9911796707
TMI Blog2015 (12) TMI 1871X X X X Extracts X X X X X X X X Extracts X X X X ..... egard is that the assessee had owned various lands, which have been declared in the balance sheet under the list of Sundry Debtors related with land transactions Scheme VII starting from assessment year 2003-04 and then in assessment year 2004-05. During the year under consideration, there is certain movement in the lands and two of the lands have been sold by the assessee. In view of the large number of transactions carried out by the assessee in lands reflect the nature of assessee to carry on the business of sale and purchase of lands, where the lands purchased by it were shown as stock-in-trade. The nature of the lands purchased by the assessee is claimed to be agricultural lands. No iota of evidence has been filed by the assessee to es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gain of Rs.11,12,595/- was taxable as business income of the appellant. 3] The learned CIT(A) failed to appreciate that the lands sold in this year were capital asset of the firm and since the said lands were agricultural lands and beyond 8 kms from the municipal limits, the gain arising on sale of lands was exempt from tax. 4] The learned CIT(A) ought to have appreciate that- a. The lands sold in this year were capital assets of the appellant firm and simply because, it was engaged in the business of land trading did not imply that it could not hold certain lands as capital assets. b. A trader in land could hold certain lands as an investments and hence, since the lands sold in this year were capital assets, the gain arising wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer was of the view that the profit from sale of agricultural lands was to be taxed as business income as the principal business of the assessee was to sell land. The said lands were acquired with the motive of dealing and not for the purpose of cultivating. Further, the assessee had not shown any agricultural income in the past years. Ever since the agricultural lands were acquired, the assessee had shown the agricultural lands as business assets in its Balance Sheet. Further, the agricultural lands were held in the name of one of the partners and the payments for the same were made by the assessee firm. Since the firm being non-agriculturist, there was prevention from purchasing the agricultural lands in its own name and in such circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006-07 were perused by the CIT(A) and they revealed that the lands were shown in the balance sheet under the head 'List of Sundry Debtors related with land transactions Scheme - VII'. The details of lands as shown in the schedule are tabulated at para 4 at pages 9 and 10 of the appellate order. Similarly, the said lands were shown in the assessment year under consideration. Some of the lands were sold by the assessee resulting in profit under dispute, the CIT(A) from the said evidence held that it clearly established that the assessee was carrying on the business of dealing in lands. Large number of transactions reflected in the list of Sundry Debtors also proved that the lands purchased by the assessee were stock-in-trade. It was also note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l finding of the CIT(A) in this regard is that the assessee had owned various lands, which have been declared in the balance sheet under the 'list of Sundry Debtors related with land transactions - Scheme - VII' starting from assessment year 2003-04 and then in assessment year 2004-05. During the year under consideration, there is certain movement in the lands and two of the lands have been sold by the assessee. In view of the large number of transactions carried out by the assessee in lands reflect the nature of assessee to carry on the business of sale and purchase of lands, where the lands purchased by it were shown as stock-in-trade. The nature of the lands purchased by the assessee is claimed to be agricultural lands. However, no iota ..... X X X X Extracts X X X X X X X X Extracts X X X X
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