SARALA DEVI K Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Cochin Bench of Income tax Appellate Tribunal has referred for the opinion of this Court under S.256(1) of the Income Tax Act, 1961 the following questions of law arising out of the order of the Tribunal dt. 31.8.1984 in I. T. A. No. 920 (Coch)/1983:

(2.) The fair market value of the property as on 1.1.1954 as opted for by the assessee was determined by the Income Tax Officer at Rs. 1,50,000/- for the purpose of working out capital gains under S.55(2). Before the Income Tax Officer the assessee contended that only the amount of Rs. 1,75,626/- should be treated as having been received as consideration for the sale of the land as the balance amount was paid to Income Tax Department pursuant to the attachment of the properties by the department. This contention was not accepted by the Income Tax Officer. Consideration received for the sale of the property was fixed at Rs. 6,20,000/-. This finding was affirmed by the C. I. T. (Appeals) as also the Tribunal.

(3.) The contention raised by the assessee claiming exemption under S.54 E on the basis of the deposits of sale consideration made by the assessee in May 1978 and in February 1979 was also rejected on the ground that the deposit was not made within six months of the transfer of capital asset. This finding was also affirmed both by the CIT (Appeals as well as the Tribunal. Before the C. I. T. (Appeals) the assessee took up a fresh contention by way of an additional ground that the property sold was agricultural land and therefore, the transaction did not attract tax on capital gains. The contention was that the property was situated outside Quilon Municipal limits more than 8 km. away in a locality where the population was below 10,000/ -. Coconut trees and other trees were planted and also seasonal crops like plantain and tapioca were being cultivated on the property. It was only a small portion of about 1 acre that was used for cashew factory. Reliance was placed on a certificate issued by the village Officer to show that the property was agricultural land. C. I. T. (Appeals) declined to entertain the contention as the same has not been advanced before the Income Tax Officer and as the required particulars for deciding the issue were not on record. In support of the above finding the decision in Add. C. I. T. v. Gurjargravures Pvt. Ltd., 111 ITR was relied on. Before the Tribunal the assessee contended that the description of the property in the schedule on the sale deed itself would show that there were trees, wells etc. in the property, thereby bringing it under the category of agricultural land. The Tribunal was not inclined to accept the contention. It took the view that description in the document mentioned in routine manner need not show the real character of the property. The claim of the assessee could be decided only after detailed investigation with regard to the nature of the property and nature of the agricultural operations carried on. It cannot be decided merely on the basis of a certificate from the Village Officer produced before the C.I.T. (Appeals)