JUDGMENT - Mrs. MANOHAR SUJATA, J.:---This is a reference under section 256(1) of the Income-Tax Act, 1961. The assessment year involved is 1967-68 for which the previous year ended on 31st March, 1967. The following question has been referred to us by the Income-tax Tribunal :

"Whether on facts and circumstances of the case, the land in question owned by the assessee is agricultural land and exempt from liability to pay capital gain tax?"

2. The reference pertains to a land situate in the City of Ahmedabad within the Municipal limits. The land formed a part of a larger piece of land bearing Survey No. 3/1 admeasuring 1 acre 34 gunthas and Survey No. 1 admeasuring 1 acre in Changispur area of the City of Ahmedabad Municipal Corporation. The then owner of this land entered into an agreement to sell this land to one Ramanlal Lalbhai Seth and others. The purchasers under the contract represented themselves as well as several other persons including the assessee. All these persons purchased this land collectively. The actual conveyance was executed on 10th January, 1945.

3. From 15th March, 1945 the Elis Bridge Town Planning Scheme was extended to this land. The land was divided into several plots which wee then re-numbered. The land was divided by the co-owners into 14 plots after making a provision for roads. The plots were also fenced. The plan for division of the land into plots was approved by the Ahmedabad Municipal Corporation on 14th January, 1949. Out of 14 plots plot No. 8 admeasuring 1594 sq. yds. came to the share of the assessee and was transferred to her name in the Government records on 13th December, 1951.

4. By a sale deed which has been registered on 22nd of August, 1966 the assessee sold this Plot No. 8 along with the wire fencing and along with the right to use the roads running between Plots Nos. 9 and 7 as well as Plot No. 11 and Plot No. 12 and Plot No. 6 and Plot No. 7 to one Alarkha Gulamrasul Mansoori at the rate of Rs. 65/- per sq. yd. The total sale consideration received by her was Rs. 1,03,610/-.

5. For the assessment year 1966-67 the assessee submitted a return of income in which the assessee disclosed in Part II of the return, inter alia a sum of Rs. 99,800 as sale proceeds of agricultural property at Ahmedabad and stated that the amount was not taxable because the land was agricultural land and therefore any gains made on the sale of the land were not taxable to capital gains tax in view of the definition of "capital asset" as given in section 2, sub-section (14) of the Income Tax Act, 1961. The Income tax Officer considered the transaction of sale and the capital gains arising therefrom as an income arising from an adventure in the nature of trade. He brought the amount to tax as income from business. The Appellate Assistant Commissioner, however held that the I.T.Os. finding was incorrect. He said that this income was not in connection with any adventure in the nature of trade nor was it capital gains subject to tax because it was in respect of agricultural land. Being aggrieved by the order of the Appellate Assistant Commissioner the revenue preferred an appeal before the Tribunal. The Tribunal upheld the contention of the Appellate Assistant Commissioner that this was not an income arising by reason of adventure in the nature of trade. The Tribunal, however, held that the land could not be considered as agricultural land and hence the capital gains arising from the sale of this land were subject to income-tax. The Tribunal restored the matter to the Income-tax Officer to determine the fair market value of the property as on 1-1-1954 in order to compute the quantum of capital gains. From this decision of the Tribunal, the above question has been referred to us.

6. In the reference, on the application of the assessee, which was granted, certain additional documents have been brought on record. These are extracts from the Record of Rights pertaining to this land. Certificate dated 24-11-1970 issued by

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