TaxTMI 
TaxTMI 
2023 (1) TMI 322
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....) relating to the Assessment Year (A.Y) 2014-15. 2. The brief facts of the case is that the assessee is an individual and engaged in the business of Trading of timber. For the Assessment Year 2014-15, the assessee filed its Return of Income declaring income of Rs. 3,00,380/-. The return was selected for limited scrutiny assessment and then converted into complete scrutiny assessment vide PCIT letter dated 15.12.2016. 2.1. The assessee purchased a piece of land at Ajapar Village on 06.02.2014 for a consideration of Rs. 1,53,00,000/-. Within six days thereafter i.e. on 12.02.2014, the assessee sold the very same land to M/s. Agarwalla Teak International Pvt. Ltd. (hereinafter referred as ATIL) for a consideration of Rs. 1,86,00,000/-. T....
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....Act, but only after issuance of the show cause notice for the Assessment Year 2014-15. Thus the claim of the assessee that the gain on the sale of land is to be treated as agriculture income is without basis and merits. Trading in agriculture land cannot be termed as income from agriculture. The intention of the assessee was clear not to do any agriculture activities, but clearly to sell the said land to non-agriculturist from whom he received the entire funds. Therefore the A.O. treated the transaction as Short Term Capital Gain and charged to tax for the Assessment Year 2014-15 and demanded tax thereon. 3. Aggrieved against the Assessment Order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-3. The assesse....
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....om the appellant. Faced with these facts appellant gave another explanation that though the sale deed was entered in relevant FY it could only be registered in FY 2015-16 after getting the NA Certificate. The appellant reiterated that accordingly he has declared short term capital gain in A.Y. 2016-17 and hence no further addition in AY 2014-15 is warranted. The appellant also argued that this single transaction should not be treated as adventure in nature of business. However AO made observation that from the entire chain of sequence it is apparent that doing agriculture was not at all intention of the applicant. The intents was to buy the agricultural land, get it converted into non-agricultural land and sale the same to M/s. Agarwalla Te....
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....e of agricultural land in AY 2014-15 on the basis of agreement to sale instead of gain already offered for taxation in AY 2015-16 on the basis of registered sale deed and the year in which actual transfer takes place. 2. Ld. CIT(A) had erred in law as well as on fact in confirming addition of Rs.23,96,970/- being profit on sale of agricultural land treating it as adventure in nature of trade. 4.1. Ld. Counsel Mr. Chetan Agarwal appearing for the assessee filed a Paper book consisting of the written submission filed before Ld. CIT(A), Registered Sale Deed dated 30.12.2015 and unregistered sale agreement dated 12.02.2014 and Income Tax Return filed for the Assessment Year 2016-17. The Ld. Counsel submitted that the assessee entere....
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....n record including the Paper Books filed by the assessee. The assessee purchased the above piece of land on 06.02.2014 for a consideration of Rs. 1.53 crores and within a period of six days thereafter, the assessee entered into a sale agreement dated 12.02.2014 with Agarwalla Teak International Pvt. Ltd. for a consideration of Rs. 1.86 crores. This clearly proves that the assessee has no intention of carrying out any agricultural activity in the land. Further it clearly proves that the assessee converted the agricultural land into non-agricultural purpose and sold it to M/s. ATIL. It is further seen from the registered sale deed that the entire sale consideration was funded by M/s. ATIL to the assessee to buy the above piece of land. Furthe....