TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 79
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....d that the agricultural land sold by him does not fall in the category of "Capital asset" as defined in sec. 2(14) of the Act, since the land was not located in a municipality or within the prescribed distance from the limits of municipality. Accordingly, he filed a letter dated 30-10-2010 requesting the assessing officer to treat the gains arising on sale of agricultural land as not taxable. The assessing officer, however, did not consider the same and completed the assessment by assessing the short term capital gain declared by the assessee as arising on "sale of Shares". Before Ld CIT(A), the assessee raised a ground relating to this issue. The Ld CIT(A) directed the AO to furnish a remand report on the grounds raised as well as on the written submissions filed by the assessee. The assessing officer, in his remand report, expressed the view that the plea of the assessee cannot be accepted, since the assessee has not raised the claim by filing revised return of income. The AO placed reliance in this regard on the decision rendered by Hon'ble Supreme Court in the case of Goetze (I) Ltd. 3. The Ld CIT(A) noticed that this issue has been raised before the AO. Before the Ld CIT(A), ....
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....and the real estate market has boomed in and around that area. He then referred to the recitals given in an agreement dated 02-07-2007 entered with Shri Ravi Gehi (purchaser), wherein it is stated that the land is capable of being converted into non-agricultural land and the purchaser is in the business of developing residential township. Some more recitals were also referred to by Ld CIT(A), wherein the action that are going to be taken by the buyer to convert the land for non-agricultural use were discussed. Based on these recitals, the Ld CIT(A) further supported his view that the intention of the assessee was to trade in land. He further reiterated that the assessee should have held the land for a longer period, enjoyed its income for some time and then should have sold the same as profit. He also reiterated that the assessee did not carryon any agricultural operation on the land. The contention of the assessee that certain plots of land were shown as "Investments" in the Balance Sheet was also rejected by the Ld CIT(A). He further referred to certain instances, wherein the lands were seen as having been sold prior to the purchase. Hence, on a cumulative consideration of the fa....
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....compensation for acquisition of land. Under these set of facts, the Hon'ble High Court rejected the contentions of the assessee that it has sold agricultural lands and accordingly held that the transactions of purchase and sale of agricultural lands amounted to "adventure in the nature of trade", and as such, chargeable to income-tax under the head "Profits and gains of business or profession". Hence there should not be any dispute that the facts and surrounding circumstances prevailing in each case have to be independently examined in order to resolve this kind of disputes. 8. In the instant case, nothing was brought on record to show that the assessee was in possession of some information prior to its purchase that the lands could be sold at a higher price. Hence, in our view, the decision rendered in the case of Gopal Ramnarayan Kasat are distinguishable on facts. However, whether the ratio of the said decision, viz., if the lands were purchased with the intention of holding them as "capital asset" and only with an intention of earning huge profits on the said purchases, then the assessee cannot place reliance on sec. 2(14) to contend that they are not "capital assets", is appl....
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....Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbi Alemao (2011)(331 ITR 59). Identical views have been expressed in the following cases also:- (a) ITO Vs. P.Prakasam (2014)(41 taxmann.com 79)(Chennai Trib) (b) Tulla Veerender Vs. Addl CIT (2013)(36 Taxmann.com 545)(Hyd Trib) (c) Smt. M. Vijaya Vs. DCIT (2014)(49 taxmann.com 26)(Hyd Trib) Hence, we are of the view that this reasoning of Ld CIT(A) fails. 11. The next reasoning given by Ld CIT(A) is that the assessee did not carry on any agricultural activity in the land. We notice that this reasoning of Ld CIT(A) is not sustainable. In the case of ITO Vs. Ashok Shukla (2012)(28 taxmann.com 112), the Indore bench of Tribunal held that there is no requirement in the Act that only self cultivated land would be treated as agricultural land and hence the land situated beyond the prescribed municipal limit and recorded as agricultural land in revenue record is to be considered as agricultural land untile proved otherwise. 12. The Hon'ble Bombay High Court has observed in the case of CWT Vs. H.V. Mungale (1984)(145 ITR 208) that the land which is recorded as agricultural land in the revenue paper cannot be used for a n....
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....Parose, Kale, Lute and Choudhari (1993) (202 ITR 98) are relevant:- "The case of the revenue mainly appeared to be that "the land in question was not purchased by the assessee for carrying on agricultural operations and that there was an intention of doing business". However no material could be brought on record in support of this stand except the allegation that some of the members of the assessee- association of persons, had also entered into similar deals in their individual capacity and that the and in question was sold by the assessee within three months from the date of purchase. The fact of purchase and sale of the land by the members of the assessee- association of persons was also contradicted by the assessee. The Tribunal did not accept the contention of the revenue in that regard. In that view of the matter, there being no finding in regard to the carrying on of the business by the assessee of sale and purchase of land and land being stock in trade, the contention of the revenue that the income from sale of land amounted to profits and gains of business could not be sustained. As in the instant case, there was no evidence at all of any trading activity in the isola....