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TMI Blog2019 (8) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the onus of proving that the land formed part of the business assets of the assessee is on the Department and in the absence of any evidence to that effect the presumption will be that the land was held as a capital asset by the assessee and the income from transfer thereof was not income from business. - we set aside the order of the Ld. CIT(A) and direct the AO to delete the addition from the hands of the assessee on this issue Disallowance of development expenses at ad-hoc @ 10% - HELD THAT:- The assessee has provided all the details of development work that he has undertaken before the Revenue Authorities. The Revenue Authorities did not raise any doubt regarding development activities taken place. That on verification of the relevant documentary evidences, it was found that certain receipts were not available or they were sans any signature. The Revenue Authorities disallowed 10% of the expenses only on the ground that proper vouchers and documents were not maintained/signed and in order to prevent any leakages of revenue. Taking the totality of facts and circumstances into consideration, we are of the considered view that this 10% disallowance of the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 19,29,01,090/-, after making various additions/disallowances as appearing in the assessment order. 3. With regard to ground No.1 in the appeal of assessee, the detailed written submission was filed before the Assessing Officer. It was stated therein that land at Waki was sold to TATA International DLT P. Ltd. and the land at Jaidwadi was sold to Riddhi Siddhi Trexim P. Ltd. Copy of the sale deeds of both these lands had been submitted before the Assessing Officer on 04.10.2011. It is further stated that these lands were agricultural land at the time of sale. There is a certificate of Deputy Director, Town Planning, Pune certifying the same is forming part of sale deed and a copy of the same has been submitted separately to the Revenue Authority. Further, in Clause No.A(f) on page No.4 and 5 of the sale deed of land at Waki wherein it is written as follows: Transferors having being carrying on agricultural activities on the lands described in Schedule First to Fifth and sharing the revenue there from in proportion to their holdings. Since the income from agricultural activities are meager and it was not possible to get labourers to work on the farms on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, however, normal practice is that the agricultural land were not purchased from unrelated persons for carrying out agricultural activity. Further, land in question was sold within a short span of two years which suggest intention of the assessee was not to carry out agricultural activities but to sale the same at a profit. Though, the 7/12 extracts has shown that the land is agricultural land, the Ld. CIT(Appeals) did not place any reliance on this revenue document since in the return for the current assessment year, no agricultural income was shown by the assessee. That even, the agricultural income of ₹ 20,000/- shown in assessment years 2007-08 and 2008-09, whether they represents agricultural income from the said land as the assesee was holding many plots of land during the concerned assessment years and therefore, it was not clear that the agricultural income as reflected in the earlier returns of income, were the agricultural income from the said land in question. 5. At the time of hearing, the Ld. AR of the assessee submitted that lands in question at Waki purchased from Shri Sachin Agarwal is a close relative of the assessee and therefore, assertion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee through his Ld. AR claims that he was never cross examined by the Assessing Officer. 8. We find that the Hon‟ble Bombay High Court in the case of Commissioner of Income Tax Vs. Smt Debbie Alemeo (supra.) has held that land shown as agricultural land in revenue records, admittedly the land was shown in the revenue records as agricultural land and no permission was ever obtained for non agricultural use by the assessee. Permission for non agricultural use was obtained for the first time by the purchaser after it purchased the land. As regards the contention of the Revenue that no agricultural income was shown from this land, it was explained by the assessee that the agricultural income derived by sale of coconut grown on the land was just enough to maintain the land and there was no surplus. Therefore, land which was shown as agricultural land in the revenue records and never sought to be used for non agricultural purposes by the assessee till it was sold has to be treated as agricultural land, even though no agricultural income was shown by the assessee from this land and therefore, no capital gain was taxable on the sale of the said land. Rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses pertained to land excavation, removing stores, soiling, cutting, murrum filling for approach road work at site, JCB charges etc. as well as expenses for general improvement of land. The Assessing Officer noticed that the vouchers of the expenses were not fully supported by payees acknowledgement or signature. The Ld. AR of the assessee submitted that the expenditure had been incurred in connection with purchase of land only. After considering the mandatory expenses, the Assessing Officer noticed that an amount of ₹ 80,36,028/- represents the amount for which proper receipts/ signatures are not available. Accordingly, the Assessing Officer made disallowance @10% of the expenditure which was calculated at ₹ 8,03,602/- in order to cover leakages to the revenue. 12. The Ld. CIT(Appeals) as per detailed reasons and observations as appearing in his order upheld the said disallowance of 10% of the total expenditure as made by the Assessing Officer. 13. We have perused the case records and analyzed the facts and circumstances on the issue. The assessee has provided all the details of development work that he has undertaken before the Revenue Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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