Shylendra Kumar J.
1. Appeal u/s 260A of the Income Tax Act, 1961 [for short, the Act] by the revenue, seeking to raise the following substantial questions of law for our examination in this appeal:
1. Whether the appellate authorities were correct in holding that the land which is subject matter of sale is agricultural land as on the date of sale without taking into consideration conversion of land to non-agricultural purpose and consequently recorded a perverse finding?
2. Whether the appellate authorities were correct in holding that though the land is converted into non-agriculture, in view of the cultivation of land till the date of sale, the land should he treated as agricultural land, and the same is exempt from capital gains in view of Section 2(14) r/w Sections 45 and 48 of the Act?
as questions that arise from out of the order of the income tax appellate tribunal, Bangalore bench in ITA No. 997/Bang/2010, which, by that order, dismissed the appeal of the revenue against the order passed by the appellate commissioner, holding that there is no need to interfere with the finding of the appellate commissioner that the sale transaction dated 7-4-2004 effected by the respondent-assessee in favour of some third parties in respect of an extent of 3 acres 38 guntas in Sy No 75 and 3 acres in Sy No 77 of Seshahaili village, Bangalore rural district, put together for sale consideration of ` 50.00 lakh, is not a transaction involving transfer of a capital asset and therefore no need to bring the income referable to the capital gains part of the transfer of the asset.
2. Appearing on behalf of the appellant-revenue, submission of Sri M. V. Seshachala, learned senior standing counsel for the income tax department, is that the tribunal and the appellate authority have committed an error in ignoring the finding of the assessing officer that the very sale deed under which the subject land had been sold recited that it is a converted land, converted for non-agricultural use, and as per the permission granted by the competent authority viz., Assistant Commissioner in the revenue sub-division concerned. It is, therefore, submitted that the appellate commissioner and the tribunal should not have ventured to extend the relief to the assessee even against assessee''s own document viz., sale deed etc.
3. It is also sought to be submitted that even independent of the question as to whether the land had been converted for a non-agricultural purpose or had retained its agricultural character, but as it was within a distance of 8 kms from the urban agglomeration of Bangalore city, it is inevitably a capital asset within the meaning of Section 2(14) of the Act and therefore the tax liability as had been determined by the assessing officer should not have been altered or reduced by the appellate authorities.
4. We have perused the orders impugned and bestowed our attention to the submissions made at the Bar.
5. We find from the record that the appellate commissioner as well as the tribunal followed an earlier ruling of the tribunal rendered on 30-12-2009 in the case of T. Suresh Gowda [ITA No 262/Bang/2009], wherein, it appears, the question was resolved by looking into the date of permission for conversion as the cut off line to decide as to whether the land was an agricultural land or otherwise.
6. It appears, the tribunal had opined that the land retained its agricultural character till the date of the order permitting non-agricultural use and thereafter it is not an agricultural land and therefore can be treated as capital asset.
7. The appellate commissioner as well as tribunal has applied this norm and while did hold that the sale transaction in respect of the following extents of land:
|
Conversion Notification No. and date |
Sy No |
Extent of area Acre/Gt |
Date of sale |
Sale consideration |
|
No A.I.NSR/ 94/98-99 dt 29.4.1999 |
75 77 |
3A 38G 3A 00G |
7-4-2004 |
50,00.000 |
|
No ALNSR/ 8/2004-05 dt 10.5.2004 |
15.15 16 17 86.1 87 |
OA 10G 4A 14G 2A 17G 5A 31G 5A 12G |
2-6-2004 |
1,82,50.000 |
|
TOTAL |
|
23A 22G |
|
2,32,50,000 |
in respect the sale transaction dated 2-6-2004, it was taken as a sale of capital asset, as this sale was after the date of permission for non-agricultural use granted by the Assistant Commissioner viz.. after 10-5-2004, whereas the earlier sale transaction dated 7-4-2004 is held to be in respect of an agricultural land. We do not find the reasoning and the principle enunciated by the tribunal for making a distinction as to whether the land was agricultural land or otherwise in the case of T. Suresh Gowda [supra] apply to the present case to be obnoxious or violating any statutory provisions and therefore we do not find any illegality in the finding recorded by the appellate commissioner and the tribunal.
8. Irrespective of the finding constituting a question of law when we do not find any illegality or statutory violation, per se, no need to further examine the question in this appeal and therefore the appeal is dismissed at the threshold.
