1. The income-tax Appellate Tribunal, at the instance of the assessee, has referred the following question for our opinion under section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as

"the Act"

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the land under reference was not agricultural land within the meaning of section 2(e)(i) of the Wealth-tax Act, 1957 ?"

2. The assessee along with two others had purchased the land with which we are now concerned situated at Paldi, Ahmedabad, on December27, 1946, for Rs. 84,999. The other two persons released the entire land in favour of the assessee by release deed dated June 3, 1961. In the sale deed obtained by the assessee the land has been described as agricultural land. By virtue of the exemption granted to agricultural lands under section 2(e), the assessee claimed exemption. The Wealth-tax Officer rejected her plea that the land comes within the meaning of agricultural land and included the value of the land in net wealth of the assessee for the assessment years 1963-64 to 1970-71. While so including the value of the land in the net wealth of the assessee, the Wealth-tax Officer did not give any reasons. The assessee, therefore, carried the order of assessment in appeal to the Appellate Assistant Commissioner and he agreed with the plea of the assessee that the land is agricultural land and decided the issue in her favour. That led the department preferring an appeal before the Tribunal. The Tribunal, on the basis of the ratio of the decisions cited before it, held that the material placed before it would not bring the land within the meaning of agricultural land and in that view restored the assessment order of the Wealth-tax Officer.

3. Mr. K. C. Patel, learned counsel appearing for the petitioner, strongly contended that the tests formulated by this court in Rasiklal Chimanlal Nagri v. Commissioner of Wealth-tax [1965] 56 ITR 608 (Guj) have been wrongly applied by the Tribunal and that the decision of this court in Commissioner of Income-tax v. Manilal Somnath [1977] 106 ITR 917 (Guj) would squarely cover this case.

4. The facts as presented in this case as to the nature and character of the land and the situation and the use to which it was put are these. The land was purchased on December 27, 1946, by the assessee. The land is situated at Paldi area of Ahmedabad town. The recitals in the deed show that it is an agricultural land. Evidence has been placed by the assessee that agricultural operations were carried on on the land from1950-51 to 1960-61. We are here concerned with the assessment years 1963-64 to 1970-71. So, what has to be seen in whether the land was used for purpose of agriculture during these assessment years. The assessee had not placed any evidence to show that the she had cultivated the land either personally or through tenants between the assessment years 1963-64 and 1968-69. That the land was kept fallow during these years is not in dispute. For other two assessment years 1969-70 and 1970-71, we find that there was cultivation by the assessee and juwar and vegetables were grown in those two years. The net income realised in 1969-70 was Rs. 83.25 and for 1970-71 was Rs. 301.35. The land is covered by the Town Planning scheme of the Ahmedabad Municipality. All round the land, co-operative housing colonies have come up. From the valuer's report we get that the land is situated the South Rajnagar Co-operative Housing Society, near the bank of the river Sabarmati and just touching the southern boundary of Ellisbridge Town Planning Scheme No. III. It is flanked by Laxmikunj Co-operative Society on its northern side and it has roads on the southern and eastern side. On the eastern side, beyond the road, Tagore flats were coming up. The valuer has recorded the finding in his report that the land is in the midst of housing societies and, taking that factor into consideration, he valued the land at the rate of Rs. 40 per square yard. It is, therefore, clear form the undisputed facts operative housing colonies with all civic amenities. This development, that is, the co-operative housing colonies coming up all round the site, had taken place prior to the period of the assessment years with which we are now concerned. The actual agricultural operations were there on the land before the assessment years in question and in the last two assessment years 1969-70 and 1970-71, that is to say, for the first six assessment years there was no cultivation on the land and it was not used for either agricultural or horticultural purposes.

5. The earlier cases which determined whether a particular land comes within the meaning of agricultural land may be referred to. Bhagwati. J., as he then was of this court in Rasiklal Chimanlal Nagri v. Commissioner of Wealth-tax [1965] 56 ITR 608 (Guj), had occasion to construe the meaning of "agricultural land" occurring in section 2(e)(i) of "the act". According to the learned judge, whether a land is agricultural land or not cannot depend on the fluctuating or ambulatory intention of the owner of the land. The criterion must be something more definite and more objective, something related to the nature or character of the land and not varying with intention of the owner as to the use to which he wants to put the land at a particular point of time. The intention as to user is, however, land at a particular point of time. The intention as to user is, however, not altogether an irrelevant consideration and is a factor which would bear on the nature or character of the land, but it does not afford a sole or exclusive criterion for determining whether land is agricultural land or not. Where the land is actually put to use, there is usually not much difficulty in ascertaining the nature or character of the land. If the land is used for agricultural purposes, ordinarily it would be correct to say that the land is agricultural land and vice versa. But even this test may not always furnish a correct answer, for there may be cases where land admittedly non-agricultural (such as a building site) may be used temporarily for agricultural purposes. In that case, having regard to the facts placed before the court that the plots were situate in a wholly residential area with numerous residential buildings around the plots and were also in an area in respect of which a town planning scheme was in force for some years, the learned judges held that in the circumstances of that case the plots cannot be said to be "agricultural land" and were not covered by the exemption in section 2(e)(i) of "the act". The learned judges, it may be said, had noticed the fact that three out of the four plots were cultivated upon above 1934-35 but had ceased to be cultivated since then and no agricultural operations were carried on in those plots for above 21 to 22 years and there was no special reason for stopping cultivation on those plots. In other words, the learned judges were of the view that the intention of assessee was to put the plots for use for purposes other than agriculture.

6. Rasiklal Chimanlal Nagri's case [1965] 56ITR 608 (Guj) and Commissioner of Wealth-tax v. Narandas Motilal [1971] 80 ITR 39 (Guj) were referred to and reviewed by P. D. Desai J., sitting with Bhagwati C.J., as he then was, in Himatlal Govindlal v. Commissioner of Wealth-tax [1977] 106 ITR 658 (Guj). In that case, the learned judges found on the facts presented before them that the land there was put to agricultural use only by way of stop-gap arrangement till the assessee found ready and willing buyers for the plots and such user of land cannot furnish prima facie evidence about the nature and character of the land. In their view, the totality of circumstances should be taken into consideration. That was a case where after the assessee purchased the land, permission for non-agricultural use was obtained, land was plotted out, a large number of plots were sold for building purposes, there was considerable building activity in the area surrounding land and intention of the assessee to sell the land was also taken into account to hold that the land had ceased to be agricultural land at the relevant time.

7. In Narandas Motilal's case [1971] 80 ITR 39 (Guj), the land had been put to agricultural use only after they were acquired by the assessee in 1952 and they could not have been used for building or non-agricultural purpose at any time during the relevant period on account of their situation. The circumstances that were relied upon in that case to show that the land was non-agricultural were, (i) that a draft town planning scheme had been applied to the area; (ii) that the lands had been plotted out by the assessee; and (iii) that the plots of the land had been sold to different persons on the basis of yardage. The evidence in that case showed that neither the assessee nor the persons who purchased some portions of the land from him had put their plots or the portions of the land to non-agricultural use at any time. It was also found that no attempt was made to put this land to non-agricultural purpose to lend support to the contention that it w as intended to be used during the relevant period as a building site or for any other non-agricultural purpose to lend support to the contention that it was not an agricultural land. It was for that reason that the learned judges expressed the view that the fact that there was draft town planning scheme or some plots in the land had been sold or that it had been sold on the basis of yardage would not make any difference so far as the character and the nature of the land is concerned by reason of the fact of the land having been cultivated throughout the relevant period.

8. Divan C.J., sitting with B. K. Mehta J., in Commissioner of Income-tax v. Manilal Somnath [1977] 106 ITR 917 (Guj), referred to the earlier cases of this court and held, on the question whether the land in that case was agricultural land, that the fact that the land was within municipal limits or that it was included within a proposed town planning scheme was not by itself sufficient to rebut the presumption arising from actual use of the land. In that case, the land had been used for agricultural purposes for a long time and nothing had happened till the date of the sale to change the character of the land. It was also observed by the learned judges that the potential non-agricultural value of the land for which purchaser may be prepared to pay large price would not detract from its character as agricultural land at the date of the sale.

9. The learned counsel, Mr. Pate, sought to draw support from the view expressed in Narandas Motilal's case [1971] 80 ITR 39 (Guj) and Manilal Somnath's case [1977] 106 ITR 917 (Guj). It should be clearly understood that whether a particular land is an agricultural land or not depends on the facts and circumstances of each case. The cumulative effect of the evidence placed on record should be the guiding factor in reaching the conclusion whether a particular land is agricultural land. It is true, as pointed out by Mr. Patel, that after the assessee purchased the land there were agricultural operations till 1960-61. The Tribunal has found that the area was well developed for housing purposes and co-operative housing colonel had come up before the period involved in these appeals. it would, therefore, appear from the facts of the case that on account of the development of the area all round the land, the assessee had stopped agricultural operations presumably with a view to find a good buyer who could develop it into a housing colony. It is not as if the assessee, for the reason that she could not get a tenant or she could not personally raise some vegetables or some crop on the land, stopped cultivating the land for the six assessment years. The fact that she resumed cultivation in the last two assessment years 1969-70 and 1970-71 and realised a meagre income of Rs. 83.25 and Rs. 301.35, respectively, from a very valuable land would clearly bring out her intention that she was not intending to use it as an agricultural land and that she was only waiting for a proper buyer who would buy for a good price. The Tribunal had before it the tests which this court had laid down and felt that the mere fact that it was put to agricultural use in the last two years will not by itself make the land, which was kept fallow or idle for a long period, "agricultural land". The agricultural character of the land had changed after the assessee stopped cultivating it from the assessment year 1960-61.

10. We are, therefore, of the view that having regard to the facts and circumstances of the case the Tribunal had correctly applied the tests laid down by this court and come to the conclusion that the land is not "agricultural land" so as to entitle the assessee to exemption by virtue of section 2(e)(i) of "the act". The reference is accordingly answered in the affirmative, in favour of the revenue and against the assessee, with costs.