TaxTMI 
TaxTMI 
2021 (4) TMI 210
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....ct) concerning AY 2011-12. 2. The grounds of appeal raised by the assessee read as under: "1. The learned Commissioner of Income-tax (Appeals)-3, Rajkot erred in confirming the action of the Income-tax Officer in making addition of Rs. 1,13,56,933/- by treating the income from sale of impugned properties as business income as against long term capital gain of Rs. 1,00,56,134/- shown by the appellant. 2. The learned Commissioner of Income-tax (Appeals)-3, Rajkot erred in holding that the appellant purchased and sold the lands with the intention of adventure in the nature of trade. 3. The learned Commissioner of Income-tax (Appeals)-3, Rajkot failed to appreciate the capital nature of such lands accepted in past income-tax assessments,....
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....d the income declared by assessee as 'business income' instead of 'capital gain' claimed. 4. Aggrieved, the assessee preferred appeal before the CIT(A). However, the CIT(A) declined to interfere with the order of the AO and denied the relief claimed by the assessee. 5. Further aggrieved, the assessee preferred appeal before the Tribunal. 6. When the matter was called for hearing, the learned AR for the assessee relied upon the detailed submission made before the AO & CIT(A) on factual aspects. It was adverted that the assessee jointly holds about 215 bigha agricultural lands in co-ownership at different locations at Junagadh. It was submitted that the assessee has derived agricultural income from the land parcels acquired....
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....tribution is deemed as 'transfer' in the definition provided under s. 2(47) of the Act. Consequently, the assessee is liable to capital gain tax under s. 45(3) of the Act on such unreal transfers but only where the capital investment is transferred by assessee partner. If the allegations of the AO is accepted that the profits arising on sale/transfer of land parcels are business activity then long term capital gain declared to the extent of Rs. 41,35,806/- as capital contributions to firm out of the total amount of Rs. 1,00,56,134/- would not be regarded as 'transfer' under S. 2(47) of the Act and consequently would not liable for taxation at all. 6.2. It was next contended that the assessee has not sold any property in the....
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....y treated as 'business income' by the Revenue. 8. We have considered the rival submissions and perused the material available on record. The substantive question placed for our consideration is whether the revenue authorities were justified in realigning and treating the 'capital gains' declared by the assessee on sale of certain land parcels to be 'business income' of the assessee (inviting higher tax slabs) in the given facts and circumstances. 8.1. The issue is essentially factual and thus no rigid legal principles could be applied to determine the issue. We have thus examined the issue from factual perspective as brought to our notice. On perusal of the contentions on behalf of the assessee, we find persuasive ....
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.... F.Y. 2004-05 i.e. after a gap of 5-6 financial years. For taking adverse view, the AO was mainly guided by the fact that agricultural income is meager and the assessee applied for conversion immediately after acquisition of land which reveals the intention of commercial spirit. The cumulative effects of all circumstances most of which signifies the capital orientation were not weighed and co-ownership with third party was given undue primacy. 8.4. Significantly, the provisions of Section 2(14) of the Act defines a 'capital asset' whereby property of any kind held by the assessee, whether or not connected with his business or profession would fall within the sweep of expression 'capital asset'. Thus, the law does not expect....