Patto Plaza, Panaji, Goa v. Shri Minguel Chandra Pais

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEALS NO. 1 AND 2 OF 2002. TAX APPEAL NO. 1 OF 2002. The Commissioner of Income Tax,having office at Aayakar Bhavan, Patto Plaza, Panaji, Goa. .... Appellant. Versus 1. Shri Minguel Chandra Pais, E­15, Bainfall, Assolna, Salcete, Goa. Assolna, Salcete, Goa. 2. The Income Tax Appellate Tribunal, Panaji Bench, Aaayakar Bhawan, Panaji Bench, Aaayakar Bhawan, Patto Plaza, Panaji, Goa. .... Respondents. TAX APPEAL NO. 2 OF 2002. The Commissioner of Income Tax,having office at Aayakar Bhavan, Patto Plaza, Panaji, Goa. .... Appellant. Versus 1. Smt. Maria Leila Tovar Furtado e Pais, E­15 Bainfall, Assolna, Salcete, Goa. e Pais, E­15 Bainfall, Assolna, Salcete, Goa. 2. The Income Tax Appellate Tribunal, Panaji Benc, Aayakar Bhawan, Patto Plaza, Panaji, Goa. .... Respondents. Mr. S. R. Rivonkar, Advocate for the Appellant. Mr. S.V. Pikale, Advocate for the Respondent No.1. CORAM: A. P. LAVANDE & N. A. BRITTO, JJ. Date of reserving the Judgment: 07.03.2005. Date of Pronouncing the Judgment: 23.03.2005. J U D G M E N T : (PER BRITTO, J.) These appeals filed by the Revenue under Section 260A of theIncome Tax Act, 1961 were admitted on a substantial question of law whichreads as follows :­ “ Whether on the facts and in the circumstances of the case the assessee's land could be termed as agricultural land ?” 2. Some facts are required to be stated to dispose of both the appeals: Therespondents in both the appeals are the assessees ­ husband and wife andthough they are non­resident Indians from the year 1983 or thereabout,they are governed by the regime of communion of assets as in force inthis State. In May, 1995 they sold their ancestral property bearingSurvey Nos.103/1 and 102/4 admeasuring about 65,282 sq.metres to M/s Sunset Resort Pvt. Ltd. for a sum of Rs.2,88,10,600/­ which worksout to a price of Rs.441.33 per sq.m. The assessees did not declarecapital gains on the sale of the said property and therefore a notice underS.143(2) of the Act was issued to them and in reply to the said noticethey contended that the land held by them was agricultural land havingcoconut and cashew plantation. 3. The Assessing Officer by his Order dated 14.10.98 held that they wererequired to pay Rs.26,06,040/­ each as tax on long term capital gainsfor assessment year 1996­97 stating that the land sold by them was baradin nature and was not capable of agricultural operations. The AssessingOfficer noted that the assessees were non­resident Indians and there wasno one to look after the said land. The Assessing Officer declined toaccept that the father of the male assessee who was an old man, couldlook after the said property or involve himself in agricultural activitiesand also noted that the trees were not planted in a row and in order. Hewas also of the view that the price at which the land was sold showedthat it was not agricultural land and besides, the land was adjacent to 4five Star Hotels namely Holiday Inn, Donna Sylvia, Dalmia Old Anchorand Hotel Leela Palace. It may be stated here that M/s Sunset Resort Pvt.Ltd. is said to be sister concern of Hotel Leela Palace. 4. The assessees then filed appeals to the Commissioner of Income Tax,Belgaum (CIT(A)). Before the C.I.T.(A) the assessees filed affidavits ofone Smt. Salvacao Correia e Fernandes who stated that she wasemployed by the said father as a house servant and that she was alsoworking in the property along with other labourers and had done theplantation of coconut saplings, cashew plants, watering, manuring andplucking of fruits. An affidavit of Bosco Rodrigues, a panch member ofthe Village Panchayat of Cavelosim was also filed and who had statedthat he had seen labourers working prior to the sale of the property in thecoconut plantation and other fruit bearing trees existing in the saidproperty. A report of Shri Menezes, registered valuer who had opinedthat the property was agricultural land was also filed. Belgaum (CIT(A)). Before the C.I.T.(A) the assessees filed affidavits ofone Smt. Salvacao Correia e Fernandes who stated that she wasemployed by the said father as a house servant and that she was alsoworking in the property along with other labourers and had done theplantation of coconut saplings, cashew plants, watering, manuring andplucking of fruits. An affidavit of Bosco Rodrigues, a panch member ofthe Village Panchayat of Cavelosim was also filed and who had statedthat he had seen labourers working prior to the sale of the property in thecoconut plantation and other fruit bearing trees existing in the saidproperty. A report of Shri Menezes, registered valuer who had opinedthat the property was agricultural land was also filed. 5. The C.I.T.(A) carried out an inspection on 18.3.99 and he found that theland of survey No.102/4 was adjacent to Hotel Holiday Inn, being arectangular strip, with one side of it touching River Sal and the other sidetouching the road; he found that part of the land which was on the riverside was marshy and was not fit for agricultural or horticultural use andthe other part was open land without any trees. He found that surveyNo.103/1 was a stretch extending from the bank of River Sal on one sideto the sea shore on the other side and was divided in two parts by theroad leading to Margao and the land between the road and the river wasland of survey No.102/4 was adjacent to Hotel Holiday Inn, being arectangular strip, with one side of it touching River Sal and the other sidetouching the road; he found that part of the land which was on the riverside was marshy and was not fit for agricultural or horticultural use andthe other part was open land without any trees. He found that surveyNo.103/1 was a stretch extending from the bank of River Sal on one sideto the sea shore on the other side and was divided in two parts by theroad leading to Margao and the land between the road and the river was found to be covered by coconut, cashew, mango and acacia trees, with amundcarial house in it and the mundcar had been looking afterhorticultural operation since long. He also found that coconut trees werefound planted more or less under a regular plan. He also found that theother portion stretching from the road to the sea shore was havingcoconut plantation only on the sea side, but on the road side it was abarren land having sand dunes, some cashew shrubs strewn here andthere and according to him the cashew shrubs were not planted but werepart of natural growth. The C.I.T.(A) ultimately treated 2/3 portion ofsurvey No.103/1 as garden land where plantation of mainly coconut treeswas done. He held that 1/3 portion of this land could not be said to beagricultural land. The C.I.T.(A) therefore directed that the sale proceedsof 1/3 of Survey No.103/1 and the sale proceeds of Survey No.102/4could be charged to capital gains and thus partly allowed the appeals. 6. Both the parties then filed appeals before the Income Tax AppellateTribunal (ITAT), Panaji Bench, and the ITAT by judgment dated 28.9.01was pleased to allow the appeals filed by the assessees and dismiss theappeals filed by the Revenue. The ITAT came to the conclusion that thedocumentary evidence produced by the assessees and its prevailingnature and considering all surrounding facts brought on record, it was ofthe opinion that the land sold was agricultural land. The C.I.T. also found that the land was in settlement zone and the said property wassituated in village Cavelosim, outside the Municipal limits as well asnotified outer limits. 7.Before this Court, on behalf of the Revenue, two judgments have been`relied. The first is in the case of Sarifabibi Mohmed Ibrahim (Smt) andOthers v. Commissioner of Income Tax, Gujarat (1993 Supp (4) S.C.C.707) and the second is of this Court in the case of Gopal C. Shrma v.Commissioner of Income­Tax (1994 ITR 946 Vol209) in which the case ofSmt. Sarifabibi Mohmed Ibrahim (supra) was referred to and reliedamongst other cases. 8.Shri Rivonkar, the learned counsel on behalf of the Revenue(appellants) has submitted that the ITAT has not followed all the tests laiddown by the Hon'ble Supreme Court in the case of Sarifabibi Mohmed(supra) and that at least eight of the tests laid down by the Supreme Courtfavoured the Revenue. As per Shri Rivonkar, the price at which theproperty was sold certainly required more weight to be given because atthat rate no one would have bought the property for agricultural purpose.According to him, the tests laid down by the Supreme Court in the said caseof Sarifabibi have not at all been followed by the learned ITAT. 9.On the other hand, Shri S.V. Pikale, the learned counsel of assessees,(Respondents) has submitted that the substantial question of law as framedby this Court does not arise at all. As per Shri Pikale, the learned ITAT hasgiven a finding of fact that the property sold is agricultural land and thesame cannot be disturbed under S.260A of the Act. Shri Pikale has alsoreferred to the case of M. Janardhana Rao v. Jt. Commissioner ofIncome Tax (2005 Vol.273 ITR 50) in support of his submission that afinding of fact cannot be disturbed in appeal under S.260A of the Act. ShriPikale has also referred to the case of SantoshHazari v. PurushottamTiwari [(2001) 3 SCC 179] wherein the Hon'ble Supreme Court hasdefined what is a substantial question of law and it is only when asubstantial question of law is involved that the interference of this Court iscalled for under S.260 of the Act. 10.It may be noted that both the cases of Gopal Sharma v. Commissionerof Income Tax (supra) as well as Sarifabibi Mohmed v. Commissioner ofIncome Tax (supra) were referred to and relied upon by the authoritiesbelow including the learned ITAT and after considering the same, theycame to conclusions to which a brief reference has already been made. 11.Section 260A of the Act is analogous to S.100 of C.P.C. Both the saidprovisions provide that an appeal shall lie to this Court only in case this Court is satisfied that the case involves a substantial question of law. Sub­section (4) of S.260A of the Act and sub­section (5) of S.100 of C.P.C.provide that the appeal shall be heard on the questions so formulated, andthe respondent shall, at the hearing of the appeal, be allowed to argue thatthe case does not involve such question. As stated, it is the case of theassessees that the question framed is not at all involved in these appeals. 11.Section 260A of the Act is analogous to S.100 of C.P.C. Both the saidprovisions provide that an appeal shall lie to this Court only in case this Court is satisfied that the case involves a substantial question of law. Sub­section (4) of S.260A of the Act and sub­section (5) of S.100 of C.P.C.provide that the appeal shall be heard on the questions so formulated, andthe respondent shall, at the hearing of the appeal, be allowed to argue thatthe case does not involve such question. As stated, it is the case of theassessees that the question framed is not at all involved in these appeals. 12.The Supreme Court in the case of Santosh Hazari (supra) has statedthat pure findings of fact remain immune from challenge before the HighCourt in second appeal. The first appellate court is also a final court of lawin the sense that its decision on a question of law even if erroneous may notbe vulnerable before the High Court in second appeal because thejurisdiction of the High Court has now ceased to be available to correct theerrors of law or the erroneous findings of the first appellate court even onquestions of law unless such question of law be a substantial one. TheSupreme Court has further held that a point of law which admits of no twoopinions may be a proposition of law but cannot be a substantial question oflaw. To be 'substantial' a question of law must be debatable, not previouslysettled by law of the land or a binding precedent, and must have a materialbearing on the decision of the case, if answered either way, insofar as therights of the parties before it are concerned. To be a question of lawinvolved in the case there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings offact arrived at by court of facts and it must be necessary to decide thatquestion of law for a just and proper decision of the case. An entirely newpoint raised for the first time before the High Court is not a questioninvolved in the case unless it goes to the root of the matter. Therefore itwill depend on the facts and circumstance of each case whether a questionof law is a substantial one and involved in the case, or not. 13.In the case of Mahavir Woollen Mills v. Commissioner of IncomeTax (2000 ITR 245 297) the then learned Chief Justice of the Delhi HighCourt Mr. Justice Arijit Pasayat writing for the Division Bench stated thatthe words “substantial questions of law “ has acquired a definiteconnotation through a catena of judicial pronouncements and usually fivetests are used to determine whether a substantial question of law isinvolved. They are as follows : (1) whether, directly or indirectly, it affectssubstantial rights of the parties, or (2) the question is of general publicimportance, or (3) whether it is an open question in the sense that the issuehas not been settled by pronouncement of the Supreme Court or PrivyCouncil or by the Federal Court, or (4) the issue is not free from difficulty,and (5) it calls for a discussion for alternative view. The Division Benchalso stated that there is no scope for interference by the High Court on afinding recorded when such finding could be treated to be a finding of fact. 14. The view held in Mahavir Woolen Mills has now become the lawlaid down by the Hon'ble Supreme Court in the case of M. Janardhana Rao(supra). 15.The Supreme Court in the case of Sarifabibi (supra) has approved thedecision of a Division Bench of the Gujarat High Court in the case of CIT v.Siddharth J. Desai [(1983) 139 ITR 628 and has laid down 13 tests orfactors which are required to be considered and upon consideration ofwhich the question whether the land is an agricultural land or not has got tobe decided or answered. We could reproduce the said 13 tests withadvantage. They read as follows :­ “ (1) Whether the land was classified in the revenue records asagricultural and whether it was subject to the payment of land revenue ? 14. The view held in Mahavir Woolen Mills has now become the lawlaid down by the Hon'ble Supreme Court in the case of M. Janardhana Rao(supra). 15.The Supreme Court in the case of Sarifabibi (supra) has approved thedecision of a Division Bench of the Gujarat High Court in the case of CIT v.Siddharth J. Desai [(1983) 139 ITR 628 and has laid down 13 tests orfactors which are required to be considered and upon consideration ofwhich the question whether the land is an agricultural land or not has got tobe decided or answered. We could reproduce the said 13 tests withadvantage. They read as follows :­ “ (1) Whether the land was classified in the revenue records asagricultural and whether it was subject to the payment of land revenue ? (2)Whether the land was actually or ordinarily used foragricultural purposes at or about the relevant time ?agricultural purposes at or about the relevant time ? (3) Whether such user of the land was for a long period orwhether it was of a temporary character or by way of astopgap arrangement ?whether it was of a temporary character or by way of astopgap arrangement ? (4) Whether the income derived from the agriculturaloperations carried on in the land bore any rationaloperations carried on in the land bore any rational proportion to the investment made in purchasing the land ? (5) Whether, the permission under Section 65 of the BombayLand Revenue Code was obtained for the non­agriculturaluse of the land ? If so, when and by whom (the vendor orthe vendee) ? Whether such permission was in respect of aportion of the land and if it was obtained in the past, whatwas the nature of the user of the said portion of the land onthe material date ?Land Revenue Code was obtained for the non­agriculturaluse of the land ? If so, when and by whom (the vendor orthe vendee) ? Whether such permission was in respect of aportion of the land and if it was obtained in the past, whatwas the nature of the user of the said portion of the land onthe material date ? (6) Whether the land, on the relevant date, had ceased to beput to agricultural use ? If so, whether it was put to analternative use ? Whether such cesser and/or alternativeuser was of a permanent or temporary nature ?put to agricultural use ? If so, whether it was put to analternative use ? Whether such cesser and/or alternativeuser was of a permanent or temporary nature ? (7) Whether the land, though entered in revenue records, hadnever been actually used for agriculture, that is, it had neverbeen ploughed or tilled ? Whether the owner meant orintended to use it for agricultural purposes ?never been actually used for agriculture, that is, it had neverbeen ploughed or tilled ? Whether the owner meant orintended to use it for agricultural purposes ? (8)Whether the land was situate in a developed area ? Whetherits physical characteristics, surrounding situation and anduse of the lands in the adjoining area were such as wouldindicate that the land was agricultural ?its physical characteristics, surrounding situation and anduse of the lands in the adjoining area were such as wouldindicate that the land was agricultural ? (9) Whether the land itself was developed by plotting andproviding roads and other facilities ?providing roads and other facilities ? 12 (10) Whether there were any previous sales of portions of theland for non­agricultural use ?land for non­agricultural use ? (11) Whether permission under Section 63 of the BombayTenancy and Agricultural Lands Act, 1948, was obtainedbecause the sale or intended sale was in favour of a non­agriculturist ? If so, whether the sale or intended sale tosuch non­agriculturist was for non­agricultural or agriculturaluser ?Tenancy and Agricultural Lands Act, 1948, was obtainedbecause the sale or intended sale was in favour of a non­agriculturist ? If so, whether the sale or intended sale tosuch non­agriculturist was for non­agricultural or agriculturaluser ? (9) Whether the land itself was developed by plotting andproviding roads and other facilities ?providing roads and other facilities ? 12 (10) Whether there were any previous sales of portions of theland for non­agricultural use ?land for non­agricultural use ? (11) Whether permission under Section 63 of the BombayTenancy and Agricultural Lands Act, 1948, was obtainedbecause the sale or intended sale was in favour of a non­agriculturist ? If so, whether the sale or intended sale tosuch non­agriculturist was for non­agricultural or agriculturaluser ?Tenancy and Agricultural Lands Act, 1948, was obtainedbecause the sale or intended sale was in favour of a non­agriculturist ? If so, whether the sale or intended sale tosuch non­agriculturist was for non­agricultural or agriculturaluser ? (12) Whether the land was sold on yardage or on acreagebasis ?basis ? (13) Whether an agriculturist would purchase the land foragricultural purposes at the price at which the land was soldand whether the owner would have ever sold the landvaluing it as a property yielding agricultural produce on thebasis of its yield ? “agricultural purposes at the price at which the land was soldand whether the owner would have ever sold the landvaluing it as a property yielding agricultural produce on thebasis of its yield ? “ 16.At the same time, the Supreme Court has stated that whether a landis an agricultural land or not is essentially a question of fact. The questionhas to be answered in each case having regard to the facts andcircumstances of that case. There may be factors both for and against aparticular point of view. The Court has to answer the question on aconsideration of all of them – a process of evaluation and the inference has to be drawn on a cumulative consideration of all the relevant facts. TheSupreme Court has further stated that not all these factors or tests would bepresent or absent in any case and that in each case one or more of thosefactors may make appearance and that the ultimate decision will have to bereached on a balanced consideration of the totality of the circumstances. 17.Section 2(14) of he Act defines capital asset to mean property of anykind held by an assessee, whether or not connected with his business orprofession, but does not include, inter alia agricultural land in India, notbeing land situate – (a) in any area which is comprised within the jurisdiction of aMunicipality (whether known as Municipality, Municipal Corporation,notified area committee, town area committee, town committee, or by anyother name) or a cantonment board or which has a population of notless than ten thousand according to the last preceding census of which therelevant figures have been published before the first day of the previousyear; or (b) in any area within such distance, not being more than eightkilometres, from the local limits of any municipality or cantonment boardreferred to in item (a), as the Central Government may, having regard tothe extent of, and scope for, urbanisation of that area and other relevantconsiderations, specify in this behalf by notification in the Official Gazette. (a) in any area which is comprised within the jurisdiction of aMunicipality (whether known as Municipality, Municipal Corporation,notified area committee, town area committee, town committee, or by anyother name) or a cantonment board or which has a population of notless than ten thousand according to the last preceding census of which therelevant figures have been published before the first day of the previousyear; or (b) in any area within such distance, not being more than eightkilometres, from the local limits of any municipality or cantonment boardreferred to in item (a), as the Central Government may, having regard tothe extent of, and scope for, urbanisation of that area and other relevantconsiderations, specify in this behalf by notification in the Official Gazette. 18.The expression “agricultural land” is not defined in the Act, and now,whether it is agricultural land or not has got to be determined by using thetests or methods laid down by the Hon'ble Supreme Court in the case ofSarifabibi Mohmed (supra). As already stated, all the authorities under theAct as well as the learned ITAT was fully aware of the tests laid down by theHon'ble Supreme Court and after considering the said tests the CIT(A) andthe ITAT have come to the conclusion (the former partly and the latterfully) that the land sold by the assessees was agricultural land and this,inour view, is a finding of fact which cannot be interfered in an appeal underS.260A of the Act. It is to be noted that it is a finding which was renderedafter considering the totality of circumstances and if one or two or three ofthe tests were in favour of the Revenue, the same would not make thefinding a perverse finding. It is only a perverse finding which could beinterfered with in an appeal under S.260 of the Act. A perverse finding is afinding where there is no evidence to support it or it is based on materialwhich is irrelevant or partly relevant and partly irrelevant or it is based onconjectures or surmises or partly on these and partly on evidence, or afinding which is so perverse and unreasonable that no person actingjudicially and properly instructed in law would have arrived at it. In otherwords, as stated in Mahavir Woollen Mills (supra) a question of factbecomes a question of law, if the finding is either without any evidence or material, or the finding is contrary to evidence or is perverse or there is nodirect nexus between the conclusion of fact upon which that conclusion isbased. This is not the case at hand. It is not possible to turn a merequestion of fact into a question of law by asking whether as a matter of lawthe authority came to a correct conclusion upon a matter of fact. In ourview, therefore, the finding arrived at by the learned ITAT that the propertysold by the assessees was an agricultural land is a finding which has beenrendered after considering the totality of the circumstances and the testslaid down by the Hon'ble Supreme Court in the case of Sarifabibi Mohmed(supra) and therefore calls for no interference from this Court. 19.The learned ITAT had relied upon Forms No.I and XIV of both the sub­divisions of the property of the assessees wherein their property waspredominantly shown as garden land and therefore agricultural innature. The learned CIT(A) ought to have seen whether the land soldwas predominantly agricultural or not. The learned ITAT had alsoobserved that the assessees had produced receipts for payment of landrevenue which could not be ignored. Admittedly, the subject land wassituated in a village and at a distance of about 15 kms. from themunicipal limits as noted by the CIT(A). The CIT(A) visited the subjectland, but however the learned ITAT found fault with his visit, stating thathe ought to have given a finding on the basis of the evidence produced 19.The learned ITAT had relied upon Forms No.I and XIV of both the sub­divisions of the property of the assessees wherein their property waspredominantly shown as garden land and therefore agricultural innature. The learned CIT(A) ought to have seen whether the land soldwas predominantly agricultural or not. The learned ITAT had alsoobserved that the assessees had produced receipts for payment of landrevenue which could not be ignored. Admittedly, the subject land wassituated in a village and at a distance of about 15 kms. from themunicipal limits as noted by the CIT(A). The CIT(A) visited the subjectland, but however the learned ITAT found fault with his visit, stating thathe ought to have given a finding on the basis of the evidence produced before him. In our view, there was nothing wrong in the CIT(A) to havevisited the subject land in order to appreciate in a better way theevidence produced by the assessees before him. The assessees had alsoproduced an award of the Land Acquisition Officer dated 14.11.1990.This award showed that by Notification issued under S.4(1) of the LandAcquisition Act, 1894 a portion of Survey No.103/1 (part) was acquiredand the male assessee was paid compensation due thereon. Theassessees had produced the said award because the L.A.O. had observedthat the lands acquired by virtue of the said notification were agriculturallands only, as the interested parties had neither converted nor made anyplans nor taken any steps towards the conversion of the said land intonon­agricultural. As regards the affidavits filed and the report by the ex­Director of Agriculture, the learned ITAT was right in observing that whatwas stated therein could be discarded only after they were brought andcross­examined which was not done by the CIT(A). All the aforesaiddocuments produced by the assessees showed that the acquired land wasagricultural. In this context, reference could be made to the case ofWealth Tax v. Officer­in­charge (Court of Wards) Paigah[(1976) 105ITR 133] wherein the Constitution Bench of the Hon'ble Supreme Courtstated that the term “agriculture” and “agricultural purpose” was notdefined in the Indian Income Tax Act and that we must necessarily fallback upon the general sense in which they have been understood in common parlance. The Hon'ble Supreme Court observed that the term'agriculture' is thus understood as comprising within its scope the basic aswell as subsequent operations in the process of agriculture and raising onthe land all products which have some utility either for someone or fortrade and commerce. It will be seen that the term 'agriculture' receives awider interpretation both in regard to its operation as well as the resultof the same. Nevertheless there is present all throughout the basic ideathat there must be at the bottom of it cultivation of the land in the senseof tilling of the land, sowing of the seeds, planting and similar workdone on the land itself and this basic conception is essential sine qua nonof any operation performed on the land constituting agriculturaloperation and if the basic operations are there, the rest of the operationsfound themselves upon the same, but if this basic operations are wanting,the subsequent operations do not acquire the characteristics ofagricultural operations. The witnesses whose affidavits were producedhad clearly stated that labourers were seen working in the subject landuntil it was sold to M/s Sunset Resorts Pvt. Ltd. The Assessing Officerhad noted that the father of the male assessee was an old man and wasnot capable of involving himself in agricultural pursuits. It was commonknowledge in this State that gentlemen of the landed gentry at times onlysupervised agricultural operations which were generally done once a yearor once in two years from under the shade of their own umbrellas and therefore it could not be said that only because the father of the maleassessee was an old man, he could not involve in agricultural pursuits. Itmay be noted that the term “to cultivate” in The G.D.D. AgriculturalTenancy Act, 1964 with its grammatical and cognate expressions meansto till land for the purpose of raising or improving agricultural producewhether by manual labour or machinery or to carry on any agriculturaloperations thereon and the expression 'uncultivated' is to be construedcorrespondingly. The Constitution Bench of the Supreme Court in theaforesaid case observed that the entries in revenue records wereconsidered good prima facie evidence and the Gujarat High Court in thecase of Motibhai D. Patel (Dr.) v. Commissioner of Income Tax[(1981) 127 ITR 671] referring to the Constitution Bench had statedthat if agricultural operations are being carried on in the land in questionat the time when the land is sold and further if the entries in the revenuerecords shows that the land in question is agricultural land, then, apresumption arises that the land is agricultural in character and unlessthat presumption is rebutted by evidence led by the revenue,it must beheld that the land was agricultural in character at the time when it wassold (emphasis supplied). The Division Bench of the Gujarat High Courtfurther held that there was nothing on record to show that thepresumption raised from the long user of the land for agriculturalpurpose and also the presumption arising from the entries of the revenue records are rebutted. The same is the case at hand. This Court in thecase of Commissioner of Wealth Tax v. H.V. Mungale [(1984) 145ITR 208] held that the Supreme Court had pointed out that the entriesraised only a rebuttable presumption and some evidence would,therefore, have to be led before taxing authorities on the question ofintended user of the land under consideration before the presumptioncould be rebutted. The Court further held that the Supreme Court hadclearly pointed out that the burden to rebut the presumption would be onthe Revenue. This Court held that the ratio of the decision of theSupreme Court was that what is to be determined is the character of theland according to the purpose for which it was meant or set apart andcan be used. It is therefore obvious that the assessees had abundantlyproved that the subject land sold by them was agricultural land not onlyas classified in the revenue records, but also it was subjected to thepayment of land revenue and that it was actually and ordinarily used foragricultural purpose at the relevant time. It was nobody's case that theassessees had obtained any permission for non­agricultural use asrequired under the G.D.D. Land Revenue Code, 1968 in respect of thesubject land or any portion thereof. The assessees had also proved thaton the relevant date of sale, the subject land had continued to be put toagricultural use and that it was always used for agricultural purpose.The assessees had satisfied most of the tests which were laid down by the Hon'ble Supreme Court in the case of Sarifabibi (supra). As far as testNo.4 is concerned, one may tend to argue that the price paid by thebuyer was rather on the higher side, but two things are required to betaken note of. The first is that the subject land was abutting the landowned by the sister concern of the buyer and secondly it is also probablethat the said buyer wanted to continue to use the subject land foragricultural purpose so as to be an added attraction to the said sisterconcern or to do landscaping, etc. In this context it may also be statedthat the subject land had also not lost its physical characteristics at thetime of sale or soon thereafter by the setting up of the said Hotelsnearabout it. We may refer to the case of Commissioner of Income­Tax, Gujarat­III v. Manilal Somnath (1977 ITR 917) wherein theDivision Bench observed that the potential non­agricultural value of theland for which a purchaser may be prepared to pay a large price wouldnot detract from its character as agricultural land on the relevant date ofsale. We may also refer to the case of Gopal C. Sharma v.Commissioner of Income Tax (1994 ITR 209) wherein a Division Benchof this Court has stated that the profit motive of the assessee selling theland without anything more by itself can never be decisive fordetermination of the issue as to whether the transaction amounted to anadventure in the nature of trade. In other words, the price paid is notdecisive to say whether the land is agricultural or not. As far as test No.12 is concerned, there is no dispute that the subject land was sold onsquare metre basis. This test is not relevant in this State. It is quiteprobable that Courts elsewhere in the Country consider that fixation ofprice with reference to square foot is generally a characteristic of non­agricultural land, but we must hasten to add and remind ourselves, thatas a Country we have given up the yard (British system of measurement)long back and adopted the metre (metric system of measurement) and asfar as this State is concerned, whether it is flats which are sold or landwhich is sold, the same is always sold on sq.metre basis. A normalagriculturist might have not paid the price at which the subject land hadbeen sold and this is as far as test No.13 is concerned, but as said beforethe land had special significance to the buyers as it was abutting HotelLeela Beach. As far as the intended use was concerned, the subject landhad remained in the same condition as before without any changescarried out at least till the decision of ITAT. The subject land has beenpurchased by a sister concern of Leela Beach Resort and as noted by thelearned ITAT, the memorandum and articles of association of the saidcompany show that its main object is to do agricultural operations. Thelearned ITAT has also taken note of the fact that the subject land fell inCR Zone and being so, it will not be possible to be put to anyconstruction activity . In our view the learned ITAT was right, uponconsideration of all the tests or factors laid down by the Supreme Court, in coming to the conclusion that the subject land was agricultural andthe sale of the same did not invite the payment of capital gains. 20. In view of the above, we find there is no merit in these appeals.Consequently, the same are hereby dismissed. We leave the parties tobear their own costs. A. P. LAVANDE, J. N. A. BRITTO, J. sl.