TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 254
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssues raised in both the appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience. 4. First, we shall take appeal in ITA No. 1382/Chny/2025 AY 2013-14 for adjudication. 5. The Appellant-Revenue raised 2 grounds challenging the action of the ld. CIT(A) in deleting the addition by holding that the transfer of property to be viewed as a capital gain transaction in the facts and circumstances of the case. 6. We note that in the assessment order, the Assessing Officer observed that as per the records of the assessee for the AYs. 2006-07, 2007-08, 2009-10, 2010-11 & 2016-17, the assessee has been purchasing and selling properties frequently and most of the sales are to M/s. Hindustan Educational and Charitable Trust at an exorbitant price much higher than guideline value. We note that after considering the submissions of the assessee and by referring to the decision of the Hon'ble High Court of Bombay in the case of DCIT v. Gopal Ramnarayan Kasat 328 ITR 556, the Assessing Officer treated the sale transaction as adventure in the nature of trade and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in the appellant's case when the lands were under consideration for acquisition at the time of purchase. All the properties have been sold after a considerable period of couple of years. This exact issue came up before the Hon'ble ITAT, Chennai in the appellant's own case for AY 2011-12 in ITA No.804/Mds/2016 dated 28.10.2016, wherein it has been held that the assessee had no intention to trade in land or do real estate business and since assessee was in the business of manufacturing transformers, surplus arising out of sale of land could have been considered only under the head 'capital gain'. For ready reference, the relevant portion of the said judgment is reproduced as under: 12. We have considered the rival contentions and perused the orders of the authorities below. The first issue that is to decided is whether the sale of land done by the assessee during the relevant previous year is to be considered as part of a business activity or not. Assessee had sold two pieces of land during the relevant previous year. First piece of land at Sowripalayam on which assessee returned long term capital gains 33,52,365/- Obviously, the land was more than thre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat assessee had an intention to do a business or trade of purchase and selling a land. Just like any other investor, assessee invested in land over a long period of time at disparate places. It effected sale of land whenever an opportunity arose. In some years, there were more than one number of such transactions. In certain other years, there were no transaction of purchase or sale of land. In our opinion, the conclusion of the lower authorities that there existed a series of transactions and assessee had an intention to trade in land or do real estate business was incorrect. Especially so, since assessee was in the business of manufacturing transformers. Thus, according to us, surplus arising out of sale of land during the relevant previous year could not have been considered under the head 'income from business' but only under the head 'capital gains'. Further, relying on its above decision, the Hon'ble ITAT, in ITA No.257/Chny/2018 dated 12.09.2018, allowed the appeal filed by the appellant in his own case for AY 2009-10 also. The above decision is squarely applicable for the year under consideration also. Thus, respectfully following the decision ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re is no chain or continuity in the transactions of immovable property. 10. We note that the Assessing Officer referred to the decision of the Hon'ble High Court of Bombay in the case of DCIT vs Gopal Ramnarayan Kasat (supra) and the ld. DR also heavily relied on the above said decision. We note that in the impugned order, the ld. CIT(A) distinguished the above decision. 11. On perusal of the said decision, in that case, the assessee had purchased certain agricultural lands during the period 1992 to 1998 which were thereafter immediately acquired by the State Government and the assessee thereon received compensation/enhanced compensation towards the acquisition of the said lands during the assessment years 2000-01, 2001-02 and 2002-03, apart from their regular business/ professional activities, jointly purchased agricultural lands involving 13 transactions. Out of those 13 transactions, nine lands were under consideration for acquisition at the time of purchase of land and subsequent to purchase, within a short span of time, the said lands were acquired and the assessee had received compensation, as well as, enhanced compensation under the Land Acquisition Act, 1894. 12. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e also appear to have sold shares of M/s. Ganesha Ginning Co. Ltd to M/s. DLF Retails during the said year. However, this in our opinion cannot be equated to a land sale. During the previous year relevant to assessment year 2009-2010 assessee had sold a piece of land for 10.67 crores. There obviously was no purchase or sale during the relevant previous year 2008-2009. In our opinion, above transactions which happened over a number of years were so sporadic that it could not be considered as one creating a series which could show an intention to trade in land. None of the land sold by the assessee over the period of five years was developed by the assessee or plotted by the assessee. Assessee had shown the land always as investments in its balance sheet. No doubt it was held that Bombay High Court in the case of Gopal Ramnarayan Kasat(supra) that even an isolated transaction could qualify as an adventure in the nature of trade. But their Lordship also held that a continuity was necessary for reaching a conclusion that assessee was indulging in a trade or business. In our opinion, purchase and sale done by the assessee over a period of five years was not of such frequency that could ....