COMMISSIONER OF INCOME TAX Vs. DEBBIE ALEMAO

JUDGEMENT

(1.) THE respondents in these two tax appeals are the wife and husband and were co -owners of the land bearing survey No. 126 admeasuring about 46,250 sq. mtrs. situated at revenue Village Varca, Salcete Taluka, in the District of South Goa sum of Rs. 73,00,000 and the consideration was paid equally to the wife and husband. The respondents filed separate returns of income under the IT Act. The capital gain arising out of the sale of the land was claimed by each of them to be exempt, being arising out of the sale of agricultural land. The AO held that the said land had non -agricultural potential and the fact that it was sold at a price which was nearly 10 times the purchase price within two years from its purchase and it was purchased by the purchasers for the purpose of a beach resort showed that the said land was not an agricultural land. Consequently, he held the profit arising out of the sale of the said land was assessable to the tax as capital gains.

(2.) AGGRIEVED by the decision of the AO, each of the respondents filed a separate appeal before the CIT(A). The CIT(A) accepted the contention of the respondents that the said land was an agricultural land and the capital gain arising out of the sale of agricultural land was not chargeable to tax under s. 45 of the IT Act. He, accordingly, allowed the appeals by deleting the amount of capital gains. In the appeals at the instance of the Revenue, the Income -tax Appellate Tribunal (for short "the Tribunal") confirmed the decision of the CIT(A). Aggrieved by the decision of the Tribunal the Revenue is in appeal.

(3.) The learned counsel for the appellant submitted that the said land had non -agricultural potential when it was purchased by the respondents. She submitted the very fact that the respondents sold the said land within two years of its purchase to a purchaser for construction of a beach resort showed that the respondents had purchased the property with an intention of selling it for a non -agricultural use. The huge difference in the price nearly 10 times the purchase price would indicate that the land was purchased with an eye on the non -agricultural potential. The learned counsel for the appellant, therefore, submitted that the said land was not an agricultural land. The learned counsel for the appellant also invited our attention to the fact that the respondents had not shown any agricultural income during the period of two years from the date of the purchase till the date of the sale, arising out of the said land. This also showed that the land was not an agricultural land. The counsel for the appellant submitted that the CIT(A) as well as the Tribunal committed a gross error, bordering on perversity, in holding that the said land was an agricultural land. Ordinarily, the question whether a land is an agricultural land and a non -agricultural land is a question of fact and the finding on the question of fact recorded by the Tribunal is final.