Law:

Section:

Section 2(e) of Wealth-tax Act, 1957 – Assets – Agricultural land – Assessment year 1969-70 – Assessee after purchasing lands in years 1930 & 1933, used them for agricultural purposes, - Thereafter, lands were put to non-agricultural use, for manufacturing of bricks upto 1952 when assessee obtained permission for reconversion of land for agriculture use – After lying fallow for some years, from 1959-60 onwards, lands were being utilised, in part, for cultivation of juvar and from year 1963-64 lands were exclusively used for cultivation of juvar – After lands were included in Town Planning Scheme in year 1959, same were sold in year 1968 to cooperative societies and an individual also applied for permission to convert said land for non-agricultural purposes – ITO charged capital gains tax on gains arising from sale of said lands – Tribunal affirmed order of ITO – Whether what had to be seen was not intermediate use but actual user of lands at time of sale and actual character of lands on date of sale – Held, yes – Whether, since, it was clear from records that from 1-7-1959 onwards that juvar was atleast partially being grown on lands in question, it could be concluded that land was actually being used for agricultural purposes – Held, yes – Whether lands would not be required to change from agricultural user to any other user because of factum of development plan being made or under preparation or because of town planning scheme being made or under preparation – Held, yes – Whether in view of aforesaid, lands in question were found to be agricultural lands on dates of sales, and, consequently, gains arising therefrom could not be assessed as capital gains – Held, yes FACTS Immediately after certain lands were purchased by the assessee-HUF, in 1930 and 1933, they were used for agricultural purposes. Thereafter, the land was put to non-agricultural use, i.e., manufacture of bricks, upto 1952, when the assessee obtained permission for discontinuance of non-agricultural use. From 1951-52 onwards, the lands were assessed to land revenue on the footing that they were agricultural lands. For some years, the lands were being fallow. Sometime in 1959-60 onwards the…

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