2014 (1) TMI 1693

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.... business, long & short term capital gains and from other sources. On perusal of the record, it was noticed that the assessee was carrying on business of precious/ semi-precious stones, land and shares but has shown the receipts from land and share transactions under the head 'Capital Gains' rather than business income. It was also found that she has wrongly claimed deduction u/s 54F of the Act. The assessee furnished a chart of gross profit rate etc in the case of M/s. Rani Gems which is as under:- A.Y Turnover Gross profit Gross profit rate 2006-07 1399290 469565 33.56% 2007-08 360814 155983 42.23% 2008-09 1004180 322936 32.15%   However, after considering the reply of the assesse....

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....nd that the assessee was doing business of only precious and semi precious stones. (b) The AO has observed this was a single transaction of land during the year. Just because it was for more than Rs. 50 lacs it is not a good basis to form the premises the nature of transaction was business. (c) The fact that the land was sold to mustard seed Ghaloti Hotels P. Ltd. is not a reflection on the assessee for determining that she was engaged in the business of trade of land. Had it been so all the cases where the land was sold to builders and developers or colonizers the would be assessed as business income. (d) Further more, it was pointed out that the assessment order was passed on 7-12-2010 wherein in the case of the assessee an order....

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....he assessee has treated this land as her asset and not stock in trade. When the entire evidence are examined in their entirety, the only one irresistible conclusion can be drawn that the assessee owned and possessed a piece of agricultural land as her 'asset' acquired for investment and it was sold as an agricultural land. The above points mentioned as (a) to (g) have been duly examined by us and we are of the considered opinion that not only these contentions are correct and their effect would terminate into a finding that the assessee used her own funds to acquire the assets and in the wealth tax assessment order she has reflected this land as agricultural land. It is found that only because there is some mistake committed by the auditor ....