Law:

Section:

Section 2(e)(1)(i ) of the wealth-tax act, 1957-Assets-Agricultural land-Assessee owned land situated within city municipal limits shown in revenue records as agricultural land and also being assessed to land revenue-Land used for agricultural purposes till 1963 and remained fallow thereafter-No material produced by income-tax authorities to rebut presumption raised by land revenue records that said land continued as agricultural land-Whether said land was agricultural land within the meaning of section 2(e)(1)(i )-Held, on facts yes Facts The assessee was the owner of a piece of land which was recorded in the revenue records as agricultural land and was also assessed to land revenue. It was under cultivation up to 1963 but remained fallow thereafter. The land was situated within municipal limits and there were temporary corrugated sheds on it occupied by the assessee himself and an unauthorized tenant. For the assessment years 1965-66 to 1969-70, the assessee claimed that the said land was agricultural land and hence, in view of the provision of section 2(e)(1)(i) its value should be excluded for the purposes of computation of his net wealth. The WTO disallowed the assessee's claim. On appeal, the AAC upheld the WTO's order holding that having regard to the situation of the plot and other surrounding circumstances the land could not be said to be agricultural land. On second appeal, the Tribunal upheld the assessee's claim. On reference: Held It is well established that in a given case agricultural land may or may not yield agricultural income. If there is land which was once cultivated or put to agricultural use but is now fallow or barren, it would not merely by reason of such fact cease to be agricultural land. Conversely what is patently non-agricultural land may in extraordinary circumstances be used for a purpose to which agricultural land is usually put and may, therefore, yield agricultural income. However, merely by reason of the yield, it cannot be designated as agricultural land. Again, where the land is being assessed as agricultural land, then, normally, although it is not being put to actual agricultural use, it may be presumed that it continues…

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