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TMI Blog2018 (4) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... the same land as income of the assessee. Though, the issue was set aside to the Assessing Officer by the Tribunal, however, it needs to be seen under which head the Assessing Officer treated it as income and the reason for doing so. In this regard, the Balance Sheets of earlier years are also required to be examined. Considering the overall facts and circumstances of the case, we are of the opinion that the issue whether the land in question was held as an investment or business asset requires to be examined afresh taking into consideration all material facts including the intention of the assessee at the time of purchase of land. Assessee’s appeal is allowed for statistical purposes. - ITA no. 4370/Mum./2013 - - - Dated:- 28-3-2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid facts, the Assessing Officer called upon the assessee to show cause why the profit from sale of land should not be treated as business income. In response, it was submitted by the assessee that since the land was held as investment, the income derived from sale of land is chargeable to long term capital gain. The Assessing Officer, however, did not find merit in the submissions of the assessee. He observed, the assessee had entered into an agreement in respect of the said land with Sameer Bhojwani on 10th November 2003 in the capacity of sole proprietor of Everest Builder. He also observed, the land has been held in the Balance Sheet of Everest Developer as stock in trade. From the facts on record, the Assessing Officer found tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted to hold the land as an investment of the proprietorship concern, he should have converted the land to stock in trade while entering into the development agreement. Thus, the learned Commissioner (Appeals) upheld the decision of the Assessing Officer in treating the profit derived from sale of land as income from business thereby negating assessee s claim of long term capital gain and consequently disallowing deduction under section 54 of the Act. 5. Learned Authorised Representative contesting the findings of the Departmental Authorities submitted that the land having been held as investment, the profit derived from sale of land cannot be treated as business income as against assessee s claim of long term capital gain. 6. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into an agreement with a third party for development of land. However, as it appears from the facts on record, the said agreement was ultimately terminated and the assessee sold the land on 27th July 2007 to another party on long term lease basis. Thus, it is a fact on record that land in question was held by the assessee from the year 1995 till its sale in the year 2007. Therefore, the question which arises is, if a person is in the business of buying and selling land, whether he will hold on to the land for such a long period or whether he will sell it at the first available opportunity. The next issue which arises is, what was the intention of the assessee while purchasing the land in the year 1995. As observed earlier, though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seen under which head the Assessing Officer treated it as income and the reason for doing so. In this regard, the Balance Sheets of earlier years are also required to be examined. Considering the overall facts and circumstances of the case, we are of the opinion that the issue whether the land in question was held as an investment or business asset requires to be examined afresh taking into consideration all material facts including the intention of the assessee at the time of purchase of land. Accordingly, we set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to the file of the Assessing Officer for fresh adjudication after due opportunity of being heard to the assessee. In the event the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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