2015 (10) TMI 2469

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..... s declared long term capital gain on sale of two adjacent plots. We also notice that the assessee continues to hold other plots as his investments only. The long holding period, in our view, supports the case of the assessee. Further, it is not shown to us that the assessee has been indulging in repetitive transactions of purchase and sale in plots. It was also not shown that the assessee has borrowed funds for the purpose of purchasing plots. Since the AO has not brought on record any valid reason to support his case, we are of the view that the tax authorities are not justified in assessing the capital gain as his business income. Hence, we are not able to agree with the view taken by the Ld CIT(A) on this issue. Accordingly, we set aside .....

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..... purchased these plots as agricultural land, but did not carry on any agricultural activity. Further, the assessee had purchased these plots as a co-owner, i.e., jointly with other unrelated persons. Hence, the AO took the view that the assessee had indulged in real estate activities and accordingly assessed the capital gains, referred above, as business income. The assessee could not succeed in the appeal filed before Ld CIT(A) and hence the assessee has filed this appeal before us. 3. We heard the parties and perused the record. With regard to the first issue relating to the determination of Annual letting value of the property, both the parties agreed that the same requires fresh examination at the end of the AO by duly considering th .....

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..... dered to be the sole ground to determine the intention of the assessee. The question relating to presence or absence of agricultural activity may be relevant to determine the character of land, but, in our view, the same may not be relevant to determine the intention of the assessee to hold the same as investment or as stock in trade. Similarly, the joint purchase of land cannot also be considered to be the main determinative factor, since it is quiet normal to make investments jointly with others. It is well settled proposition that the intention of the assessee at the time of purchase of plot would determine the nature of asset either as investment or as stock in trade. In the instant case, the submission of the assessee is that these ass .....

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