 369 ITR 558 (Mad) and allowed the assessee's appeal. 8. Therefore, we find no good grounds to interfere with the findings rendered by the Tribunal. Accordingly, the appeal fails and it is dismissed and the substantial questions of law are answered against the Revenue. No costs. (T.S.S.,J.) (R.N.M.,J.) 23.02.2021 Index:Yes/No Internet:Yes/No hvk To 1. The Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.No.83 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.83 of 2021 23.02.2021 6/6 https://www.mhc.tn.gov.in/judis/