agriculure land in rural area

a company ownes an agriculture land in rural area.on all legal papers it shows that the said land is an agriculture land but actually there is no agriculture activty carried by that company.

this land was sold to a construction company.

wll profit be exempted?

Replies (1)

No. Because,the actual user to which the land is being put should furnish prima facie evidence of the true nature or character of the land and, therefore, whenever a question arises whether a particular land is agricultural land or not, primarily regard must be had to the purpose for which the land is being actually used at or about the relevant time and that would ordinarily provide a satisfactory answer to the problem - Rasiklal Chimanlal Nagri v. CWT [1965] 56 ITR 608 (Guj.).

n ‘Agricultural land’ should comprise the following characteristics :
a. It must be a land;
b. It must pertain to or be connected with cultivation;
c. It must involve expenditure of human labour and skill for the purpose of cultivation or for keeping it in a cultivable state - Tea Estates India (P.) Ltd. v. CWT [1966] 59 ITR 428 (Cal.)

 

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