9911796707
TMI Blog2018 (10) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... wer authorities reached to the conclusion that intention of the assessee was to earn profit rather than investing in the agricultural land to be used for agricultural purposes. Assessee was not at all interested in carrying out any agricultural activity. If it all in case that intention of assessee was to embark on a venture in the nature of trade as distinguished from a capital investment. CIT(A) has discussed the various judicial pronouncements and also the criteria laid down in case of Mahaveer Enterprises [1997 (4) TMI 21 - RAJASTHAN HIGH COURT] to the facts of the instant case and reached to the conclusion that assessee alongwith 8 other persons entered into transaction for sale and purchase of land. Intention was not to carry out any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confronted by the Assessing Officer, it was replied that since the land is agricultural land, therefore, the same is not taxable in view of the provision of Section 2(14) of the IT Act. However, this argument of the assessee did not find favour with the Assessing Officer and he treated the income as income earned out of adventure in the nature of trade. 5. By the impugned order CIT(A) confirmed the action of AO after observing as under:- "I have perused the facts of the case as well as arguments taken on of the appellant. On a perusal of the facts, it is noticed that the appellant surplus of ₹ 11,07,499/- on account of following land transactions: Sr.No Description of land Date of Purchase Purchase Cost Date of Sale Sale Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the aforesaid proposition laid down by the Hon'ble Court. 6.4 Hon'ble Gujarat High Court in the case of CIT vs. Premji Gopalbhai [1978] 113 ITR 785 (Guj.) has held that "Even if land which is not a commercial commodity is purchased and it can be shown that the purchase of the land was made solely and exclusively with an intention to resell it at a profit, it would be a strong factor to indicate that the transaction would be an adventure in the nature of trade." 6.5 Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT [1959] 35 ITR 594 has held that "In cases where purchase has been made solely and exclusively with intention to resell at a profit and purchaser has no intention of holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose for which the land was held by the present owner. A firm which holds it may well be presumed to have held it as stock-in-trade and not for carrying out agricultural operations. (7) As regards use of the land for agricultural purposes prior to sale, mere use ' in remote past though land revenue is paid, would not make it agricultural. (8) Mere capability of being used as agricultural land is not enough. [Para 8.3] 6.8 Applying the above tests in the appellant's case, it is seen that the land in question meets the criteria as laid down by the Hon'ble Rajasthan High Court. The appellant along with eight other persons entered into the transaction for sale and purchase of the land. The intention was certainly not to carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rightly taxed as business income. The order of the Assessing Officer is accordingly confirmed. 6. Assessee is in further appeal before us against the above order of CIT(A). It was contended by learned AR that assessee has declared agricultural income of ₹ 42,870/-, out of which ₹ 12,500/- was derived from six agricultural land sold during the year. Learned AR also placed on record chart indicating the amount of agricultural income disclosed by the assessee during the last two assessment years i.e. for the A.Y. 2010-11 & 2011-12 as under:-. S.NO. A.Yrs. Agricultural income disclosed in the return 1 2010-11 28,500 2 2011-12 36,980 3 2012-13 42,870 7. As per learned AR, the assessee has shown net agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Veerender 160 TTJ 0435. 9. On the other hand learned DR relied on the order of the lower authorities. 10. We have heard rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the various judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned AR during the course of hearing before us in the context of factual matrix of the case. From the record we found that six plots of agriculture land was bought by the assessee with eight other persons. These plots of land were held for lease by owner and thereafter sold and profit accruing there on was claimed as exempt being income from sale of agricultural land. After analyzing the factual posi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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