TaxTMI 
TaxTMI 
2013 (8) TMI 833
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....cluded long term capital gain of Rs. 5,33,41,751. In the note given in the computation of income the assessee had stated as under: "The assessee owns the agricultural lands admeasuring 25 acres and 34 guntas in survey No. 227, 228, 229 bearing patta No. 562, pass book No. 431863 situated at Mankal village in Maheswaram Mandal of R.R. Dist. whose cost as already reported in the earlier A.Y. 2006-07 is Rs. 5,25,61,860. During the year, i.e., 2007-08, the assessee has sold the entire land on 1.12.2006 to M/s. Prajay Holding Pvt. Ltd. for a total consideration of Rs. 24,81,60,000. A Photocopy of the sale deed is herewith enclosed. The said lands are situated more than 8 Km from the local limits of any Municipality or Cantonment Board. Mankal village, having less than 10,000 population due to which the agricultural lands in question are outside the definition of the asset within the meaning of sec. 2(14) of the IT Act. The Agricultural lands are actually grape gardens which are assessed to revenue also, as such any gain whether Long term or short term is not gain taxable under the Act. These lands were purchased by the assessee during the A.Y. 2006-07 for a total consi....
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....lla, Sri M. Ravinder and Sri Vijayender Tulla, as lessors, with M/s. VVT as lessee, wherein the entire grape orchard admeasuring acres 85 and 22 guntas was given on lease with effect from 25.10.2005 on the following terms: a) Yearly rent for this entire land was fixed at Rs. 12.80 lakhs. Each lessor was to receive following annual lease rent: Dr.E.Adilakshmi - Rs. 3,50,000 M. Ravinder - Rs. 1,50,000 T. Vijayender - Rs. 3,97,500 T. Veerender - Rs. 3,82,500 These payments were exclusive of all taxes and other maintenance of the premises. b) That the lease is commenced from 26.10.2005 for a period of one year. However, lessee shall be entitled to exercise his option by giving 2 months advance written notice to the lessors to continue the lease for a maximum period of three years, subject to the condition that 10% of the lease shall be increased every year. c) That the lessee shall pay regularly electricity consumption charges, other taxes etc. d) That the lessee will carry on the agricultural activity in the na....
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.... the owners have decided to sell the scheduled property. It was also mentioned that the company, being a leading developer in the city and a renowned construction company, anticipating good development opportunity in the said property, have decided to buy the scheduled property from the owners. A second Memorandum of Understanding was entered between Sri T. Vijayender and the same company i.e., M/s. Prajay Holding Pvt. Ltd., expressing the intention to sell and buy the property on the same date. At the time of these MOUs on 15.09.2006, an advance of Rs. 3,00,00,000 was received by Sri Vijayender, besides the advance of Rs. 2.5 crores each by Sri T. Veerender and Dr. E. Adilakshmi and one crore by Sri M. Ravidner. 10. It was noticed that the sale consideration had been fixed at Rs. 96 lakhs per acre and the entire amount of Rs. 23,54,40,000 was received by Sri T. Vijayender at the time of final registration of the sale deed in January, 2007. The entire land of Ac. 79. 32 guntas purchased by four persons, including the assessee, had been sold/entered into agreement with M/s. Prajay Holding Pvt. Ltd., for Rs. 76 crores approximately, as below:- S. No. Purchased from Addres....
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....of trade wherein the intention was to sell the land from the beginning itself in the ever spiralling real estate market of Hyderabad at the relevant time. 13. On delving into the Agricultural history of the impugned lands, the Assessing Officer noticed that all these agricultural lands were owned by the family of Sri B.K. Khosla, consisting of his wife Smt. Satish Khosla, and daughters Richha Mahindru and Vani Kumra. They were in possession of these lands for close to one and half decade and grape cultivation was being carried out on these lands. There were three farms, by the name M/s. Eastern Farms, M/s. Khosla Farms and M/s. Vani Farms, wherein all these four family members were partners. These farms were showing agricultural income from the sale of grapes. It was significantly noted that for years together grape cultivation was being done on these lands and the sale proceeds from the grapes grown in these farms were shown as under:- Eastern Farm Financial year Gross Proceeds (Rs.) Net Proceeds (Rs.) 2005-06 74,81,086 62,74,518 2004-05 17,39,000 2003-04 52,63,191 26,44,710 2002-03 54,56,338 26,88,602 2001-02 46,97,6....
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....cade. Even M/s. VVT had reported a net loss of Rs. 26 lakhs out of gross receipts of Rs. 39,15,000 in the A.Y. 2007-08 while nil income/receipts was shown for A.Y. 2008-09 by them. Further, it was seen that the lease deed entered with M/s. VVT was only for one year initially. 17. In view of the above facts, the Assessing Officer observed that the facade of M/s. VVT got fully exposed from the above arrangement. She further noted that as per accounts of M/s. VVT, the said company had incurred various expenditures mentioned below, up to various dates, which are broadly as under: Labour charges - up to 03.05.2006 Misc. Expenses - up to 02.05.2006 Printing and Stationery - up to April, 2006 Repair and maintenance - up to April, 2006 Salaries - up to 02.05.2006 18. From the above, the Assessing Officer noticed that after April, 2006, no activities on the said agricultural land were undertaken. Therefore, she concluded that these facts showed that the assessee did not have the intention to actually carry on agriculture on the said lands since the very beginning. She noted that at the time of purchase of the said la....
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....nes for determining whether a person is a trader or an investor - Land is not a commercial commodity. Land alone is also not a trade in itself. Normally the purchase of land represents investment of money in land. A transaction of purchase of land cannot be assumed without more facts to be a venture in the nature of trade. An investment in purchasing a property is also made with a view to earning returns on the same investment. Therefore, the mere fact that a person invested money for the purpose of reselling whenever a suitable opportunity arises does not give a substantive ground to hold that the transaction is in the nature of trade. Deep Chandra & Co. vs. CIT, 107 ITR page 716 (All), CIT vs. Jawahar Develop- ment Association, 127 ITR 431 (MP), Bhageerath Prasad Pilgaiya vs. CIT, 139 ITR 916 (MP.) And lastly your observation is of no use in citing the case laws is in correct and it appears only that you have pre-determined mind in the case. 20. The assessee made the following further submissions vide his letter dated 11-12-2009: "If a person invests money in land with an intention to hold it enjoys its income for some time and then sells it at profit, it would ....
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.... thereby the grapes were not fit for export. Meanwhile the market price of the lands has gone up to such an extent that in order to make good profit the assessee has sold the lands in question and by selling the very character or nature of the lands has not changed and as was in the case of Deepchandra & Co. vs. CIT, 107 ITR 716 (All) and CIT vs. Jawahar Development Association, 127 ITR 431 (MP) land is not a commercial commodity. Land alone is not a trade and itself. Normally the purchase of land represents investment of money in land. The transaction of purchase of land cannot be assumed without more facts to be a venture in the nature of trade ... 14. As already submitted in the computation of income the agricultural lands in question are 16 Km. away from the local limits of Greater Hyderabad Municipal Corporation at Mankhal (v) of Maheswaram Mandal of R.R. District. These lands are not an asset within the meaning of capital asset u/s. 2(14)(iii)(a) or (b). As such they are not capital assets under the Income-tax Act, and on sale of agricultural lands the capital gains whether Long/ Short are not taxable" 21. The assessee made further submissions vide his letter date....
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.... 14 and under the various computation sections, section 15 to 59. it is, therefore, submitted that on the gain being classified as agricultural income, the contention that it is an adventure in the nature of trade and taxable under the head 'income from business' is not correct. 11. As the yield from the crop has been drastically affected due to 'mealy buy' disease, the assessee could not continue the business and instead proposed to sell the lands together with the standing crop to others to mitigate future losses. The sale is made with an intent to mitigate the losses arising from grape plantation. The gain is incidental to the intent of disposing the property and is a capital accretion which cannot be termed us 'adventure in the nature of trade'. The sales are mode in the measure of acreage and not yardage. The assessee has sold the grape garden: along with the appurtenant farm buildings and equipment. 22. On a consideration of the submissions of the assessee, a final show-cause notice letter was issued to the assessee on 24.12.2009. In response, the assessee made further submissions vide letter dated 29.12.2009 as under: 1) In your a....
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....y for sale in September, 2006. 4) What we submit that due to sudden rise in the market prices of the lands in that area the assessee and other co-owners like many others in that area have sold the properties. 5) It was never the intention of assessee and other co-owners at the time of purchase of lands to make profit out of it by selling but they wanted to have income earning by exporting the grapes as the lands were with the grape gardens. If at all the assessee and other co- owners could visualize increase in the market price at the time of purchase, so also original sellers of the farm land whose lands were there from long time could have visualised the same and in that case why should they sell the same particularly when they are financially well placed, 6) The assessee and other co-owners have purchased the properties with cm intention to enjoy the income by making efforts to export the grapes. It is only on the favourable conditions the assessee has sold the properties. It is only a chance sale for the assessee. 7) We once again bring to your kind notice to para (17) of our letter dated 13.11.2009 wherein we submitted that land is no commer....
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....e chain of his actions, from the time of purchase of the property. 25. The Assessing Officer opined that for an agricultural land purchased for around Rs. 5 crores and having consistent healthy agricultural income for over a decade, the annual lease rent deed of Rs. 3.5 lakhs could not be considered as genuine. She held that such a low value deed exposed the hollowness and falseness of the arrangement. She felt that the lease rent of as low as an amount as Rs. 12.8 lakhs, exposed the fact that assessee never actually wanted to do agriculture on this land which in the past was producing high quality grapes which was being exported abroad. Besides, she noted that the lease deed was only for one year, which again highlighted the nature of the stop gap arrangement which was created till the land was sold. The Assessing Officer agreed that the investment in the land will be of higher value than the income received from it, but in the assessee's case the actual income being earned in the earlier years was several times more than Rs. 12.80 lakhs of rentals fixed in the lease deed. She, therefore, held that this one act at the time of purchase of property singly brought out that fro....
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....ycle of crop both in the vegetative growth period and fruit development period. 28. She further noted that the agricultural activity in this case was stopped in April, 2006, i.e. almost within 6 to 7 months of its purchase. Even though the agreement to sell land was entered in September, 2006 and the lease deed was cancelled in September, 2006. She felt that this showed that the assessee was never interested in the agriculture on this land. Therefore, after harvesting the crop in March/April 2006, for which the fruit had appeared at the time of purchase of the land, all the agricultural activities were abandoned. 29. It was further noted by the Assessing Officer that even though the assessee had stated in his reply that he is an agriculturist and is from an agricultural family, the facts of the case were totally different. She observed that the assessee himself had admitted that he is a business man, as was apparent from all the sale/purchase deeds of the land, wherein the occupation of the assessee was mentioned as business. She noted that such a reference was not causal or by default, but a true indicator of the assessee's own version about himself. She noted that in an....
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....perty, by its specific nature, was being assessed as an adventure in the nature of trade as per section 2(13) of the IT Act. The fact that the land is agricultural land is of no significance for being treated as adventure in the nature of trade. 33. The Assessing Officer also felt that the conduct of assessee was to be interpreted in the entire economic context of city of Hyderabad during the relevant period. She noted that the period when there was real estate boom in Hyderabad and its surrounding areas and the Urban Development authorities had notified various villages including the Maheswaram village for special development meant for various in and around international Airport and Shamshabad. There were various specific notifications in this regard, which have been placed by her in the file. However, without going into the details, she considered it fit to mention that the overall conduct and intention of the assessee was to be examined in the overall economic context of that time and his intention to enter into this adventure to make quick profit. 34. Examining the facts of the case in the light of various legal pronouncements on this issue, the Assessing Officer noted th....
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....tegory of adventure in the nature of business. 35. The Assessing Officer noted that in various cases, such as CIT vs. Jawahar Development Association (127 ITR 431) (MP) , Smt. Indramani Bai vs. Addl. CIT (200 ITR 594)(SC), P.M. Mohammed Meerakhan vs. CIT (73 ITR 735) (SC) and Hemchand Hirachand Shah vs. CIT (206 ITR 55) (Gujarat), on the specific conduct of assessee, it was held to be adventure in the nature of trade. 36. Lastly, the Assessing Officer referred to the Plato's Theory of 'Knowledge' and opined that one should not go by the 'appearance of reality', but comprehend the 'substance of reality'. She also took note of the maxing that "whole" is more than merely the mathematical sum total of the "parts" that constitute it. On a complete analysis of all the facts of the case and the conduct of the assessee since from the time of purchase of land to its sale, besides in the light of the economic scenario of the Hyderabad city during the period and the principles laid by Apex court for analyzing such a case, she concluded that the assessee had not purchased the land with an intention to do agriculture on it. Instead, the land had been purchased ....
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....ing on agricultural activities on his own on the said land and with sole intention of selling the land for profit. According to the CIT(A), the assessees entered into lease agreement with M/s. VVT just to create a facade with a view to give semblance of doing of agricultural operations. Even after taking the land on lease by M/s. VVT there was no agricultural operation on the said land after payment of lease rent. The real intention of the assessee is not to carry on agricultural operations. He further observed that the company, VVT, was floated as it was difficult to export grape individually, it is clear that while the said company did not have any experience therein, the Directors thereof were also inexperienced in this area. As stated earlier, no expert had been employed to handle the agricultural operations or the export thereof. Therefore, floating of such a company itself could not have solved the problems likely to be faced in exporting grapes individually. Rather, the facts of the case clearly go to show that the said company was created as a facade only and not for any real agricultural operations. 39. The CIT(A) observed that one of the reasons cited by the assessee f....
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....lf, had a better knowledge of the economic boom, while the earlier owners from Delhi might not be having the real life knowledge of the economic scenario. Besides, their expectation of appreciation might also have been achieved, as they had already earned substantial return on their investments, both in the form of substantial agricultural produce over the years and the huge consideration received by them on sale thereof. 43. He observed that so far as the contention that the land under consideration was an agricultural land, sale whereof was to be exempt u/s. 10(1), it is seen that the land was in Maheswaram village, which had been notified, along with other villages by the Urban Development Authorities. Under the circumstances, the true nature of the land sold by the assessee is to be determined by applying the tests laid down by the Hon'ble Courts in this regard. It is seen that the Hon'ble Rajasthan High Court in the case of Mahaveer Enterprises vs. UOI (244 ITR 789) have considered the following as the relevant tests, which can act as guidelines in determining the nature or the character of land as agricultural or otherwise: (1) The proximity of the land to....
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....ve factor. 45. The CIT(A) opined that the Hon'ble Apex court in the case of Sarifabibi Mohmed Ibrahim & Ors. vs. CIT (204 ITR 631) have clearly opined that whether a particular land is agricultural or not is essentially a matter of fact. In this regard their observation is that several tests evolving in the decisions on this issue are "more in the nature of guidelines". The question, therefore, has to be answered in each case, having regard to the facts and circumstances of that case. They had observed that there may be factors both for and against a particular point of view, and therefore, the question has to be answered on a consideration and evaluation of all of them. The inference, accordingly, has to be drawn on a "cumulative consideration" of all of the relevant factors. On a consideration of the relevant facts in the case of the present assessee, it becomes abundantly clearly that almost all of the tests laid down lead to the conclusive inference that the agricultural land sold by the assessee was not an agricultural land at the time of sale. 46. The CIT(A) observed that under similar facts even the Cochin Bench of the ITAT have taken a similar view in the case of ....
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....ted that there was nothing to show that the assessee desired to convert the property to some other use. He did not employ any brokers for sale, rather the purchaser himself had approached the company from whom the assessee had purchased the Press. He contacted the assessee thereafter, who agreed to sell the Press. The Hon'ble Apex court opined that the .Jute Press could have been purchased for own business or for being let out also, and therefore, it could not be said that there was a venture intended. Therefore, it is clear that considering the nature of Jute Press, which was already subject to litigation, the Hon'ble Court opined that the property purchased was not such that an inference that a venture in the nature of trade must have been intended could be raised. In the case of the present assessee, however, the facts are entirely different and these go to show that the assessee only want to make quick profits from the transaction in a land which was very much in demand in the rising real estate market. 49. So far as the decision of the Hon'ble Bombay High Court in the case of CIT vs. Smt. Debbie Alemao (331 ITR 59) (Bom) is concerned, the Hon'ble High Court ....
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....on, indeed establish that the profit of Rs. 19,55,98,140 from the sale of the impugned land was assessable as 'Business income", being an adventure in the nature of trade. Thus, the CIT(A) decided the grounds against the assessees. Against these findings the assessees are in appeal before us. 52. The learned AR submitted that the impugned land is an agricultural land and not covered by the definition of capital assets u/s. 2(14) of the Act. He submitted that the land is situated in an area outside any municipality or cantonment board having a population of not less than 10,000 and also beyond the distance notified by the Central Government from the limit of any such municipality or cantonment board. According to the AR, the said land was purchased by the assessee's along with other co-owners for the purpose of carrying on agricultural activities on 8.9.2005 with the sole intention of carrying on the agricultural activities. According to the AR sale of agricultural land cannot be treated as transfer u/s. 45 to attract capital gain tax and also it cannot be treated as an adventure in the nature of trade treating the income arising out of that transaction as business income....
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....ation of all of them - a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts. The appellants were co-owners of a plot of land inherited from an ancestor through their father. On March 15, 1967 they agreed to sell the land to a housing co-operative society and, to enable them to complete the transaction, they applied in June, 1968, and March, 1969, for permission to transfer the land for a non-agricultural purpose and the permission was granted in April, 1969. A number of sale deeds were executed in May, 1969 and the purchasing society applied for conversion of the land to non- agricultural purposes, viz., construction of buildings. The question was whether the profit from the sale of the land was assessable to capital gains tax. The facts in favour of the appellants were: the land was registered as agricultural land in the revenue records and land revenue had been paid in respect thereof till the year 1968-69; there was no evidence that the land was put to non-agricultural use and the land was actually cultivated till and including the agricultural year 1964-65; there were agricultural lands abutting the land; and the appe....
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....of that company was to carry on agricultural operations. Later, the assessees and the other co-owners entered into a lease agreement on 25.10.2005 with M/s. VVT wherein the entire grape orchard measuring 85 acres 23 guntas was given on lease that company with effect from 25.10.2005 on rental basis for the purpose of cultivation. 56. M/s. VVT has filed return of incomes for A.Ys. 2007-08 and 2008-09 declaring nil income. Later there was cancellation of lease deed dated 29.9.2006 wherein the lease of the agricultural property was cancelled as the lessor intend to sell the agricultural property. Accordingly, this agricultural property was sold to one M/s. Prajay Holding Pvt. Ltd. The Revenue authority are of the opinion that the amount received on sale of this agricultural property is nothing but on account of adventure in the nature of trade and the same was brought into income from business. In these cases, the assessee held the land always as investment and not at all converted into stock- in-trade. The character of the land in the hands of the assessees has not changed. There is no material on record to show that the assessee carried on activities of buying and selling of land ....
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....cultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of the land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? 6. Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser and/or alternative user was of a permanent or temporary nature? 7. Whether the land, though entered in Revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? 8. Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? 9. Whether the land itself was developed by plotting and providing roads and other facilities? 10. Whether there were any previous sales of portions of the land f....
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....127 ITR 671 (Guj) referring to the Constitution Bench of the Hon'ble Supreme Court had stated that if agricultural operations are being carried on in the land in question at the time when the land is sold and further if the entries in the Revenue records show that the land in question is agricultural land, then, a presumption arises that the land is agricultural in character and unless that presumption is rebutted by evidence led by the Revenue, it must be held that the land was agricultural in character at the time when it was sold. The Division Bench of the Hon'ble Gujarat High Court further held that there was nothing on record to show that the presumption rose from the long user of the land for agricultural purpose and also the presumption arising from the entries of the Revenue records are rebutted. 62. The Hon'ble Bombay High Court in the case of CWT vs. H. V. Mungale (1983) 32 CTR (Bom) 301 : (1984) 145 ITR 208 (Bom) held that the Hon'ble Supreme Court had pointed out that the entries raised only a rebuttable presumption and some evidence would, therefore, have to be led before taxing authorities on the question of intended user of the land under considera....
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....rchased it for non- agricultural purposes, were totally irrelevant consideration for the purposes of application of s. 54B. 9. In the abovesaid case, the assessee an individual sold 15 karnals, 18 marlas of land out of her share in 23 karnals, 17 marlas land during the financial year 1990-91, relevant to the asst. yr. 1991-92, the sale was effected by three registered sale deeds. While filing her return of income, she claimed exemption from levy of capital gains under s. 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land within two years. The AO rejected the claim of the assessee holding that the land sold by the assessee was not agricultural land and this was upheld by the CIT(A). On further appeal, the Tribunal accepted the claim of the assessee holding that the transaction in question duly fulfilled the conditions specified for relief. On further appeal to the High Court, the Punjab & Haryana High Court found that the finding that the land had been used for agricultural purposes was based on cogent and relevant material. The Revenue record supported the claim. Even the rec....
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....rposes by the Revenue authorities concerned. To our understanding nature of land cannot be changed by any State Government notification and the land owners are required to apply to the concerned Revenue authorities for the purpose of conversion of the agricultural land into non-agricultural land and there is no automatic conversion per se by State Government notification. 68. It is also an admitted position that mere inclusion or proximity of land to any Special zone without any infrastructure development thereupon or without establishing and proving that the land was put into use for non-agricultural purposes by the assessee does not and cannot convert the agricultural land into non-agricultural land. In the instant case, at the relevant point of sale of the land in question, the surrounding area was totally undeveloped and except mere future possibility to put the land into use for non-agricultural purposes would not change the character of the agricultural land into non-agricultural land at the relevant point of time when the land was sold by the assessee. It is also an admitted position that the assessee had not applied for conversion of the land in question into non- agricu....
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...., notified area committee, town area committee, town committee, or cantonment committee and which has a population of not less than 10,000. 10. Section 2(14)(m)(b) of the Act covers the situation where the subject land is not only located within the distance of 8 kms from the local limits, which is covered by Clause (a) to section 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this Clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a "Capital Asset. 11. In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, Clause (a) to section 2(14][iii] of the Act is not attracted. 12. However, though it is contended that it is located within 8 knits,, within the municipal limits of Dasarahalli City Municipal Council in the absence of any notification issued under Clause (b) to section 2(14)(iii) of the Act, it cannot be looked in as a capital asset within the meaning of Section 2(14)(iii)(b) of the Act also and therefore though the Tribuna....
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.... situated in India was excluded from the definition of " capital asset" and any gain from the sale thereof was not to be included in the total income of an assessee tinder the head "capital gains". In order to determine whether a particular land is agricultural land or not one has to first find out if it is being put to any use. If it is used for agricultural purposes there is a presumption that it is agricultural land. If it is used for non-agricultural purposes the presumption is that it is non-agricultural land. This presumption arising from actual use can be rebutted by the presence of other factors. There may be cases where land which is admittedly non-agricultural is used temporarily for agricultural purposes. The determination of the question would, therefore, depend on the facts of each case. 'The assessee, Hindu, undivided family, had obtained some land on a partition in 1939. From that time, up to the time of its sale, agricultural operations were carried on in the land. There was no regular road to the land and it was with the aid of a tractor that agricultural operations were being carried on. The land was included within a draft town planning scheme. The a....
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....39; clearly indicates that such expressions are used to denote a municipality only, irrespective of the name by which such municipality is called. This fact is further substantiated by the provisions contained under clause (b) wherein it has been clearly provided that the authority referred to in clause (a) was only municipality. 74. We also perused the meaning of the term local authority as referred in section 10(20) of the Act. (20) the income of a local authority which is chargeable under the head "Income from house property", "Capital gains" or "Income from other sources" or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service [(not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area]. [Explanation. - For the purposes of this clause, the expression "local authority" means - (i) Panchayat as referred to in clause (d) of article 243 of the Constitution; or (ii) Municipality as referred to in clause (e) of article 243P of the Constitution; or (iii) Municipal Committee and District ....
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....according to the last preceding Census of which the relevant figures have been published before the first day of the previous year. In other words, the land does not fall in sub-clause (a) of section 2(14)(iii) of the Act as the land is outside of any municipality including GHMC. Further we have to see whether the land falls in clause (b) of section 2(14)(iii). This section prescribes that any area within such distance, not being more than 8 km from the local limit of any municipality or cantonment board as referred to in sub-clause (a) of section 2(14)(iii) of the Act, as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette. 77. We have carefully gone through the notification issued by the Central Government u/s. 2(1A)(c) proviso (ii)(B) and 2(14)(3b) vide No. 9447 (F. No. 164/(3)/87/ITA-I) dated 6th January, 1994 as amended by notification No. 11186 dated 28th December, 1999. In the schedule annexed to the notification dated 6.1.1994, Entry No. 17 is relating to Hyderabad wherein mentioned that the areas up to a distance of 8 km from....
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.... the relevant improvement/development taken place during this time is relevant for deciding the issue whether transaction was in the nature of trade. Though intention subsequently formed may be taken into account, it is the intention at the inception is crucial. One of the essential elements in an adventure of the trade is the intention to trade; that intention must be present at the time of purchase. The mere circumstances that a property is purchased in the hope that when sold later on it would leave a margin of profit, would not be sufficient to show, an intention to trade at the inception. In a case where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant factor and unless it is offset by the presence of other factors it would raise as strong presumption that the transaction is an adventure in the nature of trade. Even so, the presumption is not conclusive and it is conceivable that, on considering all the facts and circumstances in the case, the court may, despite the said initial inten....