PETITIONER:
COMMISSIONER OF WEALTH-TAX, ANDHRA PRADESH
Vs.
RESPONDENT:
OFFICER-IN-CHARGE (COURT OF WARDS) PAIGAH
DATE OF JUDGMENT06/08/1976
BENCH:
BEG, M. HAMEEDULLAH
RAY, A.N. (CJ)
SARKARIA, RANJIT SINGH
SHINGAL, P.N.
SINGH, JASWANT
CITATION:
1977 AIR 113 1977 SCR (1) 146
1976 SCC (3) 864
ACT
Wealth Tax Act (27 of 1957)--Agricultural Lands, What
are--Tests for determining.
HEADNOTE
The assessee was the owner of more than 100 acres of
land within municipal limits and enclosed by a compound
wall. The land was adjacent to a tank, had two wells in
it, was capable of being used for agriculture, was assessed
to land revenue as agricultural land, but had not been
actually put to any non-agricultural use.
The High COurt held that the land was ’agricultural
land’ under s. 2(e)(i) of the Wealth Tax Act, 1957 and
exempt from wealth tax on the basis that, (1 ) the expres-
sion ’agricultural land’, not having been defined in the
Act, must be given the widest possible meaning; (2) so
interpreted, all land which is capable of being utilised for
agricultural purposes would be ’agricultural land unless it
is actually put to some non-agricultural use like construc-
tion of buildings etc; and (3) the land has been assessed
to land revenue as agricultural land under the State Revenue
Law.
Allowing the appeal,
HELD: It is only land, which either is being actually
used or ordinarily 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 use, that would be ’agricultural land’. [156 A]
(1 ) It is not correct to give. the expression a wide
meaning merely because the statute does not define it. The
correct rule is for the Court to endeavour to find out
logically the exact sense in which the words have been used
in a particular context, reading the statute as a whole,
giving an interpretation in consonance with the purposes of
the statute, and avoiding absurd results. [153 A-B]
(2) The object of the Wealth Tax Act is to tax surplus’
wealth. It is not all land but only ’agricultural land’
that is excluded from the definition of assets. Therefore,
it is imperative to give reasonable limits to the scope of
the expression ’agricultural land’. [153 C]
(3) The determination of the, character of land, accord-
ing 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 by some possible
future. owner or possessor. for an agricultural purpose. It
is not the potentiality, but its actual condition and in-
tended user which has to be seen for purposes of exemption
from wealth tax. The correct test to apply would be to. find
out whether human labour had been applied to the land it-
self, in order to extract from its natural powers, added to
or aided by other natural or artificial sources of strength,
a product which can yield income. If there is nothing in
its condition, or in the evidence to indicate the intention
of its owner or possessor, so. as to connect it with an
agricultural purpose, the land could not be agricultural
land. The person claiming that any property is exempt must
satisfy the conditions of the exemption. [155 G-H]
The extent of the land, its situation, that it was
capable of being used for agricultural purposes and has not
been actually put to any use which would make it unfit for
immediate cultivation, .are, therefore, inconclusive
being based on absence of user for non-agricultural purpose.
Entries in revenue records are. however, good prima facie
evidence since they are based on some quasi-judicial enquiry
but they raise only a rebuttable presumption. If such
147
pritma facie evidence was enough for the assessee to dis-
charge his burden to establish an exemption, evidence to
rebut it should have been led on behalf of the Department.
In the present case, however, the High Court relied not only
on the entries, but also on the inconclusive circumstances
based on potentialities. While doing so, the High Court did
not hold that categorical finding of the taxing authorities
and Tribunal that the land was never used, nor was intended
to be used for an agricultural purpose did not rest on any
evidence at all; nor did it give any reasons for rejecting
the finding. it is therefore a fit case for being remanded
to the Tribunal for deciding the question of fact, after
giving opportunity to both sides to adduce evidence. [155
B-E]
C.I.T.W. Bengal v. Raja Benoy Kumar (1957) I.T.R.
466, followed.
Sarojini Devi v. Raja Sri Krishno A.I.R. 1944 Mad.
401, overruled.
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 2552-2556 of 1969.
(From the Judgment and Order dated 26.11.1968
of the Andhra Pradesh High Court in Case Referred
No. 40/64 arising from R.A. Nos. 1709-1713/62-63).
B. Sen, S.P. Nayar for the Appellants.
K. Vasudeva Pillai, H.R. Puri and P.K. Pillai for
the respondent.
The Judgment of the Court was delivered by
BEG, J.--Civil ’Appeals Nos. 2552-2556 of 1969,
are directed against a judgment of the Full Bench
of the High Court of Andhra Pradesh. The case was
certified as fit under Articles 132 and 133 of the
Constitution for an appeal to this Court. The
question involved, as framed in the Andhra Pradesh
Case is, on the facts and circumstances of the
present case are certain lands situated at Begum-
pet, Lalguda, Jaiguda, Subzimandi, Yerraguda,
Zamboorkhana and Vicarabad, "agricultural lands"
within the meaning of section 2(e) (i) of the
Wealth Tax Act (hereinafter referred to as ’the
Act’) ?
If any of the lands mentioned above are agri-
cultural lands, as defined by the Act, they would
be excluded from the definition of "assets" given
in Section 2(e) of the Act, and, therefore, exempt
from wealth tax. Section 2(e) says:
"2(e) ’assets’ includes property of every
description, movable or imovable, but does not
include--
XXX XXX XXX XXX
(i) agricultural land and growing crops,
grass or standing tress on such land;"
The word ’agricultural land’ occurs in entries
86, 87 and 83 of List 1 to 7th Schedule of our
Constitution relating to matters on which Parlia-
ment may legislate. Entry 86 here says :" Taxes
on the capital value of the assets, exclusive of
agricultural land of individuals and companies;
taxes on the capital of companies:" Entries 87
and 88 deal with Estate duty and duties of succes-
sion to property and each of them excludes agricul-
tural land from property on which
148
taxes may be levied by Parliament. Entry 18 of
List II giving subjects of exclusively state legis-
lation says:
"Land, that is to say, rights in or over
land, land, tenures including the relation of
landlord and tenant, and the collection of. rents,
transfer and alienation of agricultural land; land
improvement and agricultural loans; colonization."
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 land 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 inten-
tion of the owner or occupier of the land to put it
to agricultural uses. This raises the further
question:What is an agricultural purpose or agri-
culture ?
The term "agriculture" was discussed very
thoroughly by this Court in Commissioner of Income
Tax, West Bengal, Calcutta v. Raja Benoy Kumar
Sahas Roy.(1) This Court said there (at p. 472-
473):
"The term ’agriculture’ and ’agricultural
purpose’ not having been defined in the Indian
Income-tax Act, we must necessarily fall back upon
the general sense in which they have been under-
stood in common parlance. ’Agriculture’ in ’its
root sense means ager, a field, and culture,
cultivation, cultivation of a field which of course
implies expenditure of human skill and labour upon
land. The term has, however, acquired a wider
significance and that is to be found in the various
dictionary meanings ascribed to it. It may be
permisible to look to the dictionary meaning of the
term in the absence of any definition thereof in
the relevant statutes."
Therefore, this Court, beginning with the
decision of Lord Coleridge in R.v. Peters(2),
scanned and discussed various decisions of English
and Indian Courts, and the meanings given in var-
ious dictionaries of the English language, as well
as in the law dictionaries.
It then reached the conclusion (at p. 510):
"If the term ’agriculture’ is thus understood
as comprising within its scope the basic. as well
as subsequent operations in the process of agricul-
ture and the raising on the land of products which
have some utility either for consumption or for
trade and commerce, it will be seen that the term
’agriculture’ receives a wider interpretation both
in regard to its operations as well as the results
of the same. Nevertheless there is present all
throughout the basic idea that there must be at
the bottom of it cultivation of land in the sense
of tilling of the land, sowing of the seeds, plant-
ing, and similar work done on the land itself. This
basic conception is the essential sine qua non of
any operation performed on the
(1) [1957] 32 LT.R.p. 466 at 472 & 510. (2)
[1886] 16 Q.B.D. 636, 641.
149
land constituting agricultural operation. If the basic
operations are there, the rest of the operations found
themselves upon the same. But if these basic operations
are wanting the subsequent operations do not acquire the
characteristic of agricultural operations."
In Raja Benoy Kumar Sahas Roy’s case (supra), the question
before this Court was whether income from forest lands
derived from sal and piyasal trees "not grown by human skill
and labour" could constitute agricultural income. The test
applied there was whether there was some integrated activity
which could be described as agricultural operation yielding
income. It was pointed out that, although,
a mere wild or spontaneous growth of trees, not involving
the employment of any human labour or skill for raising
them, could not be agricultural income, yet, when there was
a forest more than 150 years old, which had been carefully
nursed and attended to by its owners, the income would be
agricultural. It is true that this case is not a direct
authority upon what is "agricultural land." Nevertheless,
it goes a long way in helping us to decide what could be
agricultural land. 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 Raja Benoy Kumar
Sahas Roy’s case (supra), have a direct bearing. In that
case, this Court held that the wider meaning given to agri-
cultural operations, such as breeding and rearing of live-
stock, poultry farming, or dairy farming will not be ap-
plicable. It held that the correct test to apply would be
to find out whether human labour had been applied to the
land itself, in order to extract from its natural powers,
added to or aided by other natural or artificial sources of
strength to the soil a product which can yield an income.
In the case before us, the question is a connected one.
Here also the term "agricultural land" has not been defined.
That, however, does not mean that the land to be considered
can be divorced from its actual or natural or ordinary user.
If all land which is capable of being used for agriculture,
could be intended to be excluded from "assets", practically
every type of land, including that covered by buildings,
would fall within that class. Hence, it seems to us to be
impossible to adopt so wide a test as would obviously defeat
the purpose of the exemption given. Apparently, agricul-
tural 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 exemp-
tion 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 proper-
ty of his from the scope of his assets must satisfy the
conditions of the exemption.
150
It is true that, in Rain Benoy Kumar Sahas Roy’s case
(supra), this Court pointed out that meanings of words used
in Acts of Parliament are not necessarily to be gathered
from dictionaries which are not authorities on what Parlia-
ment must have meant. Nevertheless, it was also indicated
there that, where there is nothing better to rely upon,
dictionaries may be used as an aid to resolve an ambiguity.
The ordinary dictionary meaning cannot be discarded simply
because it is given in a dictionary. To do that would be to
destroy the literal rule of interpretation. This is a
basic rule relying upon the ordinary dictionary meaning
which, in the absence of some overriding or special reasons
to justify a departure,. must prevail. Moreover, it was
held there that the dictionary meanings. of the word "agri-
cultural" were wider than what was meant by "agricultural
income" as that term was used in the Income tax Act. Even
if we could give a wider connotation to the term "agricul-
tural" than the one it carries with it in the Income tax
Act, we cannot dispense with credible evidence of at least
appropriation or setting apart of the land for a purpose
which could be regarded as agricultural and for which the
land under consideration could be reasonably used without an
alteration of its character. This, we think, is the minimal
test of "agricultural land" which should be applied in such
cases.
In stating the facts of the case with regard to the
Begumpet property, which, according to a rather surprising
agreement between parties, was to be used for reaching an
inference applicable to all other lands in the case, the
High Court said:
"The property at Begumpet was known as
’Begumpet Palace, Hyderabad.’ The buildings in
this property were valued at Rs. 8,81,336/- while
the vacant land comprising an area of about 108
acres was valued at Rs. 15,69,052. The entire plot
of land was enclosed in a compound wall and the
various buildings inside it had their own compound
walls. The property is situated within the limits
of the Hyderabad Municipal Corporation. The land
had never been actually used for agriculture, in
the sense, that it had never been ploughed or
tilled. The property is situated adjacent to the
tank known as "Hussain Sagar’ on the southern
side, and there are two wells in the said land. The
land was capable of being used for agriculture and
land revenue was being assessed and paid in respect
of the said lands. A portion of the land was
acquired by the Government of Hyderabad on 15th
September, 1955 and utilised by them for construc-
tion of buildings thereon."
The High Court then stated the views of the
taxing authorities as follows:
"On these facts, the Wealth Tax Officer, came
to’ the conclusion that the lands could not be
treated as ’agricultural lands’ as no agricultural
operations were carried on, in the sense of
ploughing and tilling the land and raising any crop
thereon. The Appellate Assistant Commissioner,
151
confirms the order of the Wealth Tax Officer on
this point. The assessee preferred an appeal to the
Income Tax Appellate Tribunal The Tribunal also
took the view that the said land was never in.
tended to be used for agriculture and that the
lands were never ploughed or tilled and that the
lands were situated within the limits of the Hyd-
erabad Municipal Corporation and that the presump-
tion would be that they were not agricultural lands
and that the said presumption was not rebutted, as
no agricultural operations were ever carried on in
the said land. On this view, the Tribunal con-
firmed the order of the Appellate Assistant Commis-
sioner on this point."
The High Court had discussed the various mean-
ings of the term "agriculture" and pointed out how
it had acquired a wide sweep. It also discussed a
number of cases, including Sarojini Devi v.
Srikrishna,(1) which had not been followed by a
Division Bench of the Andhra Pradesh High Court in
Manyarn Meenakshamma v. Commissioner of Wealth Tax
A.P.(2) on the ground that the Madras view, that it
was enough that the land was capable of being used
for agricultural purposes, was no longer good law
in view of the pronouncement of this Court in Raja
Benoy Kumar Sahas Roys case (supra). The Andhra
Pradesh Division Bench had said in Smt. Manyam
Meenaksharnma’s case (supra) (at p. 544) :--
"We are inclined to agree with the observa-
tion of Hegde and Ahmed Ali Khan, JJ. in Sri Krish-
na Rao L. Balekeai v. Third Wealth Tax Officer
[1963] 48 I.T.R. 472 that the present characteris-
tics and not the potentialities of a land are the
proper criterion. If a land is ordinarily used for
purposes of agriculture or for purposes subservient
to or allied to agriculture, it would be agricul-
tural land. If it is not so used, it would not be
agricultural land. The question how a land is
ordinarily used would be one of fact depending on
the evidence in each case. If, for instance,
an agricultural land, as we have interpreted above,
is left fallow in a particular year owing to ad-
verse seasonal conditions or to some other special
reason, it would not cease to be agricultural
land."
Apparently, the conflict between the views
contained in Sarojini Devi’s case (supra) and in
Smt. Manyam Meenakshamrna’s case (supra), had led
to a reference of the case to a larger bench. The
Full Bench of the Andhra Pradesh High Court, after
discussing a number of cases of various High
Courts, preferred the Madras High Court view,
principally on two grounds: firstly, because as
wide a connotation as was possible to give to the
words, "agricultural land" was preferable in a
taxing statute; and, secondly, because the entry to
the large tract of vacant land in ’the Begumpet
Palace in revenue records as assessable to land
revenue raised a presumption of its agricultural
character.
A.I.R. 1944 Mad. 401. (2)
[1967] 63 I.T.R. 534 at 544.
152
The Full Bench stated its conclusions on ques-
tions of law as follows:
"(1 ) The words ’agricultural land’ occurring
in Section 2(e)(i) of the Wealth Tax Act should be
given the same meaning as the said expression bears
in Entry 86 of List I and given the widest meaning:
(2) The said expression not having been
defined in the constitution, it must be. given the
meaning which it ordinarily bears in the English
language and as understood in ordinary parlance:
(3) The actual user of the land for agricul-
ture is one of the indicia for determining the
character of the land as agricultural land:
(4) Land which is left barren but which is
capable of being cultivated can also be ’agricul-
tural land’ unless the said land is actually put
to some other non-agricultural purpose, like con-
struction of buildings or an aerodrome, runway,
etc. thereon, which alters the physical character
of the land rendering it unfit for immediate culti-
vation:
(5) If land is assessed to land revenue as
agricultural land under the State revenue law, it
is a strong piece of evidence of its character as
agricultural land:
(6) Mere enclosure of the land does not by
itself render it a non-agricultural land:
(7) The character of land is not determined
by the nature of the products raised, so long as
the land is used or can be used for raising valu-
able plants or crops or trees or for any other
purpose of husbandary:
(8) The situation of the land in a village or
in an urban area is not by itself determinative of
its character."
The Full Bench rejecting the effect of such
features as construction of a Palace and the loca-
tion of the land within its compound said:
"The land is of a large extent of 108 acres
and abuts Hussain Sagar tank and has two wells in
the land itself. These indicate that the land
possesses all the characteristics of agricultural
land and that it is capable of being put to agri-
culture. It is also not disputed that the land is
vacant and has not been actually put to any purpose
other than agriculture and that the physical
character of the land is not such as to render it
unfit for immediate cultivation. The other rele-
vant fact is that the land has been admittedly
assessed to land revenue as agricultural land under
section 50 of the Hyderabad Land Revenue Act.
These factors in our opinion, strongly indicate
that the land in question is agricultural land."
153
We think that it is not correct to give as wide a mean-
ing as possible to terms used in a statute simply because
the statute does not define an expression. The correct
rule is that we have to endeavour to find out the exact
sense in which the words have been used in a particular
context. We are entitled to look at the statute as a whole
and give an interpretation in consonance with the purposes
of the statute and what logically follows from the terms
used. We are to avoid absurd results. If we were to give
the widest possible connotation to the words "agricultural
land", as the Full Bench of the Andhra Pradesh High Court
seemed inclined to give to the term "agricultural land", we
would reach the conclusion that practically all land, even
that covered by buildings, is "agricultural land" inasmuch
as its potential or possible use could be agricultural. The
object of the Wealth Tax Act is to tax surplus wealth. It
is clear that all land is not excluded from the definition
of assets. It is only "agricultural land" which could be
exempted. Therefore, it is imperative to give reasonable
limits to the scope of the "agricultural land", or, in other
words, this exemption had to be necessarily given a more
restricted meaning than the very wide ambit given to it by
the Andhra Pradesh Full Bench.
The Full Bench itself saw the need for some kind of
limitation to the application of "widest purpose" principle,
if one may call it that. Therefore, evidently in an attempt
to avoid the unreasonable conclusion to which too wide a
definition of "agricultural land" would naturally lead to,
the Full Bench., in the fourth conclusion recorded by it,
held that, if some vacant land is actually built upon, it
changes its physical characteristics and becomes unfit for
immediate cultivation. It thus qualified its view that the
widest possible meaning must be given to "land". Its final
view was that only such land could cease to be agricultural
land as had actually become unfit for immediate use for an
agricultural purpose. This view seems to imply that one has
to start with the presumption that all "land", as such is
"agricultural land". If one were to start with such a pre-
sumption, (although, we must, in fairness to the views
actually expressed by the Full Bench, observe that it did’
not expressly say so), even desert land will have to be
first presumed to be agricultural land. We feel certain
that the Full Bench did not mean to carry the application of
assumptions or principles, which seem to follow from its
reasoning, so far as that.
Conclusions 6, 7 and 8 are only negative in character.
They merely indicated what could not be conclusive in decid-
ing whether the land was agricultural. Conclusions 6 to 8,
as stated above, would seem to be correct. But, in our
opinion, they do not carry us far in formulating a test of
what is agricultural land. Conclusion No. 5 seems to have
been the real or positive test, based on entries in revenue
records, actually adopted by the Full Bench for determining
the nature the land.
The attempted application of the principles laid down by
the Full Bench shows that what were treated as tests were
really presumptions arising from the following facts: first-
ly, that the area was 108 acres abutting Hussain Sagar tank;
secondly, that this land had two wells in
12--1003 SCI/76
154
thirdly, that it was capable of being used for agricul-
tural purposes; fourthly, that it had not been actually put
to any use which could change the character of land by
making it unfit for immediate cultivation; and, fifthly,
that it was classified and assessed to land revenue as
"agricultural land" under the provisions of the Andhra
Pradesh Land Revenue Act 8 of 1317 Fasli perhaps on the
assumption that it could be used for agriculture.
We may observe that the first four indicia set out above are
based on absence of any user for non-agricultural purposes.
Hence, they are inconclusive. The last feature does seem to
provide some evidence of the character of the land from the
point of view of its purpose. Section 50 of the Hyderabad
Land Revenue Act (No. VIII of 1317F) (now called the Andhra
Pradesh Land Revenue Act) lays down.
"50. Land revenue shall be assessed accord-
ing to the various modes of use.
(a) Agricultural use.
(b) In addition to agricultural use any other
use from which profit or advantage is derived.
When rate is assessed on any land for any one
of the aforesaid purposes and the land is appropri-
ated for any other purpose the rate thereof shall
be altered and fixed again, although the term of
subsisting settlement may not have expired.
If any land granted by the Government with
remission of land revenue for any special purpose
is appropriated to some other purpose against the
intention of the grant, the land revenue thereof
shall be recovered.
It shall be lawful for the Taluqdar, and in
case a taluqa is under settlement, for the Commis-
sioner of Survey Settlement or Commissioner of land
Records after giving a hearing to the land holder
to prohibit its appropriation for any particular
purpose and record reasons therefor and to summari-
ly evict the holder who may have appropriated the
said land to prohibited purpose".
Provisions of the Andhra Pradesh Land Revenue Act seem
to involve quasi-judicial proceedings, or atleast, an en-
quiry into the purposes for which land to be assessed has
been appropriated. The Full Bench of the Andhra Pradesh
High Court has held these entries to be "strong prima facie
evidence", and, it practically decided the case on the basis
of these entries. But, the difficulty seems to us to be
that the taxing authorities had given a categorical finding
that the land under consideration had neither been used for
an agricultural purpose nor was it ever tended to be so
used. It may be that this finding was based on no evidence
or was based on the circumstance that the land appeared to
have been kept, as the environs of a huge palace, unused for
any agricultural purpose. It may be that the past history
of such lands could give rise to some guess-work that no
agricultural user was intended by the owners of the Begum
pet Palace. But, is it possible to
155
reach a categorical finding or conclusion on the basis of
general notion based on past history of the way in which
such lands were treated by their aristocratic owners? At
any rate, there presumably was sore possibly quasi-judicial,
enquiry at the time of classification of land "agricultural"
under the provisions of Section 50 of the Andhra Pradesh
land Revenue Act. There must have been some evidence given
such a classification.
Learned Counsel for the assessee respondents submitted
that evidence had been led on the question of intended user
before the Taxing authorities as the "prima facie evidence",
provided by the entries in the revenue records, was consid-
ered enough. It has, however to be ’remembered that such
entries could raise only a rebuttable presumption. It
could, therefore, be contended that some evidence, should
have been led before the Taxing authorities of the purpose
intended user of the land under consideration before the
presumption could be rebutted. If the "prima facie" evi-
dence of the entries was enough for the assessee to dis-
charge his burden to establish an exemption, as it seemed to
be, evidence to rebut it should have been led behalf of the
Department.
We think that this aspect of the question was not exam-
ined by the Full Bench from a correct angle. Although it
seems to have based in conclusion primarily on the "prima
facie" evidence provided by the entries under Section 50 of
the Andhra Pradesh Land Revenue Act it had also used other
indicia which were really not very helpful. The had a bear-
ing on potentialities for agricultural user. The Full Ben
had, however, not recorded a finding that conclusion reached
by the Taxing authorities, that the land was never even
intended to be use for an agricultural purpose, rested on no
evidence at all. It had n given its reasons for rejecting
this finding of the Tribunal.
We also think that the Full Bench was not correct in
adopting view expressed in Sarojini Devi’s case (supra) by
the Madras High Court where it was held that it was enough
to show that the land under consideration was capable of
being used for agricultural purpose This erroneous view also
seems to us to have affected the conclusion of the Full
Bench on what was essentially a question of fact. It has
led the Full Bench into giving excessive weight to consider-
ations which had a bearing only on potentialities of the
land for use for agriculture purposes.
For the reasons already given, we do not think that the
term "agr cultural land" had such a wide scope as the Full
Bench appears have given it for the purposes of the Act we
have before us. 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 rural 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 use which
has to be seen for purposes of exemption from wealth tax.On
156
the objects of the exemption seemed to be to encourage
cultivation actual utilisation of land for agricultural
purposes. If there is neither anything in its condition, nor
anything in evidence to indicate the intention of its owners
or possessors, so as to connect it with an agriculal pur-
pose, the land could not be "agricultural land" for the
purses of earning an exemption under the Act. Entries in
revenue ords are, however, good prima facie evidence. We do
not think that all these considerations were kept in view by
the taxing authorities deciding the question of fact which
was really for the assessing authorities to determine having
regard to all the relevant evidence and law laid down by
this Court. The High Court should have sent the case to the
assessing authorities for deciding the question of :t after
stating the law correctly.
We think that this is a fit case in which we should set
aside the judgment of the Full Bench of the High Court and
hold that the tribute should determine afresh, from a
correct angle, the question of fact ether any of the lands
under consideration were "agricultural" or t for the
purposes of the Act before it. Accordingly, we allow these
peals, set aside the judgment and order of the Full Bench
and send the cases to the Tribunal for appropriate orders
for giving opporpriate both sides to lead further evidence,
if they so desire, and the decision of the cases in
accordance with the law as declared w by this Court. The
parties will bear their own costs throughout.
P.S. Appeals
allowed.
157