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of <h1>Agricultural land sale taxed as Short Term Capital Gain, not double taxed. Appeal dismissed.</h1> <h3>Naresh Kantilal Thacker Versus The Income Tax Officer, Ward-2, Gandhidham</h3> Naresh Kantilal Thacker Versus The Income Tax Officer, Ward-2, Gandhidham - TMI Issues involved:1. Taxation of gain on sale of agricultural land as Short Term Capital Gain.2. Treatment of the transaction as an adventure in the nature of trade.3. Double taxation on the same transaction in different assessment years.Issue 1: Taxation of gain on sale of agricultural land as Short Term Capital Gain:The appellant, engaged in the trading of timber, purchased agricultural land and subsequently sold it to a non-agriculturist, claiming the gain as exempt under section 2(14)(iii) of the Income Tax Act. The Assessing Officer treated the transaction as Short Term Capital Gain, asserting that the intention was not agricultural but commercial, leading to taxation for the Assessment Year 2014-15. The Commissioner of Income Tax (Appeals) upheld the assessment, considering the sale as an adventure in the nature of trade, despite the appellant's arguments. The appellant contended that the sale was completed in the subsequent assessment year and should not be taxed twice. The Tribunal affirmed the lower authorities' decision, emphasizing the conversion of the land and the commercial nature of the transaction, dismissing the appeal.Issue 2: Treatment of the transaction as an adventure in the nature of trade:The Tribunal analyzed the timeline of events, noting the quick sale after purchase, conversion of the land, and financial involvement of the buyer in the transaction. It observed the appellant's actions and intentions, concluding that the transaction was indeed an adventure in the nature of trade. The Tribunal agreed with the lower authorities' findings, emphasizing the commercial motive behind the land transaction and the subsequent conversion for industrial use. The Tribunal held that the sale to a non-agriculturist and the financial arrangements supported the characterization of the transaction as a trade venture, leading to the dismissal of the appeal.Issue 3: Double taxation on the same transaction in different assessment years:The appellant raised concerns about potential double taxation due to the treatment of the sale in two different assessment years. However, the Tribunal clarified that the subsequent deletion of the income offered in the following assessment year by the Commissioner of Income Tax (Appeals) prevented any double taxation. The Tribunal highlighted the directive to remove the Long Term Capital Gain claim in the subsequent year, ensuring no overlap in taxation for the same transaction. Consequently, the Tribunal rejected the appellant's argument on double taxation and upheld the decision to tax the transaction in the initial assessment year.In conclusion, the Tribunal affirmed the taxation of the gain on the sale of agricultural land as Short Term Capital Gain, considering it an adventure in the nature of trade, and addressing concerns of double taxation by deleting the income offered in the subsequent assessment year. The appeal by the Assessee was dismissed, and the decision was pronounced on 06-01-2023.
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