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TMI Blog2023 (1) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... the land. It clearly proves that the assessee converted the agricultural land into non-agricultural purpose and sold it to M/s. ATIL. As further seen from the registered sale deed that the entire sale consideration was funded by M/s. ATIL to the assessee to buy the above piece of land. Further it is seen from the ld. CIT(A) s order, CIT(A) directed the AO to delete the claim of Long Term Capital Gain offered by the assessee in the Return of Income filed for the subsequent Assessment Year 2016-17. Thus there is no question of double taxation of the very same sale transaction. The above transaction is to be treated as an adventure in the nature of trade, as the assessee converted the above land as non-agricultural and for the purpose of indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e land to M/s. Agarwalla Teak International Pvt. Ltd. (hereinafter referred as ATIL) for a consideration of Rs. 1,86,00,000/-. The assessee had shown the gain on sale of land in his capital account of Rs. 23,96,970/- however not declared in the Return of Income as the same is an agriculture land, exempt from taxation u/s. 2(14)(iii) of the Act. The Assessing Officer issued a show cause notice why not to treat the sale of land as Short Term Capital gain and called for explanation from the assessee. 2.2. The assessee replied that the land sold was an agriculture land not being a capital asset and also exempt u/s. 2(14)(iii) of the Act, therefore not offered any capital gains. Though the land was sold on 12.02.2014 but registered only on 30.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the Assessment Order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-3. The assessee pleaded the same arguments before the Ld. CIT(A). After considering the submission, the Ld. CIT(A) treated the sale transaction as an adventure in the nature of trade and assessable to tax during the assessment year 2014-15, however directed the A.O. to delete the income offered by the assessee in the subsequent assessment year 2016-17 and thereby dismissed the appeal as follows: 5.1. I have carefully considered the submission of the appellant and perused facts of the case in A.O's order. The only effective grievance in this case is addition on account of Rs.23,96,970/- during impugned previous year instead of FY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to buy the agricultural land, get it converted into non-agricultural land and sale the same to M/s. Agarwalla Teak International Pvt. Ltd. 5.2 I agree with the AO that the sale has been completed in AY 2014-15 itself, himself has declared so in his return filed u/s, 139(1) and has also received the entire proceeds. He has also clearly mentioned that registration was kept waiting only due to pending conversion of land into agricultural land. There is no doubt whatsoever that sale was completed san registration in FY 2013-14 itself and registration was kept pending merely for getting non-agricultural conversion certificate. I also confirm the AO's .action of treating the transaction as trade adventure because of the apparent intentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed for the Assessment Year 2016-17. The Ld. Counsel submitted that the assessee entered into agreement on sale of land on 12.02.2014 to M/s. Agarwalla Teak International Pvt. Ltd. The land was converted into non-agriculture land on 01.08.2015 and ultimately sold and registered on 31.12.2015, after completing all legal formalities. Thus the physical ownership of the land was transferred on 31.12.2015 during the Assessment Year 2016-17 and not in the Assessment Year 2014-15, as determined by the Assessing Officer which was based on the agreement of sale dated 06.02.2014. Therefore the action of the Lower Authorities required to be set aside and thereby allow the assessee's appeal. 5.Per contra, the Ld. Sr. D.R. Mr. B.D. Gupta appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration was funded by M/s. ATIL to the assessee to buy the above piece of land. Further it is seen from the ld. CIT(A)'s order, the Ld. CIT(A) directed the Assessing Officer to delete the claim of Long Term Capital Gain offered by the assessee in the Return of Income filed for the subsequent Assessment Year 2016-17. Thus there is no question of double taxation of the very same sale transaction. 6.1. In our considered opinion the above transaction is to be treated as an adventure in the nature of trade, as the assessee converted the above land as non-agricultural and for the purpose of industrial use and sold it to M/s. Agarwalla Teak International Pvt. Ltd. for a consideration of Rs. 1.86 crores. We do not find any infirmity in the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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