Case: Commissioner of Income Tax Vs. Gemini Pictures Circuit Private Limited

per sq. yard. Neither the sale deed under which the assessee purchased the said land nor the sale deeds executed by it in 1966-67 describe the land as agricultural land. It could not be so described for the simple reason that it was registered in the municipal records as urban land and urban land tax was levied thereon. After purchasing the land, the assessee itself constructed two large buildings thereon. Indeed, the buildings were being used for non-residential purposes. The land is situated on Mount Road, Madras, which is the most important and the busiest thoroughfare in the city. The land is surrounded on all sides by industrial and commercial buildings. No agricultural operations were being carried out on any land nearby. In the face of the above circumstances, the mere fact that vegetables were being raised thereon at the time of the sale or for some years prior thereto does not change the nature and character of the land. Obviously, it was only a stop-gap activity. It was not a true reflection of the nature and character of the land. It is a matter of common knowledge that in the heart of New Delhi, there are houses with large compounds wherein a portion of the open land is used for raising vegetables. That does not make those portions agricultural lands. In the case of the assessee too, the raising of vegetables was a stop-gap activity until the assessee found a better use for it, whether construction of buildings or sale. It is well to remember that the question whether a particular land is agricultural land has to be decided on a totality of the relevant facts and circumstances. There may be circumstances for and against. They have to be weighed together and a reasonable decision arrived at. One has to take a realistic view and see how the persons selling and purchasing it understood it. Is it believable that in 1966-67, the assessee and the aforesaid purchasers were under the impression that they were selling and purchasing agricultural land ? Did they consider and treat the land as agricultural land ? The answer is too evident to call for an elucidationCertain decisions have been cited before us by counsel for both the parties in support of their respective stands. It must, however, be remembered that facts of no two cases will be identical. The tests evolved by the courts are in the nature of guidelines. No hard and fast rules can be laid down in the matter, for the reason that it is essentially a question of fact. Even so, a brief reference to the cases cited would be in order. Strong reliance was placed by Sri Aruneshwar Gupta upon the two decisions of the Gujarat High Court in Gordhanbhai Kahandas Dalwadi v. CIT and Dr. Motibhai D. Patel v. CIT. In the first case, the land was registered as agricultural land in the revenue records and land revenue was being paid thereon. No permission was taken for converting it to non-agricultural use before the date of sale. Potential non-agricultural use or the fact that development had taken place in the vicinity of the land, it was held, do not militate against the fact that it was agricultural land. In the next case too, the land was registered as agricultural land and permission to convert it into non-agricultural land was not obtained before the date of sale. In the circumstances, it was held that the mere fact that it was sold at a high price only indicates its potentiality for non-agricultural use. On a consideration of the entirety of the circumstances, it was held that it was agricultural land. 4. A recent decision of this court in Sarifabibi Mohmed Ibrahim v. CIT, rendered by a Bench comprising one of us (B. P. Jeevan Reddy J.) is relied upon by learned counsel for the Revenue. The Bench observed (page 637) : "Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The court has to answer the question on a consideration of all of them--a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts." * 5. Several judgments of this court and the High Courts were referred to including a judgment of the Bombay High Court in CIT v. V. A. Trivedi. On a consideration of the factors for and against, the Bombay High Court observed in V. A. Trivedis case that for ascertaining the true character and the nature of the land, it must be seen whether it has been put to use for agricultural purposes for a reasonable span of time prior to the date of sale and further whether on the date of sale the land was intended to be put to use for agricultural purposes for a reasonable span of time in future. Examining the case from the said point of view, the High Court held that the fact that the agreement of sale was entered into by the assessee with a housing society is of crucial relevance since it showed that the assessee had agreed to sell the land for admittedly non-agricultural purposes. The ratio of the said decision was approved in Sarifabibis case (SC)We do not think it necessary to multiply the cases, since, in our respectful opinion, no other conclusion is reasonably possible in the facts of the case before us than the one arrived at by us. All the three authorities under the Act too arrived at the same conclusion. With great respect to the learned judges of the High Court, we find their conclusion wholly unsustainable and unacceptable 6.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The answer is too evident to call for an elucidationCertain decisions have been cited before us by counsel for both the parties in support of their respective stands. It must, however, be remembered that facts of no two cases will be identical. The tests evolved by the courts are in the nature of guidelines. No hard and fast rules can be laid down in the matter, for the reason that it is essentially a question ofthe face of the above circumstances, the mere fact that vegetables were being raised thereon at the time of the sale or for some years prior thereto does not change the nature and character of the land. Obviously, it was only a stop-gap activity. It was not a true reflection of the nature and character of the land. It is a matter of common knowledge that in the heart of New Delhi, there are houses with large compounds wherein a portion of the open land is used for raising vegetables. That does not make those portions agricultural lands. In the case of the assessee too, the raising of vegetables was a stop-gap activity until the assessee found a better use for it, whether construction of buildings or sale. It is well to remember that the question whether a particular land is agricultural land has to be decided on a totality of the relevant facts and circumstances. There may be circumstances for and against. They have to be weighed together and a reasonable decision arriveddo not think it necessary to multiply the cases, since, in our respectful opinion, no other conclusion is reasonably possible in the facts of the case before us than the one arrived at by us. All the three authorities under the Act too arrived at the same conclusion. With great respect to the learned judges of the High Court, we find their conclusion wholly unsustainable and unacceptable