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TMI Blog2023 (2) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. - ITA No. 746/Del/2019 - - - Dated:- 30-1-2023 - SHRI KUL BHARAT , JUDICIAL MEMBER For the Appellant : Ms.Rano Jain, Adv. Ms. Mansi Jain, CA For the Respondent : Shri Sumesh Swani, Sr.DR ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee for the assessment year 2013- 14 is directed against the order of Ld. CIT(A)-14, New Delhi dated 18.12.2018. The assessee has raised following grounds of appeal:- 1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad, both in the eye of law and on the facts. 2. On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law, in confirming the action of A.O. in holding the capital gain arising on sale of investment by the assessee to be income assessable under the head business and profession . 3. That the above said has been held despite the fact that the properties, which were sold, were being held by the assessee as investment and there was no intention to deal in those as her business. 4. Without prejudice to the above, Id. CIT(A) has erred both on facts and in law, in confirming the action of the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. After considering the facts as putforth above, the income from sale of properties is worked out as under: 4. Aggrieved by the action of Assessing Authority, the assessee carried the matter before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed the appeal of the assessee. 5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal. 6. Ld. Counsel for the assessee reiterated the submissions as made in the synopsis. The relevant contents of the synopsis are reproduced as under:- 1. This is an appeal filed by the assessee against the order of the CIT(A)-14 dated 18.12.2018 wherein the additions of Rs. 46,29,992/- made by the AO in his order dated 30.03.2016 has been confirmed by the CIT(A). 2. During the year under consideration, the assessee has sold three properties on which income under the head capital gains had been declared. The AO considered the sale of such properties to be the business income of the assessee solely on the basis of findings concluded in the assessment proceedings for AY 2012-13 and accordingly computed the business profits to be Rs. 46,29,992/-. (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor AO was that since the assessee was in possession of many properties and also purchased properties during that year, therefore, the gain on sale of them to be treated as business income and not capital gains and this finding was later on confirmed by the CIT(A) (PB page no. 151). 7. Another imperative fact which needs to be highlighted here is that, no properties have been purchased during the year under consideration and only three immoveable properties already held by the assessee were sold during the year under consideration. (PB page no. 107) 8. It is a settled law that if the property is held with the intention of investment purpose, the gain arising on the sale of such property be treated as Income under the head Capital Gains and not business income. 9. The issue is squarely covered from a number of decisions of various Courts and Tribunals. Reliance can be placed on the following decisions: High Court of Bombay in the case of Indian Human Pipe Co. Ltd. vs. CIT 195 ITR 386 (Bom) observed that surplus realized on sale of properties cannot be assessed as business profits where they were not purchased with an intention to trade but as investments of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat the profit shown by the assessee of Laxmipurpatti Land of Rs. 5.32 lakhs as long-term capital gain and Jaitpur Ghoshi land profit of Rs. 5.60 lakhs as short term capital gain. In view of this ground number one of the appeal of the assessee is allowed. In the case of CIT v. Kasturi Estates (P.) Ltd. reported in [1966] 62 ITR 578 the Madras High Court held as follows: If a land-owner developed his land, expended money on it, laid roads, converted the land into house sites and with a view to get a better price for the land, eventually sold the plots for a consideration yielding a surplus, it could hardly be said that the transaction is anything more than a realisation of a capital investment or conversion of one form of assets into another. Obviously, the surplus in such a case will not be trading or business profit because the transaction is one of realisation of asset in investment rather than one in the course of trade carried on by the assessee or an adventure in the nature of trade .... The transaction involved no risk or speculation; nor can it be truly said that it is a 'plunge in the waters of trade'. It is a transaction which any prudent owner of land w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana High Court The assessee admittedly had purchased the property in the year 1967. The Revenue has not at all brought any circumstance or evidence on the record to show that at the time of the purchase of the property in the year 1967, the assessee had an intention to sell the property. Merely carving out plots in a portion of the land, without proof of anything more, cannot give rise to the conclusion that the transaction is an adventure in the nature of trade. Our attention was pointedly drawn by the learned counsel for the Revenue to a Division Bench judgment of this Court in Harbans Singh v. CIT [1981] 132 ITR 77. But that decision is of no assistance to the Revenue as the facts of that case are entirely different and on the facts found in that case, the view -was rightly taken that it was an adventure in the nature of trade. There can be no gainsaying that even a single venture may be regarded as a trade or business, but there have to be circumstances which may give rise to such a conclusion. As earlier observed, in this case the Tribunal has fallen in error in holding the venture as trade or business merely on the ground that 42 plots were carved out, out of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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