The expression \"agricultural land\" in Section 2(e)(i) of the Wealth-tax Act (27 of 1957) must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry.

R.S.Narula, J.

1. The circumstances in which the following question of law has been referred to this court by the Income-tax Appellate Tribunal, Delhi Bench "A", at the instance of the Commissioner of Wealth-tax, Punjab, Patiala, under Section 27(1) of the Wealth-tax Act (27 of 1957) (hereinafter called "the Act"), may first be noticed :

"Whether, on the facts and in the circumstances of the case, the two lands in question were agricultural lands within the meaning of Section 2(e)(i) of the Act on the valuation date ?"

2. Shrimati Sheela Devi, respondent, hereinafter referred to as the assesses, owned two plots of land on either side (one on the east and the other on the west) of the central plot which originally belonged to her but had been sold by her earlier to the Government for establishment of Government postal colony. The relevant assessment year is 1961-62, and the relevant valuation date is March 31, 1961. The pivotal question around which the present dispute revolves is whether on the valuation date these two plots of land were or were not agricultural land within the meaning of Section 2(e)(i) of the Act. If those were agricultural land, as held by the Tribunal, they would be exempt from payment of wealth-tax. If on the other hand they did not fall within that expression, the assessee would be liable to pay wealth-tax in respect of the same. The relevant facts found by the Tribunal with which both sides are bound, and on the basis of which we have to answer the question referred to us are these:

3. The lands in dispute were not within any municipal area. These lands did not fall within any town planning area. Till 1958, these lands were actually under cultivation. Right up to the valuation date, these lands were classified as agricultural lands in the relevant revenue records, and were assessed to payment of land revenue. In 1958, the husband of the assessee, who used to cultivate the land, died and thereafter actual cultivation had not been done in these lands up to the valuation date in question. The husband of the assessee left behind him, besides the assessee, a minor son and some unmarried daughters. The Tribunal has also observed that the assessee did not take any steps to secure permission for using these lands for non-agricultural purposes, but this appears to have been stated on account of some misapprehension as we have not been shown any provision of law applicable to this part of the country (Ludhiana) requiring such permission being taken for putting agricultural lands to non-agricultural use. This observation appears to have been made by the Tribunal on account of such legal provision being on the statute book of some other States. The Tribunal has then held that the assessee had done nothing to disable herself from cultivating these lands and she did not intend to give up cultivation of these lands in future. The lands were subjected to land revenue till after the valuation date. The assessee never gave up the idea of cultivating the land though cultivation was temporarily discontinued for two years and the lands were still capable of being put to agricultural use. The assessee had offered these lands for sale to the Government on December 29, 1960, for the construction of residential flats for the officers of the income-tax department, but no agreement for sale had been reached between the assessee on the one hand and the Government on the other up to the valuation date though such an agreement was in fact arrived at after the valuation date which resulted in the ultimate sale of the lands to the State.

4. By his order, dated February 28, 1963 (annexure "B"), the Wealth-tax Officer, "B" Ward, Ludhiana, held that the lands had become non-agricultural and were, therefore, liable to be included as an asset of the assessee. In the assessees appeal to the Appellate Assistant Commissioner (annexure "C"), it was ground No. 5 that these lands were not liable to wealth-tax as they were agricultural la