2015 (3) TMI 277

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....e, the Income Tax Appellate Tribunal is right in law in holding that the gains arising from sale of land is not business profit and liable only to be assessed under capital gains? 2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in holding that disallowance of development expenses is to be charged only on Rs. 2.00 lakhs even after holding that there were no proper vouchers and bills for the same?" 2. The brief facts of the case are as follows: The assessment in this case relates to the assessment year 2001-2002. The assessee purchased 1.35 acres of agricultural land in the year 1993 for a sum of Rs. 1.12 lakhs and developed the property as housing plots. During the assessment year under....

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.... Nathalal Dhayabhai 126 ITR 555, CIT Vs.Dhananjay Roy Jadhav 137 CTR (MP) 129. In addition reliance was also placed on 62 ITR 578, 176 ITR 393, 142 ITR 115 and 45 IR 626. I have perused the facts of the case and I find that the ratio of the above mentioned cases do not apply to the present case. I find that the appellant was in the business of arranging buyers and sellers for commission purposes for the purchase and sale of lands/plots. I also find the assessee was consistently engaged in dealing in properties (may be as a commission broker) and in the context of the facts of the case and attendant circumstances of the case it is clear that the appellant had acquired this property with intention to develop this property and sell it for prof....

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....Income Tax (Appeals) in paragraph 4 of the order, which we extracted supra. A solitary instance of purchase in the year 1993, development and plotting out in the assessment year 2001 cannot partake the character of business venture or profit. 8. In the case of CIT V. Mohammed Mohideen reported in 176 ITR 393, this Court following the decision in the case of CIT Vs. Kasturi Estates (P) Ltd. reported in (1966) 62 ITR 578 (Mad), held as follows: "A sale of immovable property may possible be a trading or commercial transaction, but need not necessarily be so... If a land-owner developed his land, expended money on it, laid roads, converted the land into house sites and with a view to get a better price for the land, eventually sold the pl....