Madras High Court
The Commissioner Of Income Tax vs Mr.A.Vijayaraghavan on 23 February, 2021
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
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
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,
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 &
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.
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
https://www.mhc.tn.gov.in/judis/
