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TMI Blog2014 (1) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of Shri P.T. Pavunny, a sale agreement relating to the above said transaction of sale was seized. From the said agreement, it was noticed that the selling price of the land was Rs.25,000/- per cent, which was found to be higher than the documented value. The buyer Shri A.A. Davis and the assessee herein confirmed that the transaction was carried at the rate of Rs.25,000/- per cent. Accordingly, the Assessing officer determined the sale consideration of the land by adopting the rate of Rs. 25,000/- per cent. In the statement taken from the assessee, he had stated that the land was purchased at Rs.10,250/-per cent. 4. Before the assessing officer, the assessee contended that the impugned land was an agricultural land and hence the profit arising on its sale is exempt. However, the AO noticed that the assessee did not carry on any agricultural activity and further the land was sold within a short period. Further the assessee herein also confirmed that he did not carry on any agricultural activity on the above said land. It was further noticed that the nature of the property at the time of registration was changed into a barren land due to removal of earth upto the rock bottom. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not notified. However, the assessing officer found that the transaction was adventure in the nature of trade. Accordingly he treated the profit under the head "business". According to the ld. counsel, the assessee purchased the property as agricultural land and continued to do the agricultural activities on the land. The rubber estate was registered under Rubber Act with Rubber Board. Therefore, the property cannot be treated as a capital asset. The ld. counsel further submitted that since the physical possession of the property was handed over on 14-12-2007 in pursuance of an agreement for sale, the transaction under the Income-tax Act was completed on 14-12-2007; therefore the profit, if any, cannot be assessed during the year under consideration. 4. On the contrary, the Ld. DR submitted that the assessee is a non resident and chairman and managing director of Geo group of companies. According to the ld.DR, one Shri N.A. Baby, who is a cousin of the assessee is a resident of India. Shri N.A. Baby was commission agent in the real estate dealings. On the advice of Shri N.A. Baby, the assessee intended to invest funds in the real estate for making quick profit. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the CIT(A) at page 7 of his order. Therefore, the intention of the assessee at the time of purchase is only to deal in real estate transaction and not for investment purpose. The intention the assessee is to do business in real estate at the time of purchase of the land as also the fact that the land was sold subsequently by several documents to various purchasers clearly establishes that the assessee was dealing in real estate. Therefore, the profit, if any, has to be assessed only as business profit. Hence, this Tribunal do not find any infirmity in the orders of the lower authorities. Accordingly, the same is confirmed." 6. Since the Tribunal did not adjudicate the grounds urged on the cost of purchase, the assessee Shri N.V. George moved a miscellaneous petition and accordingly, the Tribunal recalled the order to dispose of the said grounds. The Tribunal, on this date, has disposed of the said ground with the following observations:- "5. Before the assessing officer, the assessee contended that the impugned land was an agricultural land and hence the profit arising on its sale is exempt. However, the AO noticed that the assessee did not carry on any agricultural activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved before Assessing officer that he has paid such consideration. In view of the above facts and circumstances and position of law, this ground of appeal is untenable and hence dismissed." Aggrieved, the assessee is contesting the above said decision of Ld CIT(A). 7. The Ld Counsel appearing for the assessee submitted that the AO has placed reliance on the sworn statement given by Shri N.A. Baby for adopting the selling rate at Rs.25,000/- per cent, where as the AO has refused to adopt the purchase rate at Rs.10,250/- as disclosed by Shri N.A. Baby in the very same sworn statement. He further submitted that the AO was not justified in placing reliance on the sworn statement partially to suit his convenience. He submitted that the AO should have considered the sworn statement in toto and should have adopted the purchase rate at Rs.10,250/- as stated in the statement, since the said statement was given spontaneously by Shri N.A. Baby. He further submitted that the admission made in the sworn statement is considered as having evidentiary value as held by Hon'ble Kerala High Court in the case of CIT Vs. O. Abdul Razak (2012)(207 Taxman 193)(Ker); Cit Vs. Hotel Mariya (2011)(332 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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