TaxTMI 
TaxTMI 
2012 (11) TMI 1157
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....quently as income under the head income from business instead of exempting the income u/s 10(1). 3. The learned CIT(A) erred in not following the under mentioned binding decisions holding that the surplus realized from the sale of agricultural land is agricultural income only. 128 ITR 86, 154 ITR 629, 159 ITR 775, 219 ITR 554(SC), 247 ITR 150(SC). 4. The learned CIT(A) erred in not following the decision of S.C in 297 ITR 17 in as much as the exempted income u/s 10 cannot form part of the total income u/s 14 of the I.T. Act and consequently it cannot be classified under any head of income. 5. The learned CIT(A) erred in not considering the explanation I to section 2(IA) wherein it is declared that the word „revenue‟ includes the excess realized on sale of agricultural land as agricultural income in as much as the explanation incorporates the law declared by the Bombay High Court in 128 ITR 86 and other cases to remove any doubt as to the nature of income of surplus. 6. The CIT(A) erred in not following the under mentioned decisions binding on him that the word trade did not include agriculture at all. AIR 1999 SC 1867 AIR 1958 487 (Bom) AIR 1968 SC 554 ....
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....n not following the under mentioned decisions binding on him that the word trade did not include agriculture at all. AIR 1999 SC 1867 AIR 1958 487 (Bom) AIR 1968 SC 554 70 ITR 730, 732 (SC) 7. Without prejudice to the above the CIT(A) erred in holding that in the facts and circumstances of the case the assessee is a dealer in agricultural lands. 8. CIT(A) erred in holding that the agricultural lands are trading assets and consequently stock-in-trade 9. The CIT(A) erred in not following the decisions of the Supreme Court in 78 ITR 58 and 60 ITR 435 wherein it is held that an income producing asset is a capital asset and the surplus realized is the capital gain and not the revenue receipt. 10. The CIT(A) erred in confirming the addition of Rs. 1,00,000/- u/s 69C as the unexplained investment in the purchase of branded seeds of soya bean and fertilizer in the cultivation of the land. 11. The learned CIT erred in dismissing the additional ground of charging of interest on the ground that levy of interest is mandatory." 2. Both learned A.R. and learned D. R. agreed that the facts involved in both the appeals are common, therefore, both the appeals be decided....
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....had been land development activities in this area in the last 5-6 years because of the proposed Cargo Hub and MIHAN Project and proposals of other industrial houses like DLF Boeing. It was also noted that the assessee also purchased land on behalf of his sons Ankitkumar and Gauravkumar just to exploit the market conditions. The Assessing Officer was of the view that the intention of the assessee was to indulge in trading. The land at Sl. No. 1 & 2 admeasuring 2.01 & 1.2 Hectors and located at Khasra No. 43/3 & 43/4, Ph. No. 68, Khairi (Khurd), Tal. Hingna was purchased on 09/05/2005 when the owner gave the possession. No sale deed is executed. On 08/05/2005, the assessee got the power of attorney along with the agreement to sale. This land was sold to different persons vide sale deed dated 15/04/2006. The land at Sl. No. 3 & 4 were purchased from some persons on 23/02/2006 and the entire consideration was paid on the same date. These two separate pieces of land were sold to one party Adianubhav Developers Pvt. Ltd. through its Director Sudhakar Komawar for Rs. 69 lakhs. The sale deed dated 10/09/2006 was registered on 10/10/2006. The consideration of Rs. 69 lakhs was received from ....
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....,90,410/- realizing a surplus of Rs. 59,74,148/-. The detail of the land with the date of purchase and sale are given as under: S. No. Name of place Area of land Purchase Name of seller Purchase value Sale dt. Name of purchase Sale value 1. Khairi (khurd) Khairi (Khurd) 2.01 1.02 09/05/2005 09/05/2005 Wamanrao Kudaji Narmada Wananrao 322420 19/04/06 19/04/06 Damabai Jagannath 1121098 2. Mangred Mangred 2.43 1.94 23/02/2006 23/02/2006 Murtaja Kothawale Akbar Kothawale Akbar Kothawale Murtaja Kothawale 1368033 1025809 11/10/06 Adianbhav Developers 6900000 2716262 8690410 4.1 The land were beyond 8 Km. away from Nagpur. The assessee was owning about 100 acres of land as on 31/03/2006. Some land measuring 7.16 Hectors was sold by the assessee during 2004-2005. It was stated that the purchaser even cultivated the land. This is the second time when the assessee sold the land since 94-95. After the sale of the land, the assessee purchased the land for a consideration of Rs. 2.29 crore. Thus, it was contended that the entire sale consideration was invested in the purchase....
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.... or mercantile, as distinguished from the liberal arts or learned professions or agriculture." 4.2 Thus, it was contended that the agriculture is excluded from the word "trade". The question of adventure in the nature of trade did not include agriculture or its operations. Our attention was drawn towards the decision of this Bench of the Tribunal in the case of ACIT vs. Shagun Infrastructure P. Ltd., I.T.A. No. 209/NAG/09 for the proposition of the law that the transaction entered into by the assessee was not adventure in the nature of trade. There is no dispute that the land sold by the assessee was beyond 8 Km. of the Municipal limit of Nagpur. It was contended that the case of the assessee is duly covered by the decision of I.T.A.T., Nagpur Bench in the case of ACIT vs. Shagun Infrastructure P. Ltd. (supra). 5. The learned D. R., on the other hand, relied on the order of CIT(A). 6. We have heard the rival submissions and carefully considered the same. We noted that the main consideration of the Assessing Officer while holding sale of land as adventure in the nature of trade is that the assessee has made a number of purchases of the land and sold the land. We have gone throu....
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....eptt. There is no reason to deviate from the said approach or stand with regard to the agriculture income already taken by the Deptt. Moreover, as mentioned by the appellant AR, Bombay Tenancy & Agricultural Lands (Vidarbyha Region) Act, 1958, Chapter VIII- Restrictions on Transfers of Agriculture Lands ad Acquisition of Holdings and Lands, certain restrictions are provided and it is clearly spelt out in section 89 of this chapter that transfer of agricultural lands to non-agriculturist is barred. This implies that in the Nagpur region the appellant was registered and acknowledged as a bonafide agriculturist and acceptance of its income from such agricultural activities as agriculture income by the IT Deptt also confirm appellant‟s status as agriculti8rist. It is the same agricultural land which was sold out and the sale proceeds thereof were reinvested in acquiring another agriculture land in Pune where again the appellant is recognized as a bonafide agriculturist. The new land thus acquired in Pune is also situated more than 8 Km. Away from Municipal limited. 4.3 Therefore, I agree with the contention of the ld AR that the appellant is a bonafide cultivator as per the rel....
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.... Hon'ble Bombay High Court in AIR 1958 BOM 487 as under: "Undoubtedly in its primary sense the word „trade‟ means exchange of goods for goods or goods for money. But in a secondary sense it includes any business carried on with a view to profit whether manual or mercantile as distinguished from the liberal arts or learned profession. Permit of a skilled employment with a view to earn profit such an employment not being in the nature of a learned profession or agriculture must be regarded as engaging in „trade‟ within the meaning of Art. 276 of the Constitution. A skilled occupation which involves the application of a manufacturing process to a commodity submitted to the person carrying on the occupation must, therefore, be regarded as trade." 6.2 The facts involved in the impugned case before us are almost similar to the facts in the case of ACIT vs. Shagun Infrastructure P. Ltd. (supra). Respectfully following the said decision, we hold that the income derived by the assessee from the sale of agricultural land is not adventure in the nature of trade. It is not in dispute that the land is situated more than 8 Kim. From the Municipal limited and, ther....