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TMI Blog2019 (1) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... ts similar, they are disposed of vide this consolidated order. For the sake of convenience, we would take ITA No.1005/PUN/2015 as lead case. We find that though the assessee in both the appeals have taken multiple grounds, the crux of the grievance in both the appeals is whether the gain arising on the sale of land is to be taxed as 'business income' in the hands of the assessee. 3. The facts in ITA No.1005/PUN/2015 are that the assessee deals in sale and purchase of land and is a partner in M/s. Shrihari Builders and Developers derives income from other sources as well as claims income from agricultural activities. Return of income for assessment year 2010-11 was filed on 25.09.2010 at the total income of Rs. 7,47,270/- apart from agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achalam Vs. ACIT, 369 ITR 558 (Mad.). The second contention of the assessee is that land situated beyond 8 Kms. from local limits of Lonavala Municipal Corporation. In support of this contention, the assessee has placed reliance on the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Minguel Chandra Pais & ANR, reported as 282 ITR 618. 5. The Ld. CIT(Appeal) on this issue analyzed the facts and circumstances which has given rise to this particular dispute. It is on record that the Assessing Officer during the course of assessment proceedings noticed that the assessee who is partner in the Firm M/s.Shrihari Builders and Developers, had shown profits from his proprietary business which was dealing in purchase & sale of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance. However, main issue remains whether land can be termed as 'investment' as shown in the books of account of the assessee and also whether it could be taxable as long term capital gain and also whether the character of the land is agricultural as taken by assessee merely because of the fact that agricultural income has been shown by the assessee in the return of income. On this issue, Ld. CIT(Appeal) has made following observations: i) The land was acquired by the assessee along with other two persons, one of whom also happens to be partner in the firm M/s. Shrihari Builders and Developers. ii) The land in question is in the foothills of Lohgarh Fort and is located in Forest Zone. iii) The assessee claims that as per 7/12 extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Additional area of 50 sq.mtrs. may also be permitted for ancillary users. Structure to be erected for these purposes should be of Ground Floor only and should not have height more than 5 meters and should be of such material as would blend with the surroundings: Provided further that no forest house should be permitted unless owner has planted at least 800 trees per hector ( or such lesser number on the basis of the species selected and approved by Forest Department), and only after such trees are reared for 1 year) Provided further that no such forest house will be permitted i) within a distance of 100 meters, from the H.F.L/ F.S.L of the lake, ii) and on hill slopes steeper than 1:5. Layout of the forest ledges may be permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively on land and even at the present date also, there is no commercial activity that has been undertaken and it is still agricultural land. That it is already established, it is beyond 8 Kms. from municipal limits. On this assertion, it was prayed by the Ld. AR that land should be treated as investment. Since it is agricultural land, it cannot be charged to business income and that the sale of land is, therefore, not business transaction. That it is further submitted by the Ld. AR that the Revenue on hypothetical basis has stated that the assessee and the other co owners have purchased land to sale it later on higher profits and therefore, the motive was only business. This is purely hypothetical as there is nothing on records from R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual verification done by the Ld. CIT(Appeal) to ascertain the nature and character of land and whether it could be called as agricultural land in terms of continuous agricultural activities, if at all undertaken. Similarly, the Ld. AR of the assessee submitted that even at present the land is used for agricultural purposes and all throughout, they have shown it as investment in their books of account and agricultural income is also shown in the return of income. 10. We had put a question to the Ld. AR whether they have any physical proof regarding the agricultural nature of the land and that as on date whether still it is agricultural land. To which, Ld. AR stated as instructed by the assessee, it is still agricultural land and there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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