TaxTMI 
TaxTMI 
2014 (11) TMI 773
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....e being disposed of by this common order, for the sake of convenience. Since, the facts prevailing in all the cases are identical, we shall discuss the facts prevailing in the case of M/s Classic Commercial Services Pvt Ltd taking the same as the lead case. 2. The issue urged before us is whether the Ld CIT(A) was justified in confirming the assessment of gain arising on sale of agricultural land as "business Profit" by rejecting the claim of the assessees that the same is not liable for taxation. 3. The Ld Counsel appearing for the assessee submitted that all these assessees have purchased agricultural land and have carried out basis activities like securing, fencing etc. All these lands were continued to be used for agricultural purpose....
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....d the agricultural lands to treat them as investment asset only. The Ld Counsel further submitted that the lands purchased by the assessee companies were notified by the State Government as "Special Economic Zone" and hence these companies had no other option but to sell the land to the concerned authority within short period from the date of purchase. The Ld Counsel submitted that these companies could not have avoided sale of land and hence the short period of holding cannot change the intention of the parties to hold the agricultural land as an investment. 4. On the contrary, the Ld D.R submitted that these assessees have held the land for less than a year and further they themselves did not carry on any agricultural activity thereon. H....
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.... Ltd, wherein the AO has observed that "since the land fall under the definition of agriculture land, it cannot be considered as capital asset and therefore assessee's claim of not being hit by the provisions of taxability under Capital gain has to be accepted." In all other three cases also, the assessing officer has expressed similar views in paragraphs 7 & 10 of the assessment orders passed in their respective hand. However, the assessing officer has taken the view that the activity of purchase and sale of agricultural land indulged in by these assessees are in the nature of "adventure in the nature of trade" and accordingly concluded that the profit arising in their hands on sale of land would be assessable as "Business Profits". Accord....
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....as transferred some interest in land. Accordingly, the ld CIT(A) upheld the orders passed by the assessing officer. 8. We notice that the Ld CIT(A) has proceeded on a new line of thought and concluded that there was no purchase or sale of land and further held that it was a simple case of giving advance in the course of business activity. First of all, we notice that the business activity of the assessees is not giving of advances. Even if it is considered to be so, for a moment, the advance should be returned back by the same person who had received the advance. If the assessee had not acquired interest in the land, there was not necessity for the Mumbai SEZ Ltd to enter into MOU with the assessee. Though the Ld CIT(A) that the assessee h....
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....Services Pvt Ltd, the assessing officer has observed that the said assessee had carried on similar activities of purchase and sale of land in earlier years. However, the Ld A.R strongly disputed the said observation by saying that the same is contrary to the facts available on record. 10. Thus, it is seen that the tax authorities have proceeded to assess the income as business income of the assessee on wrong understanding of facts. Further, they were influenced by the fact that the assessees have sold the lands within a period of one year from the date of purchase. However, the submission of the assessees was that they were constrained to sell the lands to Mumbai SEZ Ltd as per the notification issued by the State Government. With regard t....