Law:

Section:

Section 2(1A) of the Income-tax Act, 1961 - Agricultural Income-Assessment year 1967-68 - Assessee inherited land in question in 1949 purchased by his father in 1921 for agricultural purposes - On 12-1-1967 assessee sold part of land to a co-operative housing society after obtaining statutory permission to sell land to non-agriculturist - Purchaser society obtained permission to use lands in question for non-agricultural purposes on 11-5-1967 - According to admitted position before AAC, assessee continued to cultivate lands including land sold to co-operative society till date of sale and continued to carry on agricultural operations in remaining land right down till 1972-73, as shown by land revenue entries - Presumptions arising from actual user of land, viz agricultural user and from entries in revenue records had not been rebutted by Department - Whether under aforesaid circumstances and in absence of any other material on record, it could not be said that land had lost its agricultural character - Held, yes - Whether even high price that purchaser was willing to pay merely reflected potential non-agricultural value and it did not mean that land had ceased to be agricultural land because of such price - Held, yes FACTS In 1949 the assessee inherited the lands purchased by his father in 1921 for agricultural purposes. During the relevant accounting year, the assessee entered into an agreement to sell part of the said land he owned. On 23-8-1966 the assessee applied to the Collector for permission under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, since the sale of agricultural land was going to be in favour of a non-agriculturist. This permission under section 63 was granted by the Assistant Collector, on 2-1-1967. Thereafter, on 12-1-1967, the assessee executed the sale deed in favour of the Co-operative Housing Society Ltd. After the sale was effected, the purchaser applied under section 65 of the Bombay Land Revenue Code to the revenue authorities for permission to use of the lands which it had purchased for non-agricultural purposes and for that non-agricultural use permission was granted on 11-5-1967. It was the case of the…

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