AJAY TEWARI, J. - (1.) THIS order shall dispose of WT Case Nos. 9 to 14 of 1990 and 7 of 1997, as common questions of law and facts are involved therein. For the sake of convenience, facts are being extracted from WT Case No. 9 of 1990.
(2.) THE dispute in the present case relates to the classification of land of the assessee. The Revenue has filed the present case for a direction to refer the following question of law for opinion of this Court : - - "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that various lands owned by the assessee should not be considered to be non -agricultural for the purpose of computing his net wealth, even if the lands in question were put to sale in the shape of plots as per the planned maps as also the khasra Girdawari obtained from the Revenue Department for the period from 1972 -73 to 1980 -81 show the lands either under plots or vacant except a small portion (in which the residential house is situated) which was shown under a small garden and a residential house -
(3.) IT is not disputed that for the assessment year in question agricultural land was not exigible to wealth -tax. It is to be noticed that the expression 'agricultural land' has not been defined either in the WT Act, 1957 or in the IT Act, 1961 but it is settled law that mere potential for agricultural use is not enough to decide the character of land. In CWT vs. Officer -In -Charge (Court Of Wards), Paigah (1976) 1976 CTR (SC) 0404 : (1976) 105 ITR 133 (SC), a Constitution Bench of the Hon'ble Supreme Court held as follows : "It is thus clear that 'agricultural land is only a species of land. The main question before us is whether it should stand for all and which is capable of being utilised for agricultural purposes or for some land which either is being actually used or has been set apart or prepared for use for agricultural purposes so as to indicate the intention of the owner or occupier of the land to put it to agricultural uses.... (p. 135) ... We think that this must be land which could be said to be either actually used or ordinarily used or meant to be used for agricultural purposes. In other words, 'agricultural land' must have a connection with an agricultural user or purpose. It is on the nature of the user that the very large number of definitions and authorities discussed by this Court in CIT vs. Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC) case have a direct bearing...." (p. 136) ... Apparently, agricultural land is excluded from the definition of 'assets' as it was thought that Parliament was not competent to impose taxes which will fall on agricultural land. Whatever may be the reason for the exemption, we think that the exemption is connected with the user of land for a purpose which must be agricultural. It is an enactment to tax 'wealth' which includes all that is ordinarily understood as 'assets'. The person claiming an exemption of any property of his from the scope of his assets must satisfy the conditions of the exemption, (p. 137) .. .We agree that the determination of the character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case. What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land, by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality which will only affect its valuation as part of "assets", but its actual condition and intended user which has to be seen for purposes of exemption from wealth -tax. ..." (p. 143);